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of <h1>Assessee's Appeal Granted: No Taxable Capital Gain for 2012-13</h1> <h3>Sama Om Reddy, HYDERABAD Versus The Income Tax Officer, Ward-8 (2), HYDERABAD</h3> Sama Om Reddy, HYDERABAD Versus The Income Tax Officer, Ward-8 (2), HYDERABAD - TMI Issues:Assessment of Long Term Capital Gain on property sale without considering cost of acquisition and transfer of property by the assessee.Analysis:The case involved an appeal by the assessee against the order of the Commissioner of Income Tax (Appeals) for the Assessment Year 2012-13. The primary issue was whether the assessee was liable to pay tax on Long Term Capital Gain arising from the sale of a property. The Assessing Officer initiated proceedings under section 147 of the Income Tax Act after the assessee did not offer any capital gains from the property sale. The assessee argued that there was no transfer of property as the sale was executed by the attorney and not directly by the assessee. The AO, however, treated the entire sale amount as capital gain without considering the cost of acquisition.The assessee contended before the Tribunal that the transfer of property had occurred in 2006 when the sale consideration was received, and possession was handed over to the buyer. The subsequent sale deed in 2012 was executed by the AGPA-holder, not the assessee, and the assessee did not receive any consideration. The Tribunal analyzed the Agreement of Sale cum GPA and held that the assessee had effectively transferred the property in 2006 itself. As per the Transfer of Property Act and the Income Tax Act, the buyer became the owner of the property upon receiving possession and paying the consideration. The subsequent sale by the AGPA-holder could not be attributed to the assessee, who was not a signatory to the sale deed and did not receive any consideration. Therefore, the Tribunal concluded that the assessee was not liable for tax on the capital gain arising from the 2012 sale deed.In conclusion, the Tribunal allowed the appeal of the assessee, holding that there was no capital gain taxable in the hands of the assessee for the Assessment Year 2012-13. The judgment emphasized the legal implications of property transfer, possession, and consideration in determining tax liability on capital gains.
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