Manulaben D. Brahmbhatt, Vadodara V. The Income Tax Officer, Ward-1(2)(4), Baroda

ITA 643/AHD/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5272 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 15-03-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMEET KUMAR VERMA
• Section: 143(3); 147

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR ./ I.T.A. NO. 643/AHD/2017 ( ASSESSMENT YEAR : 2009-10) MANJULABEN D BRAHMBHATT THROUGH L/H SHRI KISHOR B BRAHMBHATT, PATEL FALIA, GOTRI GAM, VADODARA - 390021 / VS. ITO WARD 1(2)(4), RACE COURSE, VADODARA - 390007 ./ ./ PAN/GIR NO. : BCUPB7650J ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI MANISH SHAH, A.R. / RESPONDENT BY : SHRI SUMEET KUMAR VERMA, SR.D.R. DATE OF HEARING 25/01/2019 !'# / DATE OF PRONOUNCEMENT 29/01/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-5, AHMEDAB AD (CIT(A) IN SHORT), DATED 22.01.2017 ARISING IN THE ASSESSMENT ORDER DATED 26.02.2015 PASSED BY THE ASSESSING OFFICER (AO) UND ER S. 143(3) RWS 147 OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNIN G AY 2009-10. 2. AS PER GROUNDS OF APPEAL, THE ASSESSEE HAS CH ALLENGED THE JURISDICTION OF THE AO ASSUMED UNDER S.147 OF THE A CT AS WELL AS THE ITA NO. 643/AHD/17 [MANJULABEN D BRAHMBHATT VS. ITO] A.Y. 2009-10 - 2 - ADDITIONS MADE ON ACCOUNT OF CAPITAL GAINS IN THE H ANDS OF THE ASSESSEE ON MERITS. 3. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEA RNED AR HOWEVER DISPENSED WITH THE OBJECTION TOWARDS ASSUMPTION OF JURISDICTION AND PROCEEDED THE CASE ON MERITS. 4. AS POINTED OUT ON BEHALF OF THE ASSESSEE, THE AS SESSEE IS AN INDIVIDUAL WHO INTER ALIA SHOWN INCOME FROM CAPITAL GAINS AT RS.40,400/-. THE AO NOTICED FROM AIR INFORMATION AV AILABLE ON SYSTEM THAT THE ASSESSEE HAS SOLD IMMOVABLE PROPERT Y ON 22.07.2008 FOR A CONSIDERATION OF RS.1,80,30,000/-. AN INQUIR Y WAS MADE ON THE CHARGEABILITY OF CAPITAL GAINS ON THE SALE OF AFORE SAID PROPERTY IN THE HANDS OF THE ASSESSEE IN THE COURSE OF SCRUTINY ASS ESSMENT. THE ASSESSEE CLAIMED BEFORE THE AO THAT SHE HAS RECEIVE D SALE CONSIDERATION OF RS.1,21,628/- IN AY 2009-10; RS.1, 44,186/- IN AY 2010-11 AND RS.1,44,186/- IN AY 2011-12 ONLY AND AC CORDINGLY CAPITAL GAIN OF RS.40,282/- WAS COMPUTED FOR AY 200 9-10 AND SIMILAR CAPITAL GAINS WERE COMPUTED OF RS.57,819/- FOR AY 2 010-11 AND RS.58,911 FOR AY 2011-12. IT WAS THUS CLAIMED BY T HE ASSESSEE THAT SHE HAS RECEIVED TOTAL RS.4,10,000/- ONLY IN DIFFER ENT ASSESSMENT YEARS AS HER SHARE OF CO-OWNERSHIP IN THE SALE CONSIDERAT ION AND THE CAPITAL GAINS WERE ACCORDINGLY OFFERED BY HER IN DIFFERENT ASSESSMENT YEARS BASED ON ACTUAL RECEIPTS. THE AO HOWEVER TOOK A VI EW THAT THE ASSESSEE (CO-OWNER) ENJOYED 25% OF THE SHARE IN THE SAID PROPERTY AFTER DEATH OF HER HUSBAND AND ACCORDINGLY ASSESSEE WAS ENTITLED TO SALE CONSIDERATION ON RS.45,07,500/- INSTEAD OF RS. 4,10,000/-. THE AO ACCORDINGLY RE-COMPUTED THE CAPITAL GAIN AT RS.4 4,26,514/- IN THE HANDS OF THE ASSESSEE AS CHARGEABLE CAPITAL GAINS. 