The Income Tax Appellate Tribunal(ITAT), Chennai Bench, has recently while deciding an appeal filed before it, held that an assessee alone cannot be taxed, when the land belongs to many co-owners.
The aforesaid observation was made by the Tribunal when an appeal was preferred before it by anassessee, as against the order of the Commissioner of Income Tax (Appeals)-10, Chennai, in ITA No.185/16-17/CIT(A)-10,dated 31.01.2019 for Assessment Year 2014- 15.
The Assessment being framed by Income Tax Officer, Non Corporate Ward-22(3), Chennai, under section 143(3) of the Income Tax Act, 1961, vide order dated 27.12.2016, the only issue in the assessee’s appeal was with regard to the assessment of the long term capital gain on compulsory acquisition of land by the Government under the Tamil Nadu Highways Act, 2001 (Act No.34/2002), in the hands of the assessee alone, instead of all the co-owners.
With the question involved in the assessee’s appeal being as to whether the entire long term capital gain is assessssible in the hands of assessee alone, on the land compulsorily acquired, even though the assessee is only aco-owner to his proportion in the land acquired, it was submitted by the DR for the Revenue that the assessee had given concession qua and that even before CIT(A) he had not pressed this ground.
However, hearing the contentions of both the sides and perusing the materials available on record, the Tribunal consisting of G. Manjunatha, the Accountant Member and Mahavir Singh, the Vice President, observed:
“The question arises as to whether there can be an agreement against law or any concession can be given by assessee and can be accepted by departmental authorities in making an assessment in one hand i.e. the assessee alone of the entire capital gains.”
“Admittedly, as admitted by A.O and CIT(A), the land belongs to assessee along with other family members who are the co-owners, and hence the assessment of the long term capital gains should have been made in exact proportion to the extent to which land belongs to each of the assessee”, the Bench added.
Thus allowing the assessee’s appeal, the Tribunal ruled: “There cannot be a concession in law which is available to the authorities and the assessment should have been made on the right person and in the right proportion. Hence, we set aside the orders of the lower authorities i.e., of the A.O as well as CIT(A) and remand the matter back to the file of the A.O to re-do the issue as to what is the exact proportion of the share of the assessee and accordingly, assess the long term capital gain qua his share only.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
