TMI Blog2013 (11) TMI 1775X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is an individual. A search and seizure operation u/s 132 of the Act was carried out on 19-2-2008 in the residential premises of Sri J. Appa Rao who is the husband of the assessee. During the search and seizure operation since certain documents belonging to the assessee were found and seized, the Assessing Officer issued a notice u/s 153C of the Act calling upon the assessee to file her return of income. In response to the said notice, the assessee filed a return of income for the impugned assessment year declaring an income of ₹ 6,51,252/-. During the assessment proceedings, he Assessing Officer noticed that the assessee along with 12 others had purchased land admeasuring Ac.26.23 guntas situated in survey No.438A and 439A,Mankhal Gram Panchayat, Maheshwaram Mandal, Ranga Reddy District from M/s Premier Poultry Products Limited for a total consideration of ₹ 26,00,000/-. Out of the said land, the assessee along with 12 others sold land admeasuring Ac.6.39.10 guntas to M/s S.M.V Agencies Pvt. Ltd., for a consideration of ₹ 6.97,76,859/- and land admeasuring Ac.2.01.83 guntas to M/s Park View Infacon Pvt. Ltd for ₹ 2,04,56,612. He further noted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overed by Notification No.9447 issued by the CBDT, it cannot be considered as a capital asset u/s 2(14) of the Act. Accordingly, he deleted short term capital gains computed by the Assessing Officer. Being aggrieved of the order of the CIT (A) , the revenue has preferred this appeal before Income-tax Appellate Tribunal. 5. We have heard the submissions of the parties and perused the orders of the revenue authorities as well as other materials on record. On going through the assessment order, we find that the Assessing Officer does not dispute the nature and character of land which is agricultural. However, he has treated it to be a capital asset in terms with section 2(14)(iii) of the Act only on the ground that it falls within the area specified by the HADA. In our view, the issue in dispute is no more Res Integra. The Income-tax Appellate Tribunal, Hyderabad Bench in case of Smt. T. Urmila vs. ITO (2012) 28 Taxmann 222, where both the present Members are parties while considering identical issue as to whether HADA can be treated as a local authority or municipality as defined u/s 2(14)(iii) of the Act held that since HADA is neither a municipality nor a body as referred to u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd holding of the assessee and her husband at 1000 sq. meters, they received an amount of ₹ 98,58,000/-. However, in her return of income, the assessee had claimed that she was having only 1/4th share in the property and her share in the sale consideration was shown at ₹ 24,64,500/-. It was further noted by the Assessing Officer from the sale consideration shown by the assessee she had further claimed deduction towards cost incurred for levelling, construction of compound wall etc., at ₹ 21,50,000 thereby reducing the cost of purchase at ₹ 88,65,030/- for the purpose of capital gains. The Assessing Officer noted that in case of the assessee s husband while examining the details of cost of construction, it was noticed that as per the information submitted by him in the form of receipts ₹ 9 lakhs was paid for rock cutting, ₹ 4 lakhs was paid for excavation, ₹ 8.5 lakhs for levelling of plot etc. He further noted that the first two payments have been made in cash and last payment was made by cheque. The Assessing Officer noted that the cash receipts are dated 16-12-2006 and 31-1-2006 before the sale of the said land and the cheque payment was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the CIT (A) in case of assessee s husband Sri Appa Rao that the department has not challenged the order of the CIT (A) in this regard and has accepted the order of the CIT (A) in allowing 40% of the expenditure. In this view of the matter, when the department has accepted the order of the CIT (A) allowing 40% expenditure in case of assessee s husband, the department cannot challenge the same in case of the wife of Sri J. Appa Rao i.e., the present assessee. We therefore do not find any infirmity in the order of the CIT (A) and dismiss the ground raised by the department. 13. In view of our decision in ITA No.1532/Hyd/2010 as mentioned above in this order, following the reasoning given therein, we dismiss the ground No.1 in ITA Nos. 1530 and 1531/Hyd/2010 as well. In the result, all the appeals of the department are dismissed. ITA No. 1518/ Hyd/2010 14. The only effective grounds are ground Nos. 2 and 3. In ground No.2, the assessee has challenged the order passed by the CIT (A) confirming the Assessing Officer s view with regard to sharing ratio in the surplus on sale of capital asset. 