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Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD
Before: S/SHRI PRAMOD M. JAGTAP & T.R. SENTHIL KUMAR
आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद �यायपीठ आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण अहमदाबाद �यायपीठ अहमदाबाद �यायपीठ ‘B’ अहमदाबाद। अहमदाबाद �यायपीठ अहमदाबाद। अहमदाबाद। अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD (Conducted Through Virtual Court) ] ] BEFORE S/SHRI PRAMOD M. JAGTAP, VICE PRESIDENT AND T.R. SENTHIL KUMAR, JUDICIAL MEMBER ITA No.182/Ahd/2019 Assessment Year : 2015-16 Shri Vatsal Navnitlal Parikh ITO, Ward-5(2)(1) 501, Belvedere Flat Vs Ahmedabad. 5th Floor, Jodhpur Cross Road Ahmedabad. PAN : AAVPP 9647 H ITA No.183/Ahd/2019 Assessment Year : 2015-16 Smt.Rajshri Vastal Parikh ITO, Ward-5(2)(1) 501, Belvedere Flat Vs Ahmedabad. 5th Floor, Jodhpur Cross Road Ahmedabad. PAN : ACYPP 8836 H अपीलाथ�/ (Appellant) �� यथ�/ (Respondent) Assessee by : Shri S.N. Divetia, Advocate Revenue by : Shri R.R. Makwana, Sr.DR सुनवाई क� तार�ख/Date of Hearing : 03/02/2022 घोषणा क� तार�ख /Date of Pronouncement: 21/02/2022 आदेश/O R D E R PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER: These appeals are filed by two assessees against orders of even dated i.e. 27.12.2018 passed by Ld.Commissioner of Income-tax (Appeals)-5, Ahmedabad [for short “Ld.CIT(A)] relating to the assessment year 2015-16. Since common issue is raised in both the appeals, we dispose of them by this common order.
ITA No.182 and 183/Ahd/2019 2 2. Since assessees are husband and wife, and the issue of chargeability of long term capital agitated before us arises from sale of joint property, and the orders passed by the Revenue authorities verbatim same in both the cases except small variation in the income returned, we take note of the facts as mentioned in the case of Shri Vatsal Nanitlal Parikh in ITA No.182/Ahd/2019.
Brief facts of the case is that assessee is an individual. During the assessment year 2015-16, the assessee has derived income from long term capital gains and income from other sources. The assessee has e-filed his return of income on 30.8.2015 declaring total income at Rs.16,26,920/-. The return was processed under section 143(1) of the Income Tax Act, 1961 ("the Act" for short), and thereafter the same was selected for scrutiny assessment proceedings. Notices u/s.142(1) & 143(2) were issued and The assessee was being heard from time to time. During the assessment proceedings, the ld.AO noticed that in the statement of income under computation of “long term capital gains”, the assessee has shown 50% of sale consideration in respect of immovable property being “Tulsi Bungalow” at Rs.2,83,62,760/-instead of 50% of sale consideration of the property at Rs.2,50,00,000/- as per the sale deed dated 14.2.2014. This property was jointly held by his wife, Smt.Rajshri Vatsal Parikh as a co-owner. The assessee claimed that difference of Rs.33,62,760/- was on account of compensation received for late payment of sale consideration paid by purchaser. From the sale consideration received from the sale of “Tulsi Bungalow”, the assessee reinvested by purchasing immovable property at Belvadere Flats for Rs.2,12,30,000/- and claimed deduction under section 54 of the Act, and the net long term capital gain of Rs.11,47,101/- was offered to tax. However, the ld.AO has
ITA No.182 and 183/Ahd/2019 3 not accepted the above explanation given by the assessee and treated receipt of compensation for late payment as income from other sources, and worked out entire capital gain on sale of the property at Rs.2,80,50,000/- and determined total income at Rs.3,30,39,680/- and demanded tax of Rs.74,79,270/- including interest under section 234B and 234C of the Act.
