Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (1) TMI 1016 - AT - Income TaxLong term capital gains assessment arising out of property sold - assessee has claimed exemption from chargeability to capital gain by contending that as the entire sale consideration was paid to the bank towards discharge of the debt of a company and firm wherein they are directors/ partners it has to be allowed as an expenditure while computing capital gain - Held that:- As can be seen from the facts and materials on record, the sale consideration received by the assessee was deposited into his personal bank account. It is also a fact that the assessee has made FDs out of the sale consideration and also earned interest which were offered to tax in the return of income filed by the assessee. It is also a fact on record that the sale of property took place much earlier to the sanction of OTS by the bank which advanced loan to M/s Hoe Leather Garments Pvt. Ltd. and M/s. Hansa Overseas Enterprises wherein assessee along with his brother are directors/partners. Therefore, as can be seen the sale consideration received on sale of the property was not directly paid to the concerned bank towards discharge of the debt as per OTS as claimed by the assessee. Moreover, it is not in dispute that the amount claimed to have been paid by the company/firm towards OTS originated from the unsecured loan claimed to have been availed through the personal accounts of the directors/partners. In these circumstances, assessee's claim that the bank has appropriated the sale consideration towards discharge of debt as per the OTS, in our view, is not acceptable. There is no direct nexus between the receipt of the sale consideration and payment made to the bank towards discharge of the debt. Moreover, it is a fact on record that the unsecured loan of the amount claimed to have been received from the directors has been disbelieved by the Department while completing assessment in case of M/s Hoe Leather Garments Pvt. Ltd. and additions were made u/s. 68 of the Act which also stand confirmed. Therefore, in a sense the claim of unsecured loans from the directors of the amount utilised towards discharge of debt has also not been accepted by the Department. In these circumstances, assessee's claim that since the entire sale consideration was utilised towards discharge of the debt, the same cannot be chargeable to capital gain, in our view, is not acceptable. Even, assuming for arguments sake that the property in question was mortgaged as a security towards the debt availed by the company and the firm, the same cannot exempt the assessee from chargeability of capital gain on the sale of the asset. Decided against assessee.
|