IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘E’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER Assessment Year: 2014-15 Sh. Manjula Khanna, Vs. Income Tax Officer, A-102, Sector-55, Ward-5(1)(5), Noida Noida PAN: AEXPK2765B (Appellant) (Respondent)

Assessee by Sh. Ritesh Bajaj, Adv.

Sh. Aman Deep Mehta, Adv.

Department by Sh. Deepak Kumar, Sr. Dr Date of hearing 20.01.2025 Date of pronouncement 20.01.2025 ORDER PER SATBEER SINGH GODARA, JM This assessee’s appeal for assessment year 2014-15, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1069991295(1), dated 28.10.2024 involving proceedings under section 143(3) r.w.s. 147 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

2. Heard both the parties. Case file perused.

3. It emerges during the course of hearing that the assessee’s sole substantive ground raised in the instant appeal challenges both the learned lower authorities’ action assessing long-term capital gains of Rs.2,00,00,000/- in her hands, in the course of assessment framed on 31st March, 2022 and upheld in the lower appellate discussion.

4. We advert to the basic relevant facts. There is hardly any dispute between the parties that the impugned long-term capital gains have been assessed in the assessee’s hands on account of the fact that she had allegedly transferred her share to the real sister, Mrs. Meenakshi Vohra, in the relevant previous year. A perusal of the assessment order indicates that both the assessee, namely, Mrs. Manju Khanna and her sister Mrs. Meenakshi Vohra had in fact inherited an ancestral House No. 87, Sector-18A, Chandigarh. And that the assessee’s mother had executed a “Will” bequeathing the said entire house to the assessee’s sister with a caveat that the former would be either entitled to get 45% of the value in the above house or cash amount of Rs.40 lakhs, whichever is lesser. Learned Assessing Officer himself does not dispute that the said “Will” was executed by the testator/assessee’s mother on 3rd July, 2002 followed by her death of 27th September, 2010. And that there arose civil dispute(s) between the assessee and her sister regarding their respective shares in the above house; which is stated to have attained finality before the hon’ble apex court, wherein she got a lump sum amount of Rs.2 crores from her sister in lieu of her share, assessed as long-term capital gains in her hands.

5. It is in this factual backdrop that the Revenue vehemently argues that once the assessee has transferred her right or title in the residential house coming from her mother, we ought to confirm the impugned long-term capital gain’s addition. We find no merit in the Revenue’s foregoing vehement contentions as such an amount that was received by the claimant/legal heir in lieu of the share in the undivided estate of deceased ancestor in the nature of owelty, does not amount to taxable income in light of CIT Vs.

Ashwani Chopra (2013) 352 ITR 620 (P&H) holding as under:

“2. The Revenue has raised the following substantial questions of law:

i. Whether the Hon'ble ITAT was right in law in confirming the relief allowed by the learned CIT (A) in respect of the addition of Rs.2,09,47,604/- being capital gain on the compensation received?

ii. Whether the Hon'ble ITAT was right in law in holding that the assessee has only inchoate right to receive the compensation till the final outcome of the decision of the Hon'ble Apex Court?

3. However, we find that the following question of law arises for consideration:

"Whether the amount of compensation paid to the assessee to settle inequalities in partition, thus, a provision of owelty, represents immovable property and is not an income exigible to tax?"

4. The said question of law arises out of the fact that during the course of assessment proceedings, the Assessing Officer found tha