Aggrieved against this assessment order, the assessee filed an appeal before the ld.Commissioner of Income Tax (Appeals)-5, Ahmedabad. The ld.CIT(A) held that terms and conditions of sale deed dated 14.2.2014 did not support interest on late payment of sale consideration and that it was part of the sale consideration, and therefore, the ld.AO has treated the amount on late payment of interest under the head “income from other sources”. The assessee has also contended that the AO has taxed twice the amount as “income from other sources”, and also under the “income from capital gains”, the ld.CIT(A) directed the AO to verify contentions of the assessee about the same, and if double addition has been made, then the same should be deleted under the head “capital gain”, and thereby partly allowed claim of the assessee.
The second issue, viz. chargeability of capital gain is concerned, the ld.CIT(A) held as under: “Decision:
5.4. I have carefully considered the facts of the case and submission made by the appellant. It is seen that the appellant has claimed that he has received his share @11% out of the sale consideration of immovable property situated at Shakuntal Bugalow, Gulbai Tekra, Ahmedabad on dissolution of beneficiary trust. The AO noted that the appellant has not disclosed any capital gain out of the above sale consideration received by the assessee.' The AO called for specific details vide show cause notice dtd.10.11.2017 and called for the supporting documents of trust deed, dissolution deed, copy of will and cost of acquisition details.
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However, the appellant could not file the copy of will and trust deed and claimed that since the cost of acquisition and sale consideration is same, therefore, no capital gain is payable.
5.5. It is noted that the appellant received the property on distribution of assets by the trust Navnitlal Chandulal Parikh Trust which was a private discretionary trust and called for the supporting documents. However, the assessee vide letter dd. 18.12.2017 expressed his inability to furnish the document called for and contended that the amount is not taxable because the said asset was received by him on distribution of trust and the cost of which was NIL and claimed that on the basis of no cost theory no capital gain will be levied on any asset which is acquired by the assessee without paying any consideration and relied on the decision of Hon'ble Supreme Court in the case of B.C. Srinivas Shetty.
5.6. The contention of the appellant is not tenable as the appellant could not submit any document in support of the property received and as per the provisions the cost of acquisition to the previous owner will be the cost of acquisition in the hand of the recipient and accordingly it cannot said that there was no cost of acquisition in the hands of the appellant. Since, the appellant has not given any details and document in support of the acquisition of the property therefore, no benefit of cost of acquisition and indexation can be given to the appellant and the entire share of the appellant out of the sale consideration is treated as long term capital gain in the hands of the appellant. The appellant has relied on the decision of Hon'ble Supreme Court in the case of Srinivas Shetty, however the facts are different aid distinguishable as the issue involved in the case relates to the good will however the appeal under consideration, the issue relates to the sale consideration received by the appellant without any declaration of cost of acquisition. Since the asessee could not show that the long term capital gain arising out of transfer of the property was offered for the taxation in the relevant year by the trust, therefore, the share of the beneficiary is required to be taxed in his hand. Accordingly, the addition made by the AO of Rs.2,80,50,000/- on account of undisclosed long term capital gain is confirmed.
The ground of appeal is dismissed.”
Aggrieved by the order of the ld.CIT(A), assessee is in appeal before the Tribunal.
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Before us, the assessee has moved an application under Rule 29 of the Income Tax (Appellate Tribunal) Rules 1963 for admission of additional evidence, which is available at page C to F of the paper book no.1. In support of the same, the assessee also filed the following new documents: “Explanation for Filing additional evidences
(1) On account of Family dispute, Memorandum of Family Settlement entered in to 10-04-2014 and read with it-~The appellant received movable and immovable assets of the deceased father, under his will. (2) The appellant is beneficiary in Navnitlal Chandulal Parikh Will Trust a Discretionary Trust created by his father by Will dtd.21/2/2005. (3) The said trust was in possession of Immovable Property and Movable Properties which were transferred to appellant as stated below :- i) By Register Deed of Transfer (Distribution) dtd.28-5-14, movable properties of Rs.3362760/- being 11 % share, ii) By another Register Deed of Transfer (Distribution) without consideration dtd.28-5-14, 11% share in Immovable Property of Shakuntal Bunglow was given said bunglow was sold by co-owner on 21-1-15.
