Madanjeetsingh Rajasingh, Aurangabad V. Income-tax Officer,

ITA 624/PUN/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9570 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 17-04-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 05-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANIL CHAWARE
• Keywords: Cost of acquisition; Tax effect
• Section: 148; 144

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO.624/PUN/2015 ' ' / ASSESSMENT YEAR : 2010-11 MR. MADANJEETSINGH RAJASINGH, TIRUPATI HOUSING SOCIETY, IN FRONT OF HOTEL VARSHA, NEAR CANNOUGHT GARDEN, OPP MSC BANK, N-5, CIDCO, AURANGABAD 431 005 PAN : AMFPS2533R . / APPELLANT VS. THE INCOME TAX OFFICER, WARD -2(2),AURANGABAD . RESPONDENT / APPELLANT BY : SHRI C.H. NANIWADEKAR / RESPONDENT BY : SHRI ANIL CHAWARE DATE OF HEARING : 17.04.2017 / DATE OF PRONOUNCEMENT: 20.04.2017 / ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A)-2, AURANGABAD, DATED 30.03.2015 RELATING TO ASSESSMENT YEAR 2010-11 AGAINST ORDER PASSED UNDER SECTION 144 R.W.S. 147 OF THE IN COME-TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- THE HONOURABLE COMMISSIONER OF INCOME TAX (APPEALS ) HAS NOT CONSIDERED THE FACTS OF THE CASE ON REALISTIC GROUNDS AND DISM ISSED THE POINT RAISED REGARDING HUF STATUS OF THE ASSESSEE PARTITION CLAI MED BY THE FAMILY MEMBERS AND TAX EFFECT THEREON. ITA NO.624/PUN/2015 MADANJEETSINGH RAJASINGH 2 2. ANY OTHER POINT WHICH MAY ARISE DURING THE COURS E OF HEARING. 3. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINS T SHARE OF ASSESSABILITY OF THE INCOME ARISING FROM CAPITAL GAINS IN THE HAN DS OF ASSESSEE. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSE E HAD SOLD IMMOVABLE PROPERTY ON 02-07-2009 FOR A CONSIDERATION OF RS.1. 17 CRORES. THE SAID INFORMATION WAS RECEIVED BY THE ASSESSING OFFICER V IDE AIR INFORMATION. ON VERIFICATION, IT WAS FOUND THAT THE ASSESSEE HAD NO T FILED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION, THEREFORE, REASONS WERE R ECORDED FOR REOPENING THE ASSESSMENT UNDER SECTION 147 OF THE ACT AND NOTICE WAS ISSUED UNDER SECTION 148 OF THE ACT. VARIOUS NOTICES AND SUMMONS WERE I SSUED TO THE ASSESSEE. HOWEVER, NONE APPEARED ON BEHALF OF THE ASSESSEE BE FORE THE ASSESSING OFFICER. THE ASSESSING OFFICER NOTED THAT THE SHAR E OF THE ASSESSEE IN THE SAID PROPERTY WAS TO THE EXTENT OF 1/3 RD WHERE THE SAID PLOT WAS PURCHASED BY HIS FATHER WHO DIED ON 13-06-1999 LEAVING BEHIND HIS WI FE AND 3 SONS. FURTHER ONE OF THE SONS ALSO DIED ON 12-05-2005. THE SAID PROP ERTY WAS TRANSFERRED IN THE NAMES OF THE ASSESSEE, HIS BROTHER AND HIS MOTHER A ND THE ASSESSEES SHARE WAS DIVIDED AT 1/3 RD . SINCE THE ASSESSEE FAILED TO APPEAR BEFORE THE A SSESSING OFFICER THE ASSESSING OFFICER COMPLETED THE ASSESSM ENT UNDER SECTION 144 OF THE ACT BY COMPUTING THE INCOME FROM LONG TERM CAPI TAL GAINS AT RS.39,16,666/-. 5. THE CIT(A) HELD THAT IN THE SALE DEED, NAME OF T HREE CO-OWNERS ARE MENTIONED AND HENCE THE CAPITAL GAIN HAD TO BE ASSE SSED IN THE HANDS OF THREE CO-OWNERS INCLUDING THE ASSESSEE. THE CIT(A) ALSO NOTED THAT THE SAID PLOT OF LAND WAS PURCHASED BY ASSESSEES FATHER, THEREFORE, INDEXED VALUE OF THE PLOT AS ON 01-04-1981 WAS TO BE ALLOWED AS DEDUCTION FRO M THE SALE PROCEEDS OF THE SAID PLOT. FURTHER THERE WAS CONSTRUCTION OF 3000 SQ.FT. ON THE SAID PLOT WHICH WAS ALSO ALLOWED AS DEDUCTION WHILE CALCULATING THE INCOME FROM CAPITAL GAINS. ITA NO.624/PUN/2015 MADANJEETSINGH RAJASINGH 3 THE CIT(A) ESTIMATED THE VALUE OF PLOT AND CONSTRUC TION AS ON 01-04-1981 AT RS. 4 LAKHS AS AGAINST THE CLAIM OF THE ASSESSEE A T RS.5,65,048/- AND COMPUTED THE INCOME FROM CAPITAL GAINS IN HIS HANDS AT