Sunil Kumar Vs ITO (ITAT Delhi)
Nil consideration proved – ITAT quashes Capital Gains on spousal property transfer
Delhi ITAT dealt with the case of late Sunil Kumar, represented by his son, arising from a reassessment completed u/s 147/144/144B. The dispute centered on the addition of ₹1.40 crore as capital gains, alleged to have arisen from the transfer of a property at Nehru Ground, NIT Faridabad, by the assessee to his wife, Smt. Bimla Devi.
AO had treated the amount stated in the registered conveyance deed as sale consideration & taxed it as undisclosed capital gains. CIT(A) upheld this view, relying on the recital in the deed which recorded receipt of full consideration. Assessee, however, consistently maintained that no monetary consideration was actually received. He explained that the amount was mentioned only for stamp duty purposes & to facilitate revenue record transfer. Supporting this, he submitted copies of his bank accounts showing no such receipts & also highlighted ongoing family disputes which were later resolved through a settlement in October 2018.
Tribunal noted that what is relevant is that in the conveyance deed it is mentioned and verified by the sub-registrar that ‘NIL’ consideration/ amount was paid by vendor to vendee. The bank account statement of wife of assesse do not indicate there was any source of wife to have arranged funds form the bank. In any case when wife herself has deposed on affidavit that no amount was paid then treating her to be an independent assesse, AO could have examined the issue further in her hands. In any case, when wife could have been benefited by family settlement or even by gift deed, to transfer title without payment of consideration then it will not be justified to allege intention to conceal any capital gains. Thus payment of consideration seems to be a sham transaction. Tax authorities have failed to have prudent approach to the issue.
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