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Facts
The assessee, Vasudha Dattatraya Shinde, did not file a return for AY 2014-15. The AO, based on information regarding a high-value property transaction, issued a notice u/s 148 and made an addition of Rs. 5 crore as long-term capital gain, alleging the assessee was a 50% owner. The assessee contended that the property was purchased and paid for by her husband, and she was merely a 'Consenting Party' in a development agreement.
Held
The Tribunal held that the property was purchased and paid for by the assessee's husband. The assessee, referred to as a 'Consenting Party' in the development agreement, did not receive any amount from the sale consideration. Therefore, no income accrued to the assessee, and the addition made by the AO was directed to be deleted.
Key Issues
Whether the addition of Rs. 5 crore as long-term capital gain is justified when the assessee was only a 'Consenting Party' and not the owner or recipient of sale consideration for the property.
Sections Cited
147, 144, 144B, 250, 271(1)(c), 148, 269UL(3), 46A
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Income Tax Appellate Tribunal, PUNE BENCHES “B” :: PUNE
Before: DR.DIPAK P. RIPOTE & SHRI VINAY BHAMORE
Assessee against the Order of the Commissioner of Income tax (appeal) (NFAC) under section 250 of the Income Tax Act, 1961 for A.Y.2014-15 dated 28/01/2025 emanating from Assessment Order u/s.147 r.w.s144 r.w.s144B dated 21/03/2022. and 1566/PUN/2025 Vasudha Dattatraya Shinde 2. is filed by the Assessee against the Order of the Commissioner of Income tax (appeal) (NFAC) under section 250 of the Income Tax Act, 1961 for A.Y.2014-15 dated 18/02/2025 emanating from penalty order u/s.271(1)(c) of the Act dated 23/09/2022. relating to the quantum addition. Assessee has raised following grounds of appeal:
1. On the facts and circumstances of the case and in law Learned Assessing Officer erred in Passing order under section 147 rws 144 where in an addition of Rs. 5 Crore was made on account of long-term capital gain without realizing the fact that the transaction arising out of development agreement reported by Registrar does not pertains to appellant and therefore entire additions need to be deleted, they further erred in assuming that appellant holds 50% share in the property by ignoring the documentary evidences submitted before the lower authorities. Your appellant prays for deletion of entire addition. Your appellant craves for to add, alter amend, modify, delete any or all grounds of appeal before or during the course of hearing in the interest of natural justice.
Submission of ld.AR :
Mr. Pramod Shingte appearing for Assessee filed Power of Attorney. He submitted that the addition made by Assessing Officer (AO) in the assessment order is bad in law. He submitted that AO had received some information regarding sale transaction. Based on the said information, AO issued notice u/s.148 without making any verification. In this case, it is alleged in the assessment order that assessee has entered into high value financial transaction relating to sale of immovable property for a consideration of 2 and 1566/PUN/2025 Vasudha Dattatraya Shinde Rs.10.00 crore registered vide No.519/2014 with SRO Haveli on 25.01.2014. The AO in the assessment order has stated that assessee was 50% owner and accordingly made addition of Rs.5.00 crore. Ld. AR submitted that the impugned property was not owned by the assessee at all. Ld. AR took us through the paper book and invited our attention to Purchase Deed which is placed at page 58 to 65 of the paper book to submit that the impugned property was purchased by Mr.Dattatraya Pandurang Shinde on 06.09.2000 from Mrs. Jayashree Mohan Divgi and Mr. Mohan Narsingrao Divgi. The said sale deed is duly registered. Ld. AR submitted that as per the sale deed, the impugned property was in the name of Mr.Dattatraya Pandurang Shinde who is assessee’s husband. Entire amount was paid by Mr.Dattatraya Pandurang Shinde. Therefore, assessee did not have any ownership of the property. Ld. AR invited our attention to page 53 which is property receipt issued by Pune Municipal Corporation which is in the name of Mr. Shinde Dattatraya Pandurang. Ld. AR also invited our attention to page 51 which is a certificate u/s.269UL(3) of the Income-tax Act wherein it is specifically mentioned that the impugned property is in the name of Mr.D.P. Shinde.
4.1 Ld. AR then invited our attention to the Development Agreement dated 25.01.2014 between Mr.Dattatraya Pandurang Shinde referred as ‘Vendor’ and M/s. Gokhale Joshi Properties LLP referred as ‘Developer’. In the said Development Agreement, assessee Mrs. Vasuda Dattatraya Shinde has been referred as ‘Consenting Party’. The details of cheque numbers are mentioned 3 in the said Development Agreement and no amount has been and 1566/PUN/2025 Vasudha Dattatraya Shinde received by Mrs. Vasuda Dattatraya Shinde. Entire amount has been received by Mr.Dattatraya Pandurang Shinde, husband of assessee. Therefore, the addition made by AO is bad in law.
