Perviz Sarosh Batliwala, Pune V. Assistant Commissioner of Income-tax, Circle - 7, Pune

ITA 840/PUN/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3216 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 30-05-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Cost of acquisition
• Section: 148; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE VIRTUAL COURT BEFORE SHRI R.S. SYAL, VICE PRESIDENT ITA NO.840/PUN/2019 / ASSESSMENT YEAR : 2016-17 PERVIZ SAROSH BATLIWALA, SUPERTRISH, 37, SUYOJANA SOCIETY, KOREGAON PARK, PUNE- 411001. PAN : AAQPB4028F VS. ACIT, CIRCLE-7, PUNE. APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-5, PUNE ON 25.03.2019 IN RELATION TO THE ASSESSMENT YEAR 2016-17. 2. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST RESTRICTING LONG TERM CAPITAL LOSS TO RS.40,80,400/- AS AGAINST RS.81,60,000/- CLAIMED BY THE ASSESSEE, ON THE RAISON DETRE THAT THE PROPERTY TRANSFERRED, RESULTING INTO CAPITAL LOSS, WAS JOINTLY OWNED BY THE ASSESSEE AND HER DAUGHTER. 3. SUCCINCTLY, THE FACTUAL PANORAMA OF THE CASE IS THAT THE ASSESSEE FILED HER RETURN DECLARING LOSS OF RS.81,60,800/- WHICH WAS CLAIMED AS LONG TERM CAPITAL LOSS ARISING FROM TRANSFER OF A FLAT ASSESSEE BY SHRI S. N. PURANIK REVENUE BY SHRI SUDHENDU DAS DATE OF HEARING 20-11-2020 DATE OF PRONOUNCEMENT 20-11-2020 ITA NO.840/PUN/2019 PERVIZ SAROSH BATLIWALA 2 AT RAHEJA WOODS. SUCH FLAT WAS SOLD FOR A SUM OF RS.1.00 CRORE WITH INDEXED COST OF ACQUISITION DETERMINED AT RS.1,81,60,800/- RESULTING INTO LONG TERM CAPITAL LOSS OF RS.81,60,800/-. THE ASSESSING OFFICER, AFTER EXAMINING THE SALE DEED AS WELL AS THE PURCHASE DEED OF THE PROPERTY TRANSFERRED, OBSERVED THAT THE ASSESSEE WAS A CO-OWNER OF THE PROPERTY AND NOT THE SOLE OWNER. ON BEING SHOW-CAUSED, THE ASSESSEE SUBMITTED THAT FULL INVESTMENT IN PURCHASE OF FLAT AT RAHEJA WOODS WAS MADE BY HER AFTER SELLING ANOTHER FLAT AT DARIYAMAHAL MUMBAI. AT THE TIME OF PURCHASE OF FLAT, NAME OF TRICIA BATLIWALA, HER DAUGHTER, WAS ADDED AS A NOMINEE AND NOT AS A JOINT OWNER. IT WAS FURTHER STATED THAT HER DAUGHTER DID NOT MAKE ANY CONTRIBUTION IN THE PURCHASE OF THE FLAT. THE ASSESSEE FURTHER STATED THAT SHE WAS AN OLD LADY HAVING HER DAUGHTER AS THE ONLY LEGAL HEIR. AS THERE IS NO PROVISION TO PUT THE NAME OF THE NOMINEE IN REAL ESTATE PROPERTY, THE ASSESSEE SUBMITTED THAT SHE INCLUDED THE NAME OF HER DAUGHTER IN THE PURCHASE AGREEMENT FOR FACILITATING EASY TRANSFER OF THE PROPERTY AFTER HER DEATH. THE ASSESSING OFFICER DID NOT ACCEPT THE ASSESSEES CONTENTION AND HELD THAT ONLY HALF OF SHARE IN TOTAL LOSS, AMOUNTING TO RS.40,80,400/-, WAS DETERMINABLE IN THE HANDS OF THE ASSESSEE. HE, THEREFORE, DISALLOWED THE REMAINING AMOUNT OF SHARE IN LOSS OF RS.40,80,400/. THE LD. CIT(A) DID NOT ALLOW SUCCOUR TO THE ITA NO.840/PUN/2019 PERVIZ SAROSH BATLIWALA 3 ASSESSEE ON THIS SCORE, WHICH HAS LED TO BRINGING THE MATTER BEFORE THE TRIBUNAL. 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND SCANNED THROUGH THE RELEVANT MATERIAL ON RECORD. THE FLAT AT RAHEJA WOODS WAS PURCHASED FOR A SUM OF RS.93,00,000/- ON 24.04.2008 AND THE PURCHASE DEED WAS EXECUTED IN THE NAME OF THE ASSESSEE AND HER DAUGHTER, TRICIA BATLIWALA. A COPY OF PURCHASE DEED EVIDENCING THE NAME OF THE ASSESSEE AND HER DAUGHTER AS PURCHASERS IS AVAILABLE AT PAGE 20 ONWARDS OF THE PAPER BOOK. THE SAID FLAT WAS TRANSFERRED FOR A SUM OF RS.1.00 CRORE ON 19.09.2015. A COPY OF THE SALE DEED AGAIN REFERRING TO THE ASSESSEE AND HER DAUGHTER AS SELLERS, IS AVAILABLE AT PAGE 44 OF THE PAPER BOOK. PAYMENT