Simmi Batra Vs ITO (ITAT Delhi)
Sale Share Cannot Be Treated as Unsecured Loan- Tribunal Strikes Down AO’s Addition on Sale Consideration: Sale Share Cannot Be Treated as Unsecured Loan- Tribunal Strikes Down AO’s Addition on Sale Consideration
Assessee, an individual, filed return declaring income of Rs.11,44,220/-. The case was selected for limited scrutiny regarding large deduction claimed u/s 54/54F. The dispute arose from sale of property at Mathura Road, New Delhi, originally belonging to partnership firm M/s Batra Bros & Co. After death of her husband (partner), Assessee & her minor son inherited 6.25% share. Pursuant to agreement to sell, she received Rs.1,41,86,718/- as her share.
AO noted that agreement was not registered & alleged that Assessee had not deposited sale proceeds in Capital Gains Account Scheme. Treating Rs.1,41,87,500/- as unexplained unsecured loan, AO made addition & also disallowed deduction u/s 54F claimed on purchase of new residential property. CIT(A)-NFAC upheld the addition.
Before Tribunal, Assessee produced Memorandum of Understanding (MOU) executed on 24.09.2012 between heirs of partners & R.S. Business Solutions Pvt. Ltd. showing sale consideration of Rs.24.50 Cr with detailed payment schedule. It was shown that out of Rs.1.41 Cr received, only Rs.28.15 lakh pertained to AY 2015-16, balance having been received in earlier years. All payments were through account payee cheques. Tribunal observed that once receipt was established as share of sale consideration, it could not be treated as unexplained credit. Thus, addition u/s 68 was deleted.
