IN THE HIGH COURT OF DELHI AT NEW DELHI
.
.
.
ITA 29/2012
.
.
.
CIT ..... Appellant
.
Through Mr. Abhishek Maratha, sr. standing
counsel with Ms. Anshul Sharma, Adv.
.
versus
.
.
.
SMT RAJ RAJPAL ..... Respondent
.
Through
.
.
.
CORAM:
.
HON'BLE MR. JUSTICE SANJIV KHANNA
.
HON'BLE MR. JUSTICE R.V.EASWAR
.
.
.
O R D E R
.
18.01.2012
.
.
.
1. The present appeal by the Revenue under section 260A of the Income
Tax Act, 1961, (for short, ?the Act?) impugns the order dated 10th June,
2011 passed by the Income Tax Appellate Tribunal (for short, ?the
tribunal?) in the case of Dy. CIT vs. Smt. Raj Rajpal in ITA no.
1585/Del/2011. It pertains to Assessment Year 2007-08.
.
2. The respondent-assessee is the widow of Late Ishwar Chand Rajpal,
who expired on 10.10.1989. Late Ishwar Chand Rajpal was the owner and
had acquired property No.17, Road No.51, Punjabi Bagh (West), New Delhi,
in 1964.
.
3. The property was sold by the respondent-assessee on 12th July, 2006
for Rs.2 crores. The respondent-assessee claimed exemption under Section
54 and 54EC of the Act of Rs.37,10,000/- and Rs.50,000,00/-. The
respondent-assessee treated the sale as long term capital gain.
.
4. The Assessing Officer held that the other legal heirs of Late
Ishwar Chand Rajpal had executed a relinquishment deed in favour of the
respondent-assessee on 15th April, 2006 and the property was sold on 12th
July, 2006. Therefore, the respondent-assessee did not hold the property
for 36 months. He accordingly, treated the sale as short term capital
gains and held that the respondent-assessee was not entitled to benefit
of Section 54 and 54EC of the Act.
.
5. The CIT (Appeals) and the tribunal did not agree with the Assessing
Officer.
.
6. Late Ishwar Chand Rajpal had left behind a Will dated 14.9.1989 as
.
per which the property was to devolve on the respondent, who was to have life interest in the same and after her death, the property was to be
inherited by one son, to the exclusion of the other son and daughter.
However, there was a family settlement. A Memorandum of Family
Settlement dated 28th November, 2003 was recorded.
.
7. The Assessing Officer has referred to the Memorandum of Family
Settlement and held that it was not registered and therefore cannot be
considered. A memorandum of family settlement which records an earlier
oral settlement does not require registration. There is no contrary
allegation and a copy of the memorandum has not been filed. The property
was mutated in the name of the respondent-assessee in 1992, after no
objection from all other legal heirs. The respondent-assessee before the
CIT (Appeals) had produced the codicil dated 1st October, 1989, which was
taken on record, after following the procedure prescribed and on
satisfying conditions prescribed under Rule 46A of the Income Tax Rules,
1962. As per the said codicil the respondent-assessee was the owner of
the property after death of Late Ishwar Chand Rajpal. The witness to the
codicil Ziaul Hussain also confirmed the execution of the same.
.
8. Learned counsel for the Revenue emphasized that the codicil was not
produced and relied upon before the Assessing Officer, therefore, it has
been fudged and the CIT (Appeals) should not have admitted the said
document. It is stated that in these circumstances, orders of the CIT
(Appeals) and the tribunal are perverse. It is not possible to agree
with this contention. The CIT (Appeals) has recorded detailed reasons why
admission of additional evidence i.e. the codicil was justified. The
son, who was entitled to inherit the property after death of the
respondent-assessee under the Will dated 14th September, 1989, has
accepted and admitted the codicil dated 1st October, 1989. Secondly,
there can be several reasons why family members enter into an oral
settlement in respect of inherited assets. Peace and harmony in the
family is an important and relevant circumstance. Memorandum of family
settlement dated 28th November, 2003 was executed amongst the legal
heirs. Further after the death of Ishwar Chand Rajpal in 1989, the
property was mutated in favour of the respondent-assessee in 1992 to the
exclusion of other legal heirs with the consent of all. These facts
clearly support and affirm the stand accepted by the CIT (Appeals) and
the tribunal. Their orders cannot be regarded as perverse. With regard
to the relinquishment deed executed on 15th April, 2006 by the other
legal heirs of Ishwar Chand Rajpal in favour of the respondent-assessee,
the CIT (Appeals) and tribunal have accepted and held that the
relinquishment deed was executed to ensure that there was no impediment
in sale of the property or doubt about the title and the buyer felt
secured and sure that the title of the respondent-assessee was perfect,
clean and unblemished. It helped the respondent-assessee to get/secure
the best value or sale consideration. Lastly, the relinquishment deed in
favour of the respondent-assessee was without consideration. This amount
to a gift. The Assessing Officer had ignored provisions of Section 49
(1)(ii), which apply to gift. Thus the transfer was rightly treated as a
long term capital gain.
.
9. In view of the aforesaid position, we do not think that any
.
substantial question of law arises out of the order of the tribunal. The appeal has been filed in routine without analysis and consideration
required. Accordingly, the appeal is dismissed with costs of Rs.10,000/-
, which will be paid to the Prime Minister?s Relief Fund within a period
of four weeks from today. It will be the responsibility of the
appellant to ensure that the aforesaid amount is paid.
.
SANJIV KHANNA, J
.
.
.
.
.
.
.
R.V.EASWAR, J
.
JANUARY 18, 2012
.
vld
.
.
.
24 to 26, 32, 33 and 36
.
$
.