Case Law Details
Raju Shantaram Mandavkar Vs ITO (ITAT Mumbai)
Conclusion: Long term/short term capital gain is liable to be assessed when the income will accrued to assessee for the relevant period.
Held: Assessee was basically contractor for carrying on business under the name and style M/s. P Construction. During proceedings, AO found that assessee had entered into a development agreement with M/s. V Associates on 07.07.2009 upon the market value of the property of Rs.32,66,000/- for the purpose of registration stamp duty. AO assessed this consideration under the head ‘short-term capital gain’. Assessee argued that the transaction was liable to tax in the A.Y. 2015-16 only when assessee received the flat, therefore, assessing the short term capital gain in the present assessment year was wrong against law and facts, therefore, the same was liable to be set aside. In the case of M/s. Bindusaria properties Pvt. Ltd. Hyderabad Vs. ACIT Central Circle-4, Hyderabad in ITA. No.157/Hyd/2011 dated 04.04.2014 and CIT Vs. Balbir Singh Maini Civil Appeal No.15619 of 2017 (Arising Out of SLP (Civil) No. 35248 of 2015), dated 04.10.2017, it was held after the accrual of consideration, the capital gain was liable to be assessed in the hands of assessee and income from short term capital gain/long term capital gain was only liable to tax when it accrued to assessee. In the present case, assessee in pursuance of execution development agreement dated 07.07.2009 received no consideration if any. In view of law mentioned above, it was concluded that long term/short term capital gain is liable to be assessed when the income will accrued to assessee. It is settled law that it is the real income that is to be taxed and not the hypothetical income.
FULL TEXT OF THE ITAT JUDGEMENT
The assessee has filed the present appeal against the order dated 14.12.2015 passed by the Commissioner of Income Tax (Appeals)-3, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y. 2010-11.
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