DCIT 2(3), MUMBAI V. AMIR E. CURMALLY, MUMBAI

ITA 6864/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4188 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 26-06-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 10-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: KRISH B DESAI
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. 6864/MUM/11 ASSESSMENT YEAR : 2005-06 ACIT - 2(3) ROOM NO.556, 5 TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. VS. SHRI AMIR E. CURMALLY C/O. RHYTHAM HOUSE PVT. LTD. 40, K.DUBHASH MARG, FIRT MUMBAI-400 023. PAN NO.AABPC 4868 M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KRISH B. DESAI REVEN UE BY : SHRI MANOJ KUMAR DATE OF HEARING : 26.06.2013 DATE OF PRONOUNCEMENT : 05/07/ 13 O R D E R PER B. RAMAKOTAIAH, AM: THIS IS A REVENUES APPEAL AGAINST THE ORDER OF CIT (A)06, MUMBAI DATED 26.07.2011. THE REVENUE HAS RAISED THE FOLLOW ING TWO GROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING ASSESSEES APPEAL IN A CCEPTING OWNERSHIP OF ASSESSEES WIFE IN RESIDENTIAL FLAT WHICH WAS BO UGHT IN HIS NAME ONLY VIOLATING THE TRANSFER OF PROPERTY ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING ASSESSEES APPEAL BY ADMITTING ADDITIONAL EVIDENCES IN VIOLATION OF RULE 46A WHICH COULD NOT BE PRODUCED BEFORE AO OR THE ADDL. CIT DURING SCRUTINY ASSESSMENT. ITA NO.6864/M/11 A.Y.05-06 SHR I AMIR E. CURMALLY 2 2. BRIEFLY STATED, THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN ON ACCOUNT OF SALE OF FLAT OF RS.42,78,199/-. THE ASSE SSEE HAD SHOWN HALF SHARE OF FLAT IN HIS NAME AND OTHER HALF SHARE IN H IS WIFE NAME THOUGH THE FLAT WAS IN THE NAME OF THE ASSESSEE. IN THE RE -ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THAT THE FLAT W AS PURCHASED IN THE NAME OF ASSESSEE FOR SAKE OF CONVENIENCE IN WHICH 50% INVESTMENT WAS MADE BY HIS WIFE MRS.MEHNAZ A. CURMALLY AND 50% OF THE CAPITAL GAINS WERE ALSO ASSESSED IN HER NAME. THE ASSESSEE ALSO M ADE REFERENCE TO THE ADDL. CIT., RANGE-2(3), MUMBAI WHO GAVE DIRECTIONS TO THE AO WHICH IS QUOTED AT PARA 12 OF THE REASSESSMENT ORDER. AO HE LD THAT DEED OF PURCHASE AND SALE IS IN THE NAME OF THE ASSESSEE AN D SO, THE CAPITAL GAIN SHOULD BE ASSESSED IN THE NAME OF THE ASSESSEE. 