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TMI Blog2025 (3) TMI 830X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with ten (10) other co-owners for a consideration of Rs.5,29,74,000/-, which has market value [as per section 50C of the Act] at Rs.9,08,95,000/-; and accordingly, the assessee's share/interest in the immovable property, ought to be Rs.82,63,181/- (Rs.9,08,95,000/11); and since assessee didn't offer it for taxation, the AO reopened the assessment for AY 2016-17 and framed assessment by computing Short Term Capital Gain (STCG) from the aforesaid transfer of property, after reducing ad-hoc 10% of the consideration received towards cost of acquisition from the entire income from sale of immovable property (i.e. Rs.82,63,181 minus Rs.8,26,318/-) has computed STCG of Rs.74,36,863/-, which action of the AO has been confirmed by the Ld.CIT(A). Aggrieved by the impugned action of the Ld.CIT(A), the assessee is in appeal before us. 4. The Ld.AR, Shri S.P. Chidambaram, Advocate, assailing the action of the Ld.CIT(A), firstly submitted that the Ld CIT(A)/AO, on wrong assumption of relevant facts has added the capital gains in the hands of the assessee in relevant year i.e. AY 2016-17; and to buttress such a contention, he pointed out that transaction in question i.e. sale of immoveable pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein the AO had examined the same transaction in question [i.e. in respect of transfer/sale of schedule property situated at Vandalur Village of 1.71 acres by 11 co-owners to Mrs. R. Amudha for a sale consideration of Rs.9,08,95,000/- of which their shares/interest were Rs.46,71,613/- and Rs.1,40,14,840/- respectively]; However, the AO made additions in both their hands i.e. Smt. P.Yasodha, Long Term Capital Gain (LTCG) of Rs.81,46,406/- and in the hands of Shri. Parthasarathy Varadhan, LTCG of Rs.82,41,338/-. And on appeal, the Ld.CIT(A)-10, vide order dated 24.09.2020 in the case of P.Yasodha, inter alia deleted the addition by holding that the land in question as not a capital asset within the meaning of section 2(14) of the Act being an agricultural land and hence, no tax would be liable from transfer of it and therefore, he deleted the LTCG of Rs.82,63,181/-. Likewise the Ld.CIT(A) was pleased to delete the addition of LTCG to the tune of Rs.81,46,406/- in the hands of Shri. Parthasarathy Varadhan. Thus, according to Ld.AR, the assessee was able to prove before the Ld.CIT(A) that property in question being an agricultural land was transferred in AY 2014-15, and therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of land at Vandalur Village; and on 07.07.1978, the grand-father passed away, leaving behind nine (9) heirs as successors to the said property. The assessee's father Shri. Chakrapani Naicker was one of the nine (9) successors/heir; and he passed away on 17.04.1995, leaving behind three (3) heirs (wife Smt. Dhanu, two daughters P. Yashoda and Prema/assessee). On 15.12.2010, the scheduled property was partitioned/divided as per the mutual understanding among heirs; and thus, the assessee's father's share (1/9th) devolved on the three heirs i.e. assessee, her mother and sister (Yasodha) in three equal parts. Thus, the assessee got 1/3rd share of 1/9th share of the undivided interest in the 1.71 acres of land at Vandalur Village. Later, the scheduled property was sold on 17.02.2014 to M/s. R. Amudha, for a consideration of Rs.9,07,95,000/- and thus, the assessee's part of share was worked out at Rs.46,71,613/- i.e.1/3rd share of 1/9th interest in the immovable property. 7.1 Based on the transfer of the Scheduled property on 17.02.2014, the AO re-opened the case of assesse's sister Smt P. Yasodha, for AY 2014-15 and after enquiry made an addition of LTCG of Rs.81,46,406/- by order u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year she had transferred immovable land along with ten (10) owners for total sale consideration of Rs.9.08 Crs is on totally wrong assumption of fact; and therefore, the AO's action to reopen the assessment of assessee for AY 2016-17, on the very same transaction of immovable property which happened on 17.02.2014 i.e. in AY 2014-15, is erroneous. We have come to such conclusion by firstly taking note of the information on the basis of which the AO has resorted to reopening of assessment of assessee for AY 2016-17, which information, he disclosed at para one of the assessment order, wherein the AO notes (in his own wordings) "the assessee has sold immovable property along with ten (10) other co-owners for a consideration of Rs.5,29,74,000/- on the market value of which as per section 50C Rs.9,08,95,000/-". And thereafter, he [AO] is noted to have framed the assessment by computing the assessee's share out of the above sale consideration at Rs.82,63,818/- (Rs.9,08,95,000/11) and computed STCG of Rs.74,36,863/- from the transfer, Therefore, we find that AO has reopened the assessment for taxing an event which didn't happen during the relevant year