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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI R.S. SYAL
आदेश / ORDER PER R.S.SYAL, VP : This appeal by the assessee is directed against the order dated 10-02-2020 passed by the CIT(A)-2, Pune, in relation to the assessment year 2013-14. 2. The only issue raised in this appeal is against the double taxation of Rs.10 lakhs. 3. Succinctly, the facts of the case are that the assessee received a sum of Rs.10 lakhs on signing as a consenting party in a sale transaction of land and offered long term capital gain of Rs.5,39,068/- by deducting the remaining amount of Rs.4,60,932/- as indexed cost of acquisition. The Assessing Officer (AO) observed that the assessee was not the owner of the above property as per the Sale deed and also did not have any share in the land transferred. The property was in the exclusive name of assessee‟s mother, Mrs. Anuradha Ashok Satbhai and was fully owned by her. That is how, the AO treated the entire amount of Rs.10 lakhs as „Income from other sources‟ and made an addition for differential amount of Rs.4.61 lakhs. The assessee contended before the ld. CIT(A) that sale consideration of Rs.1.50 crores was received on transfer of property, out of which Rs.1.20 crores was retained by his mother; Rs.20 lakhs was given to his father; and Rs.10 lakhs to him as consenting parties. It was further submitted that Mrs. Anuradha Ashok Satbhai had been treated as sole owner of the land and thus, no addition at all was called for in the hands of assessee. The ld. CIT(A) in para 5.3.5 of impugned order discussed the fact that while deciding the appeal of Mrs. Anuradha Ashok Satbhai, he has held that she was the sole owner of the land and the entire capital gain was chargeable to tax in her hands. Still, he approved the addition made by the AO in the hands of the assessee.
I have heard both the sides and gone through the relevant material on record. It is an admitted position that the assessee signed the sale deed as a consenting party in respect of property which was sold by his mother, Mrs. Anuradha Ashok Satbhai. In lieu of the signing, the assessee was paid a sum of Rs.10 lakhs. He suo motu offered Rs.5.39 lakhs as capital gain after claiming indexed cost of acquisition at Rs.4.61 lakhs. The ld. CIT(A) has admitted in the impugned order that in the case of Mrs. Anuradha Ashok Satbhai, he has held that she was the sole owner of the land and “whatever capital gain arises in the sale of transaction of the said land is to be taxed in entirety in the hands of appellant only”. Thus, it is overt that the assessee‟s mother was subjected to tax as a sole owner of the property and the assessee, even though received Rs.10 lakh as a consenting party, cannot be charged to tax in respect of this transaction either as „Long term capital gain‟ offered wrongly by it or as „Income from other sources‟ assessed by the AO. Taxing the assessee in respect of a part of the transaction would lead to double taxation. The ld. AR submitted that the order passed by the ld. CIT(A) in the hands of Mrs. Anuradha Ashok Satbhai has attained finality. Once full sale consideration has been taxed in the hands of assessee‟s mother, then taxing a part of the same in the hands of the assessee would amount to double taxation, which cannot be permitted.
Here is a case in which the assessee inadvertently suo motu offered Rs.5.39 lakhs as long term capital gain and the AO made further addition of Rs.4.61 lakhs. In view of the fact that the assessee was not at all chargeable to tax in respect of receipt of Rs.10 lakhs for acting as a consenting party and the entire sale consideration has already been taxed in the hands of Mrs. Anuradha Ashok Satbhai, his mother, as a sole owner, I hold that the amount of long term capital gain of Rs.5.39 lakhs wrongly offered by the assessee is also not chargeable to tax in the same manner in which the addition of Rs.4.61 lakhs was wrongly made by the AO. It is trite that no income can be taxed merely because the assessee wrongly offered it in his return. I am reminded of the mandate of Art. 265 of the Constitution of India, which states that : `No tax shall be levied or collected except by authority of law‟. It is, therefore, held that full amount of Rs.10 lakhs should be deleted from the assessee‟s computation of total income.
In the result, the appeal is allowed.
Order pronounced in the Open Court on 7th March, 2022.
Sd/- (R.S.SYAL) VICE PRESIDENT पुणे Pune; ददिधांक Dated : 7th March, 2022 GCVSR आदेश की प्रतिलिपि अग्रेपिि/Copy of the Order is forwarded to: अपीऱधर्थी / The Appellant; 1. प्रत्यर्थी / The Respondent; 2. 3. The CIT(A)-2, Pune 4. The Pr. CIT-1, Pune 5. विभागीय प्रविविवि, आयकर अपीलीय अविकरण, पुणे / DR „SMC‟, ITAT, Pune गार्ड फाईल / Guard file 6. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अविकरण ,पुणे / ITAT, Pune
Date 1. Draft dictated on 03-03-2022 Sr.PS 2. Draft placed before author 07-03-2022 Sr.PS 3. Draft proposed & placed JM before the second member 4. Draft discussed/approved JM by Second Member. 5. Approved Draft comes to Sr.PS the Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *