COMMISSIONER OF INCOME TAX ???VII Vs. NEERA BHANDARI
May, 27th 2013
THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 22.03.2013
+ ITA 162/2013
COMMISSIONER OF INCOME TAX VII ..... Appellant
NEERA BHANDARI ..... Respondent
Advocates who appeared in this case:
For the Appellant : Mr Sanjeev Rajpal, Sr. Standing Counsel
For the Respondent : Mr Satyen Sethi, Adv.
HON'BLE MR JUSTICE BADAR DURREZ AHMED
HON'BLE MR JUSTICE R.V.EASWAR
BADAR DURREZ AHMED, J (ORAL)
The delay in refiling the appeal in condoned.
The application is disposed of.
This appeal is directed against the order dated 19.07.2012 passed
by the Income Tax Appellate Tribunal in ITA No.3773/Del/2009
pertaining to the assessment year 2006-07.
ITA 162/2013 Page 1 of 6
2. The revenue was in appeal before the Appellate Tribunal on the
following grounds: -
"1. The Ld. CIT (A) erred in law and on facts in deleting
the addition of `1,07,25,000/- made by the Assessing
Officer on account of short term capital gains.
2. The Ld. CIT (A) erred in law and on facts in deleting
the addition of `6,72,910/- made by the Assessing Officer
on account of Income from House Property."
Additional grounds had also been taken, which were in any event
related to ground No.1. The additional grounds were as under: -
"(i) The CIT(A) has erred in law and on the facts of the
case in holding that the sale of the property relates back to
date on which the assessee's father, Sh. A.P.Bajaj was
alive and that consequently the will executed by the said
Sh.A.P.Bajaj is of no consequence, when as per the
assessee's own submission (reproduced at Para 5.5 of the
CIT(A)'s order, there was no formal agreement of sale in
this case and a mere receipt of the initial advance of `7.5
lakhs can not be treated as an agreement for sale,
particularly when the sale deed executed by the son of Sh.
A.P.Bajaj on 08.11.2005 (after the death of Sh. Bajaj) does
not make any mention of any earlier agreement of sale and
when there is no evidence/indication of the date, if any, on
which possession of the land was given to the buyers in
pursuance of any agreement of sale executed during the
life time of Sh. A.P.Bajaj.
(i) The Ld. CIT(A) has erred in law and on facts in
treating the amount of `1,05,00,000/- received by the
assessee from her brother as a gift within the meaning of
ITA 162/2013 Page 2 of 6
Sec. 56(2)(v) of the I.T.Act 1961 and not as a part of the
sale consideration received in pursuance of the will of
Insofar as the first ground and the additional grounds are concerned the
issue is with regard to the addition of `1,07,25,000/- made by the
assessing officer as short term capital gains. That has been deleted by
the Tribunal. The facts are that the assessee received a sum of
`1,05,00,000/- from her brother Pramod Kumar Bajaj (`72 lakhs
during assessment year 2005-06 and a further sum of `33 lakhs during
assessment year 2006-07). This receipt was in accordance with the
direction given by her late father Sh. A P Bajaj in his will. In the will
it was stated that in case the agricultural land at village Badshahpur,
Distt. Gurgaon, Haryana is sold under any circumstance by said
Pramod Kumar Bajaj, 30% of the sale consideration would be given to
the assessee (Smt. Neera Bhandari). It is in these circumstances that
the assessee received the above sums of money from her brother which
was equal to 30% of the sale proceeds of the land. The said sum was
received in its entirety after the demise of the father (late Sh. A P
Bajaj). The assessing officer treated the sale consideration as short
term capital gains and added it to the total income of the assessee. The
ITA 162/2013 Page 3 of 6
assessing officer also denied the claim of exemption under Section
54EC to the extent of `35,25,000/- made by the assessee.
3. The Commissioner of Income Tax (Appeals) deleted the
addition of `1,07,25,000/-. The Tribunal on different reasons has
confirmed the deletion.
4. The learned counsel for the appellant submitted before us that
the Tribunal had erred in law inasmuch as the receipt of the said sum
of `1,05,00,000/- by the assessee from her brother had been received
by the brother, in part, during the lifetime of the father in November,
2004. It is only thereafter, that the assessee's father late Sh. A P Bajaj
passed away on 24.11.2004.
5. We feel that even if we accept the position as advanced by the
learned counsel for the appellant, it is apparent that the assessee
received the said sum of `1,05,00,000/- as inheritance from her father.
This would become clear from the fact that late Sh. A P Bajaj had
clearly indicated in his Will that in case the property is sold, 30% of
the sale proceeds would be given to the assessee. The fact that the
property was agreed to be sold during the lifetime of the father and
ITA 162/2013 Page 4 of 6
some part consideration had been received during the lifetime would
only imply that the condition upon which the assessee was to receive
the said 30% of the sale consideration had already been satisfied
during his lifetime. In other words, the assessee's share out of the said
consideration became payable to her directly under the will on the
death of the father. Even if we look at the matter in this perspective
the receipt in the hands of the assessee cannot be regarded as income.
However, the Tribunal has taken a different approach by holding that
even if it is regarded as income the assessee would be entitled to the
benefit of income under Section 56(2)(v) of the Income Tax Act, 1961.
Either way we look at the issue, the answer is the same. Therefore,
insofar as this aspect of the matter is concerned no interference with
the order of the Tribunal is called for.
6. As regards the second gound raised before the Tribunal with
regard to the addition of `6,72,910/-, that issue was decided in favour
of the assessee in respect of the assessment year 2005-06 by the CIT
(Appeals) and it has not been questioned by the revenue before the
Tribunal. Therefore, following the said decision, the Tribunal
ITA 162/2013 Page 5 of 6
confirmed the view taken by the CIT (Appeals). Even on that aspect,
no interference is called for.
7. No substantial question of law arises for our consideration.
The appeal is dismissed.
BADAR DURREZ AHMED, J
MARCH 22, 2013
ITA 162/2013 Page 6 of 6