Chennai, July 15: The Madras High Court has stayed the income tax department proceedings against retired IPS officer K Vijay Kumar, recently appointed as advisor to Jammu and Kashmir Governor, related to his I-T return for 2010-11 assessment year.
Justice T S Sivagnanam stayed an I-T department notice and subsequent proceedings of March 26, 2018, in connection with a tax exemption claim made by Kumar in short-term capital gains arising out of sale of a plot alloted to him as a reward by the Tamil Nadu government.
The court passed the interim order on a petition against the I-T proceedings by Kumar, who had headed the Special Task Force (STF) that shot dead dreaded sandalwood smuggler Veerappan on October 18, 2004.
The state government had allotted residential plots to all members of the STF as a reward for successfully accomplishing their mission.
Accordingly, vide a July 21, 2008 order, Kumar was allotted a plot in the Anna Nagar (West) locality here for which the state government had paid Rs 1.08 crore. A year later, he had sold the plot for Rs 1.99 crore.
Kumar filed a revised income tax return for the assessment year 2010-11 incorporating the proceeds by showing a total income of Rs 1.39 core, including short term capital gain of Rs 82 lakh.
Since the property was given as a reward, Vijay Kumar had claimed deduction for cost of acquisition in computing the income from the short-term capital gains.
But rejecting his claim, I-T issued a notice stating that the reward does not come under the schedule approved by the central government and therefore he was not entitled for the deduction.