AZAD RAHIM vs. THE INCOME TAX OFFICER

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR.JUSTICE BASANT BALAJI WEDNESDAY, THE 24TH DAY OF NOVEMBER 2021 / 3RD AGRAHAYANA, 1943 ITA NO. 6 OF 2020 AGAINST THE ORDER/JUDGMENT IN GTA 1/COCH/2018 OF I.T.A.TRIBUNAL,COCHIN BENCH APPELLANT/S: AZAD RAHIM AGED 77 YEARS S/O. FATHIMA RAHIM, MALIKA VEEDU, LAKSHMINADA, KOLLAM 68 REPRESENTED BY ITS DIRECTOR BY ADVS. G.HARIKUMAR (GOPINATHAN NAIR) SHRI.AKHIL SURESH RESPONDENT/S: THE INCOME TAX OFFICER WARD-1, KOLLAM BY ADV SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 24.11.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

ITA NO. 6 OF 2020 -2- JUDGMENT S.V.Bhatti,J. Azad Rahim, son of late Fathima Rahim/assessee is the appellant. The Income Tax Officer, Ward-I, Kollam/Revenue is the respondent. The appeal is filed by the legal heir of the assessee being aggrieved by the order dated 30.04.2019 of the Income Tax Appellate Tribunal, Cochin Bench in GTA No.01/Coch/2018. 2. The issue arises under the Gift Tax Act, 1958 in the return dated 25.07.1997 filed by the assessee. The Assessing Officer completed the assessment under Section 15(2) of the Gift Tax Act determining the taxable gift of Rs.74,80,750/-. The Commissioner of Income Tax (Appeals) (for short, CIT(A)) and the Income Tax Appellate Tribunal (for short, 'the Tribunal') confirmed that there was a taxable gift involved in the transaction. The assessee filed GTA Nos.2, 3, 4 of 2002 before this Court, and vide judgment dated 21.01.2004 this Court confirmed the order of the Tribunal however, granted liberty to the assessee to file objections before the

ITA NO. 6 OF 2020 -3- Departmental Valuation Officer (DVO) on the valuation arrived at by him and further directed the DVO to dispose of the objections filed on the valuation of the property under gift by providing reasonable opportunity of hearing to the assessee. The assessee being aggrieved by the judgment of this Court in GTA No.2, 3, 4 of 2002, filed Special Leave Petition (Civil) No.13810-13812/2004 before the Supreme Court. On 28.07.2004, the Supreme Court dismissed the appeal as withdrawn and accepted the permission prayed by the assessee to approach the Valuation Authority in regard to the ownership of the building in question. 3. On 28.02.2005, pursuant to the liberty granted by this Court and the Supreme Court, a fresh assessment was completed. The assessee filed appeal before the CIT(A). The appeal before CIT(A) was dismissed and thereafter, on the appeal filed by the assessee before the Tribunal, the Tribunal directed consideration of objections filed on the valuation and also on the ownership of the property. Upon fresh and further remand, the DVO held that the assessee was the owner of the property in question. However,

ITA NO. 6 OF 2020 -4- the value of the gift of the immovable property was reduced from Rs.58,66,000/- to Rs.37,04,000/-. 4. On 04.03.2011, assessment for the assessment year 1996-97 was completed. The assessee filed the appeal questioning the assessment order dated 04.03.2011, and the appeal was dismissed. The valuation prepared by the DVO was accepted and confirmed the value of the gift of Rs.37,04,000/-. This lead to the filing of G.T.A No.01/Coch/2018 before the Tribunal. The Tribunal through the order impugned in the appeal dismissed GTA No.01/Coch/2018. Hence the appeal with the following substantial questions of law: “1. Whether the Hon'ble Tribunal was right in law in holding that the Hon'ble Supreme court had only granted the appellant the liberty to question the issue regarding the ownership of the Building? 2. Whether the Hon'ble Tribunal was right in law on facts in holding that there wasn't any contra evidence brought on record to dispel the findings of the CIT(A)'s with regard to the ownership of the building? 3. Whether the Hon'ble Tribunal was right in law on facts in holding that the building was owned by the appellant and not Malik Dinar Trust?”

ITA NO. 6 OF 2020 -5- 5. The learned Counsel Harikumar G Nair argues that this Court in GTA Nos.2, 3, 4 of 2002, enabled the assessee to raise the objections on the valuation report of the DVO. Further the liberty granted by the Supreme Court in Special Leave Petition (Civil) No.13810-13812/2004 order dated 28.07.2004, the ownership issue is kept at large. This view or position is accepted by the Tribunal while remanding the matter for consideration afresh to the Assessing Officer. The valuation report of the DVO is completely untenable, illegal, and is contrary to the valuation report/objections submitted by the assessee. On the question of title, the view taken by the Tribunal is very perfunctory and untenable. Therefore, he prays for answering the above questions in favour of the assessee and against the Revenue. Alternatively, he contends that the assessee is given an opportunity to establish the ownership of the property and for the said purpose, prays for remand to the Tribunal. 6. Mr. Christopher Abraham, learned Standing Counsel clarifies the position by stating that GTA Nos.2, 3, 4 of 2002 were