3. IT WAS SUBMITTED BEFORE THE CIT(A) THAT WIFE OF THE ASSESSEE MRS. MEHNAZ CURMALLY WHO CONTRIBUTED 50% TOWARDS PURCHAS E OF FLAT WAS THE CO-OWNER OF THE FLAT. THE ASSESSEE ALSO SUBMITTED T HAT HIS WIFE HAS ALREADY DISCLOSED 50% OF CAPITAL GAIN IN HER INCOME -TAX RETURN. THE ASSESSEE SUBMITTED SUMMARY OF THE BANK ACCOUNT AT P AGE 157 WHICH INDICATES THAT MRS. MEHNAZ HAS DEPOSITED RS.1,30,5 00/- IN THE ASSESSEES BANK ACCOUNT AT BANK OF INDIA 0/D A/C 39 02/-. THE ASSESSEE FURTHER SUBMITTED THAT THE BANK SUMMARY SUBMITTED W ITH THE INCOME- TAX RETURN FOR ASSESSMENT YEAR 1982-83 IS PLACED A T PAGE 152 OF THE PAPER BOOK. MRS. MEHNAZ A. CURMALLY HAS WITHDRAWN A N AMOUNT OF RS.1,30,530/-. THE ASSESSEE ALSO SUBMITTED THAT THE SALE CONSIDERATION WAS RECEIVED IN THE BANK ACCOUNT OF MR. AMIR CURMAL LY AT HDFC BANK A/C NO.5011000031473 AND ON 05.02.2005, 06.02.2005 WAS SUNDAY AND ON 07.02.2005 50% OF THE SALES PROCEEDS WERE PA ID TO MRS. MEHNAZ CURMALLY IN HER BANK ACCOUNT AT HDFC A/C.. NO.50110 00041247. ITA NO.6864/M/11 A.Y.05-06 SHR I AMIR E. CURMALLY 3 3.1 THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIO NS DELETED THE ADDITIONS MADE BY AO. HIS ORDER IS AS UNDER :- 4. I HAVE GONE THROUGH THE ORDER OF THE A0 AND SUB MISSIONS OF THE APPELLANT. THE APPELLANT SUBMITTED COPIES OF RETURN OF MRS. MEHNAZ A. CURMALLY AND THE APPELLANT AT PAGE NO.137 TO PAGE 1 57 OF THE PAPER- BOOK FOR A.Y. 1982-83. THE APPELLANT FURTHER INDICA TED THAT AT PAGE 44 OF THE PAPER BOOK IS BANK SUMMARY IN THE NAME OF TH E APPELLANT FOR A.Y. 2002-03 WHICH SHOWS CONTRIBUTION OF RS.20,000 /- FOR VENUS SOCIETY FLAT EXPENSES IN HIS NAME AND AT PAGE 87 OF THE PAPER BOOK THE BANK SUMMARY OF MRS. MEHNAZ A. CURMALLY FOR A.Y . 2002-03 ALSO SHOWS CONTRIBUTION OF RS.20,000/- FOR VENUS SOCIETY FLAT EXPENSES. THE APPELLANT FURTHER EXPLAINED THAT IN ITS RETURN OF INCOME FOR A.Y. 2002-03 BANK SUMMARY OF JOINT ACCOUNT IN LAXMI VILA S BANK A/C WITH MRS. MEHNAZ CURMALLY (PG. 47 OF THE PAPER BOOK ) WAS FILED WHICH FURTHER INDICATES THAT THE APPELLANT AND HIS WIFE EQUALLY CONTRIBUTED TOWARDS THE FLAT. 4.1 THE BANK ACCOUNT OF THE APPELLANT A/C NO.501100 0031473 CLEARLY INDICATES THAT RS.1 CRORE WAS RECEIVED ON 0 5.02.2005 AND RS.50.00 LAKHS WAS TRANSFERRED TO HIS WIFE ACCOUNT ON 07.02.2005 THE WIFES ACCOUNT AT HDFC BANK A/C NO. 50100041427 , THE WIFES BANK ACCOUNT ALSO CLEARLY INDICATES THAT RS.50 LAKH S DEPOSITED ON 07.02.2005. THE ASSESSMENT ORDER IN THE NAME SMT. M EHNAZ A. CURMALLY U/S.143(3) ALSO CLEARLY MENTIONED THAT SHE WAS JOINT OWNER OF THE FIAT AND RECEIVED 50% OF SALE CONSIDERATION THE ITO-12(3)(3), MUMBAI IN THE ASSESSMENT ORDER DATED 20.12.2007 HAS ALLOWED EXEMPTION U/S.54EC TO MRS. MEHNAZ CURMALLY AND ASSE SSED LONG TERM CAPITAL GAIN IN HER NAME. THE ADDL. CITS OBSE RVATION THAT THE ASSESSEE HAS NOT FURNISHED BANK STATEMENT FROM WHER E APPELLANTS WIFE HAS INVESTED