As Capital gains rightly observed by assessee, hence additions rightly deleted
As Capital gains rightly observed by assessee, hence additions rightly deleted
Assessee individual ran business of brokerage income. Assessee in return showed total income & agricultural. Assessee purchased land. No long term capital gain was shown by assessee. Thus, AO calculated long term capital gains & made additions. On appeal CIT(A) deleted it. On appeal ITAT held, there was no loss to revenue & also capital gains have been rightly offered by concerned parties in their returns of income. CIT(A) decision held correct.-501153
Facts in Brief:
1. Assessee is an individual engaged in the business of brokerage income and derives income from salary.
2. The assessee in return of income showed the total income at Rs.1,12,000/- and agriculture income of Rs.97,340/-.
3. The return of income was selected for scrutiny assessment under CASS.
4. The notice was issued and served upon the assessee.
5. Assessee and his co- owner Becharbhai Jivrajbhai Vastarpara purchased agricultural land.
6. There was no long term capital gain income shown in the income-tax return filed by the assessee and, therefore, the Assessing Officer calculated the long term capital gain at Asst. Year2008-09 Rs.1,04,53,469/- after reducing index cost of acquisition at Rs.6,71,531/- from total sale consideration at Rs.1,11,25,000/- and arrived at long term capital gain at Rs.1,04,53,469/.
7. Assessee being co-owner, the Assessing Officer, therefore, added 50% of the total long term capital gain of Rs.1,04,53,469/- and accordingly made addition of Rs.52,26,735/- in the total income of assessee.
8. On appeal CIT(A) deleted the addition made by Assessing Officer.
On appeal ITAT held,
9. Court found that entire capital gain i.e. short term and long term capital gain has been taxed in the hands of two co-owners namely Harjibhai Parsottambhai Vastarpara and Becharbhai Jivrajbhai Vastarpara and by the four confirming parties by way of showing total sale consideration of Rs.1,11,25,000/- bifurcated amongst their returns of income and after reducing the cost of acquisition which has been duly accepted by the revenue authorities, the remaining gain has been offered to tax.
10. Court further find that the co-owners who made agreement with the four confirming parties have shed their rights at the very moment they entered into the agreement and the value of sale consideration for these co-owners was fixed at Rs.11,51,000/- and they were duty bound to sign the documents relating to sale deed irrespective of the fact that the sale deed which they were going to execute was in between the confirming parties and co-owners or with a third party.
11. Court find that four confirming parties further entered into an agreement for sale of land for Rs.1,11,25,000/- of M/s Dhara Construction and Dhirajlal PopatlaiTejani and therefore, sale deed was registered by the signatures of two co-owners who received Rs.11,51,000/- and the sale deed was further counter-signed by the confirming parties who received the balance amount of Rs.99,74,000/-. In other words there was no loss to the revenue and also the capital gains have been rightly offered by the concerned parties in their returns of income. We therefore, find no reason to interfere with the findings of ld. CIT(A). We uphold the same.
12. In the result, the appeal of the Revenue is dismissed.
Case Reference - Harjibhai P.Vastrapara, Surat vs Department Of Income Tax .
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