[2019] 103 taxmann.com 10 (SC)

IT : SLP dismissed against High Court ruling that in case of sale of property, assessee was required to offer capital gain only in respect of amount actually received by him as per sale deed even though a part of sale consideration was also received by confirming party

Section 48, read with section 263, of the Income-tax Act, 1961 – Capital gain – Computation of (Full value of consideration) – Assessee entered into agreement to sell land to ‘M’ for a sale consideration of Rs. 38.74 lakhs – At time of execution of agreement, assessee received a sum of Rs. 1 lakh from prospective buyer – Subsequently, assessee executed a sale deed in which land in question was sold to one ‘G’ Ltd. for a sale consideration of Rs. 4.43 crores – In said sale deed, assessee was seller, ‘G’ Ltd. was buyer and ‘M’ was confirming party – Sale deed also showed that assessee received balance sale consideration of Rs. 37.74 lakhs, whereas remaining amount of Rs. 4.04 crores was received by ‘M’ – In return of income, assessee claimed that cost of acquisition of land was Rs. 33.36 which was sold for Rs. 38.74 lakhs and, thus, difference was offered as short term capital gain – Assessing Officer accepted such declaration of assessee – Commissioner passed a revisional order holding that sale consideration being Rs. 4.43 crores, assessee had to offer a sum of Rs. 4.09 crores by way of short term capital gain – Tribunal, however, set aside revisional order – High Court by impugned order held that since it was undisputed that out of total sale consideration, Rs. 4.04 crores was received by confirming party ‘M’ and assessee never received anything beyond Rs. 38.74 lakhs originally agreed, question of charging capital gain from assessee on a sum larger than said amount would not arise; therefore, Tribunal was justified in setting aside revisional order passed by Commissioner – Whether Special Leave Petition filed against impugned order was to be dismissed – Held, yes

Lalitaben Govindbahi Patel