Vasudha Dattatraya Shinde Vs ITO (ITAT Pune)
Consenting Party cannot be taxed for Husband’s Property – ITAT Pune deletes ₹5 Cr LTCG Addition & Penalty
Tribunal considered whether a “consenting party” in a development agreement could be taxed for capital gains.
AO, based on registrar’s information, reopened assessment u/s 147 & treated assessee as 50% owner of a Pune property, making addition of ₹5 crore LTCG out of total consideration of ₹10 crore. Assessee explained that the property was exclusively owned & purchased by her husband, Mr. Dattatraya Pandurang Shinde, under registered sale deed dated 06.11.2000. Assessee’s name appeared in the development agreement of 25.01.2014 only as a consenting party. All consideration was received by her husband, not her.
CIT(A) confirmed addition holding that since her name appeared in the agreement, she was liable.
Before ITAT, Assessee produced municipal records, purchase deed & development agreement to prove she had no ownership & received no sale consideration. Revenue admitted that a consenting party cannot be taxed.
Tribunal held that assessee had no ownership rights & no consideration accrued to her, hence no LTCG could be assessed in her hands. Consequently, the addition of ₹5 crore was directed to be deleted. Since the quantum addition was deleted, the related penalty u/s 271(1)(c) also did not survive. Delay of 57 days in filing appeal was also condoned.
