This detailed analysis covers the tribunal decision for Usha Gupta vs. ACIT Circle-47(1), New Delhi regarding the assessment year 2015-16, where the core issue was the classification of capital gains on property sold by the assessee.
The dispute centers around the sale of a property located at DSM-528, DLF Towers, Shivaji Marg, New Delhi. The assessee, Smt. Usha Gupta, sold this property and declared it under long-term capital loss, which was contested by the Income Tax Department, claiming it as short-term capital gain.
During the scrutiny, the Assessing Officer (AO) determined the property was held for less than 36 months based on the property deed executed on 24.01.2013, thus classifying the gains as short-term. However, the assessee argued the acquisition rights were established much earlier in FY 2007-08 through substantial payments.
The tribunal meticulously examined the timeline of payments and legal documents presented, including a Space Buyers Agreement from 2008, which supported the assessee’s claim of holding the property for over 36 months. This evidence led to the conclusion that the property should be treated as a long-term capital asset, thereby qualifying the resultant gains as long-term capital gains.
The ITAT sided with the assessee, directing the AO to reclassify the capital gains from short-term to long-term and accept the reported long-term capital loss. This decision was based on substantial payments made towards the property acquisition well before the deed execution date and earlier legal recognitions of the assessee’s rights.
The tribunal’s decision in Usha Gupta’s case highlights the importance of the factual matrix and documentation in disputes regarding the classification of capital gains for tax purposes. It underscores the need for taxpayers to maintain and present comprehensive records to substantiate their claims during tax assessments.
Usha Gupta vs. ACIT Circle-47(1), New Delhi: Long-Term Capital Gain Dispute for AY 2015-16
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