IN THE RESIDENTIAL PROPERTY AND I T IS DIFFICULT TO CROSS VERIFY FROM THE RECORDS OF THE DEPARTMENT AND THAT THE AUTHENTICITY OF THE ASSESSEES CLAIM CANNOT BE VERIFIED IS FOUND TO BE NOT TENABLE AS THERE ARE LARGE NUMBER OF DOCUMENTS AVAILABLE WITH THE DEPARTMENT WHICH INDICATES THAT THE FLAT IN QUESTION WAS ALL A LONG JOINTLY HELD BY THE APPELLANT ALONG WITH HIS WIFE. 4.2 FURTHER FOR A.Y. 2005-06 THE DEDUCTION ULS.54EC WAS AVAILABLE UPTO THE WHOLE OF THE AMOUNT CAPITAL GAIN IN THE LONG TERM CAPITAL GAIN SPECIFIED ASSET TO THE LIMIT OF RS.50 LAKHS FOR INVESTMENT MADE ON OR AFTER 01.04.2007 WAS INSERTED BY THE FIN ANCE ACT, 2007. THE APPELLANT AND HIS WIFE HAS MADE INVESTMENT OF R S.42.9 LAKHS EACH IN THE RURAL ELECTRIFICATION CORPORATION LTD. BOND ON 11.03.2005 THEREFORE, NO GAIN IS AVAILABLE TO THE APPELLANT BY SPLITTING UP THE ITA NO.6864/M/11 A.Y.05-06 SHR I AMIR E. CURMALLY 4 INVESTMENT IN HIS NAME AND HIS WIFES NAME FOR THE INVESTMENT MADE PRIOR TO 01.04.2007. 4.4 AS THERE ARE OVERWHELMING EVIDENCES WHICH CLEAR LY INDICATES THAT THE FLAT WAS JOINTLY HELD BY THE APPELLANT WITH HIS WIFE, THE ACTION OF THE AO TO TREAT THE ENTIRE LONG TERM CAPITAL GAIN I N THE NAME OF THE APPELLANT IS HELD TO BE NOT VALID. THE AO IS DIRECT ED TO TREAT 50% OF SALE CONSIDERATION RECEIVED FOR THE PURPOSE OF COMP UTATION OF THE LONG TERM CAPITAL GAIN IN THE NAME OF THE ASSESSEE. GROU ND 5 IS ALLOWED. 4. AFTER HEARING THE RIVAL CONTENTIONS, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF CIT(A). THE REVENUE HAS NOT MADE OUT ANY CASE AS TO WHY, WHEN THE PROPERTY OWNED BY TWO PERSONS, CAPITAL GAIN SHOULD BE ASSESSED IN THE HAND OF ANY ONE PERSON. AS RIGHT LY EXAMINED BY THE LD. CIT(A), ASSESSEE S WIFE MRS. MEHNAZ OWNED HALF THE PROPERTY BY EQUALLY CONTRIBUTING TO THE INVESTMENT AND SHARED EXPENDITURE ALSO THEREFORE, THERE IS NO MERIT IN THE ACTION OF AO IN BRINGING TO TAX THE CAPITAL GAIN ON SALE OF PROPERTY FULLY IN THE HANDS OF ASSESSEE. FURTHER AS SEEN FROM THE PAPER BOOK FILED ON RECORD, THE LD. C IT(A) HAS NOT ACCEPTED ANY ADDITIONAL EVIDENCE AND COPIES OF THE RETURNS W ITH ENCLOSURES WHICH WERE ALREADY PLACED WITH THE REVENUE CAN NOT BE CON SIDERED AS ADDITIONAL EVIDENCE. THERE IS NO MERIT IN GROUNDS RAISED BY TH E REVENUE. 5. IN THE RESULT THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.07.2013. SD/- SD/- (VIVEK VARMA ) JUDICIAL MEMBER (B. RAMAKOTAIAH ) ACCOUNTANT MEMBER MUMBAI, DATED: 05/07/13. JV. ITA NO.6864/M/11 A.Y.05-06 SHR I AMIR E. CURMALLY 5 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.