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of <h1>Assessee's LTCG addition deleted as ITAT finds property sale in 1991, not 2009.</h1> <h3>Shri Vinod Kumar Chugh Versus ITO, Ward 33 (4). New Delhi</h3> Shri Vinod Kumar Chugh Versus ITO, Ward 33 (4). New Delhi - TMI Issues Involved:1. Addition of Rs. 78,40,062/- as Long Term Capital Gain (LTCG) on the sale of property.2. Validity of the sale transaction date for capital gains calculation.3. Applicability of Section 50C of the Income Tax Act, 1961.Issue-wise Detailed Analysis:1. Addition of Rs. 78,40,062/- as Long Term Capital Gain (LTCG) on the sale of property:The primary grievance in this appeal is the addition of Rs. 78,40,062/- made by the Assessing Officer (AO) and confirmed by the Ld. CIT(A) on account of LTCG. The AO noted that the transaction of sale of an immovable property at A-34, Sector 30, Noida for Rs. 83,70,000/- on 23rd June 2009 had not been reflected in the Return of Income. The AO held that this transaction attracted LTCG and was taxable under Section 50C of the Income Tax Act, 1961. The LTCG was computed at Rs. 78,40,062/- after allowing the benefit of indexation.2. Validity of the sale transaction date for capital gains calculation:The assessee argued that the property was sold on 03.08.1991 to Smt. Santosh Sareen for Rs. 4,55,000/- under a registered 'Agreement to Sell' along with the possession of the property. The AO, however, did not accept this sale as valid due to lack of proof and considered the sale date as 23.06.2009. The assessee contended that the sale deed executed on 23.06.2009 was only in the capacity of a General Power of Attorney (GPA) holder and not as the owner. The ITAT noted that the possession was handed over to the buyer in 1991 and corroborated by the buyer's confirmation. The transfer was considered complete in 1991 under Section 2(47)(v) of the Income Tax Act, which includes any transaction involving the allowing of possession in part performance of a contract as per Section 53A of the Transfer of Property Act.3. Applicability of Section 50C of the Income Tax Act, 1961:The AO applied Section 50C, which deals with the valuation of capital assets for the purpose of calculating capital gains. The ITAT held that Section 50C, introduced by Finance Act, 2002 with effect from 01.04.2003, was not applicable since the property transfer was completed in 1991. The sale deed executed in 2009 was merely a formalization of the transaction completed in 1991. Therefore, the provisions of Section 50C could not be invoked.Conclusion:The ITAT concluded that the sale of the property took place in 1991 and not in 2009. Hence, the addition of Rs. 78,40,062/- as LTCG in the assessment year under consideration was not justified. Consequently, the appeal of the assessee was allowed, and the addition made by the AO was directed to be deleted.Final Judgment:The appeal of the assessee is allowed, and the addition of Rs. 78,40,062/- as LTCG is deleted. The order was pronounced in the open court on 18th March 2019.
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