ITO, CHENNAI v. R.Vasanthalakshmi, CHENNAI

ITA 753/CHNY/2016 | 2011-2012
Pronouncement Date: 07-10-2016

Appeal Details

RSA Number 75321714 RSA 2016
Assessee PAN ACFPV0154M
Bench Chennai
Appeal Number ITA 753/CHNY/2016
Duration Of Justice 6 month(s) 9 day(s)
Appellant ITO, CHENNAI
Respondent R.Vasanthalakshmi, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 07-10-2016
Appeal Filed By Department
Bench Allotted C
Date Of Final Hearing 16-08-2016
Next Hearing Date 16-08-2016
Assessment Year 2011-2012
Appeal Filed On 28-03-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . ! . # $ % & [ BEFORE SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR JUDICIAL MEMBER ] ./ I.T.A.NOS. 752 & 753/MDS/2016 / ASSESSMENT YEARS : 2010-11 & 2011-12 THE INCOME TAX OFFICER NON CORPORATE WARD 2(2) CHENNAI VS. SMT. R. VASANTHALAKSHMI NO.68 GREENWAYS ROAD RAJA ANNAMALAIPURAM CHENNAI 600 028 [PAN ACFPV 0154 M ] ( '( / APPELLANT) ( )*'( /RESPONDENT) / APPELLANT BY : SHRI A.V. SREEKANTH JCIT /RESPONDENT BY : SHRI A.S. SRIRAMAN ADVOCA TE / DATE OF HEARING : 16 - 08 - 2016 ! / DATE OF PRONOUNCEMENT : 07 - 10 - 2016 + / O R D E R PER G. PAVAN KUMAR JUDICIAL MEMBER THESE APPEALS OF THE REVENUE ARE DIRECTED AGAIN ST THE COMMON ORDER OF THE COMMISSIONER OF INCOME-TAX (AP PEALS)-2 CHENNAI DATED 31.12.2015 IN I.T.A.NOS.268/CIT(A)-2 /2013-14 & 144/CIT(A)-2/2014-15 FOR ASSESSMENT YEARS 2010-11 A ND 2011-12 RESPECTIVELY PASSED U/S 143(3) AND 250 OF THE INCO ME-TAX ACT 1961(IN SHORT THE ACT). SINCE COMMON ISSUE ARISE FOR CONSIDERATION IN ITA NO.752 & 753/16 :- 2 -: BOTH THE APPEALS FOR THE SAKE OF CONVENIENCE AND B REVITY WE DISPOSE OF THE SAME BY THIS COMMON ORDER. 2. FIRST WE TAKE UP THE APPEAL FOR ASSESSMENT YEAR 201 0-11 IN I.T.A.NO.752/MDS/2016. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: 2.1 THE LEARNED CIT(A) FAILED TO APPRECIATE THAT T HE CREATION OF A PARTNERSHIP IS MERELY A SHAM TO DISTRACT THE REVEN UE FROM ASCERTAINING THE TRUE NATURE OF THE TRANSACTION WH ICH IS ONE OF SALE OF IMMOVABLE PROPERTY. 2.2 THE LEARNED CIT(A) ERRED IN NOT APPRECIATING T HAT THE TRANSACTION HAS TO BE SEEN SUBSTANCE OVER FORM WHI CH IS THE SALE OF IMMOVABLE PROPERTY WHICH IS SUBJECT TO CAPITAL G AIN. 2.3 THE LEARNED CIT(A) HAS NOT TAKEN INTO CONSIDER ATION THE FACT THAT THE SAID PARTNERSHIP WAS NOT IN EXISTENCE WHEN THE RETURN WAS FILED INITIALLY. THE REVISED RETURN WAS FILED INCORPORATING THE ABOVE MERELY TO GET TAX BENEFIT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND HAVING INCOME FROM CAPITAL GAINS AND HOUSE PROPERTY AND FILED RETURN OF INCOME ON 12.10.2010 DECLARED G ROSS TOTAL INCOME OF ` 1 14 22 489/- AND CLAIMED DEDUCTION U/S 80IB OF ` 1 15 77 452/- AND THE NET INCOME BEING NIL. SUBSEQUENTLY THE ASSESSEE FILED REVISED INCOME ON 24.1.2011 ADMITTING TOTAL INCOME OF ` 34 082/-. IN