Smt. Farida Ammale, Pondicherry V. ITO, Puducherry

ITA 902/CHNY/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96683 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2015
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 16-12-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 23-04-2012
• Court: TRIBUNAL
• Department Lawyers: DR B NISCHAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Gift; Revised return
• Section: 54F; 142(1); 139(5); 147; 148; 54

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL D BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO. 950/MDS/2012 / ASSESSMENT YEAR :20 0 6 - 0 7 THE INCOME TAX OFFICER, WARD I (1), D.P. THOTTAM, OFF M.G. ROAD, PUDUCHERRY 605 003. VS. SMT. FARIDA AMMALE, 33, CHANDA SAHIB STREET, PUDUCHERRY. [PAN: ACXPA8216 B] ( / APPELLANT ) ( / RESPONDENT ) ./ I.T.A.NO. 902 /MDS/201 2 / ASSESSMENT YEAR :200 6 - 0 7 SMT. FARIDA AMMALE, 33, CHANDA SAHIB STREET, PUDUCHERRY. VS. THE INCOME TAX OFFICER, WARD I (1), PUDUCHERRY 605 003. ( / APPELLANT ) ( / RESPONDENT ) ./ I.T.A.NO. 951/MDS/2012 / ASSESSMENT YEAR :2006 - 07 THE INCOME TAX OFFICER, WARD I (1), D.P. THOTTAM, OFF M.G. ROAD, PUDUCHERRY 605 003. VS. SHRI NC ANWAR BATCHA, 38, CAZY STREET, PUDU CHERRY. [PAN: ACDPA1706C] ( / APPELLANT ) ( / RESPONDENT ) I.T.A. NO S . 950 & 902 AND 951 & 903 /M/ 12 2 ./ I.T.A.NO. 9 03 /MDS/2012 / ASSESSMENT YEAR :2006 - 07 SHRI NC ANWAR BATCHA, 38, CAZY STREET, PUDUCHERRY. VS. THE INCOME TAX OFFICER, WARD I (1), PUDUCH ERRY 605 003. ( / APPELLANT ) ( / RESPONDENT ) DEPARTMENT BY : DR. B. NISCHAL, JCIT ASSESSEE BY : SHRI S. SRIDHAR, ADVOCATE / DATE OF HEARING : 16 . 12 .201 5 / DATE OF P RONOUNCEMENT : 31 .12 .201 5 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : TH E S E CROSS APPEAL S FILED BY DIFFERENT ASSESSEE S AND THE REVENUE ARE DIRECTED AGAINST DIFFERENT ORDER S OF THE LD. CIT (APPEALS) - X II , CHENNAI , DATED 3 1 . 0 1 . 20 1 2 RELEVANT TO THE ASSESSMENT YEAR 200 6 - 0 7 . THE ONLY EFFECTIVE GROUND RAISED BY BOTH THE ASSESSEES IS WITH REGARD TO PARTLY CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER UNDER SECTION 54 OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT], WHEREAS, THE REVENUE HAS RAISED VARIOUS COMMON GRO UNDS IN RESPECT OF ALLOWABILITY OF DEDUCTION UNDER SECTION 54 OF THE ACT AND ALSO ACCEPTING EVIDENCE WITHOUT AFFORDING AN OPPORTUNITY OF HEARING TO THE ASSESSING OFFICER. BOTH CROSS APPEALS HAVE COMMON FACTUAL MATRIX AND LEGAL PANORAMA AND, THEREFORE, ARE DEALT WITH BY THIS COMMON ORDER . I.T.A. NO S . 