Case Law Details
Shri Vinod Kumar Chugh Vs ITO (ITAT Delhi)
Conclusion: Section 50C could be invoked only when sale had taken place during the year. As the sale of vacant plot by assessee stood completed in the year 1991, there was no question of invoking the provision of section 50C for taxing the long term capital gains.
Held: Assessee had purchased a vacant plot in the year 1987 through a General Power of Attorney (GPA) from the original allottee Smt. L on which assessee had constructed the ground floor and sold the house on 03.08.1991 to Smt. S under a registered “Agreement to Sell” along with the possession of property.In the year under consideration, Smt. S obtained approval for the transfer of the above plot from the Noida Authority in her favour and asked the assessee to execute a proper Sale Deed in her favour. Assessee, accordingly, executed the Sale Deed in his capacity as the General Power of Attorney holder on 23.06.2009. AO had assumed this as sale by the assessee during the year and had taxed the capital gain u/s 50C in the assessee’s hand. It was held the transferee had taken possession in the year 1991 and had continued to be in possession of the property and hence, transfer was complete in the year 1991 in view of clause (v) of section 2(47). More so, the sale of this property by assessee had taken place in the year 1991 and AO was not justified in taxing the capital gain arising on the sale of this property in the year under consideration. As regards invoking the provision of section 50C, the same would come to be attracted only when sale had taken place during the year. As the sale by assessee stood completed in the year 1991, there was no question of invoking the provision of section 50C. Accordingly, the addition made by AO as long term capital gains was directed to be deleted.
FULL TEXT OF THE ITAT JUDGEMENT
This is an appeal filed by the assessee against order dated 20th January, 2015 passed by the Ld. CIT (Appeals) – 17, New Delhi {CIT (A)} for Assessment Year (AY) 2010-11. The only grievance in this appeal is the addition of Rs. 78,40,062/- made by the Assessing Officer and confirmed by the Ld. CIT(A) on account of the capital gain.
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