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Facts
The assessment was completed against the assessee under Section 147, bringing to tax Rs. 42,50,000/- as Short Term Capital Gains from the sale of an immovable property for AY 2016-17. The Ld.CIT(A) dismissed the assessee's appeal due to a 19-day delay in filing. The assessee contended that the property, jointly purchased and sold for the same consideration of Rs. 85 lakhs, should not attract any capital gains, and her share of acquisition cost was not deducted.
Held
The Tribunal condoned the 19-day delay in filing the appeal before the Ld.CIT(A), finding sufficient cause. On merits, the Tribunal held that since the same transaction was already examined in the co-owner husband's case under Section 147 read with Section 144B, with a conclusive finding of no capital gains liability due to identical purchase and sale prices, the same principle of parity applies to the assessee. Consequently, the addition of Rs. 42,50,000/- was deleted.
Key Issues
1. Whether there was a reasonable cause for condoning the 19-day delay in filing the appeal before the Ld.CIT(A). 2. Whether the addition of Short Term Capital Gains was justified when the property was purchased and sold for the same consideration, especially given the finding in the co-owner's case.
Sections Cited
147, 144, 144B, 45, 45(1), 49(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI “J-SMC” BENCH : MUMBAI
Before: SHRI VIKRAM SINGH YADAV & MS. KAVITHA RAJAGOPAL
Assessment Year : 2016-17 Kamini Velmurugan, Income Tax Officer, 18/369, Rajeshwari CHS, Ward-42(2)(3), Subhasnagar, vs. Kautilya Bhavan, Mumbai-400071. Mumbai-400051. PAN : AGZPN9256A (Appellant) (Respondent) For Assessee : Ms. Sailee Gujarathi For Revenue : Shri Aditya Rai, Sr.DR Date of Hearing : 04-03-2026 Date of Pronouncement : 17-03-2026 O R D E R PER VIKRAM SINGH YADAV, A.M : This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [„Ld.CIT(A)‟], dated 19-11-2025, pertaining to Assessment Year (AY) 2016-17.
Briefly, the facts of the case are that the assessment in this case was completed u/s. 147 r.w.s. 144 r.w.s. 144B of the Income Tax Act, 1961 („the Act‟), vide order dt. 12-12-2023, wherein the AO has brought to tax a sum of Rs. 42,50,000/- as Short Term Capital Gains u/s. 45 of the Act in absence of any explanation/evidences submitted by the assessee in respect of sale of immoveable property as well as cost of acquisition. The assessee thereafter carried the matter in appeal before the Ld.CIT(A), who has since dismissed the appeal on account of delayed filing and against the said order, the assessee is in appeal before us.
During the course of hearing, the Ld.AR submitted that re-assessment order and consequential demand notice came to the notice of the assessee only on 10-01-2024 when she logged into her IT-portal and she immediately approached the AO on 15-01-2024, sought professional advice and thereafter filed the appeal on 01-02-2024 along with condonation petition demonstrating her bonafide and sufficient cause for the delay in filing of the appeal. However, the Ld.CIT(A) has not condoned the delay of 19 days, which was duly supported by the affidavit, explaining the bonafide and unavoidable circumstances leading to the delay. It was submitted that delay so happened be condoned and the appeal of the assessee be admitted.
On merits, it was submitted that the assessee along with her husband, Mr. Velmurugan Ramaswamy jointly purchased a flat at Bhoomi Tower Co-operative Housing Society on 12-11-2014 for a total consideration of Rs. 85 lakhs and has paid stamp duty of Rs. 4,25,000/- and in the immediately subsequent year relevant to the impugned assessment year, the flat was sold by the assessee and her husband for the same amount of Rs. 85 lakhs on 01-03-2016 to Mr. Vaibhav Kale and Mrs. Supriya Kale and both the purchase deed and sale deeds are placed on record. It was submitted that while 50% of the sale consideration i.e., Rs.42,50,000/- represents appellant‟s share and is taxable, the AO failed to deduct cost of acquisition of Rs. 42,50,000/- and proportionate stamp duty of Rs. 2,12,500/- to compute the Short Term Capital Gain and where the same is considered, there would not be any Short Term Capital Gain and, therefore, the addition of Rs. 42,50,000/- made by the AO deserves to be set aside since the sale consideration equals to the cost of acquisition and in terms of section 45(1) r.w.s. 49(1) of the Act, no short term capital gain has arisen.
It was further submitted that in the case of assessee‟s husband, the matter was re-opened and assessment was completed u/s. 147 r.w.s. 144B of the Act vide order dt. 16-03-2024, wherein exactly the same transaction has been duly examined by the AO and there is a clear finding that selling price and purchase price of the immoveable property was exactly the same and there is no income under the head „capital gains‟. In this regard our reference was drawn to the findings of the AO, which reads as under: "The assessee has submitted reply and relevant documents in response to the notices issued from time to time. The Instrument of Transfer Document No. 529/1691 dated 01.03.2016, regarding the sale of the immovable property viz. Plot No. 28, Sector No.4, Kharghar, Navi Mumbai, Tal. Panvel, Dist. Raigad, Bank A/c Statements reflecting the entries of the payments received from the sale of above immovable property. The assessee had purchased the above property jointly with his wife which is duly registered with document No. 398/6315 dated 12.11.2014 for consideration of Rs. 85,00,000/-. The assessee (Jointly) has sold the said property with his wife for a total consideration of Rs.85,00,000/- duly registered with document No. 529/1691 dated 01.03.2016 during the year under consideration. As per the document available on record, it has been noticed that the selling price & purchase price of the abovementioned immovable property is same i.e. Rs.85,00,000/-. There is no gain in selling of the above immovable property. Therefore there is no income under the head income from capital gains from the sale of the above property during the year under consideration. (Addition of Rs. NIL)”
It was accordingly submitted that the impugned transaction of sale of immoveable property already stood examined by the Revenue, wherein the sale and purchase values are identical and there is no liability towards capital gains in hands of husband of the assessee and on parity of reasoning, the same treatment should be applied in the hands of the assessee and the addition of Rs. 42,50,000/- towards capital gains deserves to be set aside.
Per contra, the Ld.DR is heard, who has relied on the order passed by the lower authorities.
We have heard the rival contentions and perused the material available on record. Firstly, we find that there was a reasonable cause for the delay in filing the appeal before the Ld.CIT(A). The contents of the affidavit filed by the assessee have not been rebutted by the Revenue and hence, the delay is hereby condoned. Further on merits, we find that where the subject transaction already stood examined by the AO while completing the re-assessment proceedings in the case of the husband of the assessee, being co-owner of the property and there is a clear finding in the assessment order passed in his case u/s. 147 r.w.s. 144B of the Act, dt. 16-03-2024 that there is no difference between the sale and purchase value and there is no liability towards capital gains and the said finding has attained finality, on parity of reasoning, the assessee being a co-owner, the said finding equally applies in the case of the assessee and hence, the addition so made by the AO is hereby deleted.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 17-03-2026.