Consideration for sale of Property cannot be determined on the basis of Form 26AS

In the matter of Jaya Prakash vs Income Tax Officer (ITO), the Hon’ble Income Tax Appellate Tribunal (ITAT) has pronounced that the sale consideration cannot be determined only on the basis of Form 26AS. The lower authorities must have considered the relevant sale deed so as to compute the correct value of sale consideration during the year of assessment. Being so, the assessment framed on the basis of Form 26AS is set aside.

ITAT Order

Admittedly, in this case, the CIT(A) determined the sale consideration on the basis of Form 26AS without seeing the actual sale deed entered by the assessee with the concerned parties. In our opinion, sale consideration cannot be determined only on the basis of Form 26ASec The provisions of Sec2(47)(v) can be applied only if there is a written contract coupled with the transfer of possession in terms of Sec 53A of the Transfer of Property Act. In English law, the contract to which the doctrine of part-performance applies may be oral. However, Sec 53A of the Transfer of Property Act expressly requires that the contract must be in writing by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty. Thus Sec 53A does not recognize an oral contract. The writing is an essential sine qua non for the applicability of the doctrine of part-performance. The lower authorities must have considered the relevant sale deed so as to compute the correct value of sale consideration and during the year of assessment. Being so, the assessment framed on the basis of Form 26AS is set aside. However, we make it clear that if the revenue finds that there is material evidence in support of the transfer of land by the assessee to M/Sec Nambiars Pvt. Ltd. who had deducted TDS in anticipation of the transfer of land in this A.Y. under consideration that to be brought to tax. In other words, if the revenue finds that there was a transferable land by the assessee in favor of the deductor of TDS i.e. Nambiars Pvt. Ltd. in the A.Y. by executing a proper sale deed towards the transfer of the impugned property, the same may be examined in accordance with the law. At this stage, we refrain from committing anything on the status of the assessee in whose name capital gain is to be taxed as we have set aside the assessment. It is kept open.

8. In the result, the appeal filed by the assessee is partly allowed.

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