The Tax Publishers2021 TaxPub(DT) 0604 (Karn-HC)

INCOME TAX ACT, 1961

Section 153C

Where all rights in the property, including the possession constructively infact was handed over by the assessee to purchaser and AO as well as CIT(A) had rightly treated the same to be a transaction of sale, however, Tribunal, without taking into account the incriminating material on record, merely on the basis of the fact that possession of the property under the agreement was not delivered, has held the same to be not sale.

Search and seizure - Assessment under section 153C - Transfer of property under section 2(47) - Assessee having sold certain properties, not paid capital gains

During the course of search, certain incriminating materials were found and it was also found that assessee had sold certain properties and had not paid capital gains. Thereupon, proceedings under section 153C read with section 143(3) were initiated in case of assessee. AO held that as per the seized material, assessee had entered into an agreement for sale as well as executed irrevocable General Power of Attorney in favour of M/s. T for sale of land. As assessee did not offer the sale consideration to tax, therefore, AO made an addition. Held: From perusal of relevant clauses of the Power of Attorney which was executed on the same day, it was evident that all rights in the property, including the possession constructively in fact was handed over by the assessee to purchaser. Therefore, the Court has held the said transaction was the same within the meaning of section 2(47) and AO as well as CIT(A) had rightly treated the same to be a transaction of sale. However, Tribunal, without taking into account the incriminating material on record, merely on the basis of the fact that the possession of the property under the agreement was not delivered, has held the same to be not sale.

Relied:Seshasayee Steels P. Ltd. v. Asstt. CIT (2019) 421 ITR 46 (SC) : 2019 TaxPub(DT) 8333 (SC).

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2006-07



IN THE KARNATAKA HIGH COURT

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