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2016 (6) TMI 128 - AT - Income TaxAddition made on account of capital gains on protective basis - adoption of sale consideration - Held that:- In the facts of the present case, where the land though on the date of sale deed was in the name of assessee, which fact has been accepted by the Assessing Officer, Chiplun Municipal Council did not pay the consideration for sale to the plot holder, but paid the amount by account payee cheque to Shri A.F. Patel, who was a GPA holder, except for ₹ 7,50,000/-, no other amount has been paid to the assessee. The assessee has filed a civil suit in the Civil Court of Ratnagiri against Shri A.F. Patel and Chiplun Municipal Council claiming that the GPA holder had acted fraudulently and had received the consideration of ₹ 51,58,560/- after TDS which should be refunded to the assessee. The said civil suit is pending before the Civil Court. In the above said facts and circumstances, the CIT(A) held that in the hands of assessee, the capital gains is to be taxed by adopting sale consideration at ₹ 7,50,000/-. It is further held by the CIT(A) that in case the assessee recovers some amount of sale consideration from Shri A.F. Patel, then the same is to be considered as capital gains in the hands of assessee on protective basis. However, the CIT(A) has further clarified this by saying that where the assessee receives additional consideration in future from Shri A.F. Patel, then the same is to be assessed in the hands of assessee on substantive basis by taking necessary action under section 150 of the Act in accordance with law. The final conclusion of CIT(A) in this regard is that since the civil suit for recovery of the consideration is pending, then whenever if any amount is received by the assessee, then the same is includable in the hands of assessee under section 150 of the Act. We find no error in the said directions of CIT(A). The grounds of appeal raised by the assessee that the addition has been made in the hands of assessee on protective basis has no merit since the CIT(A) has directed that pursuant to the decision of Civil Court, the necessary action should be taken under section 150 of the Act in accordance with law - Decide against assessee. Non-issue of notice under section 143(2) - Held that:- Notice under section 143(2) of the Act was issued on 16.10.2006 which was duly served upon the assessee on 20.10.2006. In response to which, the assessee personally attended on 21.10.2006 and thereafter, on various dates up to August, 2007. Further, the assessee attended along with the learned Authorized Representative for the assessee from 28.09.2007 to 20.12.2007. In view of notice under section 143(2) of the Act being issued to the assessee and the assessee having failed to substantiate his claim we find no merit in the ground of appeal - Decide against assessee.
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