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2015 (7) TMI 776 - ITAT DELHI

2015 (7) TMI 776 - ITAT DELHI - TMI - Agreement to sell non materized - Advance received - litigation occurred due to non approval of map by the GDA and assessee has not returned back the amount - Held that:- Whatever amount has been received by the assessee as advance in aforementioned negotiations for sale and if those amounts are not returned back; the cost of property would stand reduced by such amount. In other words, when this sale does not materialize and the amount stands forfeited/not r .....

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ce the amount of advance if forfeited after arbitration, from cost of property while working out gain on any subsequent sale. The AO is also directed to take note of this, for future assessment purposes. We find Ld. CIT(A) has rightly held that for the-time being, there is no basis for any addition of,Rs.75,OO,OOO/- and accordingly he deleted the addition in dispute. - Decided against revenue. - I.T.A. No. 835/DEL/2011 - Dated:- 20-7-2015 - Shri N.K. Saini and Shri H.S. Sidhu, JJ. For the Petiti .....

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e entire advance proceeds whereas as per the sale agreement, it should have been divided on pro-rata basis. 2. That the Ld. CIT(A) has erred in law and on facts by falling to appreciate the fact that as per the sale agreement the sale consideration so received was to be utilized for promoting the objective of the trust. As such the advance received should have also gone to the trust only but this was not done. This again shows the colorable transaction by the assessee to take the benefit of the .....

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iling to pierce the corporate veil in this case to expose the true nature of transaction which is attempt by the assessee to evade taxation till the final transfer of capital asset and prevent the advance forfeited to be considered as income from other sources even if the capital asset is never transferred In the thus preventing any taxation on the advance forfeited till then. 5. That the Ld.CIT(A) has erred in law and on facts by not considering the case law CIT Vs Sterling Investment Corporati .....

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I.T. Act, 1961. Thereafter, the case was selected for compulsory scrutiny and notices u/s. 142(1) and 143(2) were issued and properly served upon the assessee. Notice u/s. 142(1) and 143(2) was issued on 1.12.2008. In compliance to which neither anybody attended nor any reply was filed. On going through the documents filed by the assessee s counsel , AO completed the assessment u/s. 143(3) of the I.T. Act, 1961 at a total income of ₹ 75,84,150/- + ₹ 57,500/- Agricultural Income vide .....

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entions raised in the grounds of appeal filed by the Revenue. 6. On the other hand, Ld. Counsel of the assessee relied upon the order of the Ld. CIT(A) and submitted that the order of the Ld. CIT(A) may be upheld. 7. We have heard both the parties and perused the records especially the orders of the revenue authorities, we find that the assessee is an individual. AO observed that an agreement dated 25.4.2005 was made to sell certain properties belonging to the trust to M/s Raj Hans Tower Pvt. Lt .....

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find that AO neither obtained full details nor could understand the entire sequence of transactions and has reached the conclusions in a haphazard and confused manner; the basic agreement, which has been referred to by the AO, itself, when read carefully, makes it amply clear that certain properties clubbed together were subject matter of sale; the owners of these properties were the assessee, his brother Shri Vineet Goel and Devi Dayal Charitable Trust, which is a family trust of assessee' .....

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ands of the assessee as income from other sources. The assessee has furnished proof of ownership of this land piece. These documents furnished clearly show that the assessee Shri Vishal Goyal, his brother Shri Vineet Goel and the family trust, namely, Devi Dayal Charitable Trust are all legal owners of respective portions of land which is the subject matter of sale advances. We note from the records that these land owners have received advances from M/s JMD Buildtech Private Limited and Mls Rajh .....

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fulfilled their part of commitments; so the amount received as advance part payment was also liable to be forfeited. As the matter is under arbitration; so the dispute is still undecided. In view of the above fact; even if AO's presumption that the amount has been is likely to be forfeited; section 51 will immediately come into operation. Section 51 of I.T. Act, 1961 clearly says that "where any capital asset was on any previous occasion the subject of negotiations for its transfer, any .....

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