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2023 (4) TMI 335 - AT - Income TaxGain on sale of property - status of the assessee - assessee’s individual capacity or in the capacity of proprietary firm - as per AO capital gain arising out of sale of said land was not shown by the assessee - property in question was mortgaged with Punjab National Bank as security and Lakhia Brothers failed to pay the loan, bank initiated recovery proceedings and Debt Recovery Tribunal ordered to cancel the auction and allow the property to sale with the condition that the entire amount received in respect of the sale of the property will be deposited in the Punjab National Bank - HELD THAT:- It is pertinent to note that in assessee’s return of income for A.Y. 2009-10 the assets of the assessee is individual but in verification the assessee has signed in the capacity of proprietor of M/s. Lakhia Brothers. From the perusal of the sale deed it appears that M/s. Lakhia Brothers was a partnership firm and therefore, the land was sold by the partnership firm and not by the assessee in his individual capacity or as the proprietor of M/s. Lakhia Brothers. In fact, debt recovery proceedings also give the direction was given against the partnership firm M/s. Lakhia Brothers by the Debt Recovery Tribunal. Contention of the assessee that the status of the assessee was not correctly taken into account by the AO while making the addition appears to be correct. Besides this the assessee has rightly not indicated Long Term Capital Gain as it was not in assessee’s individual capacity or in the capacity of proprietary firm that the assessee has made sale considerationin respect of sale of the property. Assessing Officer as well as the CIT(A) has not taken cognizance of the same and not taken a proper facts on record. Hence, the appeal of the assessee is allowed.
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