950 & 902 AND 951 & 903 /M/ 12 3 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE [SMT. FARIDA AMMALE] [I.T.A. NO. 902/MDS/2012] IS AN INDIVIDUAL HAVING INCOME FROM HOUSE PROPERTY AND OTHER SOURCES AND NOT FILED HER RETURN OF INCOME FOR THE ASSESSMENT YE AR 2006 - 07 AS PER THE PROVISIONS OF SECTION 139(1) OR SECTION 139(5) OF THE ACT. ON PERUSAL OF THE RETURN OF INCOME IN RESPECT OF THE ASSESSEE S BROTHER SHRI N.C. ANWAR BATCHA, IT WAS NOTICED THAT THE ASSESSEE HAS RECEIVED CASH COMPONENT OF .36,68,500/ - AND SEVEN FLATS IN CONSIDERATION FOR THE JOINT DEVELOPMENT OF PROPERTY BELONGING TO THE ASSESSEE WITH M/S. ASHED PROPERTIES AND INVESTMENTS (P) LTD., BANGALORE. THE ASSESSEE HAS CLAIMED THAT THE ENTIRE CAPITAL GAIN IS EXEMPTED UNDER SECTION 5 4 OF THE ACT. AS PER THE PROVISIONS OF THE SECTION 54 OF THE ACT, THE ASSESSEE IS ELIGIBLE FOR EXEMPTION IN RESPECT OF ONE FLAT ONLY AND THE CASH COMPONENT RECEIVED IS ALSO TAXABLE. HENCE, THE ASSESSMENT WAS REOPENED UNDER SECTION 147 BY ISSUE OF NOTICE UN DER SECTION 148 OF THE ACT DATED 25.08.2009. IN RESPONSE TO THE NOTICE, THE ASSESSEE HAS FILED HER RETURN OF INCOME ON 17.11.2009 ADMITTING TOTAL INCOME OF .67,877/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) WAS DULY SERVED ON THE ASSESSEE. A NOTICE UNDER SECTION 142(1) OF THE ACT WAS ALSO SERVED ON THE ASSESSEE ALONG WITH QUESTIONNAIRE. IN RESPONSE TO THE ABOVE NOTI CES, THE ASSESSEE HAS FILED DETAILED AND AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE ASSESSING OFFICER WORKED OUT THE TOTAL INCOME OF THE ASSESSEE AT .4,14,66,882/ - . I.T.A. NO S . 950 & 902 AND 951 & 903 /M/ 12 4 3. SIMILARLY, IN THE CASE OF THE ASSESSEE SHRI N.C. ANWAR BATCHA [I.T.A. NO. 903/MDS/2012], THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS THE PROPRIETOR OF M/S. ASSOCIATED INDO - VIETNAM AGENCIES AND FILED HIS RETURN ADMITTING TAXABLE INCOME OF .4,13,425/ - . INITIALLY, THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECT ION 143(1) OF THE ACT. ON PERUSAL OF THE RETURN OF INCOME, THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE HAS RECEIVED CASH COMPONENT OF .18,31,500/ - AND THREE FLATS IN CONSIDERATION FOR THE JOINT DEVELOPMENT OF PROPERTY BELONGING TO THE ASSESSEE WIT H M/S. ASHED PROPERTIES AND INVESTMENTS (P) LTD., BANGALORE. THE ASSESSEE HAS CLAIMED THAT THE ENTIRE CAPITAL GAINS AS EXEMPT. AS PER THE PROVISIONS OF THE SECTION 54F OF THE ACT, THE ASSESSEE IS ELIGIBLE FOR EXEMPTION IN RESPECT OF ONE FLAT ONLY AND THE C ASH COMPONENT RECEIVED IS ALSO TAXABLE. HENCE, THE ASSESSMENT WAS REOPENED UNDER SECTION 147 BY ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT DATED 25.08.2009. THERE WAS NO RESPONSE TO THE NOTICE ISSUED. HENCE NOTICE UNDER SECTION 142(1) DATED 16.04.2010 CA LLING FOR THE RETURN OF INCOME WAS ISSUED AND DULY SERVED ON THE ASSESSEE. IN RESPONSE TO THE NOTICE, THE ASSESSEE HAS FILED HIS REVISED RETURN OF INCOME ON 30.04.2010 ADMITTING THE SAME INCOME AS DECLARED IN THE ORIGINAL RETURN OF INCOME BUT DECLARING THE CASH COMPONENT RECEIVED DUE TO THE JOINT DEVELOPMENT AGREEMENT AND CLAIMING LONG TERM CAPITAL LOSS OF .3,26,058/ - AFTER DEDUCTING CERTAIN EXPENDITURE. