ITO, CHENNAI V. Roopa Ramachandran, CHENNAI

ITA 623/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73679 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 22-01-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 08-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARI RAO
• Assessee Lawyers: K RAVI
• Section: 54

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , ! , ' # $ BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER ./ I.T.A. NO. 623/MDS/2013 / ASSESSMENT YEAR : 2009-10 INCOME TAX OFFICER, WARD-XV(2), CHENNAI 600 034 ( !% /APPELLANT) VS SMT. ROOPA RAMACHANDRAN, NO.23, SIR, C.V.RAMAN ROAD, ALWARPET, CHENNAI-600 018 [PAN: AEXPM 2842 M] ( &'!% /RESPONDENT) / APPELLANT BY : SHRI HARI RAO, JCIT / RESPONDENT BY : SHRI K.RAVI, ADVOCATE / DATE OF HEARING : 22-01-2014 /DATE OF PRONOUNCEMENT : 07-02-2014 #( / O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER: THE APPEAL HAS BEEN FILED BY THE REVENUE ASSAILING THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-XI I, CHENNAI DATED 20-12-2012 RELEVANT TO THE ASSESSMENT YEAR (A Y) 2009-10. I.T.A. NO. 623/MDS/2013 2 2. THE ASSESSEE HAD FILED HER RETURN OF INCOME FOR THE AY. 2009-10 ON 31-03-2010 DECLARING HER TOTAL INCOME AS ` 3,58,790/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER RE FERRED TO AS THE ACT) WAS ISSUED TO THE ASSESSEE ON 25-08-2009. TH E ASSESSING OFFICER VIDE ASSESSMENT ORDER DATED 27-12-2011 HELD THAT THE ASSESSEE HAS EARNED LONG TERM CAPITAL GAIN [LTCG] O F ` 69,43,609/- FROM SALE OF A RESIDENTIAL FLAT. AGGRIEVED AGAINST THE ASSESSMENT ORDER DATED 27-12- 2011, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(APP EALS). THE CIT(APPEALS) VIDE IMPUGNED ORDER ALLOWED THE APPEAL OF THE ASSESSEE AND DELETED THE ADDITION MADE BY THE ASSES SING OFFICER IN RESPECT OF LTCGS IN THE HANDS OF THE ASSESSEE. AGGRIEVED AGAINST THE ORDER OF THE CIT(APPEALS), TH E REVENUE HAS COME IN SECOND APPEAL BEFORE THE TRIBUN AL. 3. SHRI HARI RAO, APPEARING ON BEHALF OF THE REVENU E SUBMITTED THAT THE ASSESSEE HAD EARNED LTCG ON SALE OF RESIDE NTIAL FLAT SITUATED AT ATMARAM DHAM BUILDING, INSIDE UTTAM CO- OP. HOUSING SOCIETY LTD., ANTHONY ROAD, CHEMBUR, MUMBAI. THE A SSESSEE I.T.A. NO. 623/MDS/2013 3 WAS ALLEGEDLY HAVE 50% SHARE IN THE SAID PROPERTY. THE REMAINING 50% BEING OWNED BY HER SISTER MISS RAMYA MOHAN. TH E LD.DR CONTENDED THAT THE PROPERTY WAS PURCHASED BY THE FA THER OF THE ASSESSEE IN THE YEAR 1978. THEREAFTER, AN AGREEMEN T FOR SALE WAS EXECUTED BY SHRI RAMASWAMY SESHADRI MOHAN, FATH ER OF THE ASSESSEE WITH THE ASSESSEE