Capital gains cannot be taxed in the hands of a confirming party when records show another person made the sale.

Long-term capital gain addition was unsustainable where the sale deed and surrounding records showed that another person was the actual seller and recipient of the sale consideration, while the assessee was only a confirming party. The stamp valuation material and the return of income of the person who disclosed the transaction supported that attribution. In the absence of evidence that the assessee received or used the sale proceeds, the transaction could not be fastened on the assessee merely because her name appeared in the deed. Any tax adjustment, if otherwise warranted, would lie in the hands of the transferor. The appellate relief deleting the addition was therefore confirmed.

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Issues: Whether the addition of long-term capital gain was rightly deleted where the sale deed and surrounding records showed that the property was sold by another person and the assessee was only a confirming party.

Analysis: The sale deed, the stamp valuation proceedings, and the return of income of the person who actually reflected the sale consideration showed that the transaction was attributable to the other seller and not to the deceased assessee. The revenue could not bring evidence to show receipt or use of the sale proceeds by the assessee or establish that the mention of the assessee in the deed displaced the real character of the transaction. On these facts, the addition could not be sustained in the assessee's hands, and if any adjustment was otherwise warranted, it would lie in the hands of the person who actually sold the property.

Conclusion: The deletion of the addition was upheld and the revenue's ground failed.

Final Conclusion: The assessed long-term capital gain addition did not survive in the hands of the deceased assessee, and the appellate relief granted by the first appellate authority was confirmed.

Ratio Decidendi: A capital gain addition cannot be sustained in the hands of a person who is not shown to be the seller or recipient of the sale consideration, especially where contemporaneous records establish another person as the actual transferor.

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