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2013 (10) TMI 558 - AT - Income TaxComputation of short term capital gain - Deduction of Title Perfection Cost - Held that:- assessee by himself was never the sole owner of the land. Had the assessee been the sole owner, then there was no necessity for the first party, namely, the Society to sign the sale deed dated 3.12.2005. Once the document has been signed by original owner, namely, M/s Malineni Perumallu Educational Society along with assessee, we cannot say that assessee had no obligation for curing the defects if any in the title. Assessee had himself returned the short-term capital gains arising out of transaction. Assessing Officer also admits that some disputes have been mentioned in the sale deed itself but, such disputes were shown as settled and a compromise arrived at. There is no finding by the Assessing Officer that the payments for settling the disputes the original owners had with M/s Malineni Perumallu Educational Society, were effected after the sale deed was executed on 3.12.2005. Therefore, the settlement of disputes mentioned in the sale deed had relevance to disputes which were settled prior to the date of sale. Assessee having paid the full amount, when he entered into the "agreement of sale cum general power of attorney" with M/s Malineni Perumallu Educational Society, on 6.6.2005, in our opinion, it was in his own interest to perfect the title, which otherwise could have been an impediment for a sale. We cannot say that the amount of Rs. 13 lakhs paid by the assessee had no relevance in such a situation. Assessee had produced confirmation for payments effected to the parties, for settlement of the disputes. Veracity of the payments was not questioned at all - Therefore, assessee was eligible for deducting such amount while computing short-term capital gains - Decided in favour of assessee. Jurisdiction of CIT - Revisionary power exercised by CIT u/s 263 - Whether revisionary power exercised by CIT was due to letter written by A.O. or due to his independent assimilation of facts - Held that:- Two reasons have been cited by the CIT for invoking revisionary power. First is that investment in property, which was sold by the assessee, was not examined by the A.O. Second is that the cost of acquisition of rights of feature film could be considered only when amounts were actually paid - letter written by the Assessing Officer to CIT on 19.3.2012 gives a lucid exposition of the state of affairs - assessee had furnished the statement of accounts for both the bank accounts from where it had effected payments for acquiring the property. Assessing Officer himself says that it was on close look the dates of payments were not found to be tallying - letter clearly brings out that Assessing Officer had applied his mind during the course of original assessment proceedings. He had taken a lawful view that the assessee had explained the source of investment. CIT himself in his order noted that only Rs. 2 lakhs, out of the total Rs. 24 lakhs, remained explained. Thus what was sought by the CIT was to substitute the view taken by the A.O. in the original assessment proceedings - A.O. had, during the course of original assessment proceedings, considered the issues and gave the allowances to the assessee. Revisionary powers were invoked by the CIT based on letter of the Assessing Officer and not based on an independent assimilation of facts. CIT was only trying to stamp his approval to a change of opinion of the Assessing Officer. - Therefore, decided in favour of assessee.
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