AND HER SISTER RAMYA MOH AN ON 24-06-2002. THE SAID AGREEMENT WAS DULY REGISTERED WITH THE OFFICE OF SUB-REGISTRAR, KURLA, MUMBAI. SUBSEQUENTLY, THE ASSESSEE HAD ALSO TAKEN A LOAN FO R THE PURCHASE OF THE SAID PROPERTY. ON 11-04-2008, A DE ED OF CONVEYANCE WAS EXECUTED BY THE ASSESSEE AND HER SIS TER IN FAVOUR OF M/S. ANMOL ENTERPRISES IN RESPECT OF SAME PROPERTY. THE ASSESSEE HAD NOT DISCLOSED REGARDING AFORESAID SALE IN HER RETURN OF INCOME. THE CAPITAL GAIN ARISING FROM TH E SALE OF AFORESAID PROPERTY HAS BEEN SHOWN IN THE RETURN OF INCOME OF THE FATHER OF THE ASSESSEE. THE FATHER HAS CLAIMED BEN EFIT OF SECTION 54 ON THE SALE PROCEEDS. THE ASSESSEE AND HER SIST ER WERE THE DEFACTO OWNER OF THE FLAT AND THE LTCG ARISING FROM THE SALE OF THE FLAT HAS BEEN RIGHTLY ASSESSED IN THE HANDS OF THE ASSESSEE BY THE ASSESSING OFFICER. THE LD.DR PRAYED FOR THE SETTIN G ASIDE OF THE IMPUGNED ORDER. I.T.A. NO. 623/MDS/2013 4 4. AU CONTRAIRE SHRI K.RAVI, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT SHRI RAMASWAMY SESHADRI MOHAN, FATHER OF THE ASSESSEE IS THE REAL OWNER OF THE FLA T. AFTER THE EXECUTION OF AGREEMENT OF SALE DATED 24-06-2002, NO CONVEYANCE DEED WAS EXECUTED IN FAVOUR OF THE ASSESSEE OR HER SISTER. SHRI RAMASWAMY REMAINED IN POSSESSION OF THE FLAT T HROUGHOUT. EXECUTION OF AGREEMENT FOR SALE WAS A FAMILY ARRANG EMENT BETWEEN THE FATHER AND THE DAUGHTERS. IT WAS A MOD E FOR OBTAINING LOAN FROM THE BANK. THE LD.COUNSEL FOR THE ASSESSE E SUBMITTED THAT A PERUSAL OF DEED OF CONVEYANCE DATED 11-04-20 08 WOULD CLEARLY SHOW THAT THE FATHER OF THE ASSESSEE SHRI R AMASWAMY SESHADRI MOHAN, IS ALSO A PARTY TO THE DEED OF CONV EYANCE CONFIRMING TO THE EXECUTION OF CONVEYANCE DEED. TH E LD.COUNSEL FURTHER POINTED OUT THAT IN CLAUSE-G AT PAGE NO.3 O F THE DEED OF CONVEYANCE IT HAS BEEN MENTIONED THAT AGREEMENT FOR SALE BETWEEN THE FATHER AND THE DAUGHTERS WAS THE RESULT OF ORAL FAMILY ARRANGEMENT. THE LD.COUNSEL CONTENDED THAT THE ASS ESSEE AND HER SISTER HAD NOT BECOME THE LAWFUL OWNERS OF THE PROPERTY AS CONVEYANCE DEED WAS NEVER EXECUTED IN THEIR FAVOUR. AS PER THE PROVISIONS OF TRANSFER OF PROPERTY ACT TILL THE TIM E DEED OF CONVEYANCE IS EXECUTED, A PERSON CANNOT CLAIM INTER EST OR TITLE IN PROPERTY ON THE BASIS OF SALE AGREEMENT ALONE. THE FATHER OF THE I.T.A. NO. 623/MDS/2013 5 ASSESSEE HAS FULLY DISCLOSED LTCG FROM THE SALE OF RESIDENTIAL FLAT- IN-QUESTION IN HIS RETURN OF INCOME AND HAS THEREAF TER CLAIMED EXEMPTION U/S.54 OF THE ACT. THE LD.COUNSEL VEHEME NTLY SUPPORTED THE IMPUGNED ORDER AND PRAYED FOR