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TMI Blog2023 (2) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 - AO is completely erred in computing capital gains in the impugned assessment year on the basis of subsequent sale deed dated 18.07.2013, even though the assessee has made it very clear, he has offered capital gains in the assessment year 2013-14. AO himself has given credit for the amount of capital gains declared for the assessment year 2013-14, while computing capital gains in the impugned assessment year. Once the AO came to the conclusion that the assessee has offered capital gains in the earlier assessment year, then there is no reason for the AO to compute capital gains on transfer of very same asset in the impugned assessment year, because transfer will not take place in two assessment years. CIT(A), without considering relevant facts simply sustained additions made by the AO and thus, we set aside the order passed by the CIT(A) and direct the AO to delete the additions made towards capital gains from sale of property for the impugned assessment year. Appeal of assessee allowed. - ITA No. 783/Chny/2022 - - - Dated:- 15-2-2023 - SHRI V. DURGA RAO , HON BLE JUDICIAL MEMBER AND SHRI G. MANJUNATHA , HON BLE ACCOUNTANT MEMBER For the Appellant : Shri. T.S. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration of Rs. 50 lakhs. Therefore, the AO called upon the assessee to file necessary evidences including computation of capital gains from sale of property. In response, the assessee vide his letter dated 21.11.2019, submitted that he along with his two brothers had sold a property for a consideration of Rs. 54,70,500/-, by way of registered POA coupled with sale receipt dated 02.01.2013 and also declared his share of consideration of Rs. 18,23,500/- and computed necessary capital gains and offered to tax for assessment year 2013-14. Since, the assessee has transferred a property by way of registered POA, and also handed over possession to the buyer, as per the provisions of section 2(47)(v) of the Act, deemed transfer took place for the assessment year 2013-14, and thus, the question of computation of capital gains for assessment year 2014-15 does not arise, when the POA holder transferred the property in favour of his wife Mrs. Krishna. 4. The AO, however, was not convinced with the explanation furnished by the assessee and according to the Assessing Officer, when the POA holder has executed sale deed on 18.07.2013, the transfer took place in terms of section 247 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation of section 50C of the IT Act by the ITO and has argued that fare market value to the registering authority is only enabling provision to arrive at fare market value and it shall not be conclusive mandatory. Further, the appellant has also argued that he was duped by the purchaser/buyer therefore, AO should have made full inquiry before reaching the fare market value at Rs. 94,48,500-. The appellant has also raised the question on the validity of reassessment order passed u/s 147 of the IT Act and has also argued that reassessment proceedings are bad in law. Based on the strength of these grounds of appeal the appellant has sought relief this office. 4.2 I have carefully perused/examined the facts of the case, reassessment order u/s 143(3) r.w.s. 147 and reply filed by the appellant during the appellate proceedings. From the perusal of reassessment order it is seen that the case was reopened u/s 14 7 of the IT Act based on the information received by the department and subsequent belief with regard to escapement of income during the assessment year 2014-15. It is seen that the appellant has sold the property during the year and has not shown/declared due capital gain ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the appellant is responsible for sale and sale consideration. Based on his clear cut findings, the AO has invoked section 50C of the IT Act for arriving at fair market value of the property sold by the appellant. Accordingly, AO has taken the sale consideration of Rs. 94,48,500/- as reflected in the sale documents. In view of the above discussion I am inclined to concur with the findings AO in his assessment order with respect of addition of Rs. 13,99,344/- on account of long terms capital gain. Hence, the addition of Rs. 13,99,344/- made by the AO is confirmed. Therefore, these grounds of appeal are dismissed. 6. The Ld. Counsel for the assessee, referring to POA dated 16th day of November, 2012 which was registered in the office of Sub-Registrar on 02.01.2013, submitted that the assessee has executed irrevocable POA in favour of the buyer Mr. A. Sridharan and also received full amount of consideration of Rs. 54,70,500/- by way of cheque and cash as per receipt dated 02.01.2013. Since, the assessee has executed irrevocable POA, coupled with sale receipt, deemed transfer referred to section 2(47)(v) of the Act took place in the assessment year 2013-14, and thus, the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vour of Mrs. Krishna, assessee s wife. From the above, what we understood is that POA holder had purchased a property from the assessee in the year 2012-13 by way of registered POA coupled with sale receipt dated 02.01.2013 and has only completed the formality of registration of documents in favour of his wife on 18.07.2013. Therefore, we are of the considered view that the AO is completely erred in computing capital gains in the impugned assessment year on the basis of subsequent sale deed dated 18.07.2013, even though the assessee has made it very clear, he has offered capital gains in the assessment year 2013-14. In fact, the AO himself has given credit for the amount of capital gains declared for the assessment year 2013-14, while computing capital gains in the impugned assessment year. In our view, once the AO came to the conclusion that the assessee has offered capital gains in the earlier assessment year, then there is no reason for the AO to compute capital gains on transfer of very same asset in the impugned assessment year, because transfer will not take place in two assessment years. The ld. CIT(A), without considering relevant facts simply sustained additions made by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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