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TMI Blog2020 (7) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax Act, which deals with sale, exchange or relinquishment of an asset ?and 3. Whether the Tribunal is correct in law in giving relief to the assessee by holding that the settlement entered into by the assessee with his brother Shri S.Rajarathnam is out of his own free will and love and affection and as such falls within the meaning of gift by overlooking the very nature of the transaction namely exchange of properties?" 2. We have heard Mr.T.R.Senthilkumar, learned Senior Standing Counsel and Ms.K.G.Usharani, learned Standing Counsel appearing for the appellant - Revenue. Though the respondent has been served and the name of the respondent printed in the cause list, none appears for the respondent. 3. The assessee is an individual and a partner of group of concerns. A search and seizure operation was conducted in the business premises of the assessee on 18.8.2011, pursuant to which, assessments were made under Section 153C read with Section 153A and Section 143(3) of the Act for the years 2006-07 to 2009-10 and completed on 30.3.2014. 4. The assessee and his brother one Mr.S.Rajarathnam purchased certain properties and they were not inherited. During the assessment year in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perties. Thus, the assessee acquired new rights in 55 properties, which were not there prior to the so called settlement, at the expense of his 50% share in 30 other properties, which share vanished after the settlement. Hence, by reading both the settlements together, since both of them between the same persons on the same day and with reference to joint properties belonging to the same persons, the clear picture which emerges that there is an exchange of properties between the assessee and his brother and such exchange was done by way of relinquishment of respective rights in the properties to suit their convenience. It can, therefore, be safely said that the act of relinquishing the assessee's share in 30 properties is not an act of charity or benevolence, but it resulted in acquisition of new rights in 55 other properties. Hence, profit did arise to the assessee in the form of his new rights in 55 other properties (whose market value comes to Rs..../- as per the settlement deed.)." 8. The facts, as culled out by the Assessing Officer, show that totally, there were 85 properties owned by the assessee and his brother, that the assessee relinquished 50% of the share in 30 pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the properties. 12. Thereafter, the Assessing Officer, took up for discussion the effect of Section 45 of the Act and summed up his conclusion by holding that the transaction amounted to transfer within the meaning of Section 2(47) of the Act, that it attracted the provisions of Section 45 of the Act thereby liable to tax on capital gains and that the exemptions provided under Section 47 of the Act were not applicable to the assessee. 13. The assessee carried the matter on appeal to the CIT(A) stating that the Assessing Officer did not consider the valid objections filed by the assessee along with appropriate judgments. It was further contended that the settlement of jointly held properties would not fall within the term 'transfer' as defined under Section 2(47) of the Act and the settlement was made for peaceful living and out of love and affection. 14. Before the CIT(A), the assessee reiterated the contentions raised before the Assessing Officer stating that the document was registered by the Sub-Registrar of the Registration Department as a settlement deed and not as a release deed by charging Rs. 10,000/- towards stamp duty instead of imposing registration fe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Department. We are informed that invariably the Assessing Officer or the Departmental Representative would be present before the CIT(A) and more particularly during the hearing of the cases. 19. However, to our shock and surprise, it is not known as to why the Department was not represented by an Officer or Departmental Representative especially when the Revenue is contesting the matter. We wish to state that the Principal Chief Commissioner of Income Tax, Chennai shall take note of these facts and ensure that in all cases, the Department is represented before the First Appellate Authority and the Tribunal not only to defend the cases of the Department, but also to assist in the decision making process. The learned Senior Standing Counsel appearing for the appellant is directed to furnish a copy of this judgment to the Principal Chief Commissioner of Income Tax, Chennai. 20. Coming back to the order passed by the CIT(A), as noted earlier, there is no discussion as to the finding of rendered by the Assessing Officer after examining the nature of transaction. All that the CIT(A) did was to note down the facts, referred to the two decisions namely the decision of the Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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