In ITA No. 2490/DEL/2016 -ITAT- ITAT (Delhi) upholds CIT(Appeals) ruling that property once gifted cannot be sold or bequeathed
Members Anil Chaturvedi (Accountant) & Kul Bharat (Judicial) [27-06-2023]

Read Order: Charan Singh v. Income-tax Officer, Ward-1(2), Noida

Chahat Varma

New Delhi, June 29, 2023: The Delhi bench of the Income Tax Appellate Tribunal has dismissed an appeal filed by an assessee, upholding the decision of the Commissioner of Income Tax (Appeals) [CIT(A)] that a property, once gifted, cannot be subsequently sold or bequeathed.

Brief facts of the case were that the assessee in the case argued that the CIT(A) made an error in treating the gift of immovable property as a sale and charging tax under the head of ‘capital gain’. The assessee further contended that the CIT(A) wrongly applied the provisions of Section 50C of the Income Tax Act to the gift of immovable property. The case arose when the Assessing Officer (AO) received information about the sale of property to Smt. Arvind Kaur, which was valued at Rs. 1,27,88,000 according to Section 50C. As a result, the assessment of the assessee was reopened under Section 147 of the Act, and after providing notice to the assessee, the AO finalized the assessment. The assessee appealed against this decision to the CIT(A), who ultimately dismissed the appeal.

The only issue for adjudication in this appeal was related to addition on account of difference in sale consideration as per sale-deed and circle rate determined by the Stamp Valuation Authority. The AO treated the difference between the sale consideration as disclosed by the assessee and the circle rate as deemed income liable for capital gain tax.

The bench comprising of Anil Chaturvedi (Accountant) and Kul Bharat (Judicial) noted that it was contended before the AO that the property in question was gifted and not sold. However, the AO did not accept this explanation, citing that Smt. Arvind Kaur, the recipient, had received a sale consideration of Rs. 4,00,000 and this fact was not controverted by the assessee by placing any material before the bench.

Thus, the bench concluded that there was no reason to interfere with the decision reached by the authorities below.