THE REVISED RETURN THE ASSESSEE HAS DISCLOSED THE SHARE INCOME OF ` 86 59 858/- FROM M/S ARIHANT HEIRLOOM AND THE SHAR E INCOME WAS EXEMPT U/S 10(2A) OF THE ACT. THE CASE WAS SELECT ED FOR SCRUTINY UNDER CASS AND NOTICES U/S 143(2) DATED 29.8.2011 AND 142(1) DATED ITA NO.752 & 753/16 :- 3 -: 8.5.2012 WERE ISSUED AND SERVED ON THE ASSESSEE. I N RESPONSE TO THE NOTICE THE LD. AR OF THE ASSESSEE APPEARED AND FI LED THE INFORMATION CALLED FOR. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS PURCHASED LAND ALONGWITH OTHERS AND ENTERED INTO AG REEMENT WITH M/S ARIHANT FOUNDATIONS AND HOUSING LTD. AND FORMED A PARTNERSHIP FIRM M/S ARIHANT HEIROOM TO CARRY ON THE BUSINESS OF BUI LDING OF HOUSING PROJECTS. THE ASSESSING OFFICER AFTER CONSIDERING THE FACTS AND THE RELEVANT TRANSACTIONS WORKED OUT THE CAPITAL GAINS IN RESPECT OF SALE OF THE UNDIVIDED SHARE OF LAND AND WAS ALSO OF THE OP INION THAT THE ASSESSEE HAS SUBSTANTIAL INCOME IN RESPECT OF THE S AID PROJECT AND CALCULATED TAXABLE INCOME OF ` 1 07 39 680/- AND PASSED ORDER U/S 143(3) OF THE ACT DATED 30.3.2013. THE ASSESSING O FFICER ALSO INCLUDED IN ASSESSED INCOME ` 1 06 73 189/- AS LONG TERM CAPITAL GAINS ON TRANSFER OF UNDIVIDED SHARE OF LAND ALONGWITH OT HERS WHERE ASSESSEE HAS 40% SHARE INTEREST. 4. AGGRIEVED BY THE ORDER OF THE ASSESS ING OFFICER THE ASSESSEE HAS FILED AN APPEAL BEFORE THE CIT(A). TH E CIT(A) CONSIDERED THE GROUNDS AND FINDINGS OF THE ASSESSIN G OFFICER AND RELIED ON THE EARLIER ORDER OF THIS TRIBUNAL IN THE ASSES SEES OWN CASE IN I.T.A.NO. 1611/MDS/2011 DATED 26.11.2012 DELETED TH E ADDITION. 5. AGGRIEVED BY THE ORDER OF THE CI T(A) THE REVENUE HAS ASSAILED AN APPEAL BEFORE THIS TRIBUNAL. BEFORE US THE LD. DR ARGUED ITA NO.752 & 753/16 :- 4 -: THAT THE PARTNERSHIP FIRM CONSTITUTED IS A SHAM AND REVENUE IS DERIVED ON SALE OF IMMOVABLE PROPERTY AND THE ASSESSEE I S LIABLE FOR PAYMENT OF TAX ON CAPITAL GAINS. THE ASSESSEE HAS IN THE ORIGINAL RETURN OF INCOME CLAIMED DEDUCTION U/S 80IB OF THE ACT AND SUBSEQUENTLY HAS FILED REVISED RETURN AND OFFERED INCOME AND ALSO CLAIMED EXEMPTION U/S 10(2A) OF THE ACT AND PRAYED THAT THE ORDER OF THE ASSESSING OFFICER BE RESTORED. 6. CONTRA THE LD. AR OF THE ASSESSEE RELIE D ON THE CIT(A)S ORDER AND ALSO THE TRIBUNALS ORDER IN ASSESSEES OWN CA SE FOR ASSESSMENT YEAR 2008-09 WHERE SIMILAR ISSUE WAS DEALT WITH AND HELD THAT THE INCOME RECEIVED FROM THE PARTNERSHIP FIRM IS EXEMPT U/S 10(2A) OF THE ACT AND IT COULD NOT BE TAXED IN THE HANDS OF THE P ARTNER. 