Dr.Abraham Thomas, Bangalore v. DCIT, Trivandrum

ITA 540/COCH/2010 | misc
Pronouncement Date: 29-03-2012 | Result: Allowed

Appeal Details

RSA Number 54021914 RSA 2010
Assessee PAN AERPK1799P
Bench Cochin
Appeal Number ITA 540/COCH/2010
Duration Of Justice 1 year(s) 5 month(s) 17 day(s)
Appellant Dr.Abraham Thomas, Bangalore
Respondent DCIT, Trivandrum
Appeal Type Income Tax Appeal
Pronouncement Date 29-03-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 29-03-2012
Assessment Year misc
Appeal Filed On 12-10-2010
Judgment Text
1 ITA NO. 540/COCH/2010 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKARA N(AM) I.TA NO. 540/COCH/2010 (ASSESSMENT YEAR 2006-07) DR. ABRAHAM THOMAS KOTARATHIL VS THE DY.CIT CIR. 1(2) 7/3 CLARKE ROAD RICHARDS TOWN TRIVANDRUM BANGALORE-560 005 PAN : AERPK1799P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R KRISHNA IYER RESPONDENT BY : SMT. VIJAYAPRABHA DATE OF HEARING : 20-03-2012 DATE OF PRONOUNCEMENT : 29-03-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX(A)-I TRIVANDRUM DATED 23 -07-2010 AND PERTAINS TO ASSESSMENT YEAR 2006-07. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO COMPUTATION OF CAPITAL GAIN ON SALE OF THE PROPERTY. 2 ITA NO. 540/COCH/2010 2. SHRI R KRISHNA IYER THE LD.REPRESENTATIVE FOR TH E ASSESSEE SUBMITTED THAT THE ASSESSEE SOLD THE PROPERTY FOR A SALE CONSIDERA TION INCLUSIVE OF THE ARREARS OF RENT. ACCORDING TO THE LD.REPRESENTATIVE THE TENA NT IS BANK OF BARODA. THE ARREARS OF RENT WAS RS.21 072 FOR THE MONTH OF DECE MBER. IN RESPECT OF TOWN PLANNING OFFICE THE ARREAR WAS RS.3 67 866. HOWEVE R THIS WAS INCLUDED IN THE SALE CONSIDERATION WHICH WAS OFFERED IN THE RETURN AS SALE CONSIDERATION OF THE BUILDING. IN FACT THE AGREED SALE CONSIDERATION W AS RS. 2 35 00 000. AFTER REDUCING THE ARREARS OF RENT TO THE EXTENT OF RS. 3 88 938 THE SALE CONSIDERATION WAS SHOWN ONLY TO THE EXTENT OF RS.2 31 11 062. AC CORDING TO THE LD.REPRESENTATIVE IF THE RENT TO THE EXTENT OF RS. 3 88 938 WAS ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY THE SAME HAS TO BE EXCLUDED FROM THE LONG TERM CAPITAL GAIN. THE LD.REPRESENTATIVE SUBMITTED THAT THE ASSESSEE IS ALSO ENTITLED FOR STANDARD DEDUCTION TO THE EXTENT OF 30 % ON THE RENTAL INCOME OF THE ASSESSEE. 3. ON THE CONTRARY SMT. VIJAYAPRABHA THE LD.DR SU BMITTED THAT WHEN THE PROPERTY WAS LET OUT THE RENT RECEIVED OR RECEIVAB LE FOR THE PROPERTY HAS TO BE INCLUDED UNDER THE HEAD INCOME FROM HOUSE PROPERTY . IF THE ASSESSEE ARGUED THAT HE CEASED TO BE THE OWNER OF THE BUILDING WITH EFFECT FROM 22-12-2005 THE RENT RECEIVABLE UPTO THE DATE OF TRANSFER / SALE OF PROPERTY HAS TO BE ASSESSED IN THE HANDS OF THE ASSESSEE. ACCORDING TO THE LD.REP RESENTTIVE IF THE ASSESSEE FORGOES THE ARREARS OF RENT IN FAVOUR OF THE PURCHA SER IT IS ONLY AN APPLICATION OF INCOME. THEREFORE IT HAS TO BE SUBJECTED TO TAXAT ION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY THE SALE CONSIDERATION OF THE PROPERTY WAS RS.2.35 CRORES. THE ASSESSEE AFTER R EDUCING THE ARREARS OF RENT 3 ITA NO. 540/COCH/2010 FROM TOWN PLANNING OFFICE TO THE EXTENT OF RS.3 67 866 CLAIMS TO HAVE BEEN RECEIVED ONLY RS.2 31 11 062. THE ASSESSEE CLAIMS THAT THERE WAS A SPECIFIC RECITAL IN THE SALE DEED. THE FACT REMAINS IS THAT THE TOTAL SALE CONSIDERATION WAS RS.2.35 CRORES. OUT OF THIS THE ARREARS WAS ADJUS TED AND THE BALANCE WAS CLAIMED TO HAVE BEEN RECEIVED BY THE ASSESSEE. IT IS NOT KN OWN HOW THE ARREARS OF RENT WAS REDUCED FROM THE SALE CONSIDERATION. WHEN THE PURCHASER AGREED TO COLLECT THE ARREARS OF RENT HE HAS TO PAY THE ARREARS OF R ENT IN ADDITION TO AGREED SALE CONSIDERATION. THEREFORE THE MATTER NEEDS VERIFIC ATION. MOREOVER WHEN THE ASSESSING OFFICER ASSESSED THE ARREARS OF RENT AS INCOME FROM HOUSE PROPERTY THE ASSESSEE IS NATURALLY ENTITLED FOR STANDARD DED UCTION OF 30% AS PROVIDED UNDER THE INCOME-TAX ACT. SINCE THE MATTER NEEDS FA CTUAL VERIFICATION WITH REGARD TO THE ADJUSTMENT SAID TO BE MADE IN THE SALE CONSI DERATION AND THE RECITALS CLAIMED TO HAVE BEEN MADE IN THE SALE DEED THIS TR IBUNAL IS OF THE OPINION THAT THE ASSESSING OFFICER HAS TO VERIFY THE MATTER. ACC ORDINGLY THE ORDERS OF AUTHORITIES BELOW ARE SET ASIDE AND THE ENTIRE ISSU E IS REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL RE-EXAMINE THE MATTER IN THE LIGHT OF MATERIAL ON RECORD AND THEREAFTER DECIDE T HE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING OPPORTUNITY TO THE ASSESSEE. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF MARCH 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN DT : 29 TH MARCH 2012 PK/- 4 ITA NO. 540/COCH/2010 COPY TO: 1. DR. ABRAHAM THOMAS KOTARATHIL 7/3 CLARKE ROAD RIC HARDS TOWN BANGALORE 2. THE DY.CIT CIR.1(2) TRIVANDRUM 3. THE COMMISSIONER OF INCOME-TAX(A)-I TRIUVANDRUM 4. THE COMMISSIONER OF INCOME-TAX TRIVANDRUM 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR INCOME-TAX APPELLATE TRIBUNAL COCHIN BENCH