Property Transfer Between Spouses Without Actual Consideration Not Taxable As Capital Gains: ITAT
Mehak Dhiman
26 Aug 2025 2:03 PM IST
The New Delhi Bench of Income Tax Appellate Tribunal (ITAT) has stated that property transfer between spouses without actual consideration is not taxable as capital gains. S. Rifaur Rahman (Accountant Member) and Anubhav Sharma (Judicial Member) were dealing with the issue arises out of addition of Rs. 1,40,00,000/-, being consideration amount mentioned in conveyance deed, executed...
The New Delhi Bench of Income Tax Appellate Tribunal (ITAT) has stated that property transfer between spouses without actual consideration is not taxable as capital gains.
S. Rifaur Rahman (Accountant Member) and Anubhav Sharma (Judicial Member) were dealing with the issue arises out of addition of Rs. 1,40,00,000/-, being consideration amount mentioned in conveyance deed, executed by late Sunil Kumar, as received, from his wife Bimila Devi, who was alleged purchaser.
The Assessing Officer treated same as undisclosed income on account of capital gain on transfer of immovable property to spouse.
The assessee, deceased now represented through son, is an individual who filed his original return of income declaring total income of Rs. 1,98,030/. The assessee was suffering from kidney ailments and has expired on 15.04.2025.
The case of the assessee was reopened under section 147 of the Income Tax Act, 1961 on account of transaction of transfer of immovable property for consideration of Rs. 1,40,00,000/. Due to COVID - 19 pandemic and bad health the assessee could not comply with the notices issued under section 142(1) of the Act.
Final show cause notice was issued to the assessee proposing to make an addition of Rs. 1,40,00,000/- on account of capital gain being sale consideration for transfer of immovable property.
The assessment was framed ex parte by the National Faceless Assessment Centre adding Rs. 1.40 crore to his income.
The assessee filed an appeal before the Commissioner of Income-tax (Appeals), NFAC, Delhi which was dismissed.
The Tribunal stated that the bank account statement of wife of assesse do not indicate there was any source of wife to have arranged funds form the bank. In any case when wife herself has deposed on affidavit that no amount was paid then treating her to be an independent assesse, AO could have examined the issue further in her hands.
The bench opined that in any case, when wife could have been benefited by family settlement or even by gift deed, to transfer title without payment of consideration then it will not be justified to allege intention to conceal any capital gains. Thus, payment of consideration seems to be a sham transaction.
In view of the above, the Tribunal allowed the appeal.
Case Title: Sunil Kumar v. Income Tax Officer
Case Number: ITA No.957/Del/2025
Counsel for Appellant/ Assessee: Praveen Kumar Misra, CA
Counsel for Respondent/ Department: Vipul Kashyap