KAMINI VELMURUGAN,MUMBAI vs. INCOME TAX OFFICER, MUMBAI

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

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:

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 4 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.