Submission of ld.DR : 5. Ld.DR stated that during the assessment proceedings assessee has not filed any details. This was strategically done by the assessee so that assessee’s husband return could not be reopened. We specifically asked ld. DR can a ‘Consenting Party’ be taxed. In reply, ld. DR accepted that ‘Consenting Party’ cannot be taxed. Ld. DR also accepted that in this case assessee Mrs. Vasudha Dattatraya Shinde is not owner of the property and she was mere a ‘Consenting Party’.
Findings & Analysis : 6. We have heard both the parties and perused the records. In this case, assessee Mrs. Vasudha Dattatraya Shinde had not filed return of income for A.Y. 2014-15. Based on the information, the AO issued notice u/s.148 of the Act. AO issued various notices after the notice u/s.148 of the Act. Assessee had not complied any of the notices. Therefore, AO based on the information made an addition of Rs.5.00 crore under the head ‘Long Term Capital Gain’. Aggrieved by the same, assessee filed appeal before ld.CIT(A). Assessee made elaborate submissions before ld.CIT(A). Ld.CIT(A) as per Rule 46A called for a remand report from the AO which is part of the order. Ld.CIT(A) held that since assessee’s name appears as co-owner even if funds have been paid by her 4 and 1566/PUN/2025 Vasudha Dattatraya Shinde husband who is the primary owner of the property, the assessee was required to be taxed and assessee failed to prove that the entire consideration has been assessed in the hands of assessee.
Aggrieved by the order of ld.CIT(A), assessee filed appeal before this Tribunal.
We have perused the assessment order and the paper book filed by the assessee. It is observed that the impugned property was purchased vide registered Sale Deed dated 06.11.2000. The said property has been purchased by Mr. Dattatraya Pandurang Shinde, the husband of assessee. It is a Bungalow admeasuring 4133 sq.fts. which was purchased by Mr. Dattatraya Pandurang Shinde vide Sale Deed dated 06.11.2000. The details of payments are mentioned in Schedule-II. It has been pleaded by the assessee that entire payment has been made by Mr. Dattatraya Pandurang Shinde. This fact has not been rebutted by ld. DR. It is observed that as per the certificate issued by Pune Municipal Corporation the said Bungalow is in the name of Mr. D.P. Shinde. We have studied the Development Agreement dated 25.01.2014 wherein Mr. Dattatraya Pandurang Shinde has been referred as ‘Vendor and M/s. Gokhale Joshi Properties LLP has been referred as ‘Developer and Mrs. Vasudha Dattatraya Shinde has been referred as a ‘Consenting Party’. It is specifically mentioned at page 19 of the said Development Agreement with the ‘Vendor’ as under :
“The said amount is paid and agreed to be paid to the Vendor/Owner as under : and 1566/PUN/2025 Vasudha Dattatraya Shinde 9. It is also mentioned at page 21 of the said Development Agreement as under :
“The vendor / owner hereby admits, acknowledges, and ratifies the receipt of the amounts paid to him and the amounts paid to Samarth Sahakari Bank Ltd. Solapur, Shivaji Nagar branch, Pune and The Jalgaon Peoples co-operative Bank Ltd, Kothrud Branch, Pune at the instance of the Vendor / Owner and the balance amount shall be paid to the respective banks on or before 31.03.2014.”
Nowhere in the Development Agreement, it is mentioned that ‘Consenting Party’ has received any amount. Ld. DR has not rebutted this fact. It is not the case of the ITO that a ‘Consenting Party’ ahs received any amount. It is a fact that Assessee is not owner of the property and Assessee do not have any rights in the property as per Purchase Deed dated 06.11.2000 and Development Agreement dated 25.01.2014. It is a fact as emanates from the Development Agreement that the assessee has not received any amount out of sale consideration of Rs.10.00 crore. Therefore, no income has accrued to the assessee for A.Y. 2014-15 and hence no addition can be made on account of Long Term Capital Gain in the hands of assessee. Accordingly, the AO is directed to delete the addition of Rs.5.00 crore made in the hands of assessee Mrs. Vasudha Dattatraya Shinde for A.Y. 2014-15.
11. Since we have adjudicated the appeal relating to quantum addition and directed the AO to delete the addition of Rs.5.00 crore made in the hands of assessee the consequential penalty proceedings does not survive. Grounds of appeal raised by the 6 assessee are allowed. and 1566/PUN/2025 Vasudha Dattatraya Shinde Condonation of Delay :
12. There was a delay of 57 days in filing the appeals by the assessee. We are convinced that there was ‘sufficient reason’ which prevented him to file the appeals within the stipulated time and hence we condone the said delay.
To sum up, both the appeals filed by the assessee are allowed.
Order pronounced in the open Court on 28th August, 2025.