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) WAS DULY SERVED ON THE I.T.A. NO S . 950 & 902 AND 951 & 903 /M/ 12 5 ASSESSEE. A NOTICE UNDER SECTION 142(1) OF THE ACT WAS ALSO SERVED ON THE ASSESSEE ALONG WITH QUESTI ONNAIRE. IN RESPONSE TO THE ABOVE NOTICES, THE ASSESSEE HAS FILED DETAILED AND AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE ASSESSING OFFICER WORKED OUT THE TOTAL INCOME OF THE ASSESSEE AT .1,81,28,879/ - . 4. BOTH THE ASSESSEES HAVE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AFTER CONSIDERING THE DETAILS AVAILABLE ON RECORD AND THE EVIDENCES FILED BY THE ASSESSEES AND BY RELYING VARIOUS DECISIONS, THE LD. CIT(A) HAS WORKED OUT THE LONG TERM CAPITAL GAINS OF .3,73,39,456/ - IN RESPECT OF THE ASSESSEE [SMT. FARIDA AMMALE] AND .1,98,17,461/ - IN RESPECT OF THE ASSESSEE [SHRI N.C. ANWAR BATCHA] AND DIRECTED THE ASSESSING OFFICER TO DETERMINE THE NET TAXABLE LONG TERM CAPITAL GAINS AND ALLOW THE DEDUCTION UNDER SECTION 54 OF THE ACT AND PART LY ALLOWED THE APPEALS FILED BY BOTH THE ASSESSEES. 5. ON BEING AGGRIEVED, BOTH THE ASSESSEES AS WELL AS REVENUE ARE IN APPEAL BEFORE THE TRIBUNAL. THE LD. DR STRONGLY CONTENDED THAT THE ASSESSING OFFICER WAS NOT AFFORDED OPPORTUNITY OF HEARING AND THE LD. CIT(A) HAS, BY CONSIDERING FRESH EVIDENCE, WHICH WERE NOT FILED BEFORE THE ASSESSING OFFICER, DECIDED THE APPEALS AND PLEADED THAT ALL THE APPEALS HAVE TO BE REMITTED BACK TO THE ASSESSING OFFICER FOR DETAILED VERIFICATION. I.T.A. NO S . 950 & 902 AND 951 & 903 /M/ 12 6 6. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE HAS NOT OBJECTED TO THE SUBMISSIONS OF THE LD. DR. 7. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESSEE [SMT. FARIDA AMMALE] AND HER BROTHER SHRI N.C. A NWAR BATCHA, HELD A LANDED PROPERTY IN HALL ROAD, RICHARDS TOWN, BANGALORE, RECEIVED BY WAY OF GIFT FROM THEIR MOTHER VIDE DEED DATED 25.08.1999 AND THEIR SHARE IN THE SAID LAND BEING 70:30. THEY, VIDE AN AGREEMENT EXECUTED ON 01.10.2005 ENTERED INTO A JOINT DEVELOPMENT AGREEMENT WITH M/S. ASHED PROPERTIES & INVESTMENTS PVT. LTD., BANGALORE FOR DEVELOPMENT OF THE PROPERTY FOR CONSTRUCTION OF MULTI - STORIED APARTMENT BUILDING. WITH REGARD TO THE ELIGIBILITY FOR CLAIMING EXEMPTION UNDER SECT ION 54 OF THE ACT FOR ALL THE FLATS, IN THE CASE OF SMT. FARIDA AMMALE, THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE ALREADY OWNED TWO RESIDENTIAL HOUSES, ONE AT NO. 33, CHANDA SAHIB STREET, PONDICHERRY - 1 [SELF OCCUPIED] AND ANOTHER ONE AT NO. 32, YANAM VENKATACHALAM PILLAI STREET, PONDICHERRY (RENTED). THE ABOVE DETAILS WERE FURNISHED BY THE ASSESSEE IN THE RETURN OF INCOME/REVISED RETURN OF INCOME. AS THE ASSESSEE ALREADY OWNS TWO RESIDENTIAL HOUSES, THE ASSESSING OFFICER HAS HELD THAT NO FURTHER EXEMPTION UNDER SECTION 54F CAN BE ALLOWED, AS SUCH CAPITAL GAINS ARE BROUGHT TO TAX WITHOUT ANY EXEMPTION UNDER SECTION 54F OF THE ACT. IN THE CASE OF THE ASSESSEE [SHRI N.C. ANWAR BATCHA] ALSO, THE ASSESSEE ALREADY I.T.A. NO S . 