Capital Gain of Tulsi Bunglow : (4) i) Return of Income filed disclosing capital gain of Tulsi Bunglow. Sale Deed was for Rs.5 crore (appellant 1/2 share) While preparing statement of income calculating capital gain, Sale Consideration was shown at 2.83 crore instead Rs.2.5 crore. Additional 33 lakhs treated as interest on late payment of Sale Consideration and included in total sale price.
ii) In fact the said 33 lakhs are amount which is received by Deed of Transfer as stated in 3(1) above.
iii) Without appreciating documents properly, under wrong representation was advised to offer 33 lakhs as additional sale price. (5) i) While making assessment AO treated Rs.2.5 crore as capital gain and treated Rs.33 lakhs as income from other source.
ii) TDS U/s 194/A on Tulsi Bunglow was deducted in A.Y. 14-15 so that this has not been allowed in ITR for A.Y. 2015-16 wherein LTCG is declared.
ITA No.182 and 183/Ahd/2019 6 Capital gain of Shakuntal Bunglow (6) Assessee's contention on two grounds not accepted by AO i) No cost No capital gain ii) Alternatively, it is cost of 28-5-14 when it was received on distribution, hence cost on date of receipt will be market price and sale price is same, no capital gain. (7) AO treated sale of Shakuntal Bunglow as undisclosed income and taxed the same without taking value as on 1-4-81 and indexation on it. (8) AO did not consider the fact that though he is taxing two properties as capital gain, but allowing TDS of one property.”
Out of the above documents, documents shown at serial nos.6 to 8 are also available with the lower authorities and other documents are filed for the first time before the Tribunal. It has been explained that on account of family dispute, the same could not be obtained from the rival parties and could not be produced before the lower authorities. As it can be seen from the order of the ld.CIT(A), more particular, in para 5.4 “…. The AO called for specific details vide show cause notice dtd.10.11.2017 and called for the supporting documents of trust deed, dissolution deed, copy of Will and cost of acquisition details. However, the appellant could not file the copy of will and trust deed and claimed that since the cost of acquisition and sale consideration is same, therefore no capital gain is payable.” But ultimately, the ld.CIT(A) confirmed addition made by the AO of Rs.2,80,50,000/- on account of undisclosed long term capital gain. In this background, the assessee has filed additional evidence before the Tribunal for consideration of his claim.
On the other hand, though the ld.DR defended in support of the order of the ld.CIT(A), he has no serious objection and requested Tribunal that let the matter be remanded back to the file of AO for reconsideration on the issue.
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We have given our thoughtful consideration to the facts of the case and the additional documents material placed before us. We find that additional evidences are produced for the first time before the Tribunal. These documents were not filed before the lower authorities during assessment proceedings due to family disputes. Therefore, in the interest of justice, we deem it fit to remand the matter back to the file of the AO. The ld.AO shall look into the record, documents and other evidences produced by the assessee, and thereafter pass a fresh speaking order in accordance with law, after providing reasonable opportunity to the assessee. Needless to say, the assessee shall cooperate with the AO by providing the details required by the AO for completion of de novo assessment. With this direction, we dispose of the appeal of the assessee.
So far as appeal in the case of Smt.Rajshri Vatsal Parikh in ITANo.183/Ahd/2019 is concerned, since facts are identical and the assessee is the co-owner of the same property, we dispose of the same with similar direction given by us in aforesaid paragraphs in the case of Shri Vatsal Parikh.
In the result, both the appeals of the assessees are allowed for statistical purposes.
Order pronounced in the Court on 21st February, 2022 at Ahmedabad.
Sd/- Sd/- (T.R. SENTHIL KUMAR) (PRAMOD M. JAGTAP) JUDICIAL MEMBER VICE-PRESIDENT
Ahmedabad, dated 21/02/2022 vk*