TMI Blog2020 (5) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... t has not caused any prejudice to the rights of the assessee and the contentions so advanced cannot be accepted. Assessment was reopened on the ground that the assessee has made time deposit - In the instant case, the assessee has not filed any return of income and only pursuant to notice u/s 148, the return of income has been filed and the assessment proceedings for the impugned assessment year have been initiated. It is therefore a case of assessment and not-reassessment - where AO is ceased of the information that the assessee had made time deposit of ₹ 10 lacs in his bank account and such time deposits remains undisclosed to the Revenue authorities, there is clearly tangible information in the possession of the Assessing officer basis which a prima facie view has been formed that the income has escaped assessment - We believe that necessary nexus has been established between the information and formation of belief that the income has escaped assessment. Capital gains on sale of property - cost of acquisition of the property - Whether entirely long term or is partly long term on assessee s portion/share in the property inherited from his father and partly short te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has explained that he has withdrawn an amount from his bank account on 8.5.2009 and 4.02.2010 and the same has been gifted to the assessee. We therefore find that the assessee has substantially discharged the initial onus cast on him and in absence of any contrary material on record, the source of deposit. Remaining deposit the source of the same has been explained as gift received from assessee s mother and sister supported by their respective affidavits. Given the quantum of amount involved and the fact that household savings by the women in our society is a norm rather than an exception, we believe that the assessee has reasonably discharged the onus cast on him in terms of explaining the nature and source of such deposit as received from his mother and sister. - Decided in favour of assessee. - ITA No. 584/JP/2019 - - - Dated:- 28-4-2020 - Shri Vijay Pal Rao, JM And Shri Vikram Singh Yadav, AM For the Assessee : Shri Tanuj Agarwal (Adv.) For the Revenue : Miss Chanchal Meena (JCIT) ORDER PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of the ld. CIT(A)-II, Jaipur dated 25.02.2019 for the assessment year 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o tax has escaped assessment. It was submitted that merely because a time deposit was made by the assessee, it does not automatically lead to an inference that income has escaped assessment as the assessee might have used his disclosed income for investment in the FDR. In support, reliance was placed on the Hon ble Bombay High Court decision in case of CIT vs. Maniben Vilji Shah 283 ITR 453. It was further submitted that no independent enquiry/verification was conducted by the AO and merely basis the borrowed AIR information, the assessment was reopened U/s 147 of the Act which cannot be a basis for reopening and hence, the notice u/s 148 and consequent reassessment proceeding should be quashed. 4. Per contra, the ld DR drawn our reference to the assessment order and submitted that there is no procedural irregularity as the reasons so recorded have been supplied to the assessee and thereafter, the assessee has chosen not to object to such reopening of assessment proceedings. It was further submitted that the Assessing officer had information that the assessee has placed time deposits of ₹ 10 lacs with his bank and given that he has not filed his return of income, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that merely because time deposit was made by the assessee and the source of which needs to be verified, it does not lead to an inference that income has escaped assessment as there must be reasons to believe and not reasons to suspect that income chargeable to tax has escaped assessment. It was submitted that merely because a time deposit was made by the assessee, it does not automatically lead to an inference that income has escaped assessment as the assessee might have used his disclosed income for investment in the FDR. We find that in the instant case, the assessee has not filed any return of income and only pursuant to notice u/s 148, the return of income has been filed and the assessment proceedings for the impugned assessment year have been initiated. It is therefore a case of assessment and not-reassessment. Therefore, where the Assessing officer is ceased of the information that the assessee had made time deposit of ₹ 10 lacs in his bank account and such time deposits remains undisclosed to the Revenue authorities, there is clearly tangible information in the possession of the Assessing officer basis which a prima facie view has been formed that the income has e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Chugh) Ajay Kumar (son of Mr. Om Prakash Chugh) Vijay Kumar, the appellant (son of Mr. Om Prakash Chugh) Anita Kumari (daughter of Mr. Om Prakash Chugh) 10. It was further submitted that a registered family settlement and relinquishment dated 07.01.2010 was entered amongst the family members, wherein Krishna Kumari (mother of the assessee) and Anita Kumari (sister of the assessee) relinquished their respective portion in the property in favor of the appellant and his brother Ajay Kumar. The assessee sold his portion of the property vide registered sale deed dated 20.01.2010 and declared long term capital gains in return filed in response to notice u/s 148. 11. Regarding the cost of acquisition/improvement and deduction claimed u/s 54, there is no dispute and the ld. AO has accepted them after due verification. 