ACIT, CHENNAI v. Shri A.K.Pattabiraman, CHENNAI

ITA 1856/CHNY/2009 | 2006-2007
Pronouncement Date: 12-01-2011 | Result: Partly Allowed

Appeal Details

RSA Number 185621714 RSA 2009
Assessee PAN AGUPP4469L
Bench Chennai
Appeal Number ITA 1856/CHNY/2009
Duration Of Justice 1 year(s) 1 month(s) 3 day(s)
Appellant ACIT, CHENNAI
Respondent Shri A.K.Pattabiraman, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 12-01-2011
Appeal Filed By Department
Order Result Partly Allowed
Bench Allotted C
Tribunal Order Date 12-01-2011
Date Of Final Hearing 12-01-2011
Next Hearing Date 12-01-2011
Assessment Year 2006-2007
Appeal Filed On 09-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI BEFORE SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN JUDICIAL MEMBER .. I.T.A. NO. 1856/MDS/2009 ASSESSMENT YEAR : 2006-07 THE ASSISTANT COMMISSIONER OF INCOME-TAX BUSINESS CIRCLE-II CHENNAI. V. SHRI A.K. PATTABIRAMAN 26 MELONY ROAD T. NAGAR CHENNAI-600 017. (PAN : AGUPP4469L) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B. SRINIVAS RESPONDENT BY : SHRI K. SANTHANAKRISHNAN O R D E R PER GEORGE MATHAN JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(A)-VI CHENNAI IN ITA NO. 123/0-09 DATED 01-04- 2009 FOR THE ASSESSMENT YEAR 2006-07. 2. SHRI B. SRINIVAS SR. DR REPRESENTED ON BEHALF O F THE REVENUE AND SHRI K. SANTHANAKRISHNAN CA REPRESENTED ON BEHALF OF THE A SSESSEE. 3. IT WAS SUBMITTED BY THE LEARNED DR THAT THE ASSE SSEE HAD DURING THE YEAR SOLD THE UNDIVIDED INTEREST OF LAND AT DOOR. NO. 26 MALONY ROAD T. NAGAR CHENNAI-600 017 AND HAD OFFERED LONG TERM CAPITAL G AINS ON THE TRANSACTION. IT I.T.A. NO.1856/MDS.2009 2 WAS THE SUBMISSION THAT THE ASSESSEE HAD INHERITED THE PROPERTY ALONG WITH HIS BROTHER AND THREE SISTERS ON THE DEMISE OF THEIR MO THER ON 30-07-1993. THE ASSESSEES MOTHER HAD DIED INTESTATE. THE THREE SI STERS OF THE ASSESSEE HAD RELINQUISHED THEIR RESPECTIVE SHARES IN FAVOUR OF T HE ASSESSEE AND HIS BROTHER THROUGH RELEASE DEEDS. IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER HAD HELD THAT THE INDEXATION WAS ELIGIBLE TO THE ASSESS EE ONLY FROM THE FINANCIAL YEAR 1993-94 THAT WAS THE YEAR IN WHICH THE ASSESSEE HAD INHERITED THE PROPERTY AND THAT TOO ONLY TO AN EXTENT OF 20% AND THE BALANCE 3 0% WAS TO BE INDEXED ONLY IN THE ASSESSMENT YEAR 2002-03 WHEN THE ASSESSEE BE CAME THE OWNER THEREOF ON THE RELINQUISHMENT OF THE RESPECTIVE SHARES BY T HE THREE SISTERS OF THE ASSESSEE IN 2002-03. IT WAS THE SUBMISSION THAT TH E LEARNED CIT(A) HAD HELD THAT THE TRANSACTION BY WHICH THE ASSESSEE RECEIVED THE UNDIVIDED INTEREST IN THE LAND FROM THE THREE SISTERS BY ENTERING INTO A FAMI LY ARRANGEMENT DID NOT AMOUNT TO ANY TRANSFER. IT WAS THE SUBMISSION THAT THIS W AS NOT THE ISSUE IN APPEAL BEFORE THE LEARNED CIT(A). THE ISSUE BEFORE THE LE ARNED CIT(A) WAS AS UNDER : 1. THE ASSESSING OFFICER ERRED BOTH IN LAW AND FAC TS OF THE CASE. 2. THE ASSESSING OFFICER ERRED IN APPLYING INDEXATION IN TWO PARTS WHEREAS THE APPELLANT IS T HE OWNER FOR 50% OF THE PROPERTY BY INHERITANCE FROM T HE ASST. YEAR 1993-94. I.T.A. NO.1856/MDS.2009 3 3. THE ASSESSING OFFICER ERRED IN NOT CONSIDERING THE ADDITIONAL INVESTMENT IN THE SAME HOUSE PROPERT Y FOR EXEMPTION U/S 54 ON THE PRETEXT IT WAS MADE IN THE SUBSEQUENT YEAR. FOR THESE GROUNDS AND ANY OTHER GROUNDS THAT MAY B E ADDUCED AT THE TIME OF HEARING THE APPELLANT PRAYS THAT THE INDEXATION BE APPLIED FULLY FROM THE YEAR 1993- 94 AND `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