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Facts
The revenue filed an appeal against the CIT(A)'s order, which deleted an addition made on the issue of part performance. The original assessment involved calculating long-term capital gain on a land sale. The CIT(A) held that the transfer occurred in FY 2021-22, not the assessment year in question.
Held
The Tribunal found that crucial documents supporting the assessee's claim of transfer in FY 2021-22 were not available to the AO. Therefore, in the interest of justice, the matter was remanded back to the AO for fresh consideration.
Key Issues
Whether the transfer of land occurred in the relevant assessment year considering the availability of crucial documents to the AO and the assessee's claim of part-performance.
Sections Cited
250, 2(47)(v), 53
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Before: MS. KAVITHA RAJAGOPAL & SMT. RENU JAUHRI
सुिवधई की िधरीख / Date of Hearing 23.04.2025 घोर्णध की िधरीख/Date of Pronouncement 30.05.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the revenue against the order of the Learned Commissioner of Income-tax (Appeals), Mumbai/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] dated 14.03.2024 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2016-17.
A.Y. 2016-17 Lakhani Industries Ltd. 2. The revenue has raised the following grounds of appeal: “1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition made on the issue of part performance, wherein assessment was completed by calculating LTCG at Rs. 33,72,24,198/ by concluding that transfer of the land had actually taken place within the meaning of section 2(47)(v) of the 1. T. Act, 1961 and the assesses is liable to pay capital gain tax on the sale of the property in the assessment year 2016- 17?
2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was correct in deciding that there was no transfer in the relevant assessment year and considering that the property land) was registered and sold to RSK Galaxy Realtors and Proviso Builders and Developers in the FY 2021-22 relevant to AY 2022-23 and accordingly, the capital gain was admitted in the return of income for A. Y.-2022-23.”
3. At the outset, it is noticed that the appeal is delayed by 170 days. Ld. DR has requested for condonation of the delay in view of the petition filed by the department. Vide petition for condonation of delay, it has been explained that due to the transfer of jurisdiction and subsequent transfer of the PAN, along with a record, delay of 170 days occurred in filing of the appeal, and it has been prayed that the delay may be condoned as it was purely unintentional.
In view of the above facts and circumstances, we hereby condone the delay in the filing of the appeal.
Brief facts of the case are that the assessee filed return declaring nil income for AY 2017-18 on 14.10.2016. The case was selected for scrutiny, and it A.Y. 2016-17 Lakhani Industries Ltd. was noticed by Ld. AO that the assessee had entered into an agreement to sell a land in district Thane for a consideration of Rs. 41,00,00,000/-, which was duly registered on 05.11.2015. Ld. AO held that this amounted to a transfer for which capital gain are liable to be charged to tax. He, accordingly, computed the long- term capital gain of Rs. 33,72,24,198/- on the impugned transaction and finalised the assessment at total income of Rs. 33,67,33,647/-.
Aggrieved with the order of Ld. AO, the assessee preferred an appeal before the Ld. CIT(A), who has allowed relief to the assessee and accepted that the transfer was effected only in FY 2021-22 as claimed by the assessee. He held the assessee had declared resultant capital gain in the AY 2022-23 and no transfer was effected in the FY relevant to AY 2016-17 as held by the AO. The assessee’s appeal was accordingly allowed.
Aggrieved with the order of Ld. CIT(A), the revenue is in appeal before the Tribunal. Before us, Ld. AR has filed a paper book containing relevant documents in support of his contentions. It has also been certified that some of these documents viz. registered agreement for sale dated 04.03.2022, possession letter dated 04.03.2022, computation of income for AY 2022-23 and ITR acknowledgement of AY 2022-23, were only filed before the Ld. CIT(A) as the same were received after the order of the Ld. AO. Ld. AR has argued that the assessee has wrongly applied provisions of section 53 of the Transfer of Property A.Y. 2016-17 Lakhani Industries Ltd. Act to hold that there was part-performance in pursuance to the agreement in question, and therefore, the transfer of land had taken place within the meaning of section 2(47)(v) of the Act during the year under consideration. He has also argued that since the possession of the property had not been handed over, section 2(47) would not be attracted as it presupposes the transfer of possession.
On the other hand, Ld. DR has pointed out that Ld. CIT(A) has not considered the registered power of attorney given by the assessee in 2015 and has disregarded the findings of the Ld. AO. He has argued that the subsequent sale deed is simply the mirror image of the agreement to sell dated 05.11.2015, and has pointed out that the documents furnished before Ld. CIT(A) were not made available to the Ld. AO.
We have considered the rival submissions and perused the material placed before us. Admittedly, crucial documents viz. registered agreement for sale dated 04.03.2022, possession letter dated 04.03.2022, computation of income for AY 2022-23 and ITR acknowledgement of AY 2022-23 were not available before Ld. AO. We are therefore of the considered opinion that in the interest of justice, the matter should be remanded back to Ld. AO for fresh consideration in the light of these documents. Accordingly, the order of ld. A.Y. 2016-17 Lakhani Industries Ltd. CIT(A) is set aside, and the matter is restored to Ld. AO for consideration on merits after giving due opportunity to the assessee.
In the result, the appeal of the revenue is allowed for statistical purposes. Order pronounced in the open court on 30.05.2025.