KUMAR RAJARAM Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) This appeal filed by the assessee under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity) is directed against the order dated 10.02.2016 passed by the Income Tax Appellant Tribunal, 'B' Bench, Chennai (hereinafter referred to as 'the Tribunal') in I.T.A.No.1876/Mds/2015 for the assessment year 2012-13.

(2.) The assessee has raised the following substantial questions of law for our consideration:

(3.) The assessee is a non-resident individual and during the assessment year under consideration (2012-13) derived income from capital gains and interest income assessed under the head 'other sources'. The assessee's father owned land and residential house at Bangalore and died on 11.06.2011 leaving his last will and testament dated 30.10.2008. The assessee's father appointed an executor to execute the directions contained in the will. In terms of the recitals in the will, the property at Bangalore was sold on 10.11.2011 for a gross sale price of Rs.8,80,00,000/-. In the will executed by the assessee's father, there was a direction to the executor of the will, upon sale of the property to pay a sum of Rs.10,00,000/- to Sri Sai Spiritual Center Trust, a sum of Rs.25,00,000/- to Helpage India, Bangalore, a sum of Rs.15,00,000/- to CRY-Child Rights and You, Bangalore and a sum of Rs.10,00,000/- to Sri Ramana Ashram, Thrivannamalai. Apart from these payments, there was a direction that the executor will be entitled to a sum of Rs.50,000/-. The balance amount was to be paid to the assessee and accordingly, the assessee received a sum of Rs.8,19,50,000/-. The assessee filed his return of income on 13.07.2012 admitting total income of Rs.6,22,63,973/- comprising of Long Term Capital Gains computed as Rs.5,99,21,346/- arising on sale of the Bangalore property by adopting the sale consideration as Rs.8,19,50,000/- and claiming a sum of Rs.7,52,500/- as expenditure incurred in connection with the sale. The Assessing Officer completed the assessment by order dated 25.09.2014 under Section 143(3) of the Act considering the sale consideration as mentioned by the assessee in his return of income, namely, Rs.8,11,97500/- (Rs.8,19,50,000 - Rs.7,52,500/-). The Commissioner of Income tax (CIT), International Taxation, Chennai issued a show cause notice under Section 263 of the Act proposing to disallow the sum of Rs.68,02,500/-, being the payment made to charitable institutions and the claim of the expenditure of Rs.8,02,500/-. The assessee submitted their objections dated 18.03.2015, firstly on the ground that the power under Section 263 of the Act could not have been invoked as well as on merits. The CIT by order dated 02.07.2015 disallowed the exclusion of Rs.68,02,500/- and directed the Assessing Officer to recompute the total income and tax thereon. The assessee carried the matter by way of appeal to the Tribunal which affirmed the order of the CIT holding that the exclusion of the payment made by the assessee by applying the diversion of income by overriding title cannot be allowed and there is no evidence for professional fee, commission paid, etc. Aggrieved by the same, the assessee is before us by way of this appeal raising the aforementioned substantial questions of law.