DCIT, CENTRAL CIRCLE- 26, NEW DELHI vs. ARUNA CHAUDHARY, NEW DELHI

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ITA 581/DEL/2020Status: DisposedITAT Delhi31 July 2023AY 2008-093 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the earlier order of the CIT(A), which established the assessee as a trustee and not the owner of the property, had attained finality. Therefore, no error was committed in deleting the capital gains addition.

What were the facts?

The Revenue appealed the deletion of an addition of Rs. 75,24,990/- made on account of capital gains from the sale of a Singapore property. The CIT(A) had previously deleted a similar addition for the prior assessment year based on evidence showing the assessee was a trustee, not the owner.

What were the issues?

Whether the assessee is liable for capital gains tax on a property where they acted merely as a trustee and not the beneficial owner.

Which sections of the Income-tax Act were involved?

Section 153A,Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘A’ : NEW DELHI

Before: SH. M. BALAGANESH & SH.ANUBHAV SHARMA

Hearing: 26.07.2023Pronounced: 31.07.2023

The appeal has been preferred by the Revenue against the order dated 05.11.2019 of CIT(A)-31, New Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in appeal no. 294/19-20/356/18-19 arising out of an appeal before it against the order dated 30.03.2016 passed u/s 153A/143(3) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the ACIT, Central Circle-26, New Delhi (hereinafter referred as the Ld. AO).

2. The revenue is in appeal raising following ground ;

“1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 75, 24,990/- made by the Assessing officer on account of Capital Gain on sale of Singapore Property the year under consideration.

2.

That the grounds of appeal

are with prejudice to each other.

3. That the appellant crave to leave, to add, amend, alter of forgo any ground(s) of appeal either before at the time of hearing of the appeal.”

3. Heard and perused the record.

4.

During the course of hearing it comes up that earlier in appeal no. 150/2017-18/CIT(A)-29 order dated 09.03.2018 for A.Y. 2007-08 addition made in assessment order u/s 147/143(3) of the Act dated 30.11.2017 was deleted by Ld. CIT(A). The issue determined in favour of the assessee in that appeal was that the disputed property was found to be owned by Ms. Bhati Naintara and assessee was merely a trustee of the property holding it on account of Ms. Bhati Naintara who was having matrimonial dispute. In that appeal, Ld. CIT(A) has thrashed all the material evidences to conclude that assessee had never paid or received any consideration. Ld. CIT(A) had also examined the fact that Ms. Bhati Naintara had sold the property on 26.12.2017 to a third party, through assessee who was a trustee, and that the consideration of SGD 7,80,000/-, was received by Ms. Bhati Nainatara and the assessee was discharged from all the responsibilities by letter dated 03.01.2008.

5.

The Revenue had preferred a appeal against that order dated 09.03.2018 and that appeal was dismissed by the Co-ordinate Bench for having low tax effect vide order dated 21.02.2023 and further by order dated 25.04.2023 it was also made clear by way of corrigendum that the CBDT Circular no. 23 dated 06.09.2019 and subsequent Office Memorandum dated 16.09.2019 which came into effect from 16.09.2019 having the prospective effect will not be applicable in the case of assessee and the exceptions mentioned thereon will also not come in the way upon dismissal of the appeal for having low tax effect.

6.

In the case in hand primarily the issue of capital gain in hands of assessee has been considered by the Ld. CIT(A) in favour of the assessee on the basis of the earlier order dated 09.03.2018 of Ld. CIT(A)-29 (supra) where addition on account of unexplained investment in the purchase of said property was deleted.

7.

In the light of aforesaid as finality stands attached to said order dated 09.03.2018, holding that assessee was not the owner of property so no error was committed by Ld. CIT(A) in deleting the present addition of short term capital gain from the said property imputed by Ld. AO upon the assessee. The grounds raised have no substance. Consequently, the appeal of Revenue is dismissed.

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