Case Law Details
ITO Vs Laxmi Realty and Advisory Pvt. Ltd. (ITAT Mumbai)
ITAT Mumbai held that as ownership of property lies with the developer on the day of ‘agreement of sale’, sale consideration is taxable under capital gains in the hand of developer and not in the hands of assessee.
Facts- The case of the assessee was selected for scrutiny under CASS, in which the reasons involved low capital gains in respect to sale consideration and that the sale consideration reported in the ITR was lower than the figure reported in the AIR statement. AO is accordingly noted to have called for the details of the property sold during the year under consideration along with complete details of sale, capital gain on it etc. On perusal of the submitted agreements, the AO noted that these agreements involved sale of flats by developer, M/s Coredelia Realty Pvt Ltd (CRPL) and purchaser, M/s Religare Finvest Ltd (RFL). AO further noted that the assessee along with another person, Mr. Manish Vyas were only the confirming parties to the sale transaction.
AO sought information from CRPL and noted that initially they had entered into an allotment agreement for 24 flats but only 17 flats were sold to RFL during the year, with the assessee as one of the confirming parties. Thus, AO inferred that the consideration value of Rs.11,27,75,000/- as mentioned in the sale agreement between CRPL and RFL had accrued to the assessee and after allowing the benefit of indexed cost of acquisition as per the allotment agreement, AO worked out capital gain.
CIT(A) held that the ownership of property in question was with CRPL and not the assessee hence no capital gain was assessable in the hands of the assessee. Being aggrieved, revenue has preferred the present appeal.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
