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: prv. C.N.Ramachandran Nair & P.S.Gopinathan, JJ. ============================================ I.T.A. 1639 of 2009 ============================================ Dated this the 10th day of February, 2010. JUDGMENT Ramachandran Nair, J. 1.The question raised is whether the Tribunal was justified in deleting Rs.13,00,000/- reckoned as additional sale consideration received by the assessee 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 the following: 4.The assessee, along with another person, had jointly owned 45.8 cents of land with a building thereon, which was sold in the previous year ITA1639/09 -:2:- relevant for the assessment year 2002-03. Both the co-owners executed separate sale deeds and the consideration shown in the sale deed executed by the respondent assessee was Rs.33 lakhs. However, the assessing officer considered the statement by the assessee in the return filed stating that assessee has to get Rs.18 lakhs towards additional consideration from the co- owner, who, according to the assessee, had taken the amount. It is the statement of the assessee that if he gets the amount, the same will be offered for tax. Strangely, without conducting any enquiry, either with the buyer or with the joint owner, who sold the property, the assessing officer treated the sale consideration as Rs.51 lakhs as against Rs.33 lakhs shown in the sale document. The assessment was challenged in appeal and though first appeal was unsuccessful, in second appeal the Tribunal held that Rs.18 ITA1639/09 -:3:- lakhs does not constitute sale consideration, because, it is actually a claim which the assessee has made against the joint owner, who sold the property. It is against this order, revenue has filed this appeal. 5.After hearing both sides and after going through the Tribunal's order, we do not find any ground to interfere with the conclusion drawn up by the Tribunal because, what the assessee had admitted in the return was that he has a claim against the other co-owner for Rs.18 lakhs. What is assessable for the purpose of capital gain is the sale consideration received by the assessee and not any claim which the assessee may maintain against a co-owner. In fact, what was required of the officer was to issue notice to the co- owner against whom assessee maintains a claim and make at least a protective assessment on him for ITA1639/09 -:4:- the additional amount to safeguard the interest of the revenue. In fact, no enquiry is conducted with the purchaser of the property about the actual sale consideration paid to the assessee and to the joint owner. We, therefore, do not find any merit in the contention of the department that, assessee's statement in the return constitutes an admission of receipt of sale consideration in excess of what is shown in the sale deed. It is upto the assessing officer to conduct enquiry and make the assessment, if assessee received the amount subject to the provisions of the Act and Rules. Appeal is dismissed with the above observation. C.N.Ramachandran Nair, Judge. sl. P.S.Gopinathan, Judge.