THE DIS MISSAL OF THE APPEAL OF THE REVENUE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES. WE HAVE ALSO PE RUSED THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE AGRE EMENT FOR SALE AND DEED OF CONVEYANCE REFERRED TO BY THE REPRESENT ATIVES OF BOTH THE SIDES. IT IS AN UN-DISPUTED FACT THAT AGREEMEN T FOR SALE DATED 24-06-2002 WAS ENTERED INTO BY SHRI RAMASWAMY SESHA DRI MOHAN, FATHER OF THE ASSESSEE WITH ASSESSEE AND HER SISTER RAMYA MOHAN. IT IS ALSO NOT DISPUTED THAT SUBSEQUE NTLY, A DEED OF CONVEYANCE DT. 11-04-2008 WAS EXECUTED BY THE AS SESSEE AND HER SISTER RAMYA MOHAN IN FAVOUR OF M/S. ANMOL ENTE RPRISES, IN RESPECT OF RESIDENTIAL FLAT SITUATED AT ATMARAM DHA M BUILDING, INSIDE UTTAM CO-OP. HOUSING SOCIETY LTD., ANTHONY R OAD, CHEMBUR, MUMBAI. THE FATHER OF THE ASSESSEE IS ALS O PARTY TO THE SAID CONVEYANCE DEED AS THE CONFIRMING PARTY. IN DEED OF CONVEYANCE, IT HAS BEEN CATEGORICALLY STATED THAT T HE AGREEMENT FOR SALE WAS ENTERED BETWEEN THE FATHER AND THE DAU GHTERS IN I.T.A. NO. 623/MDS/2013 6 PURSUANCE OF ORAL FAMILY ARRANGEMENT. THE LTCG A RISING FROM THE SALE OF FLAT HAS BEEN REFLECTED IN THE RETURN O F INCOME OF SHRI RAMASWAMY SESHADRI MOHAN AND BEING ELIGIBLE F OR CLAIMING EXEMPTION U/S.54, HE HAS CLAIMED THE BENEFIT OF THE SAME. 6. WE ARE OF THE CONSIDERED OPINION THAT THE ASSESS EE WAS NOT THE OWNER OF THE FLAT AS ALLEGED BY THE REVENUE AS NO DEED OF CONVEYANCE WAS EVER EXECUTED BY THE FATHER IN FAVOU R OF HIS DAUGHTERS. MOREOVER, THE FATHER OF THE ASSESSEE NE VER PARTED WITH THE POSSESSION OF THE PROPERTY. MERE AGREEMENT FOR SALE DOES NOT CONFER ANY LAWFUL TITLE OR INTEREST IN THE PROPERTY . IT HAS COME ON RECORD THAT AGREEMENT FOR SALE BETWEEN FATHER AND D AUGHTERS WAS A RESULT OF ORAL FAMILY ARRANGEMENT. THE FATHER OF THE ASSESSEE HAS RECEIVED THE ENTIRE SALE CONSIDERATION, AND HE HAS ACKNOWLEDGED THE SAME. HE HAS DISCLOSED THE ENTIRE CAPITAL GAIN IN HIS RETURN OF INCOME FILED FOR THE AY.2009-10 AN D HAS THEREAFTER CLAIMED DEDUCTION U/S.54, AS HE HAS PURCHASED NEW F LAT. ON THE REMAINING AMOUNT OF LTCG, HE HAS PAID CAPITAL GAINS TAX. WE CONCUR WITH THE FINDINGS OF THE CIT(APPEALS) ON THE ISSUE. THE REVENUE HAS NOT BEEN ABLE TO CONTROVERT THE FINDINGS I.T.A. NO. 623/MDS/2013 7 OF THE CIT(APPEALS). THE APPEAL OF THE REVENUE IS DISMISSED BEING DEVOID OF MERIT. ORDER PRONOUNCED ON FRIDAY, THE 07 TH FEBRUARY, 2014 AT CHENNAI. SD/- SD/- (DR. O.K. NARAYANAN) (VI KAS AWASTHY) VICE PRESIDENT JUDICIAL MEMBER DATED: 07 TH FEBRUARY, 2014 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR