TMI Blog2005 (6) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... ucting the fiats . It is an admitted fact that the assessee entered into an agreement with the builder/developer-M/s Kolte Patil Enterprises for development of the impugned land and construction of flats thereon. Also, the assessee signed a general power of attorney in favour of the builder/developer on 20th June, 1996 and gave possession of the property to the builder/developer. Further, the assessee acted on the impugned agreement by accepting from the builder/developer payments by cheques on different dates in the financial year 1997-98 aggregating to Rs. 48,00,000 as admitted in his letter dt. 22nd Feb., 2001 addressed to the AO. Thus, we are satisfied that all the conditions of sub-cl. (v) of s. 2(47) are satisfied in this case and, therefore, it has to be inferred that a 'transfer' did take place within the meaning of s. 2(47)(v) of the Act. This conclusion of ours gets support from the decision of the Bombay High Court in the case of Chaturbhuj Dwarkadas Kapadia. The argument of Shri Sathe that the deeds in respect of the sale of flats were not registered/executed is not a relevant consideration so far as provisions of sub-cl. (v) of s. 2(47) are concerned. The compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed for statistical purposes. - HON'BLE H.L. KARWA, J.M. AND AHMAD FAREED, A.M. For the Appellant : K.A. Sathe, Adv. For the Respondent : Satya Prakash, Adv. ORDER Ahmad Fareed, A.M.: 1. These three appeals by the assessee directed against the orders of the CIT(A)-II, Pune, dt. 9th June, 2003 for asst. yr. 1997-98, dt. 10th June, 2003 for asst. yr. 1998-99 and dt. 31st Dec., 2003 for asst yr. 1999-2000 were heard together and, therefore, these are being disposed of by a comman (order) for the sake of convenience. 2. The identical grounds raised by the assessee in these appeals were lengthy and argumentative and, therefore, the same were revised in the light of r.8 of ITAT, Rules, 1963 as under: 1. The learned CIT(A) erred in confirming the assessment of capital gain as made by the learned AO subject to relief that full value of consideration was to be taken at Rs. 5,39,500 in place of Rs. 5,64,13,500. The decision of the learned CIT(A) is contrary to law and facts and it is submitted that the entire addition on account of capital gain may kindly be deleted. 2. The learned CIT(A) has not considered in proper perspective the assessee's contention that the three letters of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mauze Vadgaon Sheri, Tal Haveli, District Pune, admeasuring 8 hectares 25 acres, which was received by him in pursuance of a partition of HUF dt. 31st March, 1958. During the financial year 1996-97, the assessee entered into an agreement dt. 20th June, 1996 with M/s Kolte Patil Enterprises and agreed to sell the proportionate undivided share of FSI in the above property for a consideration of Rs. 550 per sq. ft. as per para 3 of the agreement as under: The owners do hereby agree to sell to each of the prospective flat/tenement purchasers (who shall enter into an agreement with promoter/developer) proportionate undivided share of FSI in the property described in schedule 'B' written hereunder, for the consideration of Rs. 550 (rupees five hundred fifty only) per sq. ft. It shall be responsibility of promoter/developer to collect the said amount of consideration from individual prospective purchaser, at the time of agreements and/or conveyance between owners and flat purchaser, and handover the same to the owners, as per actual collections. 4. The assessee signed a general power of attorney in favour of the builder/developer-M/s Kolte Patil Enterprises and gave possession of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the AO in his aforesaid letters was not based on any documentary evidence produced either before the AO or before the CIT(A). That the only documentary evidence produced by M/s Kolte Patil Enterprises before the AO and before the CIT(A) were 83 allotments-cum-agreements issued to 83 different so-called purchasers of FSI by the developer/builder who was the power of attorney holder. That the allotment-cum-agreement letters were on plain paper and not on any judicial stamp papers. That the above-mentioned 83 letters were after thought on the part of M/s Kolte Patil Enterprises made only to substantiate false claim for giving trouble to the assessee for the reasons that the assessee had cancelled the agreement/power of attorney dt. 20th June, 1996. That the assessee had cancelled the agreement dt. 20th June, 1996 with M/s Kolte Patil Enterprises for construction of amenities like cinema hall, hotel, garden restaurant, Mangal Karyalaya, and a bungalow for assessee's use. That no transfer of FSI had taken place within the meaning of s. 2(47) of the Act. That there was no execution and the registration of bona fide deed of sale in favour of flat/tenement purchasers for sale of F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no transaction involving allowing of possession of entitled FSI rights to the prospective flats/tenements purchasers He contended that no FSI was transferred within the meaning of s. 2(47) of the Act as there were no registered sale deeds. It is seen that the sub-cls (v) and (vi) of s. 2(47) read as under: 2(47) 'transfer' in relation to a capital asset, includes........... (v) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in s. 53A of the Transfer of Property Act, 1882 (4 of 1882); or (vi) any transaction (whether by way of becoming a member of or acquiring shares in, a co-operative society, company or other AOP or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of any immovable property. 10. Clause (47) of s. 2 was amended by the Finance Act, 1987, w.e.f. 1st April, 1988 by inserting new sub-cls. (v) and (vi). These two new sub-clauses provide that 'transfer' includes (i) any transaction which allows possession to be retained in part performance of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r-M/s Kolte Patil Enterprises to develop the land bearing Survey No. 16/1 admeasuring 8 hectares 25 acres situated at Mauze Wadgaonsheri and to construct buildings/apartments. The assessee signed a general power of attorney in favour of the builder/developer and gave possession of the property to the builder/developer. In his letter dt. 22nd Feb., 2001 addressed to the AO it was stated by the assessee that, I have given permissive possession to the developer, M/s Kolte Patil Enterprises so as to enable them to develop the land and complete their part of agreement of constructing the fiats . 13. The assessee entered into another agreement dt. 20th June, 1996 with the builder/developer M/s Kolte Patil Enterprises which stated that the assessee had allowed the builder/developer to develop the said land and construct building thereon and that the assessee will be getting substantial amount of purchase consideration from the builder/developer and that the assessee had decided to use and utilize the said amount for construction of the following commercial premises on the property retained by the assessee for itself : (i) the builder/developer will construct area admeasuring 6,000 sq. ft. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 27,071 x 550 + 4,70,000) 16. The assessee in his letter dt. 22nd Feb., 2001 addressed to the AO inter alia, replied in relation to the aforesaid letters of the builder/developer as under: 4(a)........ but actually I have received an amount of Rs. 48,00,000 only on different dates by cheques in the financial year 1997-98; 4(b)...... The amounts are overstated as the valuation of all the amenities/complexes as of 7th Jan., 1999 is only Rs. 38,11,934 (including further alleged amount of Rs. 1,26,00,000 adjusted on account of construction contract of amenities in the financial year 1998-99) as per valuation done by our valuer; 4(c) It is stated in the letter dt. 31st Jan., 2001 that the following undivided share in FSI was sold by the developer: Financial year FSI area Amount in Rs. 1996-97 1,02,570 5,64,13,500 1997-98 1,59,800 8,78,90,000 The above statement is not true as I have already explained hereinabove that no sale of FSI has taken place at all in the asst. yrs. 1997-98 and 1998-99 in the form of sale deed. Similarly, no possession of flats also was given to flat owners during the above years. The PMC had not given any completion certificate in the above years. 17. It is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to cross-examine the partners of M/s Kolte Patil Enterprises in relation to the contents of their letters dt. 12th Jan., 2001, 31st Jan., 2001 and 8th Feb., 2001 and other information and documents submitted by them before the AO during assessment proceeding was not allowed. He placed reliance on the decision of P.S. Abdul Majeed vs. Agrl. ITO Ors. and contended that in the circumstances of the case, refusal to allow cross-examination amounted to violation of the principles of natural justice. 19. In the case of P.S. Abdul Majeed, the original assessment for asst. yr. 1983-84 was completed estimating the yield of cardamom at 250 kgs. which was reduced in appeal to 240kgs. Thereafter, on the basis of information allegedly obtained from cardamom auctioneers, reassessment order was passed by the AO estimating the yield at 481 kgs. thereby making an addition of 241 kgs. to the yield. The assessee objected to the proposed reopening and prayed for an opportunity to cross-examine the auctioneer but the prayer was rejected by the AO. On a writ petition filed by the assessee, it was held by the Kerala High Court that when such a request was made by the assessee it was incumbent on the AO t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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