2025 (7) TMI 1378 - AT - Income Tax

Addition on account of income on sale of land under the head Capital Gains - AO passed the final assessment order under Section 147 r.w.s. 144 - land sold by the assessee along with her family members - year of assessment - HELD THAT - It is specifically acknowledged that the land had already been sold to the buyer on 19.04.2010 and the buyer is now exercising his rights as owner by selling a part of the land. Thus it is clear that no fresh transfer of land was made by the assessee in the financial year 2014 15 relevant to AY 2015 16. What has occurred is a subsequent sale by the original buyer and the assessee s name appears only to confirm the chain of title to the ultimate purchaser. Further on perusal of the GPA as well as the sale deed we found that the Survey number and quantum of land area mentioned in sale deed as well as in GPA are the same. Hence we are of the considered opinion that the land sold vide sale deed dated 16.03.2015 is out of the same land which was sold by the assessee along with her relatives to TTCIPL vide GPA dated 19.04.2010. AR has placed on record the assessment order passed in the case of the assessee for AY 2011 12 wherein the capital gain arising from the original transfer of the land to the TTCIPL has already been assessed. We also find that in the case of Smt. Ishrat Fatima Hussain one of the co-heirs and sisters of the assessee reassessment proceedings under Section 147 were also initiated for AY 2015 16. No addition was made by the Ld. AO in her case in respect of the same transaction which clearly shows inconsistent application of facts by the Revenue in similar matters. Thus land sold by the assessee along with her family members on 19.04.2010 to TTCIPL has already been taxed in AY 2011 12 and the same has been accepted by the Department. The subsequent mention of the assessee s name in the sale deed dated 16.03.2015 is not indicative of a fresh transfer by the assessee nor does it give rise to fresh capital gains in AY 2015 16. Therefore the addition made under the head capital gains in AY 2015 16 is unsustainable and deserves to be deleted - Appeal of the assessee is allowed.

Summary

ISSUES:

Whether delay in filing appeal before the Tribunal can be condoned on grounds of reasonable cause and bonafide explanation.Whether the Assessing Officer was justified in treating the assessee as a party to the sale deed and taxing capital gains under Section 147 r.w.s. 144 of the Income Tax Act, 1961.Whether the provisions of Section 50C of the Income Tax Act apply when the assessee had no ownership or interest in the immovable property sold.Whether the addition on account of capital gains in the Assessment Year 2015-16 is sustainable where the same income was already assessed in an earlier assessment year.Whether inconsistent application of facts by Revenue in similar cases affects the validity of the reassessment.

RULINGS / HOLDINGS:

The delay of 243 days in filing the appeal was caused by "unavoidable circumstances beyond the control of the assessee," including the death of the earlier counsel and lack of communication, and thus the delay is "bonafide and covered by reasonable cause" and is condoned in the interest of justice.The Assessing Officer erred in treating the assessee as a party to the sale deed for AY 2015-16, as the assessee was neither involved in nor a signatory to the sale transaction reflected in the 2015 sale deed; the assessee's name appeared only to confirm the chain of title and not as a fresh transferor.The provisions of Section 50C of the Income Tax Act have "no applicability" where the assessee had "no rights or ownership in the property" sold in the relevant assessment year.The addition of Rs. 69,14,289/- made as capital gains in AY 2015-16 is "unsustainable" because the capital gains arising from the original transfer of the land to the buyer were already assessed and accepted by the Department in AY 2011-12, and the subsequent sale by the buyer does not constitute a fresh transfer by the assessee.The inconsistent application of facts by the Revenue, as demonstrated by no addition being made in the co-heir's case for the same transaction, supports the conclusion that the reassessment is erroneous.

RATIONALE:

The Court applied the principle that delay in filing appeals can be condoned if caused by "reasonable cause" and "bonafide" reasons, supported by affidavits, emphasizing the importance of substantive justice over procedural technicalities.The legal framework under Sections 147, 148, 144, and 50C of the Income Tax Act, 1961 was applied to assess the validity of reassessment and capital gains taxation, focusing on ownership rights and the nature of transactions.The Court relied on documentary evidence including the registered Agreement for Sale-cum-General Power of Attorney dated 19.04.2010 and the sale deed dated 16.03.2015 to determine the chain of title and ownership, concluding that the 2015 sale deed represented a subsequent sale by the buyer and not a fresh transfer by the assessee.The Court noted the principle against double taxation, holding that taxing the same capital gains income twice in different assessment years is impermissible under law.The Court highlighted the inconsistent treatment by Revenue in similar cases as indicative of erroneous reassessment, reinforcing the need for uniform application of tax laws.