2022 (9) TMI 1315

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.... 1961 (the Act) as against returned income of Rs.1,53,634/-. Long Term Capital Gains on sale of flat- Rs.1,08,637/- 2. The Ld. CIT(A) erred in upholding the action of the Assessing Officer in making addition of Rs.1,08,637/- on account of Long Term Capital Gains (LTCG) arising on sale of flat without acknowledging the fact that the said flat was jointly owned by the appellant and her son having equal share and considering 50:50 ratio, the resultant LTCG after exemption under section 54 of the Act would be Nil. 3. Without prejudice to what has been stated above, the Ld. CIT(A) failed to appreciate that even if the capital gains is computed based on the appellant's contribution towards the cost of acquiring flat (i.e. Rs.6,00,000/- out of Rs.9,50,000/-), the resultant LTCG after exemption under section 54 of the Act would be Nil. 4. The Ld. CIT(A) erred in holding that since the appellant's son had offered to tax only Rs.14,50,000/- (out of the total consideration of Rs. 1,00,20,000/- pertaining to sale of flat), if the Rs.85,70,000/- is not brought to tax in the appellant's hands, the same will escape assessment. The appellant....

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....under the head "capital gain‟, the value of consideration from sale of the said property at Rs. 14,50,000 only against which he has claimed deduction under section 48 the cost of acquisition without indexation at Rs. 7,09,827 and the balance amount of Rs. 7,40,173 is offered for taxation. The bank statement of assessee‟s son also confirms the amount of Rs. 14,50,000 received by him. The Assessing Officer ("AO‟) vide order dated 30/11/2016 passed under section 143 (3) of the Act, in the case of assessee, treated the balance amount of Rs. 85,70,000 (Rs. 1,20,00,000 minus Rs. 14,50,000) as sale consideration received by the assessee during the relevant financial year, since the assessee‟s bank statement also reflects the credit of said amount from the sale of the above said property at Bandra. Accordingly, the AO computed long term capital gain of Rs. 1,08,637 and added the same to the total income of the assessee. Further, it was observed that assessee has declared full value of consideration, in its return of income, as Rs. 23,72,161. It was submitted by the assessee that she has received Rs. 15,16,161 on sale of gold ornaments. Since, no explanation was offe....

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....tion under section 54F in respect of capital gains arising from sale of gold ornaments. 6. On the other hand, learned Departmental Representative vehemently relied upon the orders passed by the lower authorities and submitted that the entire consideration on sale of residential flat is to be taxed and since the assessee‟s son has only declared partial amount of consideration, which is received in his account, the balance amount credited in assessee‟s bank account is to be taxed in assessee‟s hands only. 7. We have considered the rival submissions and perused the material available on record. Grievance of the assessee, in the present case, can be broadly categorised as under: (i) sale consideration credited to the assessee‟s bank account should not be the basis of addition of capital gains in her hand; (ii) addition of Rs. 8,57,000 on account of error in filing return of income be deleted and (iii) deduction under section 54F be granted in respect of gains arising from sale of gold ornaments. In the present case, assessee and her son sold jointly owned residential flat at Bandra for a total consideration of Rs. 1,00,20,000. Further, the assessee has als....

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....in the case of assessee‟s son amount of sale consideration of Rs. 14,50,000, disclosed in his return of income, has already been accepted by the Department and no direction can be passed to enhance son‟s income in a concluded assessment. Since, it is the claim of the assessee that the entire sale consideration of Rs. 1,00,20,000 has further been invested by the assessee and her son in another residential flat at Khar, therefore, we deem it appropriate to direct the AO to examine as to how much of the amount of sale consideration received by the assessee has been invested in a new residential property for the purpose of claiming exemption under section 54 of the Act and to grant the exemption to the assessee under the said section if the other conditions laid down therein are satisfied. 9. As regards sale consideration of Rs. 15,15,161 on sale of gold ornaments, the assessee had claimed exemption of Rs. 7,23,711 under section 54F of the Act. The lower authorities denied the claim of the assessee in absence of any documentary proof of having made investment as per requirement of section 54F. In the present case, the learned AR referred to sale invoices of 2 jewellers, ....