The transfer of a capital asset for the purpose of computing capital gains, under the Income Tax Act, is deemed to occur upon the execution of a registered sale agreement, irrespective of the time when the physical possession is delivered or the sale consideration is formally received.

ORDER

PER RAVISH SOOD, JM:

The captioned appeals filed by the assessee are directed against the respective orders passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (for short, “CIT(A)”), dated 04/07/2025 and 29/09/2025 which in turn arises from the orders passed by the Assessing Officer (for short, “AO”) under section 143(3) r.w.s 144 r.w.s 144B of the Income Tax Act, 1961 (for short, “the Act”), dated 15/03/2024 and 04/03/2025 for the Assessment Year (AY) 2016-17 and AY 2017-18, respectively. As a common issue is involved in the present appeals, the same are being taken up and disposed of vide a consolidated order. We shall first take up the appeal for the AY 2016-17 in ITA No.2058/Hyd/2025, wherein the impugned order has been assailed on the following grounds of appeal before us:

“GROUND 1

Relevant Sections of Income Tax Act: under section 143(3)

Issue: The Assessment Unit made an addition of amount of Rs. 3,23,25,000/-towards capital gains and did not give cognizance to the fact that the major part of the sale consideration of the subject property of capital gains was received in the ensuing financial year and was subject to tax in the next Assessment Year i.e Assessment Year 2017-18.

Ground of Appeal: The Assessment Unit is not justified in making the addition of Rs. 3,23,25,000/- towards capital gains for Assessment year 2016-17

GROUND 2

Relevant Sections of Income Tax Act: under section 143(3)

Issue: The Assessment Unit made the addition of capital gains of Rs. 3,23,25000/- in toto, whereas the appellant share was only 25.65% which works out to Rs. 82,91,491/-. The Assessment unit did not gave cognizance to the submission made by the Assessee that a Memorandum of Recording a Family Settlement deed existed wherein the Appellant was entrusted with the responsibility of collecting the sale proceeds and distributing among the family members.

Ground of Appeal: The Assessment Unit is not justified in making the addition of Rs.3,23,25,000/- in toto and not proportionately which works out to Rs. 82,91,491/-

Ground 3:

Relevant Sections of Income Tax Act: Any section under Income Tax Act Issue: Any issue or matter that may arise during the course of proceedings.

Ground of Appeal: Any other ground that may be relevant to such issue or matter.”

2. Succinctly stated, the AO based on information that the assessee during the subject year had though carried out substantial financial transactions, viz., (i) sale of immovable property: Rs.3.75 crores; and (ii) sale of equity shares: Rs.1,40,344/- but had not filed his return of income for the said year, issued notice under section 148A(b) of the Act, dated 13/02/2023. Thereafter, the AO passed an order under section 148A(d) of the Act, dated 13/03/2023. Notice under section 148 of the Act, dated 13/03/2023, was issued and duly served upon the assessee. In response, the assessee filed his return of income, but he neither disclosed in his return of income the capital gain arising on the subject transaction of sale of property nor claimed the credit of the tax deducted at source (TDS) on the sale consideration of Rs.3,75,000/-, which was carried forward by him to AY 2017-18.

3. During the course of the assessment proceedings, the AO observed that, as per the information available on record, the assessee had, during the subject year, sold a Flat No.-23, Sixth Floor, Panch Ratan, Almedia Road, Bandra West, Mumbai to Mr. Sumit Anand and Smt. Chandrika Anand for a consideration of Rs.3.75 crores. The AO called upon the assessee to explain why the “capital gain” arising on the sale of the aforesaid property was not offered by him for tax during the subject year. In reply, the assessee stated that the subject property was transferred by virtue of the transfer of shares in a cooperative society, but that he did not receive the entire sale consideration during the subject year. Elaborating further, it was stated that he had, during the subject year, received a total