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Facts
The assessee appealed against the assessment of long-term capital gains of Rs.3,53,84,140/- and an addition of unexplained cash credits of Rs.1,94,98,400/- under section 68, both upheld by the CIT(A). The lower authorities also rejected the assessee's claims for capital gains exemptions under sections 54B, 54, and 54F. The sale deed for the land was executed in FY 2011-12, but the assessment was for AY 2011-12.
Held
The Tribunal deleted the long-term capital gains addition, noting that the 'transfer' of the capital asset occurred in FY 2011-12 (AY 2012-13) as per the sale deed, not AY 2011-12. The Tribunal also deleted the unexplained cash credit addition, finding it to represent 'on-money' consideration for the land sale, which was received in FY 2010-11.
Key Issues
Whether the long-term capital gains and unexplained cash credits were correctly assessed for AY 2011-12, considering the date of 'transfer' as per section 2(47) and the nature of cash deposits, and whether exemption claims under sections 54B, 54, and 54F were rightly rejected.
Sections Cited
143(3), 68, 69, 54B, 54, 54F, 2(47)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: ‘A’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI M. BALAGANESH
This assessee’s appeal for assessment year 2011-12 is directed against the Commissioner of Income Tax (Appeals)-I [in short, the “CIT(A)”] Gurgaon’s order dated 29.03.2017 passed in case no. 93/14-15, involving proceedings under sections 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Case called twice. None appeared at the behest of the assessee. We accordingly proceeded ex-parte against him.
It emerges during the course of hearing as per the relevant facts emerging from the case file that the assessee is aggrieved against both the learned lower authorities’ action assessing long term capital gains of Rs.3,53,84,140/- in his hands followed by section 68 addition of unexplained cash credits amounting to Rs.1,94,98,400/- in course of assessment dated 28.03.2014 followed by CIT(A)’s lower appellate findings upholding the said twin additions and also rejecting section 54B and section 54/54F claims; respectively.
The Revenue vehemently argues in support of both the learned lower authorities’ foregoing findings that the assessee’s land sold has been rightly assessed as a capital asset and the very outcome ought to follow for his cash deposits as well. We deem it appropriate to reiterate that we have proceeded ex-parte against the assessee. We, therefore, sought to verify the relevant facts from the Revenue side itself. Learned departmental representative took us to para 5 at page 3 in assessment discussion that the registered sale deed between the assessee (vendor) and the corresponding
2 | P a g e vendee, had been executed on 29.08.2011 i.e. in financial year 2011-12 falling in assessment year 2012-13 whereas the lower authorities have assessed the appellant in the assessment year 2011-12 only.
Learned departmental representative at this stage sought to buttress the point that the assessee had received the entire consideration in the relevant previous year and, therefore, he has rightly assessed for the long-term capital gain in question.
We invited the Revenue’s attention to the specific statutory provision i.e. section 2(47) of the Act, wherein the clinching statutory expression “transfer”; inclusive in nature, given in clauses (i) to (vi), nowhere treats such an instance of mere receipt of the entire sale consideration as amounting to transfer of a capital asset, in any manner, whatsoever. We accordingly delete the impugned addition in very terms.
Next comes the second issue of section 68/69 unexplained cash credits addition amounting to Rs.1,94,98,400/- representing assessee’s cash deposits made in his bank account on 23.02.2011 when the above cheque payment had been received. The Revenue