7. WE HEARD THE RIVAL SUBMISSIONS PERUSED THE MATERIAL ON RECORD AND THE JUDICIAL DECISIONS AND ALSO THE LD. DRS CONTENTION THAT THE TRANSACTION IS A SHAM TRANSACTION AND ALSO ASS ESSEE HAS NOT PAID THE TAXES ON THE LONG TERM CAPITAL GAINS BEING AN AFTERTHOUGHT AS THE ASSESSEE IN THE EARLIER RETURN OF INCOME CLAIMED D EDUCTION U/S 80IB AND SUBSEQUENTLY FILED THE REVISED RETURN WITH SHAR E INCOME FROM PARTNERSHIP FIRM. WE HAVE PERUSED THE TRANSACTIONS ENTERED BY THE ASSESSEE AND ALSO THE INVESTMENTS BY HER IN ARIHAN T HEIRLOOM FOR JOINT VENTURE DEVELOPMENT WHERE THE INCOME WAS DERIVED ON HOUSE BUILDING AND DEVELOPMENT PROJECTS. SIMILAR ISSUE WAS CONSID ERED BY THE CO- ITA NO.752 & 753/16 :- 5 -: ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR IN 2008-09 IN I.T.A.NO.1611/MDS/2011: 6. WE HAVE HEARD BOTH THE SIDES PERUSED THE RECORDS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSEE IS A PARTNER IN TH E PARTNERSHIP FIRM M/S. ARIHANT HEIRLOOM HAVING SHAR E OF 21.20%. IT IS AN ADMITTED FACT THAT THE ASSESS EE HAS RECEIVED HER SHARE FROM THE PARTNERSHIP FIRM. T HE SAME WAS SHOWN IN HER RETURN AS BUSINESS INCOME AND WHEN THE SCRUTINY ASSESSMENT HAD TAKEN PLACE IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE SAID INCOME WAS RECEIVED BY THE ASSESSEE FROM THE PARTNERSHIP FIRM AND THAT IT HAD ALREADY BEEN SHOWN IN THE HANDS OF THE FIRM AND THEREFORE IT COULD NOT BE TAXED AGAIN IN THE HANDS OF THE ASSESSEE U/S 10(2A) OF THE ACT. THE ASSESSING OFFICER WITHOUT CONSIDER ING THE SUBMISSIONS OF THE ASSESSEE SIMPLY SAID THAT T HE ASSESSEE IS NOT ELIGIBLE FOR THE DEDUCTION U/S 80-I B CLAIM BY FOLLOWING THE DECISION IN THE CASE OF GOET Z (INDIA) LTD. (SUPRA) AND ADDED THE SAME AS INCOME AGAIN IN THE HANDS OF THE ASSESSEE. THE LEARNED CIT(APPEALS) HAS CATEGORICALLY HELD THAT M/S. ARIHA NT HEIRLOOM HAS DISCLOSED THE ENTIRE INCOME INCLUDING THE INCOME RECEIVED BY THE ASSESSEE AND THE INCOME RECEIVED FROM THE PARTNERSHIP FIRM IS EXEMPT U/S 10(2A) OF THE ACT IN THE HANDS OF THE PARTNER AND I T COULD NOT BE TAXED IN THE HANDS OF THE PARTNER. NO MATERIAL WAS PRODUCED BY THE REVENUE TO CONTRADICT THE ABOVE FINDING GIVEN BY THE LEARNED CIT(APPEALS) . INSOFAR AS THE CASE LAW RELIED ON BY THE ASSESSING OFFICER IS CONCERNED IT HAS NO APPLICATION TO THE FACTS OF THE CASE FOR THE SIMPLE REASON THAT THE ASSESSEE IS NOT ASKING FOR ANY FRESH CLAIM. IT IS ONLY A CASE WHERE SEC. 80-IB RELIEF WAS CLAIMED WRONGLY. IN VIEW OF THE ABOVE WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LEARNED CIT(APPEALS). THEREFORE THIS GROUND OF APPEAL RAISED BY THE REVENUE IS DISMISSED. ITA NO.752 & 753/16 :- 6 -: 8. WE RESPECTFULLY FOLLOWING THE ORDER OF THE T RIBUNAL FOR ASSESSMENT YEAR 2008-09 DISMISS THE REVENUES APP EAL. 9. SIMILARLY I.T.A.NO.753/MDS/2016 FOR ASSES SMENT YEAR 2011-12 IS ALSO DISMISSED. ORDER PRONOUNCED ON FRIDAY 7 TH OCTOBER 2016 AT CHENNAI. SD/- SD/- ( . ) (ABRAHAM P. GEORGE) / ACCOUNTANT MEMBER ( . # ) (G. PAVAN KUMAR) $ / JUDICIAL MEMBER '# / CHENNAI $% / DATED: 7 TH OCTOBER 2016 RD %& '()( / COPY TO: 1 . / APPELLANT 4. * / CIT 2. / RESPONDENT 5. (+ - / DR 3. *./ / CIT(A) 6. 01 / GF