ELIZABETH JOSE,ERNAKULAM vs. DCIT, CORPORATE CIRCLE 1(1), ERNAKULAM

Brief facts of the case are that the appellant is an individual. The return of income for AY 2016-17 was filed on 03.08 disclosing total income of Rs. 14,71,400/- and unabsorbed short term capital loss of Rs. 35,89,251/-. Against the said return of income, the assessment was completed by the National Faceless assessment Centre (hereinafter called "the AO") vide order dated 18.12.2018 passed u/s. 143(3) of the Income Tax Act, 1961 (the Act) accepting Elizbeth Jose the returned income. Subsequently, the AO formed an opinion that income escaped assessment to tax as the appellant made a bogus claim for short term capital loss of Rs. 35,89,251/-. Accordingly, issued a notice u/s. 148 on 27.03.2021. In response to the notice u/s. 148, the appellant filed return of income on 12.04.2021 disclosing same income as shown in the original return of income. Against the said return of income, the assessment was completed by the AO vide order dated 21.03.2022 passed u/s. 147 r.w.s. 144B of the Act after making addition of Rs. 48,05,504/- under the head ‘income from capital gain’.

The factual background leading to the above addition is that during the previous year relevant to the assessment year under consideration the appellant sold an apartment to M/s. Bros India Group for an apparent consideration of Rs. 75,00,000/-. It was claimed that the said flat was purchased through unregistered sale agreement on 26.12.2014 from her husband for a consideration of Rs. 1,10,89,251/- and claimed short term capital loss of Rs. 35,89,251/-. According to the AO, the cost of acquisition of the said flat is only Rs. 24,60,720/- plus cost of registration of Rs. 2,33,776/- The balance short term capital gain of Rs. 48,05,504/- was brought to tax. The AO further held that since the property was purchased from her husband only through agreement of sale, which is not registered agreement, declined to accept the purchase consideration of Rs. 1,10,89,251/-.

Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.

When the appeal was called on nobody appeared on behalf of the assessee despite due service of notice of hearing. Therefore, we proceeded to dispose of the appeal after hearing the learned Sr. DR. However, vide ground of appeals the appellant submits that the appellant had filed the proof of payment of purchase consideration from husband of Rs. 1,08,55,475/- and, therefore, the AO as well the CIT(A) should have accepted the cost of acquisition as claimed by the appellant. It is further submitted that in view of the provisions of section 2(47) of the Act, the fact that purchase deed was not registered is not material to reject the claim of the appellant.

On the other hand, placing reliance on the orders of the learned lower authorities the learned Sr. DR submits that no interference is warranted.

The issue in the present appeal is what is the correct cost of acquisition of the flat sold. Undisputedly the flat in question was stated to have been purchased from the husband of the appellant for a consideration of Rs. 1,08,55,475/-. However, the AO disputed this fact, keeping in view the value adopted for stamp duty purposes as Elizbeth Jose cost of acquisition. It is settled position that the consideration stated in the sale deed executed and registsered is conclusive evidence with regard to the consideration received on sale of immovable property. Therefore, the AO was rightly adopted the sale consideration shown in the registered sale deed as cost of acquisition. I do not find any infirmity in the orders of the learned lower authorities.

In the result, the appeal filed by the assessee stands dismissed.