The Mumbai bench of Income Tax Appellate Tribunal ( ITAT ) while upheld the Short Term Capital Gain ( STCG ) from the transfer of the non agriculture land observed that the assessee failed to prove the ownership of the company with respect to purchase agreement of land for development of the property.
The Assessee Dhan Bahadur Gagan Chand case was selected for scrutiny after filing the return of income . In response to the statutory notices, the assessee submitted before the Assessing Officer that he entered into a development agreement with M/s. Indo Asian Buildcon Pvt. Ltd. with respect to the land for development and construction over the land for the consideration (compensation) of ₹2,51,000/.
It was observed by the AO that the land was earlier purchased by the appellant assessee, hence, added short-term capital gain of ₹1,45,60,000/- in his total income for the relevant AY 2016-17.
Aggrieved by the order the assessee filed an appeal before the CIT(A) who confirmed the addition. Therefore the assessee filed another appeal before the tribunal.
Bhadresh Doshi, the counsel for assessee submitted that he is director of the company submitting that the land, at which the capital gain arose, was purchased by the appellant assessee on behalf of the company. Entire consideration at the time of purchase of the said land was paid by the company itself
Mahita Nair,counsel for revenue supported the order of the assessing officer submitted that the appellant assessee has purchased the said land on 19.11.2013 on his own name and has entered into said „development agreement‟ with the company on 23.03.2016. The land was handed over to the company along with the possession along with all rights in the land for the consideration of Rs. 2,51,000/- .
Further argued that the assessee failed to prove the documents relating to the agreement of land whether the appellant assessee was authorized by the said company to purchase whether the appellant assessee was authorized by the said company to purchase
After reviewing the facts the ITAT bench of Sunil Kumar Singh( President)and Narendra Kumar Billaiya,(Accountant Member)observed that the assessee failed to prove the ownership of the company with respect to purchase agreement of land for development of the property.
Hence the bench confirmed the Short Term Capital Gain ( STCG ) from the transfer of the non agriculture land.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
