2022 (5) TMI 359 - AT - Income Tax

Tribunal remands case for detailed investigation of sale consideration & property transfer

ACIT, Circle-52 (1) New Delhi Versus Late Sh. Amarjeet Singh through legal heirs Sh. Kunwar Raj Sing

The Tribunal remanded the case to the CIT(A) for further investigation and a detailed factual report on the receipt of sale consideration and property ... Short Term Capital Gain - CIT(A) deleted the addition on the grounds that there is no evidence of receipt of the sale price handing over of the possession of the property - CIT(A) held that the provisions of Section 45(1) and Section 2(47)(v) are not applicable on the facts of the case and since the ownership has not been transferred, the applicant remain to be the owner of the property no capital gains arises - HELD THAT:- This issue is a grey matter which needs to be proved undisputedly owing to the conflicting nature of the documents as filed with the Income Tax Department, Registration Department and the arguments taken before us by both the parties. The assessee claims that he continuous to be in the possession of the property. No material has been brought on record by the revenue to prove the receipt of the money against argument that the assessee has not received the amounts. The purchaser has paid stamp duty of Rs. 58.50 lacs which cannot be expected to be spent profligately by the purchaser. The purchaser has not taken any steps to occupy the property as per the documents. At the same time, the revenue has also not confirmed with regard to the payments received by the assessee, as to which account the amounts have been credited or as to the receipt of money by both the parties namely, the assessee and Sh. Manjit Singh. The assessee is 33% owner of the property whereas Sh. Manjit Singh is 67% owner. The returns of Sh. Manjit Singh, the amounts received by Sh. Manjit Singh, the taxation thereof the receipts of 67% owner have not been brought on record to examine the issue in a holistic manner. While the assessee disputed the receipt of the payment, no enquiries have been conducted from BIC Logistics Ltd. to confirm whether they have fulfilled or defaulted the payments as mentioned in the agreement. Under these circumstances, it needs to be investigated and confirmed by the revenue that the assessee has indeed received monies from BIC Logistics Ltd. Investigations are also required to find out the fact whether the assessee is still in the possession of the property or parted with the property. Hence, in the interest of justice and in order to avoid duplication of work and for accelerated disposal, the matter is being remanded back to the file of the Ld. CIT(A) to get the investigations conducted under his/her supervision and obtained the much-needed factual reports from the Assessing Authorities/Investigation Wing as deemed fit and pass a speaking order in provisions of the Income Tax Act. The assessee shall comply with the notices issued by the revenue without seeking any unnecessary adjournments. Appeal of the Revenue is allowed for statistical purpose. Issues Involved:1. Deletion of Short Term Capital Gain amounting to Rs. 2,90,89,450/-.2. Deletion of interest expenditure amounting to Rs. 6,75,523/-.Issue-wise Detailed Analysis:1. Deletion of Short Term Capital Gain:The primary issue revolves around whether the assessee should be charged with Short Term Capital Gain (STCG) on the sale of immovable property valued at Rs. 9.75 crores. The assessee argued that no capital gain should be recognized because no sale consideration was received, and possession of the property was not transferred. The property was declared in the assessee's returns for subsequent assessment years, and the investment was reflected in the balance sheet.The Assessing Officer (AO) found discrepancies in the sale deed and noted that payments were allegedly made through cheques and cash, as acknowledged by the assessee in front of the Registrar. However, the AO observed that the payment schedule was not mentioned in the original sale deed obtained from the sub-Registrar, raising doubts about the transaction's authenticity.The Commissioner of Income Tax (Appeals) [CIT(A)] deleted the addition, stating that there was no evidence of receipt of the sale price or handing over possession of the property. The CIT(A) concluded that the provisions of Section 45(1) and Section 2(47)(v) of the Income Tax Act, 1961, were not applicable since the ownership had not been transferred.Upon appeal, the Tribunal noted conflicting evidence and arguments from both parties. The Tribunal emphasized the need for further investigation to confirm whether the assessee received any payment and whether the property was indeed transferred. The Tribunal remanded the matter back to the CIT(A) for further investigation and a detailed factual report to resolve the issue comprehensively.2. Deletion of Interest Expenditure:The issue here pertains to the deletion of interest expenditure amounting to Rs. 6,75,523/-. The assessee initially declared an income of Rs. 19,27,700/- and later revised it to Rs. 38,09,925/- due to the withdrawal of interest paid on a bank loan, which was claimed under 'property income' but was for business purposes.The Tribunal's order did not provide a detailed analysis of this specific issue, suggesting that the primary focus was on the STCG matter. As the appeal was allowed for statistical purposes and remanded for further investigation, it can be inferred that the interest expenditure issue may also require additional scrutiny during the reassessment by the CIT(A).Conclusion:The Tribunal remanded the case back to the CIT(A) for further investigation and a detailed factual report regarding the receipt of sale consideration and the transfer of property. The appeal was allowed for statistical purposes, emphasizing the necessity for a thorough and holistic examination of the facts to resolve the issues of Short Term Capital Gain and interest expenditure comprehensively.