TMI Blog2012 (12) TMI 520X X X X Extracts X X X X X X X X Extracts X X X X ..... dent from the materials on record that the intention of the parties was never to carry on any agricultural activity but to develop the land to residential/saleable plots. The nature and character of the land has also been changed from agricultural to residential by the order passed by the HUDA in its G.O. Ms. No.810 dated 21-9-2005 prior to the sale of 15% right and interest to M/s Koncept Nirman Pvt. Limited in April, 2006. That apart the assessee himself in the written submissions has submitted that no agricultural activity has taken place from the assessment year 2000-01 to 2005-06. On consideration of these facts, it cannot be said that the capital asset sold to M/s. Koncept Nirman Pvt. Limited in April, 2006 under the sale deed is the same as the land which was given for development under the development agreement and therefore not chargeable to capital gains tax. All the appeals by the Revenue as well as Cross Objections filed by the assessee are dismissed. - ITA No. 1099 to 1109/H/2010 & C O No. 76 to 86/Hyd/10 - - - Dated:- 20-7-2012 - SHRI CHANDRA POOJARI AND SHRI SAKTIJIT DEY, JJ. Department by: Sri Nageswara Rao Assessees by: Sri D. Ranga Rao ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee and all his family members. Neither the assessee nor his family members appeared in response to the notice issued. From the records, the Assessing Officer found that in course of post search enquiry, the assessee was summoned u/s 131 of the I T Act and statement was recorded from him on 28- 1-2008. In course of recording of statement, the said assessee Sri M. B. Sudarshan had given a bifurcation of the consideration received by each of the family members towards sale of their 15% right in the developed land which is given hereunder:- Name of the family Member Consideration 1. M.B. Sudharshan 36,90,000 2. M.B. Janardhan 36,11,000 3. M.Saraswathi 93,76,000 4. M. Pushpamma(includes the share of late M.B. Ratnam) 1,87,72,000 5. M. Narasamma 83,97,000 6. M. Pochamma 1,09,45,000 7. M.Swaroopa 79,24,000 8. B.N. Chandra Mohan 60,03,000 9. M.Koushlya 60,03,000 10. M.Surender 49,81,000 11. M. Navaneetha 58,98,000 Total 8,50,00,000 4. Neither the assessee nor his family members appeared before the Assessing Officer in pursuance of notice issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer is not correct since the Assessing Officer has considered the value of agricultural land which has already been transferred to M/s. Fortune Constructions Pvt. Ltd., in 2001. What has been transferred by the assessee and family to M/s. Koncept Nirman Pvt. Limited is not that land but 15% interest in the developed land. The CIT (A) therefore directed the AO to find out the value of the property, registered from the office of the Sub-Registrar on the basis of which stamp duty of Rs.5,41,675/- was paid which should be adopted as the cost of acquisition of 15% right in the developed land which was subsequently transferred to M/s. Koncept Nirman Pvt. Limited. CIT (A) directed the Assessing Officer to give benefit of indexation as in the case of transfer of long term capital asset. 6. In course of hearing before us, the counsel on either side apart from making their submissions orally have also filed detail written submissions. The assessee made the following submissions:- With reference to these grounds filed by the department, we state as follows: 1) The Appellant did not receive any developed area and the cost of acquisition of assumed developed area for academic int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itate transfer of land and the complexion of land has not been changed. This was evident from the affidavit submitted, last Para of page 127 of supplementary paper book. The Exemption u/s 2(14) is not a subject matter with reference to transfer of property. In our case, the transfer took place in the assessment year 2001-02 and Income Tax Returns to this affect have been filed. Fortune Construction Pvt. Ltd. Also is a party to this transaction. Even in the Sale Deed, Deduction has been given for stamp duty paid for development cum GPA. The property stipulated in development cum GPA is the same, as that mentioned in sale deed. SUMMARY: We summarise as follows: a} Even on working on capital gain as per CIT Appeals Order, there will not be any capital gain by taking all factors into considerations. b} As per law, the property does not constitute capital assets as per Sec. 2(14}(iii) and the possession has been given in assessment year 2001-02, and Sec. 247(v} comes into picture [ITR 260, Page 491]. The capital Gain arises for the assessment year 2001-02 which is nil. c} The consideration was received after 2 years from the date of transfer and on that basis, the sale i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessees or by the Revenue at any stage. (A)(4)(c)-If the assessee are aggrieved by the consequential orders passed, they are at liberty to move rectification petitions u/s 154 before the Assessing Officer. 