2013 (5) TMI 526 - AT - Income Tax

Gain on sale of assessee s share of land - assessee received a gift of 40% undivided share in land from his father vide gift deed - whether CIT(A) erred in directing the AO to treat the sale proceeds as the Long Term Capital Gain and to allow the claim for deduction u/s 54 as claimed by the assessee - Held that - It is an undisputed fact that the assessee received a gift of 40% undivided share in land from his father vide gift deed duly executed before the Registrar on 20.11.2007 & the said land was sold to five person on 12.12.2007 by way of a sale deed which was executed by the assessee, his father and his brother the co-owners of the said undivided land. CIT(A) will allowing the claim of assessee has relied on the order in the case of his brother who was also one of the signatory of the sale deed executed on 12.12.2007 where AO had accepted the gift of undivided share in the land of 40% to him vide gift deed dated 20.11.2007 as genuine and has held the sale proceeds to be a capital receipt form the sale of the said land and also allowed the claim for deduction u/s 54. DR could not bring any material on record to show that whether any remedial action was taken by the Department in the case of assessee s brother or not. Thus as decided in UOI vs Kamodini Dalal and Another (2000 (12) TMI 101 - SUPREME Court) that it is not open to the Revenue to accept a judgement in the case of an assessee and challenge its correctness in the case of any other assessee without just cause. In favour of assessee.

Summary

Issues:
- Whether the ld. CIT(A) erred in deleting the addition of Rs.68,41,346/- received by the assessee as 40% of the sale proceeds of land.

Analysis:

Issue 1: Addition of Sale Proceeds as Income from Other Sources
The AO observed that the assessee received a gift of 40% undivided share in land from his father and later sold it. The AO treated the entire sale proceeds as income from other sources, alleging tax planning. However, the ld. CIT(A) found the gift deed genuine and held that the sale proceeds should be treated as Long Term Capital Gain. The ld. CIT(A) pointed out a similar case involving the assessee's brother, where the sale proceeds were accepted as genuine and deduction u/s 54 was allowed. The Tribunal noted the principle that the Revenue cannot challenge the correctness of a judgment in one case without just cause. Consequently, the Tribunal confirmed the ld. CIT(A)'s decision, dismissing the Revenue's appeal.

Conclusion:
The Tribunal upheld the ld. CIT(A)'s decision to treat the sale proceeds as Long Term Capital Gain, rejecting the Revenue's contention that the gift of land was not genuine and adding the proceeds to the assessee's income. The Tribunal emphasized consistency in treatment of similar cases and dismissed the Revenue's appeal.