15. Briefly the facts are, during the assessment proceedings, as noted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee s wife Smt. Anuradha was not challenged by her by preferring any appeal before the Tribunal. In fact, the assessee had not filed even a cross Objection when the department preferred an appeal against the said order of the Tribunal. Therefore, the order passed by the CIT (A) with regard to shareholding ratio in case of asseessee s wife Smt. Anuradha attained finality. Smt. Anuradha, having accepted the CIT (A) s decision holding her as 1/3rd shareholder in the property, the assessee cannot challenge the shareholding ratio again in his own case. In this view of the matter, we are unable to accept the contention of the assessee and accordingly dismiss the grounds raised in this regard. 18. The next issue as raised in ground No.3 is with regard to CIT (A) allowing at 40% of the total expenditure claimed towards land development. Briefly the facts are, during the assessment proceedings, the Assessing Officer noted that during the year under dispute, the assessee has sold property land measuring 1000 sq. mtrs., and has received sale consideration of ₹ 98,58,000/-. However, while computing capital gains, it was noted by the Assessing Officer that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore no adjudication is required. 23. Ground No.2 reads as under:- The CIT (A) ought to have allowed the claim of the appellant that the property has been conveyed to his wife on the basis of sale cum general power of attorney registered in his favour on 31-12-2001. The CIT (A) ought to have considered the fact that the sale is registered in favour of the appellant s wife instead of registering the same by the appellant in his own favour. The provisions of sec. 50C are not there in statute in the year 2001. 24. Briefly the facts are, during the assessment proceedings, the Assessing Officer noticed that as per the document dated 3-9-2007 seized during the search operations conducted in the premises of the assessee. The assessee had purportedly sold property admeasuring 333 sq. yards at Plot No.101, Road No.2 Banjara Hills, Hyderabad to his wife Smt. J. Anuradha for consideration of ₹ 33 lakhs. In the return of income filed for the impugned assessment year, the assessee has shown sale consideration of ₹ 33 lakhs and deducted there from the cost of purchase at ₹ 20,12,500 and cost of improvement of ₹ 11,81,000/- and thereby admitting no capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer noted that in the statement recorded during the search proceedings on 19-2-2008, the assessee had stated that he had purchased the said property by way of agreement of sale for a consideration of ₹ 18,99,000/- in December, 2001. 26. He had further stated that the property was transferred to his wife by registered sale deed executed in Sept. 2007 for a consideration of ₹ 33 lakh. From the above statement of the assessee, the Assessing Officer concluded that the assessee had not mentioned anything about the agreement executed with his wife in November, 2006 in respect of the property in question. He further noted that the said agreement of sale dated 6-11-2006 was neither found nor seized on the day of search and only after two months from the conclusion of the search when a statement was recorded by the assessee on 9-4- 2008, the assessee came up with a copy of agreement with his wife claiming that the property was sold for consideration of ₹ 33 lakh. The Assessing Officer observed that even in the registered sale deed dated 3-9-2007, there is no mention of existence of the agreement of sale dated 6-11-2006. He therefore concluded that the agreement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28. It was submitted that since the assessee had a general agreement cum GPA and the same has been registered with the registration authorities on 31-12-2001, the stamp valuation as applicable on 31-12-2001 has to be applied and not the valuation adopted by the stamp valuation authorities as on the date of execution of sale deed dated 3-9-2007. It was submitted that the actual sale of property should relate back to the date of agreement of sale cum general power of attorney on 31-12-2001. In this context, the assessee relied upon the decision of Rajasthan High Court in case of Assam Roller Flour Mills vs. CIT (227 ITR 43). It was thus submitted that on the day on which the actual transaction took place was 31-12- 2001. As section 50C was not there in the statute on 31-12- 2001 therefore the provision cannot be made applicable to the assessee. In this context, the assessee relied on the following decisions:- i) CIT vs. Nirmal Textiles (224 ITR 378) ii) CIT vs. Laxman Singh (159 ITR 983) 29. The assessee alternatively submitted that the agreement of sale was entered by the assessee as a GPA holder with his wife on 6-11-2006 for an apparent sale consideration of ₹ 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wife Smt. J. Anuradha. The entire