2013 (7) TMI 980 - AT - Income Tax

Summary

Issues involved:
Appeal against the order of CIT(A) for A.Y 2004-05 regarding assessment of income u/s 5A of the Income Tax Act for husband and wife governed by the Portuguese Civil Code, 1960 in Goa.

Issue 1 - Capital Gains on assignment of flats:
The AO assessed total income against declared income, adding Capital Gains from assignment of flats. Assessee claimed flats were given as brokerage and commission. AO added income of 4 flats due to lack of evidence. Assessee argued for cost of acquisition and double taxation concern.

- Assessee's argument: Lack of documentary evidence for brokerage paid, circumstantial evidence accepted. Negotiations and payments for improving property title. Concern for double taxation.
- Decision: Flats given as commission to Mr. Tahir Isani, not added to Assessee's income. Cash received for flats to be added due to lack of evidence.

Issue 2 - Taxation year for assignment of flat:
AO taxed income from assignment of flat in A.Y 2004-05, while Assessee offered it for taxation in A.Y 2009-10 upon possession. Assessee argued transaction completion upon possession, not agreement.

- Assessee's argument: Taxation upon possession, not agreement. Transaction complete upon possession in A.Y 2009-10.
- Decision: Income to be taxed in A.Y 2009-10 when possession obtained. Appeal allowed on this ground.

Conclusion:
ITA No. 87/PNJ/2013 partly allowed, while ITA No. 88/PNJ/2013 allowed. Decision pronounced on 31/07/2013.