DCIT Vs Aakar Hotels (ITAT Nagpur)
ITAT Nagpur held that addition on account of LTCG in the hands of firm not justified as property is belonged to the partner in his individual capacity and didn’t belonged to the firm. Accordingly, order of CIT(A) upheld and appeal of revenue dismissed.
Facts- A Search and Seizure action was conducted in the case of Atul Yamsanwar & Others on 25.06.2019. Atul Yamsanwar & others, are partners in the said partnership firm. Assessee had not filed any return of income for the assessment year under consideration. The case of the assessee was reopened u/s. 147 of the Act on account of reason to believe that income emanating from transfer of property has escaped.
AO noticed that assessee had sold hotel property belonging to M/s Aakar Hotels to M/s PNB Construction company for a consideration of Rs.3,30,00,000/- on 20.02.2016 vide its assignment deed. AO concluded the assessment vide assessment order dated 24.08.2021 and assessed total income at Rs.2,67,14,897/- by making addition of Rs.2,67,14,897/- on account of Long Term Capital Gain arising out of selling of hotel property belonging to Aakar Hotels to M/s PNB construction company.
CIT(A) allowed the appeal and deleted the addition. Being aggrieved, revenue has preferred the present appeal.
