The Income Tax Appellate Tribunal (ITAT), Indore Bench confirmed Income Tax Addition on Long Term Capital Gain (LTCG), as sale deed was completed by proper registration.
The assessee, Ambesh Shrivastav along with 21 co-sellers sold immovable property to M/s. Sarthak Innovations Pvt Ltd. The sale deed was registered under Section 2(14) of the Income Tax Act on 21.10.2009 for a stated consideration of Rs.30 Lakhs in which the assessee’s proportionate share comes to only Rs.1,36,561. The case of the Revenue is this that the property is situated within a distance of 8 kms. from the municipal limits of Indore.
Therefore, it is a capital asset within the meaning of Section 2(14) of the Income Tax Act and capital gain is chargeable on sale of such land. The deed was registered on 21.10.2009. Therefore, the capital gain has been found chargeable for the year under consideration. The market value of the property has been assessed by the Sub-Registrar at Rs.1,31,00,000 as against the sale consideration of Rs.30,00,000.
Since, the document was registered on 31.10.2009 as per guideline of the A.Y. 2010- 11, the assessment was finalized upon addition under Section 50C of the Income Tax Act, which was further confirmed by the first appellate authority.
The CIT(A), held that “Therefore, considering the above stated facts and the entirety of the circumstances and relevant documents, the AO has been found justified in assessing the capital gains in the A.Y. 2010-11 when the sale deed pertaining to the land belonging to as many as 22 persons was completed by way of proper registration. The same has been worked out by the AO at Rs.5,33,255/- on the basis of deemed sale consideration of Rs.5,96,315/- under section 50C of the Income Tax Act, 1961. The addition is therefore confirmed.”
A Bench consisting of Madhumita Roy, Judicial Member and Bhagirath Mal Biyani, Accountant Member observed that “Upon careful consideration of the order passed by the CIT(A) and AO, as well, we do not find any ambiguity in such order passed by them. More so, in the absence of any assistance rendered by the assessee at the time of hearing of the matter, we have no other alternative but to uphold the order passed by the CIT(A).”
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