Appeal dismissed as receipt rightly taxed under LTCG, emphasizing validity of registered conveyance deed.

The ITAT dismissed the revenue's appeal, affirming the CIT(A)'s decision that the receipt of Rs. 1,95,00,000/- by the assessee was rightly taxed under LTCG. The ITAT emphasized the validity of the registered conveyance deed over unregistered documents and confirmed the transfer of possessory rights as a capital asset. The appeal of the revenue was dismissed, upholding the CIT(A)'s order.

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Issues Involved:
1. Acceptance of Long Term Capital Gain (LTCG) by the CIT(A).
2. Treatment of receipt of Rs. 1,95,00,000/- as LTCG.
3. Ownership and transfer of rights in the property.

Issue-wise Detailed Analysis:

1. Acceptance of Long Term Capital Gain (LTCG) by the CIT(A):
The revenue challenged the CIT(A)’s acceptance of the LTCG declared by the assessee. The CIT(A) had accepted the assessee’s claim of LTCG on the sale of land, including the cost of acquisition and exemptions under Section 54F of the Income Tax Act, 1961. The CIT(A) concluded that the assessee had transferred a capital asset, leading to the LTCG.

2. Treatment of Receipt of Rs. 1,95,00,000/- as LTCG:
The revenue argued that the receipt of Rs. 1,95,00,000/- should not be considered as LTCG since the assessee was not the owner of the land. The CIT(A), however, found that the amount received by the assessee was rightly shown as taxable under the head LTCG. The CIT(A) observed that the purchasers agreed to pay a higher consideration to the legal heirs of Late Sh. Ashok Bhatia, including the assessee, due to their possessory rights in the property. The CIT(A) held that the consideration received was for the transfer of possessory rights, thus constituting a transfer of a capital asset under Sections 2(14) and 2(47) of the I.T. Act.

3. Ownership and Transfer of Rights in the Property:
The AO contended that the assessee did not have any possessory rights in the property, and thus, the receipt should be taxed under "Income from Other Sources." The AO’s argument was based on several documents, including an MOU and general power of attorneys, which indicated joint possession and ownership by Sh. Kishore B. Dalal and Sh. Ashok Bhatia. However, the CIT(A) and the ITAT found these documents unregistered and not binding over the registered conveyance deed. The registered conveyance deed clearly stated that the legal heirs of Late Sh. Ashok Bhatia, including the assessee, had possessory rights and received consideration for transferring these rights. The ITAT upheld the CIT(A)’s view that the registered conveyance deed held more evidentiary value and confirmed the transfer of possessory rights, thus validating the LTCG treatment.

Conclusion:
The ITAT dismissed the revenue’s appeal, affirming the CIT(A)’s decision that the receipt of Rs. 1,95,00,000/- by the assessee was rightly taxed under LTCG. The ITAT emphasized the validity of the registered conveyance deed over unregistered documents and confirmed the transfer of possessory rights as a capital asset. The appeal of the revenue was dismissed, upholding the CIT(A)’s order.

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