ITA NO. 6 OF 2020 -6- disposed of by this Court. The assessee was given liberty to file objections and direction was issued to the DVO to consider the objections as well. The assessee moved the Supreme Court and the Supreme Court allowed the assessee to withdraw the appeal and however, granted permission to raise objection on the ownership of the property under gift. 6.1. He argues that the Supreme Court has merely granted permission to raise objections. Therefore, the permission now granted by the Supreme Court does not in any manner come to the aid or assistance of the assessee. The Assessing Officer, CIT(A), and the Tribunal, in the first round of the litigation, have noted the legal obligation to examine both the issues viz. valuation and ownership of the property and have accordingly, rendered findings. The valuation is scaled-down from Rs.58,66,000/- to Rs.37,04,000/-. Thus the objections are considered and now the findings recorded by the Tribunal based on the record are pure and simple findings of the fact, therefore does not come within the jurisdiction of this Court under Section 260A of the Income Tax

ITA NO. 6 OF 2020 -7- Act, 1961. 7. Replying to the argument of the assessee on the ownership issue, it is stated that the execution of gift deed assumes certain state of affairs between the parties and the property. Contrary to the written document, the assessee wants to plead and prove before the authorities. It is in this background the Tribunal observed that there is no shred of evidence to record a finding in any way except that the assessee was the owner of the property under gift. Therefore, upon two rounds of remand, still, the dissatisfaction recorded by the assessee on the findings recorded by the Authorities does not warrant consideration by this Court. He prays for summarily dismissing the appeal. 8. The questions deal with valuation and ownership. Let us briefly examine the valuation finally confirmed by the assessment order dated 04.03.2011. This Court in GTA Nos.2, 3, 4 of 2002 enabled the assessee to file objections and also directed consideration of the objections. What has been marginally left for consideration by the direction is only valuation and objections

ITA NO. 6 OF 2020 -8- have been received, fresh valuation has been undertaken, the report is considered by the Assessing Officer and thereafter, the value is reduced. The method and mode of valuation suggested by the assessee and/or documents relied on by the assessee are independently considered and rejected. The CIT(A) and the Tribunal have accepted the revised valuation given in the assessment order dated 04.03.2011. Except raising a bald allegation that the property has been excessively valued than what was prevailing at the time of execution of gift deed, hardly any material much less substantial material is placed before the Authorities under the Act, atleast to canvass the ground in this Court that the finding of fact is recorded without considering the material on the record. The ipse dixit contention does not carry the assessee anywhere. Each one of the orders we have independently considered in this behalf and we are in agreement with the findings of fact recorded by the Tribunal on the valuation. Hence, the argument advanced by the assessee on the valuation, now determined by the Authorities under the Act, does not warrant

ITA NO. 6 OF 2020 -9- interference and is without merit and rejected. 9. Adverting to the argument on ownership to the property, we notice the legal heir of the assessee particularly, the donee under the gift deed dated 20.04.1995, was granted liberty by the Supreme Court to raise objections on ownership of the property. The objections as rightly pointed out by Mr. Christopher Abraham, go to the root of the very transaction under which the legal heir of the assessee is contesting the ownership. The assessee or her legal heir is now contesting the ownership of the property. Looking at from general principles of law, the burden is on the assessee or her legal heir to prove that the ownership of the property vests with someone else, not the assessee. The entries in Revenue records, or the name of the assessee in Municipal Corporation, are not conclusive as regards the ownership of the property. The Tribunal, therefore, in our considered view, rightly observed that the assessee failed to place contra evidence on the ownership of the property. 10. The findings of fact recorded by the Tribunal are

ITA NO. 6 OF 2020 -10- concurrent findings of fact recorded by the Authorities under the Act. Expecting the Tribunal to restate every conclusion while confirming the findings in all fours, is not the requirement of the adjudication before the Tribunal. Therefore, the findings are tenable and are sustained accordingly. No ground is made out warranting firstly, interference and secondly, for limited purpose, remitting the matter to the Tribunal. The appeal fails, accordingly dismissed. No order as to costs. Sd/- S.V.BHATTI JUDGE Sd/- BASANT BALAJI JUDGE JS

ITA NO. 6 OF 2020 -11- APPENDIX OF ITA 6/2020 PETITIONER'S ANNEXURES: ANNEXURE A1 ORDER DATED 28-07-2004 IN SPECIAL LEAVE PETITION (CIVIL) NO. 13810-13812/2004 ANNEXURE A2 ORDER IN GTA NO. 07 AND 08 (COCH)/2006 DATED 24-04-2007 OF THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH ANNEXURE A3 VALUATION REPORT DATED 30-10-2007 ANNEXURE A4 ORDER IN NO. GT-5(NEW PAN AZMPR3131J)/W- 1/KLM/96-97 DATED 04/03/2011 ANNEXURE A5 MEMORANDUM OF APPEAL DATED 25-04-2011 FILED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) ANNEXURE A6 HEARING NOTE FILED BY THE APPELLANT BEFORE THE COMMISSIOENR OF INCOME TAX (APPEALS) ANNEXURE A7 VALUATION REPORT DATED 16-08-2014 FILED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) ANNEXURE A8 ORDER IN GT NO. 3/KLM/CIT (A) TVM/2011-12 DATED 17-08-2018 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) ANNEXURE A9 CERTIFICATE DATED 19-01-2002 ISSUED BY THE KOLLAM CORPORATION ANNEXURE A10 ORDER DATED 30-04-2019 IN GTA NO. 01/COCH/2018 OF THE HON'BLE INCOME TAX APPELLATE TRIBUNAL.