Tribunal allows apportionment of LTCG on jointly owned residential flat based on documentary evidence.

The Tribunal recognized joint ownership of a residential flat between the assessee and his mother, based on credible documentary evidence provided by the assessee. Consequently, the assessee was allowed to apportion Long Term Capital Gain (LTCG) between them. The appeal was allowed, overturning the decisions of the Assessing Officer (AO) and Commissioner of Income Tax (Appeals) (CIT(A)).

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Issues Involved:
1. Determination of joint ownership of the residential flat.
2. Validity of documentary evidence submitted by the assessee.
3. Assessment of Long Term Capital Gain (LTCG) and its apportionment between the assessee and his mother.

Issue-wise Detailed Analysis:

1. Determination of Joint Ownership of the Residential Flat:
The primary issue revolves around whether the residential flat sold was jointly owned by the assessee and his mother. The assessee claimed joint ownership and offered 50% of the sale proceeds for taxation, while the Assessing Officer (AO) disputed this claim, asserting sole ownership by the assessee based on available records. The AO's investigation revealed that the flat was initially registered solely in the assessee's name, with the mother’s name added later, raising doubts about the authenticity of joint ownership. However, the assessee provided several documents, including an agreement to sale and a General Power of Attorney, indicating joint ownership. The Tribunal found that the documentary evidence, including the society's acknowledgment and the registered sale agreement, supported the claim of joint ownership.

2. Validity of Documentary Evidence Submitted by the Assessee:
The AO and the Commissioner of Income Tax (Appeals) [CIT(A)] questioned the validity of the documents provided by the assessee, particularly the agreement to sale, where the mother’s name was handwritten. The AO considered these documents as self-serving and manufactured. In contrast, the Tribunal noted that the agreement to sale was initialed by all parties involved, and the society had acknowledged the joint ownership in their records. Additionally, the Tribunal considered the certificate issued by the society to the Collector of Stamp, which confirmed the joint membership of the assessee and his mother. The Tribunal found that the documentary evidence provided by the assessee was credible and substantiated the claim of joint ownership.

3. Assessment of Long Term Capital Gain (LTCG) and Its Apportionment:
The AO included the entire sale proceeds in the assessee’s income, rejecting the claim of joint ownership and thereby the apportionment of LTCG. The CIT(A) upheld this view. However, the Tribunal observed that the mother of the assessee had also declared her share of the capital gain in her income tax return. The Tribunal emphasized that the sale agreement dated 10.06.2010, registered with the Sub-Registrar, recognized the mother as a joint owner, and the sale proceeds were equally divided between the assessee and his mother. The Tribunal concluded that the assessee had adequately demonstrated joint ownership and was entitled to apportion the LTCG accordingly.

Conclusion:
The Tribunal allowed the appeal, recognizing the joint ownership of the residential flat by the assessee and his mother. The Tribunal found that the assessee had provided sufficient documentary evidence to substantiate his claim. Consequently, the assessee was entitled to the benefit of LTCG apportionment, and the grounds of appeal were allowed. The order pronounced on 29/05/2019 concluded that the appeal of the assessee was allowed, thereby overturning the previous decisions of the AO and CIT(A).

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