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2023 (1) TMI 1157 - AT - Income TaxReopening of assessment u/s 147 - chargeability of capital gains arising out of sale of property - HELD THAT: CIT(Appeals) has passed a non-speaking order without considering the facts in right perspective. The assessing authority computed capital gain purely on the basis of conjectures. AO has recorded that assessee vide letter dated 8.11.2016 intimated that he had not sold any property. He was having power of attorney of his mother in respect of land admeasuring 1288 sq. yards in Shaheed Malkhan Singh Colony, Gharaunda. However, the AO made addition on the basis that the entire sale proceeds had been credited in the account of the assessee, therefore, being the actual beneficiary, addition was made in his hand. We are unable to affirm the view of the Assessing Officer as the law is clear regarding taxability of capital gain arising out of transfer of immovable property. Whether capital gain can be charged from the person who sold property as attorney of the owner? - In our considered view, there is no ambiguity under the law for chargeability of capital gain in respect of transfer of any capital asset. It is the owner of capital asset who would be liable for capital gain. In case the sale consideration is credited into the account of third party or the attorney of such owner, in that event also the money which has been credited in the account of the third party or the power of attorney cannot be subjected to tax under the head ‘capital gains’. Therefore, the action of the authorities below is contrary to the statutory provisions. The money credited to the account of the assessee could not have been subjected to tax as a capital gain earned by the assessee. Addition made by AO under the head of ‘capital gain’ is not justified. Hence, the Assessing Officer is directed to delete the addition. However, it is clarified that the Assessing Officer would be at liberty to tax the capital gains/business receipts in correct hands - Grounds of appeal raised in this appeal are allowed.
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