2019 (2) TMI 808 - AT - Income Tax

Computation of LTCG - addition of sum received by the 4 siblings of the assessee directly from the purchaser and which finds mention in the registered sale deed - Whether the persons shown as siblings have received the payments as laid out in the recitals of the sale deed? - Held that - In the interest of substantial justice would be well served if the impugned order of assessment dated 30.03.2016 for Assessment Year 2013-14 is set aside and restored back to the file of the AO for the limited purpose of verifying whether the persons shown as siblings, i.e., consenting witnesses are actually the siblings of the assessee and whether they have received the payments as laid out in the recitals of the sale deed dated 18.11.2012. If the assessee s claim is found to be factually correct, then the AO shall adopt the sale consideration arising/accruing to the share of the assessee at ₹ 8 lakhs and re-compute the assessee s LTCG on sale of the aforesaid property at Baluvanahalli, Kolar Dist accordingly complete the assessment for Assessment Year 2013-14 in the case on hand. Assessee s appeal allowed for statistical purposes.

Issues:
Assessment of long term capital gains (LTCG) on sale of property, inclusion of siblings' share in sale consideration, validity of AO's computation, appeal against CIT(A)'s order, admissibility of additional evidence, setting aside of assessment for verification.

Analysis:

1. Assessment of LTCG:
The case involved the assessment of long term capital gains on the sale of a property. The AO computed the LTCG of the assessee based on the sale consideration received, which included amounts received by the assessee's siblings directly from the purchaser. The CIT(A) upheld this computation, leading to the appeal before the Tribunal.

2. Inclusion of Siblings' Share:
The AO included the amounts received by the assessee's siblings in the sale consideration for computing the assessee's LTCG. However, the Tribunal found this inclusion unreasonable, considering that the siblings had a right in their mother's property. The Tribunal noted the importance of verifying the factual correctness of the siblings' relationship and payments received.

3. Validity of AO's Computation:
The Tribunal, after considering the facts and submissions, found discrepancies in the AO's computation of LTCG. The Tribunal admitted additional evidence provided by the assessee, such as family tree documents and death certificates, which were crucial in determining the correct computation of LTCG.

4. Appeal Against CIT(A)'s Order:
The assessee raised multiple grounds challenging the CIT(A)'s decision, including the denial of liability for a higher total income, disputes over property rights, and errors in the revised computation of capital gains. The Tribunal addressed these grounds and set aside the assessment for further verification.

5. Admissibility of Additional Evidence:
The Tribunal allowed the admission of additional evidence, including family tree documents and death certificates, which were not presented before the lower authorities. This evidence was deemed essential in determining the correct computation of LTCG and ensuring substantial justice in the case.

6. Setting Aside of Assessment for Verification:
In light of the discrepancies and the need for further verification regarding the siblings' relationship and payments received, the Tribunal set aside the assessment for the AO to re-examine the facts. The AO was directed to verify the siblings' identities and payments to accurately compute the assessee's LTCG.

Overall, the Tribunal allowed the assessee's appeal for assessment year 2013-14 for statistical purposes, emphasizing the importance of verifying factual correctness in determining LTCG and ensuring a just assessment process.

← Previous Next →