5. AGGRIEVED, THE ASSESSEE PREFERRED THE APPEAL BEF ORE THE CIT(A). ITA NO. 643/AHD/17 [MANJULABEN D BRAHMBHATT VS. ITO] A.Y. 2009-10 - 3 - 6. BEFORE THE CIT(A), THE ASSESSEE POINTED OUT THAT SHE ENJOYS ONLY 1/41TH SHARE IN THE PROPERTY AS PER THE SALE DEED A ND ACCORDINGLY THE AO HAS COMMITTED ERROR IN COMPUTING EXCESS CAPITAL GAINS IN THE HANDS OF THE ASSESSEE DE HORS ACTUAL RECEIPT OF RS.4,10,000/- AS HER SHARE. THE CIT(A) PARTIALLY AGREED WITH THE CONTEN TION OF THE ASSESSEE THAT SHE DOES NOT HAVE ABSOLUTE RIGHT ON THE PROPER TY BUT HOWEVER HELD THAT SHE WAS ENTITLED TO 1/8 TH SHARE IN THE SALE CONSIDERATION. THE CIT(A) ACCORDINGLY GRANTED PARTIAL RELIEF TO THE AS SESSEE. 7. FURTHER AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. 8. THE LEARNED AR FOR THE ASSESSEE SUBMITTED THAT T HE DOCUMENTS IN THE FORM OF PROPERTY INDEX COPY, CONVEYANCE DEED AN D OTHER DOCUMENTS CLEARLY SHOW THAT ASSESSEE HEREIN WAS ENT ITLED TO 1/41TH SHARE IN THE CO-OWNER PROPERTY AND HAS ACTUALLY REC EIVED THE CONSIDERATION OF RS.4,10,000/- AS HER SHARE IN THE PROPERTY. THE LEARNED AR REFERRED TO THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF PR.CIT VS. LALITABEN GOVINDBHAI PATE L (2018) 94 TAXMANN.COM 396 (GUJ) FOR THE PROPOSITION THAT WHER E THE ASSESSEE RECEIVED A CERTAIN SALE CONSIDERATION OUT OF SALE O F CO-OWNERSHIP RIGHT AND DID NOT RECEIVE THE REMAINING AMOUNT OF THE TOT AL CONSIDERATION, THE QUESTION OF CHARGING CAPITAL GAIN FROM THE ASSE SSEE ON A LARGER SUM THAN WHAT WAS RECEIVED WOULD NOT ARISE. THE LEARNE D AR THUS SUBMITTED THAT IN THE VIEW OF THE DEMONSTRABLE DOCU MENTS TO SHOW THE SHARES OF THE ASSESSEE IN THE PROPERTY SOLD IS ONLY 1/41TH SHARE, THERE IS NO JUSTIFICATION TO IMPOSE CAPITAL GAINS ON THE LARGER AMOUNT. THE LEARNED AR HOWEVER FAIRLY AGREED WITH THE CHARGEABI LITY OF THE CAPITAL GAINS ACCRUED IN AY 2009-10 IN QUESTION ITSELF ON A CCOUNT OF THE TRANSFER OF THE PROPERTY REGARDLESS OF RECEIPT OF T HE SALE CONSIDERATION IN THREE DIFFERENT ASSESSMENT YEARS. THE LEARNED A R ACCORDINGLY URGED ITA NO. 643/AHD/17 [MANJULABEN D BRAHMBHATT VS. ITO] A.Y. 2009-10 - 4 - THAT DIRECTION SHOULD BE GIVEN TO THE AO TO COMPUTE CAPITAL GAINS ON 1/41TH SHARE IN THE CO-OWNERSHIP OF THE PROPERTY SO LD. 9. THE LEARNED DR RELIED UPON THE ORDER OF THE CIT( A). 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. IN VIEW OF THE NARRATIVES MADE ON BEHALF OF THE ASSESSEE ABOVE , WE FIND THAT THE ACTION OF THE AO IS NOT JUSTIFIED IN VIEW OF THE DE CISION OF THE HONBLE GUJARAT HIGH COURT IN LALITABEN (SUPRA). THE AO IS NOT JUSTIFIED IN IMPOSING CAPITAL GAINS ON THE LARGER SALE CONSIDERA TION THEN WHAT HAS ACCRUED TO THE ASSESSEE. ON FACTS, THE ASSESSEE HA S DEMONSTRATED THAT SHE WAS ENTITLED TO 1/41TH SHARE IN THE SALE CONSID ERATION WHICH WAS ACTUALLY RECEIVED. THUS, THE AO IS DIRECTED TO TAK E THE SALE CONSIDERATION IN PROPORTION TO HER SHARE IN THE PRO PERTY AND RE- COMPUTE THE CAPITAL GAIN IN ACCORDANCE WITH LAW. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 29/01/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 29/01/201 9