Kamini Velmurugan Vs ITO (ITAT Mumbai)
Delay Condoned STCG Addition Deleted – No Capital Gain Where Sale = Cost (Parity with Co-owner)
AO reopened the case and, due to non-compliance, taxed ₹42.5 lakh as Short Term Capital Gain (STCG) on sale of jointly owned property, without allowing cost of acquisition. The CIT(A) dismissed the appeal due to delay of 19 days.
Before ITAT, the assessee demonstrated that:
- Property was jointly purchased & sold for the same price (₹85 lakh)
- Her share (₹42.5 lakh) had equal cost of acquisition + stamp duty, resulting in no gain
- In co-owner (husband’s) case, AO himself accepted that no capital gain arises on identical facts
Tribunal held:
- Delay deserved condonation as it was bona fide and properly explained
- On merits, since sale consideration = cost, no capital gain arises
- Applying principle of parity/consistency, finding in co-owner’s case must apply
Accordingly, the addition of ₹42.5 lakh was deleted in full.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [`Ld.CIT(A)’], dated 19-11-2025, pertaining to Assessment Year (AY) 2016-17.
2. Briefly, the facts of the case are that the assessment in this case was completed u/s. 147 r.w.s. 144 r.w.s. 144B of the Income Tax Act, 1961 (the Act), vide order dt. 12-12-2023, wherein the AO has brought to tax a sum of Rs. 42,50,000/- as Short Term Capital Gains u/s. 45 of the Act in absence of any explanation/evidences submitted by the assessee in respect of sale of immoveable property as well as cost of acquisition. The assessee thereafter carried the matter in appeal before the Ld.CIT(A), who has since dismissed the appeal on account of delayed filing and against the said order, the assessee is in appeal before us.
