Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCHES “C”, MUMBAI
Before: Shri G S Pannu, AM, & Shri Saktijit Dey, JM
O R D E R Per Saktijit Dey, Judicial Member:
The aforesaid appeals relating to two different assessees are against separate orders of the first appellate authority for A.Y. 2011-12. Since the issue involved in these appeals are inter-connected/overlapping, they are clubbed together and disposed of vide this combined order for the sake of convenience.
The core issue involved in the present appeals relates to addition made on account of capital gain on sale of immovable property.
Briefly, the fact are one Shri Roshanlal Jhingan, husband of one of the assessee before us viz. Late Smt. Bhagwatidevi Jhingan, was owner of flat no.41 in building No.8B, Navjeevan Society along with Garage no.12, since the year 1962. Shri Roshanlal Jhingan died on 17.08.1980. After his death the ownership of the flat was transferred by the society in the name of Smt.
Bhagwatidevi Jhingan on 08.12.1988. As it appears from the material on record, prior to her death, on 25.10.2008 Late Smt. Bhagwatidevi Jhingan filed a form of nomination in favour of her son Shri Ashok Jhingan, the other assessee before us. Late Smt. Bhagwatidevi Jhingan expired on 14.11.2009 leaving behind her three sons and one daughter as legal heirs. After the death of Smt. Bhagwatidevi Jhingan, the said flat was transferred to the name of Shri Ashok Jhingan. Subsequently, the said flat along with the garage was sold for a total sale consideration of Rs.1.30 crores, vide sale deed dated 06.12.2010. During the course of assessment proceedings, for the impugned assessment year in the case of Shri Ashok Jhingan, the AO having noticed that he has not offered capital gain arising out of the sale of flat as income, proceeded to compute capital gain at the hands of Shri Ashok Jhingan at Rs.1,29,06,400/- after allowing cost of transfer of Rs.93,600/-.
On the basis of assessment made in case of Shri Ashok Jhingan as aforesaid, the AO re-opened the assessment in case of Late Smt. Bhagwatidevi Jhingan u/s. 147 of the Act. In response to the notice issued, u/s. 148 of the Act the legal Heir of Late Smt. Bhagwatidevi Jhingan filed return of income on 11.9.2013 showing income of Rs.74,16,398/-, which included Long term capital gain from sale of Flat No.41 at Navjeevan Society. In the course of assessment proceedings in case of Late Smt. Bhagwatidevi Jhingan, AO observed that after the death of Smt. Bhagwatidevi Jhingan the subject flat was transferred in the name of Shri Ashok Jhingan as owner of the property hence, the capital gain was assessed at the hands of Shri Ashok Jain on substantive basis. He, therefore, proceeded to complete the assessment in the case of Late Smt. Bhagwatidevi Jhingan by computing capital gain at Rs.1,29,06,400/-, as was done in the case of Shri Ashok Jhingan, on protective basis after disallowing claim of indexation. Being aggrieved of the respective assessment orders passed assessing capital gain, both the assessees preferred appeal before the CIT(A).
While deciding the appeal in the case of Late Smt. Bhagwatidevi Jhingan, learned CIT(A) after considering the submissions of the assessee and perusing the material on record found that Late Smt. Bhagwatidevi Jhingan was owner of the flat after the death of her husband. Prior to her death, she executed a nomination in favour of her son Shri Ashok Jhingan in respect of the said flat. He found that after the death of Smt. Bhagwatidevi Jhingan, the share certificate of the society in respect of the said flat was transferred in the name of Shri Ashok Jhingan on 30.06.2010 as nominee of all the legal heirs. He therefore, concluded that Shri Ashok Jhingan did not inherit the property as an owner but as a nominee of all the legal heirs. He also found that, though, the sale deed executed on 6.12.2010 was between Shri Ashok Jhingan and the buyers, however, the sale proceeds were ultimately transferred to the bank account of Estate of Late Smt.
Bhagwatidevi Jhingan. He therefore, held that the capital gain has to be assessed at the hands of Estate of Late Smt. Bhagwatidevi Jhingan and not Shri Ashok Jhingan. Having held so, he also examined assessee’s claim of indexation on the basis of valuation made by the assessee and ultimately accepted the capital gain shown in the return of income filed on behalf of Late Smt. Bhagwatidevi Jhingan. As far as the appeal filed by Shri Ashok Jhingan against the assessment of capital gain from sale of the very same flat at his hands, the learned CIT(A) while deciding the appeal upheld the decision of the AO in assessing the capital gain on substantive basis in his hands. Being aggrieved of the decisions of the learned CITA(), the present appeals have been filed before us.
We have considered the submissions of the parties and perused the material on record. As could be seen, the issue in dispute arising in the present appeals is, in whose hand the capital gain arising from sale of Flat No.41 B at Building 8B of Navjeevan Society is to be assessed. The AO has assessed the capital gain on substantive basis at the hands of Shri Ashok Jhingan while assessing the same on protective basis at the hands of Late Smt. Bhagwatidevi Jhingan. However, while deciding the appeal of Late Smt.
Bhagwatidevi Jhingan, the CIT(A) has recorded a categorical finding of fact that Late Smt. Bhagwatidevi Jhingan has left behind three sons and a daughter as legal heir and share certificate relating to the flat was transferred in the name of Shri Ashok Jhingan only as a nominee on behalf of all the legal heirs by virtue of a nomination form filed with the society by Late Smt.
Bhagwatidevi Jhingan prior to her death. The learned CIT(A) therefore, held that Shri Ashok Jhingal is not the owner of the flat but the Estate of Late Smt.
Bhagwatidevi Jhingan is the owner and, hence, accepted the income declared from capital gain arising out of the sale of flat at the hands of Estate of Late Smt. Bhagwatidevi Jhingan. As submitted by the learned counsels appearing for both parties, the aforesaid decision of the CIT(A) rendered in the case of Late Smt. Bhagwatidevi Jhingan has not been challenged by the department.
Thus, once capital gain from sale of flat has been held to be assessable on substantive basis at the hands of Late Smt. Bhagwatidevi Jhingan, the same income cannot again be assessed at the hands of Shri Ashok Jhingan.
Therefore, the addition of capital gain at the hands of Shri Ashok Jhingan deserves to be deleted. Thus, the order passed by the CIT(A) in the case of Estate of Late Smt. Bhagwatidevi Jhingan is upheld and the first appellate order passed in the case of other assessee Shri Ashok Jhingan is hereby set aside.
In the result, the appeal in ITA 2897/Mum/2015 is dismissed and that in ITA 2898/Mum/2015 is allowed.
Order pronounced in the open court on 5th day of April 2017.