Commissioner Of Income Tax Chennai v. Kumararani Smt.meenakshi Achi Chettinad House Rajah Annamalaipuram Chennai-600 028

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 25.10.2006 CORAM THE HON'BLE MR.JUSTICE P.D.DINAKARANANDTHE HON'BLE MR.JUSTICE P.P.S.JANARTHANA RAJA T.C.(A) No.2409 of 2006 Commissioner of Income TaxChennai... Appellant /Appellant Vs Kumararani Smt.Meenakshi AchiChettinad HouseRajah AnnamalaipuramChennai-600 028... Respondent/ Respondent PRAYER: Appeal under Section 260A of the Income Tax Act, 1961against the order of the Income Tax Appellate Tribunal, 'A' Bench,Chennai dated 17.3.2006 made in I.T.A.No. 2031/Mds/2003 for theassessment year 1995-96 against the order of the Commissioner ofIncome Tax (Appeals) V Chennai dated 23.9.1998 in I.T.A.No.16/98-99 against the order of the Deputy Commissioner of Income Tax,Special Range I, Chennai dated 24.3.98 in 702-M/95-96. For Appellant : Mrs.Pushya Sitaraman J U D G M E N T (Delivered by P.D.DINAKARAN,J.) This appeal is directed against the order of the Income TaxAppellate Tribunal, 'A' Bench, Chennai dated 17.3.2006 made inI.T.A.No.2031/Mds/2003 for the assessment year 1995-96. 2.1. The facts of the case, in brief, are that the assesseealong with other three co-owners sold the land situated at Adayar,Raja Annamalaipuram, Chennai bearing R.S.No.4291/1 and 4294/1 tothe extent of 43 grounds and 845 sq.ft. The assessee had 9/16thshare and the sale consideration received to the extent of her https://hcservices.ecourts.gov.in/hcservices/ share was Rs.6,85,28,195/- during the relevant assessment year. Forthe capital gain purpose, the assessee has taken the value of theproperty as on 1.4.1981 at Rs.2,86,000/- per ground based on thereport of the valuer, but the Assessing Officer, based on the wealthtax assessment of one of the co-owners for the year 1992-93, whereinthe neighbouring property was valued at Rs.60,000/- considered thevalue of the property sold as on 1.4.1981 at Rs.70,000/- per groundas fair and reasonable and accordingly, he computed the long termcapital gain. 2.2. On appeal by the assessee, the Commissioner of Income Tax(Appeals), deleted the addition made to the capital gains by theAssessing Officer and substituted the value taken by the assessee onthe basis of value estimated by the Registered Valuer, viz., atRs.2,86,000/-. 2.3. Exasperated by the order of the Commissioner of Income Tax(Appeals), the Revenue filed an appeal before Tribunal. TheTribunal, after taking note of the order of the Commissioner ofIncome Tax, with respect to a co-owner of the land, dropping theproceedings initiated under Section 263 of the Income Tax Act andaccepting the value adopted at Rs.2,86,000/- per ground as on1.4.1981 while arriving at the capital gains assessable for the year1995-96; and the ratio laid down in Jaswant Rai v. CWT, [1977] 107ITR 477 that differential treatment cannot be met out to another co-owner while making the assessment of the same property or whilevaluing the same property, held that the value of the land taken bythe assessee based on the valuation report of the Registered Valuerat Rs.2,86,000/- per ground is fair and reasonable. 2.4. Hence, the present appeal by the Revenue raising thefollowing substantial questions of law: (i)Whether on the facts and circumstances of the case theTribunal was right in dismissing the Department's appeal onthe ground that the proceedings initiated under Section 263of the Act had been dropped in the case of one of the co-owners? and (ii)Whether on the facts and circumstances of the case theTribunal was right in dismissing the Department's appealwithout going into the merits of the case? 2.4. Hence, the present appeal by the Revenue raising thefollowing substantial questions of law: (i)Whether on the facts and circumstances of the case theTribunal was right in dismissing the Department's appeal onthe ground that the proceedings initiated under Section 263of the Act had been dropped in the case of one of the co-owners? and (ii)Whether on the facts and circumstances of the case theTribunal was right in dismissing the Department's appealwithout going into the merits of the case? 3. The learned counsel for the Revenue contends that theTribunal erred in deciding the issue without going into the merits ofthe case, merely on the basis of the co-owner's case being dropped;and that the Registered valuer had taken a sale of ½ ground of landin 1995 and worked backwards, whereas the assessing officer had takenthe value shown by one of the co-owners in respect of theneighbouring land, and therefore, the order of the assessing officerneeds to be restored. https://hcservices.ecourts.gov.in/hcservices/ 4.1. Admittedly, the assessing officer proceeded to adopt thevalue of the land disclosed by one of the co-owners for wealth taxproceedings for the assessment year 1992-93 and the said property islocated at quite a distance from the impugned property and furtherthat property was valued for the purpose of wealth-tax and not on thebasis of fair market value. Moreover, no reason has been attributedagainst the assessee by the assessing officer, for not accepting thevalue adopted by the assessee, based on the report of an approvedvaluer. 4.2. That apart, the Tribunal, while passing the order underappeal, had also taken into consideration the order of theCommissioner of Income Tax initiated under Section 263 of the IncomeTax Act, in and by which, the proposal to revise the assessment inthe case of other co-owner was dropped, finding that there was nojustification to reject the value adopted by the assessee. TheTribunal, in the light of the decision in Jaswant Rai v. CWT, [1977]107 ITR 477, held that differential treatment cannot be met out toanother co-owner while making the assessment of the same property orwhile valuing the same property. 4.3. The learned counsel for the Revenue is not in a position tosatisfy us, as to how the Commissioner of Income Tax dropped theproceedings initiated under Section 263 of the Income Tax Act qua theco-owner, who had also adopted the same value for the property as thepetitioner herein. 5. It is trite that if during the same assessment year the samequantity of wealth in possession of one co-sharer is subjected to alower rate of taxation, it would be highly improper to burden asimilarly situated co-sharer with a higher rate of tax. If such anaction on the part of the assessing authorities is sanctioned, itwould militate against the principle of equality of laws enshrined inarticle 14 of the Constitution, vide Jaswant Rai v. CWT, [1977] 107ITR 477. 6. Applying the ratio laid down in Jaswant Rai v. CWT, referredsupra, to the facts of the case on hand would lead to the firmconclusion that the assessee, who is also a co-owner of the property,is entitled to the benefit enjoyed by the other co-owner, whosevaluation of the same property, at the same rate as that of theassessee, was accepted by the Commissioner of Income Tax and recordedin the order under appeal by the Tribunal. Finding no reason to interfere with the order of the Tribunal,this appeal is dismissed. Sd/-Asst. Registrar. /true copy/Sub Asst. Registrar.sasiTo:1. The Assistant Registrar, Income-tax Appellate Tribunal, Rajaji Bhavan, Besant Nagar, Chennai 600 090 (five copies with records)2. The Commissioner of Income-tax (Appeals)-V, Chennai.3. The Deputy Commissioner of Income Tax, Special Range I Chennai.4. The Commissioner of Income Tax,Chennai.1 cc to M/s. Pushya Sitaraman, Standing Counsel for Income Tax, Sr. 49864T.C.(A) No.2409 of 2006BV (CO)kk 25/11