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2015 (7) TMI 605 - ITAT HYDERABAD

2015 (7) TMI 605 - ITAT HYDERABAD - TMI - Addition for long term capital gains - CIT(A) deleted the addition - Held that:- In the present case, there was however no such contract in writing entered into in the previous year 1994-1995 in respect of land in Survey Nos.668 and 671 singed by the assessees from which the terms necessary to constitute the transfer could be ascertained with reasonable certainty and the oral agreements stated to be entered into by the assessees, in our opinion, cannot b .....

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t. Allam Maisamma and Mr. Allam Ayalaiah (L.R. of late Allam Adavaiah) holding that their 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 t .....

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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, the capital gain attributable to such transfer was not chargeable to tax in the year under consideration. The said order of the Ld. CIT(A) holding that there was similar transfer of land belonging to assessee in .....

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ar ORDER PER P.M. JAGTAP, A.M. These four appeals are preferred by the Revenue against four separate orders passed by the Ld. CIT(A)-VI, Hyderabad dated 15.06.2012 whereby she deleted the entire additions made by the A.O. to the total income of the four assessees on account of long term capital gains. 2. All the four assessees in the present case are individuals. A search and seizure action under section 132 was conducted in the cases belonging to Janapriya Group. During the course of the said a .....

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2,20,000 26,20,000 3. Since none of the four assessees had filed the returns of income for the year under consideration 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. .....

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71 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 long term capital gain arising from sale of land chargeable to tax in the hands of the assessee by taking the fair market value as determined by the Sub-Registrar Office at ₹ 400 per s .....

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ments completed under section 143(3) read with section 147 of the Act by orders dated 30.12.2011. 4. Against the orders passed by the A.O. under section 143(3) read with section 147, appeals were preferred by all the four assessees before the Ld. CIT(A). During the course of appellate proceedings before the Ld. CIT(A), it was contended on behalf of the assessees that the possession of the lands in Survey Nos.662 and 663 having been already handed over to the purchaser at the time of execution of .....

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not in the year under consideration. This contention of the assessee was found acceptable by the Ld. CIT(A) and relying on the provisions of section 2(47)(v) of the Act read with Section 53A of the Transfer of Property Act, she held that the capital gain arising from the transfer of lands by the assessees was not chargeable to tax in the year under consideration. The reasons given by the Ld. CIT(A) to come to this conclusion as contained in paragraph Nos.6.3 and 6.4 of her impugned order are rep .....

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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 th .....

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-2. The said provisions along with the provisions of Section 53A of the Transfer of Property Act incorporated therein are extracted hereunder : 2(47)(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 section 53A of the Transfer of Property Act, 1882 (4 of 1882) ; Section 53A. Part Performance. - Where any person contracts to transfer for consideration any immovable property .....

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ract, then, notwithstanding that where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract. Provided .....

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d contract, we are of the view that the land in Survey No.662 and 663 was transferred by the assessees to the purchaser in the previous year relevant to A.Y. 1995-1996 itself within the meaning of clause (v) of sub-section(47) of section(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, th .....

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ontention 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 from which the terms necessary to constitute the transfer can be asc .....

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section 2(47)(v) of the Income Tax Act read with section 53A of Transfer of Property Act even though it is accepted that the possession of the said land was taken by the transferee in that year. At the time of hearing before us, Ld. Counsel for the assessee has not been able to raise any material contention to dispute this position. He however has sought to raise altogether new issues by filing the following additional grounds with an application under Rule 27 of the Appellate Tribunal Rules, 19 .....

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f the word transfer vis-à-vis the facts and circumstances of the respondents case and not restrict the transfer to Sec.2(47)(v). 8. Learned D.R. has strongly opposed the application filed by the assessee for admission of the above additional grounds by contending that the assessee as a respondent cannot raise altogether new issues, which were not raised either before the A.O. or before the Ld. CIT(A). In this regard, it is observed that the following question was raised by the Revenue in .....

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swered 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( .....

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as raised with regard to the non-taxability of the dividend earned in Malaysia in India under the agreement in question. Learned Counsel has further submitted that in the appeals filed by the respondents, they have clearly raised the questions that the Tribunal was not justified in dismissing the cross-objection filed by the assessee on the ground of limitation specially when it took the view that the dividend income was not taxable in India. Attention has also been invited to rule 27 of the Inc .....

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sed in widest possible terms. The purpose of assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, there is no reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as .....

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he Department. In view of the wide powers that the Tribunal is invested with, as clearly referred to and spelt out by their Lordships in their decision in National Thermal Power Co. Ltd. [1998] 229 ITR 383, the Tribunal cannot be precluded from considering the questions of law arising in an assessment proceeding not raised earlier, and restricted to issues arising out of appeal before the Commissioner. 9. The issue involved in the present case as to whether the assessee as a respondent can raise .....

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ectfully 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 li .....

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