AT THE TIME OF PURCHASE OF PROPERTY CAME FROM A BANK ACCOUNT WHICH WAS JOINTLY OPERATED BY THE ASSESSEE AND HER DAUGHTER. SIMILARLY, AT THE TIME OF SALE OF THE PROPERTY, THE SALE CONSIDERATION WENT BACK INTO A BANK ACCOUNT JOINTLY OPERATED BY THE ASSESSEE AND HER DAUGHTER. THESE FACTS EVIDENTLY DEMONSTRATE THAT TRICIA BATLIWALA WAS JOINT OWNER ALONG WITH THE ASSESSEE AT THE TIME OF PURCHASE AS WELL AS THE SALE. THE CONTENTION PUT FORTH ON BEHALF OF THE ASSESSEE THAT SHE INCLUDED THE NAME OF HER DAUGHTER IN THE PURCHASE AS WELL AS SALE DEEDS ONLY FOR ENSURING THAT THE PROPERTY GETS EASILY TRANSFERRED TO TRICIA BATLIWALA AFTER HER DEATH, DOES NOT AND CANNOT CHANGE THE ITA NO.840/PUN/2019 PERVIZ SAROSH BATLIWALA 4 LEGAL POSITION. IF TITLE OF AN IMMOVABLE PROPERTY STANDS IN THE NAME OF TWO PERSONS, IT EVIDENCES BOTH AS CO-OWNERS. ONE OF SUCH PERSONS CANNOT CLAIM HIMSELF AS SOLE OWNER NOR CAN HE UNILATERALLY TRANSFER THE SAID PROPERTY BY CLAIMING THAT HE WAS INDEED THE SOLE OWNER AND THE NAME OF THE OTHER PERSON WAS INCLUDED JUST AS A NOMINEE AND NOT AS A CO-OWNER. IT IS TITLE OF THE IMMOVABLE PROPERTY WHICH IS DECISIVE OF OWNERSHIP AND NOT THE UNDERSTANDING OUTSIDE THE RECORDS WHICH BOTH THE PARTIES MAY HAVE ENTERED INTO. IN FACT, REGISTRATION OF AN IMMOVABLE PROPERTY IS A PROOF OF OWNERSHIP, WHICH, IN TURN, GETS REFLECTED FROM THE LEGAL DOCUMENTS. SINCE THE FLAT IN QUESTION WAS PURCHASED AS JOINT OWNERS AND ALSO TRANSFERRED BY THE TWO PERSONS AS JOINT OWNERS, THERE IS ABSOLUTELY NO DOUBT THAT THE PROFIT OR LOSS IN THE TRANSACTION WILL ALSO HAVE TO BE SHARED BY BOTH OF THEM AS JOINT OWNERS AND NOT IN THE HANDS OF ONE PERSON TO THE EXCLUSION OF THE OTHER. SUCH A CONTENTION, IF ACCEPTED, WOULD OPEN FLOODGATES OF DISPUTES WITH NO END IN SIGHT. 5. THE CONTENTION OF THE ASSESSEE THAT SHE OFFERED FULL RENTAL INCOME FROM THE FLAT AS HER OWN DOES NOT CHANGE THE OWNERSHIP OF PROPERTY. IF SUCH RENTAL INCOME HAS BEEN WRONGLY ASSESSED FULLY IN THE HANDS OF THE ASSESSEE, THE REMEDY LIES IN CORRECTING SUCH ASSESSMENT OF INCOME AND NOT MAKING A FURTHER WRONG ASSESSMENT ITA NO.840/PUN/2019 PERVIZ SAROSH BATLIWALA 5 BY TAXING THE ENTIRE CAPITAL GAIN/LOSS IN THE HANDS OF THE ASSESSEE. RELIANCE PLACED BY THE LD. AR ON THE JUDGMENT IN THE CASE OF S. RAJALAKSHMI VS. ITO, (2018) 409 ITR 157 (BOM) IS MISCONCEIVED. THE CHALLENGE IN THAT CASE WAS TO THE ISSUANCE OF NOTICE U/S 148 OF THE INCOME-TAX ACT, 1961. THE WRIT PETITION CAME TO BE DISMISSED BY THE HONBLE HIGH COURT UPHOLDING VALIDITY OF THE NOTICE U/S 148 OF THE ACT. THUS, IT IS VIVID THAT THE HONBLE HIGH COURT DID NOT ACCORD ITS IMPRIMATUR TO THE FACTUAL MATRIX OF THE CASE WHICH WAS TO BE DECIDED BY THE ASSESSING OFFICER IN DUE COURSE THEREAFTER. 6. IN VIEW OF THE FOREGOING DISCUSSION, I AM OF THE CONSIDERED OPINION THAT NO FAULT CAN BE FOUND WITH THE LD. CIT(A) IN REJECTING THE ASSESSEES CLAIM. THE IMPUGNED ORDER IS, ERGO, UPHELD. 7. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH NOVEMBER, 2020. SD/- (R.S.SYAL) / VICE PRESIDENT PUNE; DATED : 20 TH NOVEMBER, 2020 ITA NO.840/PUN/2019 PERVIZ SAROSH BATLIWALA 6 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT (APPEALS)-5, PUNE 4. THE PR.CIT-4, PUNE 5. , , SMC / DR SMC, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE DATE 1. DRAFT DICTATED ON 20-11-2020 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 20-11-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER - JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. - JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *