INCOME TAX ACT, 1961

Section 2(47), 45

Capital loss - Year of allowability - No proof that possession of property was handed over -

Assessee claimed long-term capital loss of Rs. 24,76,342 on sale of piece of land. AO required assessee to produce sale deed in respect of said property. Assessee furnished special power of attorney dated 10-8-2010, wherein it was mentioned that advance of Rs. 1.50 crores was received by assessee-company from the prospective buyer and possession of the land was given through SPA. AO, therefore, observed that land transfer did not take place in assessment year 2010-11 and assessee was not eligible to claim long-term capital loss in assessment year 2010-11 and accordingly, AO disallowed assessee's claim of LTCL. Held: Assessee failed to submit sale deed, if any, issued by concerned authority to establish that property was transferred in the year under consideration. Mere consideration received and possession handed over without any documentary evidence for enjoyment of property to the buyer was not sufficient, hence, section 2(47)(vi) was also not applicable. Therefore, AO was justified in disallowing assessee's claim of long-term capital loss. However, assessee could offer income under the head 'long-term capital gain' in the year in which the land was duly transferred in all respects.

Relied:CIT v. Balbir Singh Maini (2017) 86 Taxmann.com 94 (SC) : 2017 TaxPub(DT) 4346 (SC)

REFERRED :

FAVOUR : Against the assessee

A.Y. : 2010-11

INCOME TAX ACT, 1961

Section 14A Rule 8D(2)(iii)

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