RS.32,73,545/- (1/3 RD SHARE). IN ADDITION, THE ASSESSEE HAD RAISED TWO C ONTENTIONS; THAT THE SAID PROPERTY WAS TO BE CONSIDERED AS A HUF PROPERTY, HO WEVER, THIS CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE CIT(A) AS IT W AS EVIDENT FROM THE REGISTERED SALE DEED DATED 21-07-1972 THAT THE PROP ERTY WAS HELD BY THE FATHER OF THE ASSESSEE IN HIS OWN NAME AND NOT IN THE NAME OF THE HUF. THE SECOND CONTENTION RAISED BY THE ASSESSEE WAS THAT THE CAPI TAL GAINS SHOULD BE TAXED IN THE HANDS OF FOUR PERSONS, I.E. ALL THE FAMILY MEMB ERS OF THE ASSESSEE, HIS WIFE, DAUGHTER AND ONE SON. THE CIT(A) NOTED THAT, IN PA GE 3 OF THE REGISTERED SALE DEED, IT IS MENTIONED THAT AFTER THE DEMISE OF THE ORIGINAL OWNER, I.E. FATHER OF THE ASSESSEE, HIS WIFE AND TWO SONS BECOMES THE ABS OLUTE OWNERS AND POSSESSORS OF THE PROPERTY UNDER SALE. THE CONTENT ION OF THE ASSESSEE THAT HIS FAMILY MEMBERS ARE TO BE ASSESSED IN RESPECT OF THE IR SHARE WAS REJECTED BY THE CIT(A). 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF C IT(A). 7. THE ONLY ISSUE RAISED IS REGARDING THE HUF STATU S OF THE ASSESSEE, ITS PURPOSE AND TAX EFFECT THEREON. 8. SHRI C.H. NANIWADEKAR, LD. AUTHORISED REPRESENT ATIVE APPEARED ON BEHALF OF THE ASSESSEE AND SHRI ANIL CHAWARE, LD. D EPARTMENTAL REPRESENTATIVE APPEARED ON BEHALF OF THE REVENUE AN D PUT FORWARD THEIR CONTENTIONS. 9. ON THE PERUSAL OF THE RECORD AND THE CONTENTIONS PUT FORWARD BY THE AUTHORIZED REPRESENTATIVES, THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS ONLY IN RESPECT OF THE SHARE OF CAPITAL GAINS TO BE ASSE SSED IN THE HANDS OF THE ASSESSEE. THERE IS NO DISPUTE TO THE PRIMARY FACTS ARISING IN THE PRESENT CASE, ITA NO.624/PUN/2015 MADANJEETSINGH RAJASINGH 4 I.E. THE ASSESSEE HAD SOLD THE PROPERTY ALONG WITH HIS MOTHER AND OTHER BROTHER FOR A CONSIDERATION OF RS.1.17 CRORES. THE COST OF ACQUISITION OF THE SAID PROPERTY WAS ADOPTED BY THE CIT(A) AS ON 01-04-1981 AT RS.4 LAKHS. THEREAFTER, THE INDEXED COST OF LAND AND THE CONSTR UCTED PORTION WAS ALLOWED IN THE HANDS OF ASSESSEE AND THE GROSS CAPITAL GAINS W AS WORKED OUT AT RS.98,20,634/-, IN WHICH THE ASSESSEE HAD 1/3 RD SHARE TO THE EXTENT OF RS.32,73,545/-. THE CASE OF THE ASSESSEE IS THAT O UT OF THIS 1/3 RD SHARE WHICH HAS BEEN ALLOCATED TO HIM, HIS FAMILY MEMBERS, I.E. HIS WIFE AND TWO CHILDREN ALSO HAVE SHARE AND ACCORDINGLY HE SHOULD BE ASSESS ED TO THE EXTENT OF 1/4 TH OF THE 1/3 RD SHARE IN THE TOTAL PROPERTY. THERE IS NO MERIT IN THE CLAIM OF THE ASSESSEE WHERE WHILE EXECUTING THE SALE DEED, THE A SSESSEE HAD ACKNOWLEDGED THAT HE ALONG WITH HIS MOTHER AND THE OTHER BROTHER WERE THE ABSOLUTE OWNERS AND POSSESSORS OF THE PROPERTY UNDE R SALE. THE CONVEYANCE OF REGISTERED DOCUMENT TAKE PRECEDENCE OVER ANY OF THE CLAIMS MADE BY THE ASSESSEE. AS THE ASSESSEE HAS FAILED TO FURNISH AN Y EVIDENCE IN RESPECT OF HIS CLAIM, THE CAPITAL GAIN ARISING ON SALE OF THE SAID PROPERTY IS TO BE DIVIDED IN THREE SHARES AND THE NET CAPITAL GAIN TO THE EXTENT OF 1/3 RD SHARE IS TO BE ASSESSED IN THE HANDS OF ASSESSEE AT RS.32,73,545/- . ACCORDINGLY, THERE IS NO MERIT IN THE GROUND OF APPEAL RAISED BY THE ASSESSE E AND THE SAME IS DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED ON THIS 20 TH DAY OF APRIL, 2017 SD/- (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 20 TH APRIL, 2017 SATISH ITA NO.624/PUN/2015 MADANJEETSINGH RAJASINGH 5 $ %'( )( / COPY OF THE ORDER IS FORWARDED TO : THE APPELLANT; THE RESPONDENT; ' () THE CIT(A)-2, AURANGABAD; ' THE CIT- 2, AURANGABAD; % ((), ), , - / DR SMC, ITAT, PUNE; 0 / GUARD FILE. % ( // TRUE COPY // BY ORDER, % ( // TRUE COPY // / ASSISTANT REGISTRAR, ) , / ITAT, PUNE