Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (12) TMI 503 - AT - Income TaxReopening of assessment u/s 147 - reasons to believe that the long term capital gain from the said transaction is taxable, and the income, to that extent, has escaped assessment - year of transfer in which the taxability arises - AO noted that the assessee was a director of M/s Abid Steels Co Ltd (ASCL, in short) and the assessee had given his personal guarantee to, on behalf of the ASCL and in respect of its commercial borrowings from, the State Bank of India - HELD THAT:- Transaction before us is concerned, that is between the ARC and the end buyer but the very fact that ARC is selling the property as the owner of the property does indicate that the transfer from the assessee to the ARC, via SBI perhaps, taken place at an earlier stage. That is the year of transfer in which the taxability arises so far as the assessee is concerned. There is no categorical finding about that aspect of the matter at any stage. It is also not clear as to what is the date on which the transfer took place from the assessee to the State Bank of India, and what is the documentation or court/ DRT orders in this regard. This aspect of the matter has simply not been examined. We deem it fit and proper to remit the matter to the file of the CIT(A) for recording a specific finding in this regard, after giving a due and reasonable opportunity of hearing to the assessee, in accordance with the law and by way of a speaking order. The question of taxability of capital gains will arise only in the year in which such a transfer takes place. As the matter is being reknitted to the file of the CIT(A) for this purpose, all contentions remain open. There is, also, a fundamental point regarding the protection of legitimate interests of the revenue. In most of the cases in which the assets are taken over, as part of the recovery of commercial borrowings, by the bankers, or by the ARCs, the owners of these assets are not in a position to pay their dues, and that is the reasons that these assets get taken over. On a conceptual note, that is an undesirable situation, and it is time that the Government seriously considers protecting its legitimate interests by ensuring some mechanism to ensure that the tax liability on the capital gains is duly recovered from the borrower whose property is sold, and when it is not possible to do so on account of the borrower‟s genuine financial difficulties, from the person who receives the proceeds of the sale of such assets. As we have remitted the matter to the file of the CIT(A) for fresh adjudication, after taking a call on the year in which the actual transfer has taken place, the issues raised by the assessee with respect to the correct quantification of capital gains are academic at this stage. Appeal is allowed for statistical purposes.
|