Nirmala Venkatapathy v. ITO - Taxpublishers.in

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The Tax PublishersITA No. 2492/CHNY/2019 2024 TaxPub(DT) 841 (Chen-Trib) IN THE ITAT CHENNAI MAHAVIR SINGH, V.P. & MANOJ KUMAR AGGARWAL, A.M. Nirmala Venkatapathy v. ITO ITA No. 2492/CHNY/2019 9 February, 2024 Appellant by: N.Arjun Raj, CA (Amicus Curie) Respondent by: R. Clement Ramesh Kumar, CIT ORDER *Mahavir Singh, V.P.* This appeal by the assessee is arising out of the order of the Commissioner (Appeals)-2, Madurai in ITA No.010/2013-14 dated 8-8-2019. The assessment was framed by the Income Tax Officer, Ward-II(1), Madurai for the assessment year 2010-11 under section 143(3) of the Income Tax Act, 1961 (hereinafter the Act) vide order dated 14-3-2013. 2. The first issue on merits is as regards to assessment of capital gains. 3. Brief facts are that the assessee was the owner of 1/3rd of vacant land measuring 4840 sq.ft., located at old Door No.11/New Door No.44, Letangs Road, Purasawalkam, Chennai. The assessee declared capital loss in the return of income filed on 1-7-2010 for the assessment year 2010-11 of Rs. 87,57,468 on sale of above property for a total sale consideration (for her 1/3rd share) of Rs. 41,94,664 on 3-10-2009. The Assessing Officer noted that he assessee has adopted cost of acquisition as on 01.04.1981 at Rs. 21,58,689 and hence, the Assessing Officer issued notice under section 148 of the Act on 29-3-2012 by recording reasons by assuming jurisdiction under section 147 of the Act on account of inflation of cost of acquisition which resulted in capital loss and accordingly, escapement of income. According to Assessing Officer, the fair market value of this land as on 1-4-1981 is @ Rs. 14.6 per sq.ft., and the cost of acquisition as on 1-4-1981 was estimated being fair market value at Rs. 70,664. The assessees share of 1/3rd was to be adopted at Rs. 23,554. The Assessing Officer referred the cost of acquisition of property as on 1-4-1981 to the DVO, Chennai under section 142A of the Act vide letter dated 26-10-2012. The DVO, Chennai sent a valuation report dated 5-12-2012 estimating the cost of acquisition of property as on 01.04.1981 at Rs. 27,000. The Assessing Officer noted that the cost of acquisition is adopted as Rs. 27,000 but assessees liability to be paid as per the partition deed during assessment year 2008 is Rs. 17.50 lakhs, which is already received by her and hence, he has not allowed any deduction. The Assessing Officer computed the sale consideration and capital gains at Rs. 40,32,664 as under:- SUBSCRIBE FOR FULL CONTENT

The Tax PublishersITA No. 2492/CHNY/2019
2024 TaxPub(DT) 841 (Chen-Trib)

IN THE ITAT CHENNAI

MAHAVIR SINGH, V.P. & MANOJ KUMAR AGGARWAL, A.M.

Nirmala Venkatapathy v. ITO

ITA No. 2492/CHNY/2019

9 February, 2024

Appellant by: N.Arjun Raj, CA (Amicus Curie)

Respondent by: R. Clement Ramesh Kumar, CIT

ORDER

Mahavir Singh, V.P.

This appeal by the assessee is arising out of the order of the Commissioner (Appeals)-2, Madurai in ITA No.010/2013-14 dated 8-8-2019. The assessment was framed by the Income Tax Officer, Ward-II(1), Madurai for the assessment year 2010-11 under section 143(3) of the Income Tax Act, 1961 (hereinafter the Act) vide order dated 14-3-2013.

2. The first issue on merits is as regards to assessment of capital gains.

3. Brief facts are that the assessee was the owner of 1/3rd of vacant land measuring 4840 sq.ft., located at old Door No.11/New Door No.44, Letangs Road, Purasawalkam, Chennai. The assessee declared capital loss in the return of income filed on 1-7-2010 for the assessment year 2010-11 of Rs. 87,57,468 on sale of above property for a total sale consideration (for her 1/3rd share) of Rs. 41,94,664 on 3-10-2009. The Assessing Officer noted that he assessee has adopted cost of acquisition as on 01.04.1981 at Rs. 21,58,689 and hence, the Assessing Officer issued notice under section 148 of the Act on 29-3-2012 by recording reasons by assuming jurisdiction under section 147 of the Act on account of inflation of cost of acquisition which resulted in capital loss and accordingly, escapement of income. According to Assessing Officer, the fair market value of this land as on 1-4-1981 is @ Rs. 14.6 per sq.ft., and the cost of acquisition as on 1-4-1981 was estimated being fair market value at Rs. 70,664. The assessees share of 1/3rd was to be adopted at Rs. 23,554. The Assessing Officer referred the cost of acquisition of property as on 1-4-1981 to the DVO, Chennai under section 142A of the Act vide letter dated 26-10-2012. The DVO, Chennai sent a valuation report dated 5-12-2012 estimating the cost of acquisition of property as on 01.04.1981 at Rs. 27,000. The Assessing Officer noted that the cost of acquisition is adopted as Rs. 27,000 but assessees liability to be paid as per the partition deed during assessment year 2008 is Rs. 17.50 lakhs, which is already received by her and hence, he has not allowed any deduction. The Assessing Officer computed the sale consideration and capital gains at Rs. 40,32,664 as under:-