TMI Blog2015 (7) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... r respective lands in survey Nos.662 and 663 having been transferred in the previous year relevant to A.Y. 1995-1996 within the meaning of section 2(47)(v) read with section 53A of the Transfer of Property Act, the addition made by the A.O. on account of capital gain in the year under consideration was not sustainable. The impugned order of the Ld. CIT(A) passed in the case of Mr. Allam Krishna holding that there was a similar transfer of the land belonging to him in survey No.668 and 671 in A.Y. 1995-1996 however is set aside in the absence of any contract for transfer in writing and the matter is restored to the file of the A.O. for the limited purpose of examining and deciding the new issue raised by the assessee for the first time before the Tribunal by way of additional grounds. In so far as the case of Mr. Alam Ayaliah L.R. of late Allam Adavaiah is concerned, the impugned order passed by the Ld. CIT(A) is upheld only to the extent whereby she held that there was a transfer of land belonging to him in survey No.662 and 663 within the meaning of section 2(47)(v) read with section 53A of the Transfer of Property Act in the previous year relevant to A.Y. 1995-1996 and therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eration declaring the long term capital gains arising from the sale of their lands, notices under section 148 were issued by the A.O. to them on 31.03.2011. In response to the said notices, all the assessees filed their returns of income on 12.05.2011 declaring total income at NIL. During the course of assessment proceedings, it was submitted on behalf of the assessees before the A.O. that the corresponding lands representing their ancestral property in Yellareddy (v), Keesara (M), Kapra Revenue Division were actually agreed to be sold way back on 31.12.1994 to M/s. Janapriya Engineers Syndicate. It was also submitted that possession of the land in Survey Nos.662 and 663 was also handed over to M/s. Janapriya Engineers Syndicate, as per the Irrecoverable Power of Attorney cum- Agreement for Sale dated 31.12.1994, while the possession of land in other two Survey Nos.668 and 671 was handed over as per the oral agreement entered into with the said purchaser. Keeping in view this submission made on behalf of the assessees and having regard to the fact that sale consideration declared by the assessee was not accepted by the registration authorities, the A.O. proceeded to compute the lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssession had been handed over during the F.Y. 1994-95 itself. The A.O. has not brought any evidence on record to show that the assessee s claim as evidenced by these two documents is incorrect. In view of this, Section 2(47)(v) applies to the assessee s case and it is held that the capital gains on the sale of land was chargeable to tax in the A.Y. 1995-96 itself and not in the A.Y. 2004-05. 6.4. The subsequent payment of consideration to the assessee and the execution of sale deed are also of no consequence since the only issue relevant for application of section 2(47)(v) is the date of handing over of possession in terms of section 53A of the Transfer of Property Act. It is, therefore, held that the Assessing Officer s decision in bring to tax, capital gains on the sale of land in the A.Y. 2004-05 is not as per law and these grounds of appeal are allowed. Aggrieved by the Order of the Ld. CIT(A), Revenue has preferred these appeals before the Tribunal. 5. We have heard arguments of both the sides and also perused the relevant material on record. The common issue that is involved in the present cases is, whether there was a transfer of lands by the assessee as on 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) read with section 53A of the Transfer of Property Act. This position is not even disputed even by the learned D.R. at the time of hearing before us. 7. The learned D.R. however has contended that in so far as the land in Survey No.668 and 671 is concerned, there was no agreement or contracts in writing entered into by the assessees with the purchaser in the previous year 1994-1995 and in the absence of such agreement/contracts to transfer the land, there was no transfer of the said land in the previous year 1994-1995 within the meaning of clause (v) of section 2(47) read with section 53A of the Transfer of Property Act even if it is agreed that the possession of the said land was taken by the transferee in that previous year. We find merit in this contention of the learned D.R. As per the provisions of section 53A of the Transfer of Property Act, which are incorporated in section 2(47)(v) of the Income Tax Act, the requirement is that the transferee has taken possession of the property or any part thereof in part performance of the contract and such contract to transfer for consideration any immovable property has to be in writing signed by the transferee or on his behalf fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r before the A.O. or before the CIT(A) but was raised for the first time before the Tribunal and that too in an appeal filed by the department.? 8.1. The Hon ble Madhya Pradesh High Court answered the above question along with the related question No.4 in favour of the assessee after recording the following observations : Coming to questions Nos. 3 and 4, whether the issue could be raised by the assessee before the Income-tax Appellate Tribunal for the first time and having dismissed the cross-objection, the Income-tax Appellate Tribunal could proceed to give a finding on the same, learned counsel for the assessee has invited our attention to the decision of the CIT Appeal Ex./CIT(A) in I. T. A. No. 112 of 2003 in which reference has been made to the decision of the Hon'ble Madras High Court in CIT v. Vr. S. R. M. Firm (1994) 208 ITR 400, but he has erroneously stated that it was held in the said decision that the said dividend is taxable in India under sections 8 and 9 of the Income-tax Act, 1961, though the decision holds to the contrary. Learned counsel, therefore, contends that the fact that the said decision was cited bears testimony to the fact that contention w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner. 9. The issue involved in the present case as to whether the assessee as a respondent can raise a new issue, which was not raised by him either before the A.O. or before the Ld. CIT(A), for the first time before the Tribunal as a respondent in the appeal filed by the department thus is squarely covered in favour of the assessee by the decision of the Hon ble Madhya Pradesh High Court in the case of DCIT vs. vs. Turquoise Investment and finance Ltd., (supra) and there being no decision of any High Court that has been brought to our notice by the learned D.R. taking a contrary view, we respectfully follow the said decision of the Hon ble Madhya Pradesh High Court and admit the additional grounds filed by the assessee. 10. As the issue involved in the additional grounds raised by the assessee has been raised for the first time before the Tribunal and neither the A.O. nor the Ld. CIT(A) has got an opportunity to examine the same, we consider it fair and proper and in the interest of justice, to restore this matter to the file of the A.O. with a direction to decide the same in the light of facts and materials already available on record after giving the assessee an opportun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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