The Income Tax Appellate Tribunal (ITAT), Surat Bench has upheld the denial of capital gain exemption under section 54 by holding that an unregistered document has no evidentiary value.
The appellant, Varshaben Jigneshbhai Bhajiyawala during the assessment proceedings, claimed deduction under section 54, on behalf of the sale of Long Term Capital Gain (LTCG). The Assessing Officer disallowed the deduction by considering the gain earned on the sale of property under reference as a short-term capital gain (STCG) and not as a long-term capital gain (LTCG). The aggrieved appellant approached the CIT(A), which confirms the addition. Hence, an appeal was filed before the ITAT.
The counsel for the appellant submitted that a 50% share of the Jariwala family was purchased by the assessee and her family members by way of possession-cum-Satakat dated 14/02/2007. On the execution of possession-cum-Satakat on 14/02/2007, possession was handed over, thus transfer book place on handing over the possession. The Assessing Officer has not considered the evidentiary value of the document and has not brought on adverse material against the assessee.
The counsel further submitted that the sale transaction from the Jariwala family to the Bhajiyawala family was registered on 16/09/2008 and the Assessing Officer instead of considering the date of acquisition from the date of Satakat on 14/02/2007, considered the transfer/acquisition only from the date of registered deed on 16/09/2008.
The Coram of Mr. Pawan Singh, Judicial Member, and Dr. Arjun Lal Saini, Accountant Member observed that there is no reference in the sale deed executed by the previous owner on 16/09/2008 that the assessee agreed to sell before execution of the sale deed on 16/09/2008, thus the assessee propounded the theory of Satakat-cum-possession letter dated 14/02/2007 only to get qualified for long term capital gain.
The Tribunal has held that “we find that there is no other corroborative evidence to substantiate the claim of the assessee that she acquired or holding possession of the property since 14/02/2007, therefore, we uphold the orders of lower authorities in treating the capital gain as short-term capital gain in place of long-term capital gain as claimed by the assessee”.
Mr. Hiren Vepari, CA, and Ms. Ishiti Madhwani, CA appeared on behalf of the appellant and Mr. Abhishek Gautam appeared on behalf of the respondent.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.
