2016 (4) TMI 1334 - AT - Income Tax

Long Term Capital Gain (LTCG) arising out of transfer of residuary right in the land - determining the value of consideration arising out of transfer of capital asset - Held that - We have seen the conveyance deed dated 30.12.2007 executed by assessee in favour of the purchaser which is available in the form of Paper Book. The said conveyance deed is duly witnessed by mother of assessee i.e. Smt. Vimlaben Dwarkadas Sanghvi. The receipt of consideration executed by assessee is for Rs. 7.00 Crores. No documentary evidence was filed by the assessee which may prove the fact that mother of assessee has offered the amount of Rs. 75, 00, 000/- to tax. The assessee has executed the sale documents as absolute owner and further executed the receipt of Rs. 7.00 Crores as sale consideration. By executing the receipt of consideration of Rs. 7.00 Crores the assessee acknowledged the consideration/sale price. We have seen that the said facts were considered and discussed by the CIT(A) in his order. The order of CIT(A) is reasoned one and does not require any interference at our end. - decided against assessee.

Summary

Issues:
Assessment of Long Term Capital Gain (LTCG) arising from transfer of residuary right in land.

Analysis:
1. The appeal was filed against the order of CIT(A) assessing LTCG at Rs. 1,28,92,569 arising from the transfer of residuary right in the land at Rs. 7.00 Crores. The assessee declared total income at Rs. 1,03,39,200 for the relevant Assessment Year. The AO observed discrepancies in the sale consideration for a plot of land, leading to the assessment of LTCG at Rs. 7 Crores.

2. The assessee explained that the property was initially gifted by the mother and later sold after a joint development agreement. The AO considered the sale consideration at Rs. 7 Crores, as reflected in the registered sale deed, despite the initial advance received by the mother. The AO calculated LTCG based on this amount in the assessment order.

3. The CIT(A) dismissed the appeal, emphasizing that the full value of consideration as per the registered sale deed was Rs. 7 Crores. The CIT(A) analyzed the transaction history, highlighting that no overriding title existed, and the mother did not retain the advance received. The CIT(A) concluded that the amount retained by the mother was part of the sale consideration, and the appellant legally received Rs. 7 Crores.

4. During the appeal, the AR argued that the assessee received only Rs. 6.25 Crores, which was offered for taxation. However, no evidence was presented to show that the amount received by the mother was declared for tax. The conveyance deed and receipt of consideration supported the Rs. 7 Crores sale price acknowledged by the assessee.

5. The Tribunal upheld the CIT(A)'s order, noting that the assessee executed the sale documents as the absolute owner, acknowledging the Rs. 7 Crores consideration. The Tribunal found no grounds for interference, and the appeal was dismissed.

In conclusion, the judgment analyzed the sale transaction, emphasizing the legal ownership and consideration received, leading to the dismissal of the appeal against the assessment of LTCG.