Venkataramappa Shaila Vs ITO (ITAT Bangalore)
BDA Replaced the Site, Not Necessarily the Holding Period—ITAT Restores LTCG Claim &; ₹46.40 Lakh Confirming-Party Payment
The controversy
The assessee, Mr. Venkataramappa Shaila, was a non-filer for AY 2016-17. Based on risk-management information indicating TDS on the sale of immovable property, proceedings were initiated u/s 148A, followed by notice u/s 148.
In response, the assessee filed a return declaring short-term capital gain of ₹48,600 and income from other sources of ₹2,050.
The AO found that the property had been sold for ₹60 lakh, whereas its apparent purchase cost was only ₹21,400. The assessee claimed deduction of ₹46.40 lakh paid to Mr. P.S. Srinivasaiha, described as a confirming party, and brokerage of ₹5 lakh paid to Mr. Jagadish.
The AO rejected both claims and computed short-term capital gain at ₹55,78,600. Deduction u/s 80C was also disallowed, and the total income was assessed at ₹55,79,432 u/s 147 r.w.s. 144B.
Confirming party appeared in the sale deed
Before the CIT(A), the assessee furnished the sale deed, purchase documents, an agreement to sell, a declaration regarding payment of ₹46.40 lakh, bank details of the confirming party & his own bank statement showing brokerage payment.
The CIT(A) nevertheless rejected the claim, observing that neither the sale deed nor any enforceable agreement satisfactorily established the assessee’s obligation to pay ₹46.40 lakh to the confirming party. The brokerage deduction was rejected on similar reasoning.