950 & 902 AND 951 & 903 /M/ 12 7 OWNED TWO RESIDENTIAL HOUSES AND THERE FORE, THE ASSESSING OFFICER HAS HELD THAT NO FURTHER EXEMPTION UNDER SECTION 54F CAN BE ALLOWED. WITH REGARD TO THE PROPERTY AT BANGALORE, THE LD. DR HAS SUBMITTED THAT THE ASSESSEE HAS FILED ANY PARTICULARS AS TO WHETHER THE PROPERTY WAS A RESIDENTIAL PRO PERTY OR NOT? TO CLAIM DEDUCTION UNDER SECTION 54 OF THE ACT, THE ASSESSEE HAS FILED FOLLOWING EVIDENCES BEFORE THE LD. CIT(A) , : (A) KHATHA EXTRACT ISSUED BY REVENUE DEPARTMENT OF BANGALORE MAHANAGAR PALIKE DATED 21.09.2005 SHOWS THAT THE PROPERTY IS A R ESIDENTIAL PROPERTY AND ASSESSED TO TAX AS RESIDENTIAL HOUSE. (B) CONSEQUENT TO THE JOINT DEVELOPMENT AGREEMENT, THE ASSESSEE HAS SURRENDERED THE ELECTRIC CONNECTION OF THE SAID PROPERTY. THE LETTER DATED 20.05.2006 ISSUED BY THE BANGALORE ELECTRICITY SUP PLY COMPANY LTD. SHOWS THAT THE ELECTRIC CONNECTION HAS BEEN PERMANENTLY TERMINATED AS PER THE ASSESSEE S REQUEST LETTER DATED 17.05.2006. (C) EVEN THE DEVELOPER M/S. ASHED PROPERTIES AND INVESTMENTS PVT. LTD., VIDE ITS LETTER DATED 19.08.2006 SUBMITTED TO ASSISTANT EXECUTIVE ENGINEER, BWSSB, BANGALORE, WHILE SURRENDERING THE WATER METER (RR NO. 38 - 65/592, CONSUMER I D NO. 6552), INFORMED THE AUTHORITIES THAT THEY WERE IN THE POSSESSION OF THE PROPERTY, ON WHICH THEY HAVE DEMOLISHED THE OLD HOUSE IN ORDER T O BUILD THE NEW HOUSE. 8. SINCE THE LD. CIT(A) HAS NOT OBTAINED ANY REMAND REPORT FROM THE ASSESSING OFFICER BEFORE DECIDING THE ISSUE, THE LD. DR STRONGLY CONTENDED THAT IT IS IN VIOLATION OF RULE 46A OF INCOME TAX RULES AND THE ISSUE MAY BE REMITTED B ACK TO THE ASSESSING OFFICER TO VERIFY THE DETAILS AND THE LD. I.T.A. NO S . 950 & 902 AND 951 & 903 /M/ 12 8 COUNSEL FOR THE ASSESSEE HAS NOT OBJECTED TO THE ABOVE SUBMISSIONS OF THE LD. DR, WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND REMIT THE MATTER BACK TO THE ASSESSING OFFICER WITH A DIREC TION TO VERIFY ALL THE PARTICULARS AND DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW AFTER ALLOWING SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESSEE. SINCE THE ASSESSING OFFICER HAS TO EXAMINE AND VERIFY ABOUT THE ELIGIBILITY OF EXEMPTION UNDER SECTION 5 4 OF THE ACT, WE ARE NOT ADJUDICATING OTHER ISSUES RAISED BY THE REVENUE AS WELL AS ASSESSEE IN ITS APPEALS ON MERITS. IN VIEW OF THE ABOVE, THE GROUNDS RAISED BY THE ASSESSEES IN THEIR APPEALS ALSO REMITTED BACK TO THE ASSESSING OFFICER. 9. IN THE RESUL T, BOTH THE CROSS APPEALS FILED BY THE REVENUE AS WELL AS ASSESSEE S ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 31 ST D ECEMBER , 2015 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI , DATED, THE 31 . 1 2 .201 5 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.