Assessee transferred his property to a partnership firm in which he was a partner. AO brought the capital gains arising out of the property to tax in the hands of the assessee. CIT(A) deleted the addition. ITAT upheld the deletion as assessee had executed the sale deed only on behalf of the said partnership firm and not in his individual capacity. Making of an addition in respect of sale of the property would only result in double taxation.-501111
1. Assessee is in individual and deriving income from marriage hall, income from partnership firm, income from supply of orders and income from other sources. The assessee was a partner in a partnership firm styled as M/s. R.S Construction. The assessee possessed a property, which was transferred to the said partnership firm, M/s. R.S Construction on 13-02-2006. The said property was sold by M/s. R.S Construction during the assessment year under appeal. The sale deed for the same was executed by the assessee for and on behalf of the said partnership firm. But in the sale deed the assessee's name was mentioned. The said partnership firm had duly disclosed the sale of flats in its P & L account and paid taxes thereon in the assessment year under appeal. Since the name of the assessee was found in the sale deed, the ld.AO brought the capital gains arising out of the property to tax, in the hands of the assessee.
2. CIT(A) deleted the impugned addition.
3. On appeal, the ITAT held as under:"From the aforesaid observation, we find that the factual finding given by the ld.CIT(A) that the sale of flats have been duly reflected in the Income-tax returns of the partnership firm, M/s. R.S Construction. In view of the said certificate issued to the District Registrar, Chinsurah, Hooghly by the Addl. Dist. Sub-Registrar, Chinsurah, Hooghly, we find that the assessee had executed the sale deed only on behalf of the said partnership firm and not in his individual capacity. We find makingof an addition in respect of sale of subject mentioned property would only result in double taxation by way of addition. We also find that none of these findings have been controverted by the revenue before us. Hence, we find no infirmity in the impugned order of the ld.CIT(A) in deleting the addition made by the ld.AO in this regard. We uphold the same. Accordingly, the grounds raised by the revenue are dismissed.
4. The assessee has filed cross objection [no.23/Kol/2013], which only supports the order of the ld.CIT(A).
5. In the result, the appeal of the revenue and cross objection of the assessee both are dismissed as stated above."