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2019 (6) TMI 654 - AT - Income TaxShort Term Capital Gain - no transfer of property under the provisions of section 2(47) - Validity of the agreement with the company which was not there in existence - assessee was just a name lender in the entire deal of the transactions - HELD THAT:- Assessee did not have any occasion to receive any consideration on the transfer of such lands on the agreement to sell. It is because the assessee has not incurred any cost on the purchase of the land, registration of the land, conversion of the land and the development of the land. Thus the assessee being a representative of Abellon Agrisciences Ltd (AAL) had no occasion to receive the consideration on the transfer of the land either at the time of agreement to sell or registration of sale deed. Therefore we are of the view that the provisions of section 53A of the Transfer of Property Act can be applied in the case on hand There was a property transfer by the assessee to the companies as discussed above in the A.Y.2009-10. Accordingly, we are of the view that the subsequent registration of the conveyance deed in the A.Y. 2011-12 will not amount to transfer of property under the provisions of section 2(47). Accordingly, the question of capital gain for the year under consideration does not arise. The impugned land transferred by the assessee in the A.Y.2009-10 when it was an agricultural land which does not fall within the meaning of capital assets as provided u/s 2(14). Accordingly the same cannot be the subject matter of capital gains under the Act in the AY 2009-10. The buyers of the impugned land have recorded the purchase consideration in the books of accounts at the actual cost incurred by its group company. As such we note that there was no element of profit transferred by the companies to the assessee. Therefore it can be inferred that there is no loss to the Revenue as the buyers of the land have recorded the purchase consideration at the actual cost incurred by its group company. Accordingly, the buyers (group companies) will show the profit at the high value or less loss as the case may be on the subsequent sale of such impugned land in the given facts & circumstances. We hold that the assessee is not liable to pay tax on the capital gain computed by the AO as the same is not the real income and it was not generated in his hands. Hence the assessee succeeds in his grounds of appeal.
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