M.S.SOUNDARARAJAN,CHENNAI vs. ITO, CHENNAI

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ITA 3251/CHNY/2016Status: DisposedITAT Chennai14 June 2017AY 2006-073 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found merit in the assessee's claim of double taxation and decided to remit the matter back to the AO. The AO was directed to verify if the capital gain was indeed already assessed in the HUF's hands and to reframe the assessment accordingly.

What were the facts?

The Assessing Officer (AO) reopened the assessee's case and assessed long-term capital gain on a jointly owned property. The assessee argued that this gain was already assessed in the hands of his HUF, leading to double taxation.

What were the issues?

Whether the same long-term capital gain can be assessed in the hands of an individual and his HUF, leading to double taxation.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 250(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ ‘C’ BENCH, CHENNAI

Before: Shri A. Mohan Alankamony

Hearing: 14.06.2017

आदेश / O R D E R

1.

This appeal by the assessee is directed against the order passed by the Ld. Commissioner of Income Tax (Appeals)- 4, Chennai dated 26.09.2016 in 07/CIT(A)-4 for the assessment year 2006-07 passed u/s.250(6) r.w.s.143(3) & 147 of the Act.

2.

The assessee has raised several grounds in its appeal, however the crux of the issue is that the Ld.AO has erred in assessing the capital gain pertaining to sale of jointly owned property in the hands of the assessee once again when the same was already assessed in the hands of the Assessee’s HUF and the Ld.CIT(A) has erred in confirming the order of the Ld.AO.

3.

The brief facts of the case are that the assessee is an individual filed his return of income for the assessment year 2006- 07 on 31.07.2006, admitting total income of Rs.1,29,705/-.

Subsequently the case was reopened and notice U/s.148 of the Act was issued to the assessee and thereafter assessment U/s.143(3) r.w.s. 147 of the Act was completed vide order dated 28.03.2014, wherein the Ld.AO assessed long term capital gain of Rs.2,48,529/- in the hands of the assessee. On appeal, the Ld.CIT(A) also confirmed the order of the Ld.AO.

4.

At the outset, the Ld.AR submitted that the long term capital gain assessed in the hands of the assessee was already assessed in the hands of M.S. Soundararajan (HUF) and therefore it was unjust to once again assess the same income in the hands of the assessee as it would amount to double taxation.

The Ld.AR pleaded that the matter may be remitted back to the file of the Ld.AO for verification. The Ld.DR could not successfully controvert to the submission of the Ld.AR and therefore did not raise any serious objections for remitting the matter back to the file of Ld.AO for verification of the claim made by the Ld.AR.

5.

After hearing both sides, I’m of the considered view that the matter requires to be looked in to by the Ld.AO because if the claim of the Ld.AR proves to be genuine, then it would amount into double taxation resulting in injustice to the assessee and miscarriage of justice. Therefore, I hereby remit the matter back to the file of Ld.AO to verify whether the long term gain assessed in the hands of the assessee was already assessed in the hands of the assessee’s HUF and if found so, reframe the assessment of the assessee by excluding the same. If found otherwise, reinstate the order after examining the issue in accordance with law and merit. It is ordered accordingly.

6.

In the result, the appeal of the assessee is allowed for statistical purposes as indicated herein above.

Order pronounced in the open court on the 14th June, 2017.

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