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Income Tax Officer-11 (3) (4) , Mumbai Versus Dr. Vandana Bhulchandani

2016 (8) TMI 951 - ITAT MUMBAI

Short term capital gain - addition on account of assessing 50% of the STCG on sale of the said property in the assessee’s hands - Held that:- AO after reopening the assessee’s case for A.Y. 2005-06 for the purpose of examining, inter alia, the investment in the said property, has in the order of assessment dated 30.11.2012 not disputed the fact that the assessee has not purchased the said property, but rather that the same was purchased by the assessee’s husband, Shri Arjun Bulchandani, out of h .....

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er which the STCG arising thereon was admittedly disclosed by the assessee’s husband in his return of income. In this factual matrix of the case, we concur with the finding rendered by the learned CIT(A) that the entire STCG arising on sale of the said property is to be assessed in the hands of Sri Arjun Bulchandani, the assessee’s husband and not in the assessee’s hands and consequently uphold his direction to the AO to delete the addition of ₹ 45,38,254/- on account of 50% STCG arising o .....

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her return of income for A.Y. 2009-10 on 31.07.2009 declaring income of ₹ 55,230/-. The case was subsequently taken up for scrutiny. In the course of assessment proceedings, the Assessing Officer (AO), on the basis of AIR information that there was a sale of a property at 1601, Era IV, Marathon Nextgen, Veer Santaji Marg, Lower Parel, Mumbai 400013 (hereinafter referred to as the said property ) for ₹ 2,12,00,000/-, observed that no such sale was reflected in the assessee s return of .....

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as disclosed in his return of income. It was further submitted before the AO that though the assessee s case reopened for A.Y. 2005-06 for considering the investments made in the acquisition of the said property, the AO after examining the issue accepted that, though the said flat/property was in the joint names of the assessee and her husband, the whole investment in acquisition of the said property was made by her husband, Sri Arjun Bulchandani. The AO in the case on hand, however, did not acc .....

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the matter, the AO, observing that the case of the assessee s husband case was not selected for scrutiny for A.Y. 2005-06 and 2009-10 and also since the assessee was shown to be the first holder of the said property as per the agreement and AIR information, proceeded to bring to tax 50% of the short term capital gains (STCG) arising on sale of the said property in the assessee s hands as co-owner of the property. The assessment was completed under section 143(3) of the Income Tax Act, 1961 (in s .....

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the addition of ₹ 45,38,254/- made in the assessee s hands in respect of 50% of the STCG on sale of the said property. 3.1 Revenue, being aggrieved by the order of the CIT(A)-2, Mumbai dated 09.11.2012 for A.Y. 2009-10, has preferred this appeal raising the following grounds: - 1. On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) was justified in deleting the short term capital gain of Rs. 45,38,254/- arising out of sale of residential flat jointly held .....

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f the sale of the said property (flat) in which she was a co-owner with her husband, Sri Arjun Bulchandani. The learned D.R. placed strong reliance in the findings of the AO in the order of assessment that the assessee being a joint owner of the said property along with her husband was liable for tax of 50% of the STCG arising from the sale thereof. It was submitted that the AO was correct in concluding that the whole arrangements surrounding the transaction in respect of the said property was w .....

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to delete the addition of ₹ 45,38,254/- on account of assessing 50% of the STCG on sale of the said property in the assessee s hands. The learned A.R., reiterating the submissions put forth before the authorities below, submitted that while the said property was held in the names of the assessee, her husband Sri Arjun Bulchandani and Shri Ashwin Bulchandani, it was purchased totally out of the funds of her husband s account; the said property was reflected as part of his immovable property .....

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d. It was argued that, in these factual circumstances, the AO s bringing to tax 50% of the STCG in the assessee s hands is erroneous as the same had undisputedly been disclosed by her husband in his return of income for A.Y. 2009-10. 3.3.2 The learned A.R. for the assessee also assailed the view of the AO that the whole arrangement surrounding the transactions in respect of the said property was a device to avoid payment of due taxes as baseless and factually incorrect since all the transactions .....

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the said property, being factually correct ought to be upheld and Revenue s appeal dismissed. 3.4.1 We have heard the rival contentions of both the parties and perused and carefully considered the material on record. The issue before us is whether or not the 50% of STCG of ₹ 45,38,254/- arising on sale of the said property is exigible to tax in the assessee s hands. 3.4.2 The facts of the matter as emanate from the record are that the AO in the course of assessment proceedings, on the basi .....

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n his return of income for the relevant period, was brushed aside by the AO. The AO was of the view that since the assessee s name appeared in the agreement, she was liable to be taxed for 50% of the STCG arising from sale of the said property, observing that since the assessee s husband had set off the STCG on sale of the said property against sale of some shares, the entire arrangement was done with the intention to avoid payment of legitimate taxes. 3.4.2 On an appreciation of the facts on re .....

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