5. The Department's argument is that Stamp Duty of Rs.5,41 ,6751 - or Rs.6,37,2501 - has no relevance when the provisions of See. 48 are properly adhered to by the A.O while computing capital gains. The Indexation has rightly been done by the A.O while computing the capital gains on sale of 15% of Rights in the Developed Residential Construction in the Financial Year 2006-07 relevant to the Asst. Year 2007-08. B. CROSS OBJECTIONS: There is no dispute on this. But at this point of time what matters is the consideration received or receivable? Admittedly, the consideration receivable was the Right of 15% in the Developed Residential Construction which is a capital asset as defined uls 2(14) of the Act. There is no change in the cost of acquisition of this asset. It is nothing but the cost of agricultural land i.e. Rs.4, 94,8751 -. At this point of time, there is no cost of improvement also. The A.O has not charged any capital gains on the transfer of agricultural land ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary, we state that the Right of 15% was not exercised by the Appellant. The Affidavit, land records and other evidence justify the fact that Agricultural land was transferred and consideration received. Any asset to attract Capital gain should be specific. For the above reasons and as per petition dated 01.06.2012, We pray that a final opportunity be granted by posting the Appeals to any convenient date prior to disposal to meet the ends of Justice on humanitarian grounds. 9. We have heard rival submissions of the parties and perused the material on record and also gone through the respective written submissions filed before us. At the outset, we make it clear that the assessee s prayer for rehearing of the matter cannot be acceded to since we have heard counsels on either side at length and also exhaustive written submissions have been filed before us. Therefore, it is felt that there is no necessity for rehearing the matter. 10. As found from record, the assessees along with his family members were owners of Ac.50.39 guntas of agricultural land. By virtue of development agreement entered into between M/s. Fortune Constructions Pvt. Ltd., on 31-1-2001 the assessee and hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Rs.6,37,250/-. This aspect can be re-examined at the time of computation of capital gains by the Assessing Officer. In the written submissions, the assessee has contended that the Assessing Officer has not complied with the directions of the CIT (A) while working out the capital gains by not considering the expenditure incurred on transfer, along with deduction u/s 54B and 54F of the Act. If the direction of the CIT (A) has not been complied with by the Assessing Officer in the consequential order, the same can be raised before appropriate forum and cannot be a matter for consideration before us. In view of the above, the appeal filed by the Revenue is dismissed. 12. Since grounds raised in all the appeals are identical and similar, in view of our decision in ITA No.1099/Hyd/2010, all other appeals filed by the Revenue are dismissed 13. So far as Cross Objections filed by the assesseerespondents are concerned, since grounds raised by the assessee are identical and similar, for the sake of brevity, we reproduce hereunder grounds raised by the assessee in C.O. No.79/Hyd/2010:- 1. The interpretation by DCIT is not in order. 2. The appellants were agitating right from be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... UDA and such plots shall be called as owners plots. Thus, from definite clauses of aforesaid development agreement, it is clear that the intention of the owners of the land i.e., the assessee and his family members was to develop the land into plots of different sizes for the purpose of developing a residential colony. Under the sale deed executed with M/s Koncept Nirman Pvt. Limited on 20-4-2006, the assessee along with his family members has sold 15% interest which is in nature of saleable plots areas from the developed land for a consideration of Rs.8.50 crores. Thus, it is clear that under the development agreement, the assessee has transferred agricultural land to M/s Fortune Constructions Pvt. Limited and acquired capital asset which is 15% right and interest in the developed land. This 15% right and interest in the developed land was sold to M/s. Koncept Nirman Pvt. Limited as per the sale deed dated 24-2-2006. Therefore, the asset sold by the assessee to M/s Koncept Nirman Pvt. Limited is not the same which was given to the developer under the development agreement. Once the agricultural land was transferred to the developer under the development agreement, it lost its c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