12. It was submitted that the limited controversy which arose in the present case is whether the capital gains on sale of property is entirely long term capital gains (as computed by the assessee in the return filed u/s 148) or is partly long term capital gains on appellant s portion/share in property inherited from father and partly short term capit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purposes of determination of the cost of acquisition in the hands of the successor. Indexation is to be allowed in respect of holding of the asset and not in relation to the individuality of the assessee. Period of holding of the capital asset is to be taken as 01.04.1981 and hence cost inflation index applicable for F.Y. 1981-82 is to be applied instead of the cost inflation index of the year of succession. 15. The ld DR is heard who has submitted that once the assessee has explained the source of such time deposits as amount received on sale of the property and the same has been offered to tax under the head capital gains in his return of income, there is no basis in preliminary objection so raised by the ld AR. Further, regarding period of holding and indexation benefit relating to share of property acquired by the assessee through relinquishment of rights by his mother and sister, it was submitted that since the family settlement deed was signed on 7.01.2010 and the property was later sold on 20.01.2010, the same has been rightly brought to tax as short term capital gains. 16. We have heard the rival contentions and pursued the material available on record. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irely long term or is partly long term on assessee s portion/share in the property inherited from his father and partly short term on portion/share of property received from his mother and sister by way of relinquishment without consideration. 18. There is no dispute that after the death of his father, the assessee got 1/4th share in the property and thereafter, as per the family settlement and relinquishment deed dated 7.01.2010, his mother and sister relinquished their respective shares in the property in favour of the assessee. Therefore, as on the date of the sale of the property, the assessee was in possession of 65.26 sq. yds of property, half of which has been received through inheritance and other half through relinquishment of rights by his mother and sister. There is also no dispute that the property was originally purchased by the assessee s father in the year 1967 and thereafter, improvements have been carried out in year 1985 and 2001. The Assessing officer has therefore accepted the original cost in the hands of the previous owner (deceased father) and improvements thereto. The indexation benefit however has been restricted to the share of the property inherited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be the cost for which the previous owner of the property acquired it, as increased by the cost of any improvement of the asset incurred or borne by the previous owner or the assessee as the case may be. Therefore, once the transfer of the property through release deeds are held as transfer of the property by the respective co-owners through gift then the cost of acquisition of the asset shall be deemed to be the cost to the original co-owners. 16. The Hon'ble Bombay High Court in the case of CIT Vs. Manjula Saha reported in (2011) 16 Taxmann.com 42 (Bombay) at Para 20 to 24 of the order has held as under : 20. To accept the contention of the revenue that the words used in clause (iii) of the Explanation to Section 48 of the Act has to be read by ignoring the provisions contained in Section 2 of the Act runs counter to the entire scheme of the Act. Section 2 of the Act expressly provides that unless the context otherwise requires, the provisions of the Act have to be construed as provided under Section 2 of the Act. In Section 48 of the Act, the expression 'asset held by the assessee' is not defined and, therefore, in the absence of any intention to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld by the previous owner, then obviously in arriving at the indexation, the first year in which the said asset was held by the previous owner would be the first year for which the said asset was held by the assessee. 23. Since the assessee in the present case is held liable for long term capital gains tax by treating the period for which the capital asset in question was held by the previous owner as the period for which the said asset was held by the assessee, the indexed cost of acquisition has also to be determined on the very same basis. 24. In the result, we hold that the ITAT was justified in holding that while computing the capital gains arising on transfer of a capital asset acquired by the assessee under a gift, the indexed cost of acquisition has to be computed with reference to the year in which the previous owner first held the asset and not the year in which the assessee became the owner of the first . 17. Since Mr. Mody had held the property since 1968 and since the coowners by release deeds in pursuance of love and affection to the assessee had relinquished their right in the property in favour of the assessee which has already been held as gift, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old earlier and his sister has withdrawals from her bank account. 23. It was further submitted that the assessee had discharged its onus of establishing the identity (proved through the family settlement and relinquishment deed which was registered, ITR of Mr. Ajay Kumar, capacity (gift amount is small) and genuineness (close relatives can gift amount, moreover, property has also been relinquished during the year under consideration) and reliance was placed on the Hon ble Rajasthan High Court decision in case of M/s Aravali Trading Co. vs ITO reported in (2008) 8 DTR 199. The onus shifted on the Assessing Officer to prove that the alleged transactions were bogus, however, he grossly failed in discharging his onus. 24. It was further submitted that the contents of the affidavits remained uncontroverted. An affidavit cannot simply be brushed aside on the basis that it is a self serving document. Its contents have to be accepted as such unless otherwise proved. Reliance was placed was being placed on the decision in case of Paras Cotton Co. Vs. CIT XXX Tax World 168 (ITAT, Jodhpur Bench). 25. The ld DR submitted that assessee s mother and sister are nonassessee and gifts made ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
