SMT. AMARJEET KAUR,DELHI vs. ACIT, NEW DELHI

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ITA 2780/DEL/2017Status: DisposedITAT Delhi08 June 2021AY 2012-1318 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the addition on account of undervaluation of property sold to the son was justified as it was grossly undervalued compared to another transaction in the same property. However, the addition for the forfeited amount was deleted as it was conditional on the assessee fulfilling certain obligations which she could not, and the amount was forfeited as per the sale deed.

What were the facts?

The assessee claimed capital gains on the sale of property. The Assessing Officer (AO) made additions on two counts: first, for alleged undervaluation of a property sold to her son, and second, for an amount forfeited by the buyer of another property due to non-fulfillment of certain obligations.

What were the issues?

Whether the sale consideration of a property sold to a relative was undervalued, and whether a forfeited amount due to non-fulfillment of sale deed conditions is taxable as capital gains.

Which sections of the Income-tax Act were involved?

Section 133(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH : A : NEW DELHI

Before: SHRI R.K. PANDA & MS SUCHITRA KAMBLE

For Appellant: Shri Saurabh Jain, Advocate
For Respondent: Shri Ashok Gautam, Sr. DR
Hearing: 09.03.2021Pronounced: 08.06.2021

per the sale deed, therefore, the sale consideration to the extent the obligations are not performed cannot be the part of the apparent consideration. In this view of the matter, we are of the considered opinion that the ld.CIT(A) was not justified in sustaining the addition of Rs.1.30 crore made by the AO. We, therefore, set aside the order of the CIT(A) on this issue and direct the AO to delete the addition. However, we make it clear that in case the assessee receives any amount out of the forfeited amount of Rs.1.30 crores on a future date, the same shall be taxed in the year of receipt. This ground of appeal raised by the assessee is accordingly allowed.

20.

In the result, the appeal filed by the assessee is partly allowed. The decision was pronounced in the open court on 08.06.2021.

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