ITAT deletes Addition Applying Sec 50C since Assessee has not Received any Consideration from Sale [Read Order]

While allowing the appeal filed by the assessee for statistical purposes, the Hyderabad bench of Income Tax Appellate Tribunal (ITAT) deleted the addition by applying deemed provisions of Section 50C of the Income Tax Act by accepting the assessee’s argument that she has not received any consideration in the sales transaction.

Assessee in the present case is an individual duly filed her returns and declared a total income of Rs. 29,644 for the assessment year. During the course of assessment proceedings the Assessing Officer (AO) found that the assessee was entered into a sales transaction and a received a consideration of Rs. 1,31,53,067 which was omitted to shown in her books of accounts. While the AO considered the assessee as a vendor he made an addition of the said amount and also initiated proceedings under Section 147 of the Income Tax Act for bringing it to tax the capital gain in the aforementioned transaction.

Before the bench the assessee has contended that the said property was sold by her brother to a private company for a consideration of Rs. 84, 58,000 and now the subject property was matter of dispute and the agreement of sale included her name as a vendor at the instance of buyer to avoid further legal disputes from the family. She also submitted that she did not receive any consideration nor claimed any title to the property nor she has any title against her brother.

The bench comprising of Judicial Member P.Madhavi Devi and Accountant Member B.Ramakotaiah has observed that it is clear that the assessee has entered into is not a ‘sales deed’ it is just only an ‘agreement of sale cum Irrevocable General Power of Attorney’ for a property and accordingly all the three parties have no such right or title on the property and now the property was in the possession of Hyderabad Water Works Department for a long period. Assessee’s brother also submitted an affidavit which reflected that the assessee has not received any consideration. While remitting the matter back to the files of the AO, the bench was of the opinion that the AO has failed to prove that the assessee has received any consideration from the transaction and it cannot be taxable in the hands of the assessee.