Case Law Details
Gopalratnam Santha Mosur Vs ITO (Madras High Court)
The petitioner was the co-owner of the immovable property situated in Tamil Nadu and she had sold the property and paid the entire capital gain tax applicable in respect of the transaction. The petitioner thereafter claimed 50% of the capital gains tax as rebate under Indo-Canadian DTAA. However, before the assessment proceedings could commence, the respondent issued a notice dated 30.06.2016 referring to Article 13 of Indo-Canadian DTAA and stated that gains from the alienation of any property, other than referred under Clause 1 of Article 13 of the Indo-Canadian DTAA may be taxed in both contracting States and the petitioner’s case is that she has transferred the immovable property situated in India and hence, the gains arising on the same is taxable in India.
It was further stated that there is no provision as per Article 13 of DTAA to claim rebate for the Taxes paid in other country and the petitioner was directed to show cause as to why the rebate claimed of Rs.1,02,90,323/-cannot be disallowed.
In response to the said show cause notice, the petitioner sent a reply on 28.07.2016, whereby she submitted a revised Income Computation Statement for the Assessment Year 2014-15 after disallowing the rebate claimed and the petitioner enclosed the letter dated 08.07.2016 along with revised computation and requested the respondent to give effect to the revised tax payable and issue the refund at the earliest.
The revised Computation of Income was scrutinized by the respondent and the assessment was completed by the order dated 26.08.2016. Thereby, the assessed income tax was arrived at a sum of Rs.9,10,60,370/-. In the penultimate paragraph of the assessment order dated 26.08.2016, the respondent has stated that penalty proceedings under Section 271(1)(c) of the Income Tax Act will be initiated separately.
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