Ita/1639/2009 Of The Commissioner Of Income Tax,Kozhikode v. K.vivekanandan, Calicut

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE P.S.GOPINATHAN WEDNESDAY, THE 10TH FEBRUARY 2010 / 21ST MAGHA 1931 ITA.No. 1639 of 2009 ----------------------------- [ITA.NO.476(COCH)/2008 OF I.T.A.TRIBUNAL,COCHIN BENCH] .................... APPELLANT/RESPONDENT: ---------------------------------------- THE COMMISSIONER OF INCOME TAX, KOZHIKODE. BY SRI.JOSE JOSEPH, S.C, (INCOME TAX). RESPONDENT/APPELLANT: ---------------------------------------- SRI.K.VIVEKANANDAN, VENGALIL HOUSE, MANKAVU, CALICUT. BY ADVS. SRI.P.T.SRINARAYANANUNNI, SRI.K.M.JAMALUDHEEN, SMT.LATHA PRABHAKARAN. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 10/02/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.Ramachandran Nair & P.S.Gopinathan, JJ. ============================================ I.T.A. 1639 of 2009 ============================================ Dated this the 10[th] day of February, 2010. JUDGMENT Ramachandran Nair, J. 1.The question raised is whether the Tribunal wasjustified in deleting Rs.13,00,000/- reckoned asadditional sale consideration received by theassessee for sale of his half share of property.justified in deleting Rs.13,00,000/- reckoned asadditional sale consideration received by theassessee for sale of his half share of property. 2.We heard senior standing counsel appearing for the appellant and counsel for the respondent. 3.The facts leading to the controversy are thefollowing:following: 4.The assessee, along with another person, hadjointly owned 45.8 cents of land with a buildingthereon, which was sold in the previous yearjointly owned 45.8 cents of land with a buildingthereon, which was sold in the previous year relevant for the assessment year 2002-03. Boththe co-owners executed separate sale deeds andthe consideration shown in the sale deed executedby the respondent assessee was Rs.33 lakhs.However, the assessing officer considered thestatement by the assessee in the return filedstating that assessee has to get Rs.18 lakhstowards additional consideration from the co-owner, who, according to the assessee, had takenthe amount. It is the statement of the assesseethat if he gets the amount, the same will beoffered for tax. Strangely, without conductingany enquiry, either with the buyer or with thejoint owner, who sold the property, the assessingofficer treated the sale consideration as Rs.51lakhs as against Rs.33 lakhs shown in the saledocument. The assessment was challenged inappeal and though first appeal was unsuccessful,in second appeal the Tribunal held that Rs.18 ITA1639/09 lakhs does not constitute sale consideration,because, it is actually a claim which theassessee has made against the joint owner, whosold the property. It is against this order,revenue has filed this appeal. 5.After hearing both sides and after going throughthe Tribunal's order, we do not find any groundto interfere with the conclusion drawn up by theTribunal because, what the assessee had admittedin the return was that he has a claim against theother co-owner for Rs.18 lakhs. What isassessable for the purpose of capital gain is thesale consideration received by the assessee andnot any claim which the assessee may maintainagainst a co-owner. In fact, what was requiredof the officer was to issue notice to the co-owner against whom assessee maintains a claim andmake at least a protective assessment on him for 5.After hearing both sides and after going throughthe Tribunal's order, we do not find any groundto interfere with the conclusion drawn up by theTribunal because, what the assessee had admittedin the return was that he has a claim against theother co-owner for Rs.18 lakhs. What isassessable for the purpose of capital gain is thesale consideration received by the assessee andnot any claim which the assessee may maintainagainst a co-owner. In fact, what was requiredof the officer was to issue notice to the co-owner against whom assessee maintains a claim andmake at least a protective assessment on him for the additional amount to safeguard the interestof the revenue. In fact, no enquiry is conductedwith the purchaser of the property about theactual sale consideration paid to the assesseeand to the joint owner. We, therefore, do notfind any merit in the contention of thedepartment that, assessee's statement in thereturn constitutes an admission of receipt ofsale consideration in excess of what is shown inthe sale deed. It is upto the assessing officerto conduct enquiry and make the assessment, ifassessee received the amount subject to theprovisions of the Act and Rules. Appeal isdismissed with the above observation. C.N.Ramachandran Nair, Judge. P.S.Gopinathan, Judge.