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2022 (1) TMI 117 - AT - Income TaxCapital Gain - Sale of joint property / Land - share of the assessee in sale proceeds - HELD THAT - We find that when the ITAT remitted the issue to the file of the AO with a direction to decide the issue with verification of the issues pointed out by the ITAT cited supra, the AO accordingly completed the assessment by addressing all the points raised by the ITAT. As per the AO the assessee vide letter dated 03-12-2008 filed in this office on 04-12-2008 has stated that he has received ₹ 11,00,000/- from the purchaser towards sale of Ac. O. 30 guntas situated in Sy.No.139/ AA2, Malkapur village Kondapur mandal, Medak District. The same was pointed out by the ITAT also in para 2 of its order. Accordingly, sale price is considered as ₹ 11 lakh. Vide sale deed No.27230 dated 17-11-2006 executed by the assessee as a vendor, it was mentioned in the document that assessee is executing the said sale deed as a HUF and his share was mentioned as 3/4th and the remaining 1/4th of the share pertains to his son Sri N.Praveen Kumar. Hence the quantum of amount in the hands of the assessee is considered at ₹ 8,25,000/- (3/4th of ₹ 11,00,000/-). While confirming the addition made by the AO, the CIT(A) observed that the AO has duly complied with all the directions of the Hon ble ITAT and has given his findings on each of the four issues after examining all the information filed in the course of assessment proceedings. Therefore, we do not find any infirmity in the order of the CIT(A) and upholding the same, we dismiss the grounds raised by the assessee.
Issues:
1. Correctness of the order of the Hon'ble CIT(A). 2. Determination of sale proceeds received by the assessee. 3. Assessment of long-term capital gains. 4. Correct status determination of the assessee. 5. Consideration of agricultural land as a capital asset. Issue 1: Correctness of the order of the Hon'ble CIT(A): The appeal was filed against the CIT(A)'s order for AY 2007-08 under proceedings u/s 143(3) r.w.s. 254 of the Income Tax Act, 1961. The appellant contended that the CIT(A) erred in law and fact. The CIT(A) confirmed the AO's order, stating that the AO complied with ITAT's directions. The sale value was considered at ?11,00,000 as per the appellant's letter. The CIT(A) rejected the appellant's argument that the letter should not be considered due to illiteracy. The status of the appellant as HUF was also confirmed. The CIT(A) upheld the addition made by the AO. Issue 2: Determination of sale proceeds received by the assessee: The AO determined the sale price based on the appellant's letter dated 03-12-2008, considering it as ?11,00,000. The quantum of amount in the hands of the assessee was calculated at ?8,25,000 (3/4th of ?11,00,000). The sale deed indicated the appellant's share as 3/4th. The AO treated the asset sold as a capital asset due to its proximity to a notified municipality, making the capital gain taxable. Issue 3: Assessment of long-term capital gains: The AO assessed long-term capital gains at ?8,25,000. The appellant argued that there was no clarity or proper conclusion regarding the sale price. The appellant contended that the amount adopted by the AO as ?11,00,000 lacked supporting material or evidence. However, the AO and CIT(A) considered the appellant's letter as a valid basis for determining the sale price. Issue 4: Correct status determination of the assessee: The status of the appellant as HUF was confirmed based on the sale deed. The CIT(A) and AO agreed on the appellant's status, and there was no difference of opinion in this regard. Issue 5: Consideration of agricultural land as a capital asset: The AO considered the agricultural land as a capital asset as it fell within the specified distance from a notified municipality. The appellant's failure to provide details of the cost of acquisition led to the cost being treated as NIL, resulting in the entire amount of ?8,25,000 being considered as long-term capital gains. In conclusion, the ITAT dismissed the appeal of the assessee, upholding the orders of the CIT(A) and the AO. The ITAT found no infirmity in the CIT(A)'s decision and confirmed the addition made by the AO. The judgment was pronounced on 24th November 2021.
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