2020 (2) TMI 130 - HC - Income Tax

Long term capital gain - invocation of the provisions of Section 50C - levying tax on the transaction which already stood transferred in the AY 2008-09 - sale of property which is disputed and litigation of ownership is pending before the Civil Court - HELD THAT - Appellant wishes to withdraw the present appeal with liberty to file an application under Section 254(2) of the Act before the Tribunal. Accordingly, the present appeal stands dismissed as withdrawn.

Summary

Issues:
Challenge to order of Income Tax Appellate Tribunal for Assessment Year 2010-2011.

Analysis:
The appellant raised several substantial questions of law for determination by the Court. These questions included the perversity, justification, and warrant of the findings in the impugned order passed by the Tribunal. Additionally, the issue of whether a property transferred during the Assessment Year 2008-09 could be subject to taxation again for the Assessment Year 2010-11 was raised. Furthermore, the jurisdiction of the department for assessing the appellant for the latter year and levying tax on a previously transferred transaction was questioned.

The appellant also challenged the confirmation of the invocation of Section 50C of the Income Tax Act 1961 by the ITAT. It was argued that even if taxability under Section 47 arose, it would be regarding the right in the property, not the property itself, and thus Section 50C should not apply to the transfer of a right in a property. Moreover, the addition on account of long-term gain from the sale of a disputed property, the ownership of which was pending in a Civil Court, was contested.

The appellant further disputed the addition on account of long-term capital gain from the sale of a residential house, asserting that neither the appellant nor any representatives lawfully owned or possessed the property before its sale. It was also argued that no consideration was received during the previous year under consideration, and no lawful possession was handed over, thereby negating any case of transfer.

Lastly, the appellant challenged the invocation of Section 50C for the transfer of a right in a property, contending that the provision could only be invoked for the transfer of land or building, not for any right in land or building. After some arguments, the appellant decided to withdraw the appeal with liberty to file an application before the Tribunal under Section 254(2) of the Act. Consequently, the appeal was dismissed as withdrawn, allowing the appellant to seek legal recourse as per the law.