transaction was undertaken in relation to the agreement of sale cum GPA with an objective of holding the property either in his name or in the name of his wife. Apart from that, there is no motive of making any profit out the transaction entered into with his wife and there is no infusion of any black money into this transaction. It was submitted that since the assessee had entered into an agreement of sale cum GPA on 31-12-2001, the provisions of section 50C are not applicable as on that date the provision was not there in the statute book. It was submitted that though the assessee had obtained complete possession coupled with absolute rights over the property on 31-12-2001 i.e. the date of execution of registered agreement of sale cum GPA and though the complete sale consideration was also paid to the vendor on 31-12-2001 but the ultimate sale deed was registered with the registering authority on 3-9-2007 and the assessee had executed the registered sale deed with his wife on 3-9-2007 in the capacity of an agent of Smt. Sashikala Reddy the original owner and not in his individual capacity. Hence legally the sale was made by Smt. Sashikala Reddy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tue of agreement of sale cum GPA dated 31-12- 2001 and the registered sale deed 3-9-2007 is only a culmination of transaction which has already taken place. 35. The learned DR, on the other hand, submitted that in view of the statutory provision as contained u/s 50C of the Act the value fixed by the Stamp Valuation Authority for the purpose of stamp duty has to be considered for the purpose of computation of capital gains. 36. We have heard the submissions of the parties made at the time of hearing as well perused as the written submissions filed on behalf of the assessee. We have also perused the orders of the lower authorities as well as other materials on record. As can be seen from the orders of the authorities below as well as materials on record, the assessee does not dispute the fact that he has entered into an agreement of sale cum GPA with one Smt. Sashikala Reddy in respect of a property admeasuring 333 sq. yards at Banjara Hills, Hyderabad for a consideration of ₹ 18,99,000. The assessee also does not dispute the fact that by virtue of agreement of sale cum GPA, he has not only acquired possession over the property but also enjoying his right over the propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tamp Valuation Authority shall be considered by the stamp valuation authority of State Government for the purpose of payment of stamp duty in respect of such transfer, then value so adopted or assessed by the stamp valuation authority shall be considered as the full value of consideration received or accrued as a result of such transfer for the purpose of sec. 48. 38. Therefore, the use of word shall in sub-section (1) of section 50C makes it mandatory on the part of the Assessing Officer to adopt the value adopted or assessed by the Stamp Valuation Authority for the purpose of stamp duty in a case where the consideration received is less than such valuation made. However, sub-section (2) provides an exception to the aforesaid sub-section as per which the assessee if claims before the Assessing Officer that the value adopted or assessed by the Stamp Valuation Authority, exceeds the fair market value of the property and the value so adopted or assessed by the Stamp Valuation Authority has not been disputed in any appeal or revision before any other authority, courts or High Courts, then the Assessing Officer may refer the valuation of the said asset to the Valuation Officer and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed. ITA No.1533/Hyd/2010:- 42. The only issue in the present appeal of the department is with regard to CIT (A) deleting an amount of ₹ 14,20,000/- out of the total addition of ₹ 51,35,000/- made by the Assessing Officer. 43. Briefly the facts are, during the assessment proceedings, the Assessing Officer on the basis of a loose sheet found and seized from the residential premises of the assessee, noted that as per the scribbling made in the said loose sheet a total payment of ₹ 63.20 lakhs was allegedly made to Smt. Laxmamma for purchase of Ac.1.33 guntas of land. He further noted that the seized material contained a registered sale deed as per which land admeasuring Ac.1.39 guntas was purchased by the assessee from Smt. Laxmamma for consideration of ₹ 11,85,000/- which was paid, as mentioned in the sale deed, by way of cheque No.145494 for ₹ 2,64,000/- and cheque No.145496 for ₹ 9,21,000/-. On the basis of the amount mentioned in the loose sheet and the sale consideration as mentioned in the registered sale deed, the Assessing Officer opined that there was suppression of actual consideration at the time of registering the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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