The PCIT v. Dipak Govindbhai Dalwadi case (2023) 147 taxmann.com 393 (Guj.) highlights an important issue regarding the imposition of taxes on the sale of land. The case involves an assessee who entered into an agreement to sell his land for Rs. 95,00,000/- in 2008, with registration taking place in 2012. The Assessing Officer found that the market value of the land was determined at Rs. 8,03,09,250/- by the registrar and, under section 50C, calculated the capital gain at Rs. 7,54,36,257/-. The Assessing Officer added this amount to the assessee’s income for the 2013-14 assessment year.
The Tribunal examined the issue and found that the Assessing Officer had already examined and taxed the transaction in the 2009-10 assessment year based on the agreement to sell. Therefore, there was no reason to impose taxes on the same transaction in the 2013-14 assessment year upon the execution of the sale deed. The Tribunal affirmed the order of the Commissioner (Appeals) to delete the addition.
The Tribunal held that imposing capital gain tax on the same transaction twice would be impermissible, as the Assessing Officer had already considered the transaction as a transfer in the 2009-10 assessment year. Therefore, charging capital gain tax on the final execution of the sale deed in the 2013-14 assessment year would amount to taxing the same transaction twice, which is not permissible.
In conclusion, the PCIT v. Dipak Govindbhai Dalwadi case highlights the importance of not imposing taxes on the same transaction twice, particularly in cases involving the sale of land. Taxpayers should be aware of their rights and seek professional advice to avoid such situations.
