Tribunal upholds disallowance of payment for capital gains. Lack of evidence leads to dismissal.

The Tribunal upheld the disallowance of a payment made to the mother for computing long term capital gains, dismissing the appeal for the assessment year 2012-13 under the Income Tax Act, 1961. The contention that the payment was a diversion of income was rejected due to lack of evidence, leading to the dismissal of the appeal challenging the disallowance. Additionally, the argument of inconsistent treatment of payments between brothers was dismissed, affirming the decision of the lower authorities. The judgment was delivered on July 27, 2022, by SHRI S. S. GODARA, JUDICIAL MEMBER at ITAT PUNE.

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Issues:
1. Disallowance of payment made to mother for computing long term capital gains.
2. Discrepancy in treatment of payment made by brother.

Analysis:

Issue 1: Disallowance of payment made to mother for computing long term capital gains
The appeal pertains to the assessment year 2012-13 under the Income Tax Act, 1961. The primary contention raised by the assessee challenges the disallowance of a payment of Rs.32 lakhs made to his mother for computing long term capital gains. The CIT(A) and the Assessing Officer disallowed this payment, asserting that it was not a diversion of income but rather an application of the sale proceeds from the ancestral land. The CIT(A) highlighted that the fundamental requirement for treating the transaction as a diversion of income was lacking, as there was no overriding title or diversion by it. The dates of the agreements and payments indicated that the contention of the appellant regarding the parents not signing without payment was unfounded. The appeal was dismissed, upholding the disallowance of the payment made to the mother for computing long term capital gains.

Issue 2: Discrepancy in treatment of payment made by brother
The assessee contended that the Assessing Officer had accepted a similar claim made by his brother, implying inconsistency in treatment by the lower authorities. However, the Tribunal found no merit in this argument as the assessee failed to establish the legitimacy of the payment in question based on the sale deed's provisions. The Tribunal rejected this contention, emphasizing that the disallowance of the payment to the mother was justified based on the lack of evidence supporting the claim. Consequently, the appeal was dismissed, affirming the disallowance of the payment made to the mother and rejecting the argument of inconsistent treatment of payments between the brothers.

In conclusion, the Tribunal upheld the decision to disallow the payment made to the mother for computing long term capital gains and dismissed the appeal on both issues raised by the assessee. The judgment was pronounced on July 27, 2022, by SHRI S. S. GODARA, JUDICIAL MEMBER at ITAT PUNE.

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