2010 (12) TMI 1324 - AT - Income Tax

Summary

Issues involved:
The issues involved in this case are the assessment of capital gains u/s 53A of the Transfer of Property Act 1882 and u/s 45(5)(b) of the Income-tax Act, 1961 for the assessment years 2000-01 and 2002-03.

Assessment of Capital Gains for AY 2000-01:
The assessee entered into a sale agreement for a property with M/s Devaki Hospital Ltd. The AO assessed capital gains based on sec. 53A of the TP Act, considering the receipt of sale proceeds and possession transfer. The CIT(A) upheld the AO's decision. However, the ITAT Chennai found that the transfer, as defined u/s 2(47)(v) of the Act, was complete in the previous year relevant to AY 1993-94, not in AY 2000-01. The ITAT concluded that no further transfers occurred in the impugned years, quashing the addition of capital gains.

Assessment of Capital Gains for AY 2002-03:
The AO relied on sec. 45(5)(b) of the Act to assess capital gains on an additional consideration received by the power of attorney holder. The ITAT noted that the provision of sec. 45(5)(b) applies only when compensation or consideration is enhanced by a court, Tribunal, or authority. As there was no such enhancement by a relevant entity, the ITAT held that sec. 45(5)(b) had no application. Consequently, the ITAT allowed the appeals of the assessee, quashing the addition of capital gains for both years.