2023 (1) TMI 29 - AT - Income Tax

Capital gain - legal owner of property - entire funds at the time of purchase of property was paid by his son the entire sale consideration is also received by her son - HELD THAT - As sale of property was mad in the name of the assessee which was also purchased in the name of the assessee. Therefore, assessee is the legal owner of the above property and in absence of any other evidence same is required to be taxed under the head capital gain in the hands of the assessee. There is no evidence that son of the assessee has declared any capital gain on the above transactions. Further, merely because interest of housing loan is claimed by the son of the assessee in his computation it is not make him the owner of the property. In this case, the legal owner of the property is assessee who has transferred the property by registering sale deed. Therefore, we do not find any infirmity in the orders of the lower authorities. Accordingly, the appeal of the assessee is dismissed.

Summary

Issues:
1. Dismissal of appeal against assessment order by National Faceless Appeal Centre
2. Addition of short term capital gain in the hands of the assessee
3. Ownership of property and taxation of capital gain

Issue 1: Dismissal of appeal against assessment order
The appeal was filed by the assessee against the appellate order passed by the National Faceless Appeal Centre, Delhi, challenging the assessment order dated 11th December, 2018, passed by the Income Tax Officer, Ward 27(2) (3), Mumbai under Section 143(3) read with section 147 of the Income-tax Act, 1961. Despite notices, the assessee did not appear, and the appeal was decided based on the available information on record.

Issue 2: Addition of short term capital gain
The assessee raised grounds challenging the order of the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) (CIT(A)). The AO added a short term capital gain of Rs. 10,75,000 as the property was sold by the assessee, even though the purchase funds were provided by her son. The CIT(A) rejected the contention that the son was the real owner, as the property was registered in the name of the assessee. The son did not declare any capital gain in his returns, leading to the addition in the hands of the assessee.

Issue 3: Ownership of property and taxation of capital gain
The Tribunal analyzed the ownership of the property and the taxation of capital gain. The property was sold in the name of the assessee, who was considered the legal owner. Despite the son claiming deductions for housing loan interest, the legal transfer of the property made the assessee liable for capital gain tax. The absence of evidence showing the son declaring capital gain further supported the decision to tax the gain in the hands of the assessee. The Tribunal upheld the orders of the lower authorities, dismissing the appeal of the assessee.

In conclusion, the Tribunal affirmed the dismissal of the appeal, emphasizing the legal ownership of the property and the taxation of capital gain in the hands of the assessee. The decision was based on the registration details and absence of evidence of the son declaring capital gain, leading to the rejection of the assessee's contentions and the confirmation of the addition made by the AO.