2016 (12) TMI 1142 - AT - Income Tax

Undisclosed capital gain - legal transfer - Held that - We find that the assessee had denied to have received any money in lieu of transfer of immovable property where sale deed was actually signed by the assessee and a receipt was also found attached with the sale deed which was obtained from the office of the Registrar by the assessee after AO raised a query in respect of the said deed on the basis of AIR information. The assessee pleaded that he was forced to sign the papers/documents which he was not knowing to the documents concerning sale deed transferring the property to Mrs. Sayali S Sawant. We also find from the record that the assessee has inherited the property from his mother. The assessee has totally denied to have received any sale consideration and executed any sale deed in favour of Mrs. Sayali S Sawant. Also during the course of assessment proceedings the transaction could not be confirmed. In our opinion, the ends of justice would be met if the matter is restore back to the file of the AO to decide the issue afresh on the facts and circumstances of the case - Decided in favour of assessee for statistical purposes.

Summary

Issues:
1. Assessment of Long Term Capital Gains on the transfer of immovable property.
2. Validity of the assessment by the Assessing Officer (AO).
3. Claim of the Assessee regarding coercion in signing documents.
4. Request for restoration of the matter to the AO for further verification.

Analysis:
1. The case involved the assessment of Long Term Capital Gains on the transfer of immovable property by the Assessee for the assessment year 2009-10. The Assessee declared a total income of ?1,43,220, but the AO, based on AIR information, found discrepancies in the declared income related to the sale of a property. The AO valued the property at ?31,08,651 and calculated the capital gain at ?30,36,193, adding it to the Assessee's total income.

2. In the appellate proceedings, the ld.FAA confirmed the AO's action, stating that the property was transferred as per a sale deed and the Assessee received ?10,00,000 as consideration. The ld.FAA observed that the Assessee's claim of coercion and co-ownership with siblings lacked evidence. Referring to section 50C of the Income Tax Act, the ld.FAA upheld the AO's valuation and dismissed the Assessee's appeal, emphasizing the stamp valuation authority's adopted value as valid for capital gain computation.

3. The Assessee contended that he was coerced into signing the sale deed, was unaware of the transaction, and did not receive any consideration. The Assessee requested the matter be sent back to the AO for further verification from the buyer. The Tribunal found merit in the Assessee's claim, noting discrepancies and lack of confirmation regarding the transaction. The Tribunal set aside the ld.CIT(A)'s order and directed the AO to re-examine the issue after providing the Assessee with a fair opportunity to present his case.

4. As the Tribunal restored the matter to the AO for fresh examination of the capital gain issue, the other grounds of appeal were deemed academic and dismissed. The Tribunal allowed the Assessee's appeal for statistical purposes, emphasizing the need for a fair and thorough investigation into the transaction.