i.e. AY 2016-17, but in AY 2014-15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s sister Smt. P. Yasodha has undergone scrutiny u/s. 143(3) after re-opening u/s. 147 of the Act wherein the AO made somewhat similar addition of LTCG on the very same transaction of Rs.81,46,460/-; and on appeal, the Ld.CIT(A) is noted to have found that the AO erred in dividing the gross consideration of Rs.9.08 crores into eleven (11) heirs and computing the share of assessee at Rs.82,63,181/-, whereas her share was as per the partition-deed of 2010, and accordingly, was only Rs.46,71,613/-, which fact has been reproduced by Ld.CIT(A) at Page No.23 of his order dated 24.09.2020, wherein he noted that Smt. P.Yasodha (sister of the assessee in the present case) has received only the share of Rs.46,71,613/- (out of total consideration of Rs.9,08,98,000/-) details of which are noted as under: STATEMENT OF INCOME CAPITAL GAIN 1/12th share in sale of agricultural land at Vandalur village 1.71 acres on 17.02.2014 (The above said land is got by way of family Deed dated 15.12.2010) Total area sold 171.5 cents Total sale consideration 9,08,95,000 82,63,181.82 Less: Brokerage paid 18,17,900 Net Amount received 8,90,77,100 1,00,99,444.44 Share of Capital Gai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lation of the nearest municipality is 17,47,787 as per the 2011 census. d. Presence of well in the land - water resource for agricultural activity and EB connection. 7.8 And thereafter, the Ld.CIT(A) concluded as under: 6.10 As can be seen from the above, the appellant had produced the required documentary evidence from the Revenue authorities and other requisite documents that the land is not a capital asset within the meaning of Sec.2(14) of the Act and further, the tax utility tool of the Departmental website also reiterates the same. Further, it is stated that the AO has not adjudicated as to whether the land is an agricultural land or not as per the provisions of the Act. Further, the appellant has also successfully rebutted the contention of the AO for only partly accepting a composite proposal which is not legally tenable. In any case, the taxability or otherwise ought to be decided as per the provisions of the Act and not as per a letter submitted by the appellant. As the AO had not decided the issue on the merits of the case, as per the powers vested with CIT(A) u/s. 250(4), the issue is decided on the merits of the case. In view of the above factual and legal positio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assesse's contention that she has not made any sale/transfer of any immovable property in the relevant year i.e. AY 2016-17; and if it is found that the assessee didn't undertake any transfer/sale of immovable property in AY 2016-17, then no capital gain to be taxed in the hands of the assessee for AY 2016-17; and if it is found that the assessee along with ten (10) co-owners have sold immovable property for Rs 9.08 Crs, in AY 2016-17, then AO to assess the capital gains from such transfer of property in accordance to law; after giving opportunity to assessee. 8. In the result, appeal filed by the assessee in ITA No.2321/Chny/2024 is allowed for statistical purposes. ITA No.2322/Chny/2024: 9. This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter in short "the Ld.CIT(A)"), Chennai/Delhi, dated 11.07.2024 for the Assessment Year (hereinafter in short "AY") 2016-17, wherein the Ld.CIT(A) has confirmed the penalty of Rs.21,24,260/- passed by the AO u/s.271(1)(c) of the Act for concealment of income. 10. The penalty has been levied on the assessee which emanates from the Assessment order u/s.147 r.w.s.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (hereinafter in short "AY") 2016-17, against the confirmation of penalty u/s.271F of the Act. 15. The impugned penalty was levied on the assessee for nonfiling of the RoI for AY 2016-17 u/s.139(1) of the Act. As noted, (supra), the AO has re-opened the assessment for AY 2016-17 and added total income of Rs.74,57,960/-; and hence, was of the view that penalty u/s.271F of the Act is attracted and levied penalty of Rs.5,000/-. On appeal, the Ld.CIT(A) has confirmed the penalty. However, the main plea of the assessee is that there is no alleged transfer of any immovable property in AY 2016-17 and her taxable income was less than the threshold limit (i.e. she had earned only interest income of Rs.21,100/-), hence, she is not required to file the return and therefore, didn't file the return of income u/s.139(1) of the Act. In this regard, we are of the view that penalty u/s.271F of the Act can be imposed only if the AO is able to show that assessee had in the first-place taxable income beyond the threshold limit, then only the fault can be attributed on the assessee for failure to file return of income u/s.139(1) of the Act. And since, we have set aside the assessment back to the JAO t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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