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The ITO, Ward- 6 (3) , Jaipur Versus Smt. Bharti Gajaria

2015 (8) TMI 1093 - ITAT JAIPUR

Computation of capital gain - CIT(A) accepting the assessee’s plea that the plot in question was purchased in the year 1980 by making part payment and taking possession and consequently adopting the fair market value of the property as on 1-04-1981 and allowing indexed cost of acquisition at ₹ 31,19,050/- Held that:- As find from the records that the assessee has not produced the original sale agreements entered between the parties before the AO. The assessee has also not disclosed the cap .....

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ision of Hon'ble Apex Court in the case of Goetze India Ltd. vs. CIT (2006 (3) TMI 75 - SUPREME Court).

The ld. CIT(A) has coterminous power and whatever additional evidences submitted by the assessee before him had not been adjudicated proper perspective and in legal framework as no application for filing of additional evidence had been referred by him and no finding had been given by the ld. CIT(A) that these evidences are required to decide the basic cause of the assessee. Therefo .....

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t the order of the ld. CIT(A)-II, Jaipur dated 04-05-2012 for the assessment year 2009-10 raising therein grounds as under:- On the facts and in the circumstances of the case, the ld. CIT(A) has erred in:- (i) accepting the assessee s plea that the plot in question was purchased in the year 1980 by making part payment and taking possession and consequently adopting the fair market value of the property as on 1-04-1981 at ₹ 5,35,919/- and allowing indexed cost of acquisition at ₹ 31,1 .....

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ve and actual physical possession was handed over by the seller to the purchaser only on 28-1-1997. (c) The registered sale deed dated 28-11-1997 clearly specifies that the amount of ₹ 40,000/- paid by the buyer in May, 1980 was a loan and the same has been adjusted on 28-11-1997 towards the sale consideration and the assessee has made the payment of ₹ 4,55,000/- through cheque no. 384890 dated 27-11-1997 and ₹ 4,95,500/- through cheque no. 384889 dated 27-11-1997. (d) For any .....

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deed dated 28th and 29th Nov.1997 is the clear evidence to show that the entire sale consideration was paid on 28th / 29th Nov. 1997 and actual and effective possession of the property was handed over the buyer by the seller only after receipt of the entire sale consideration as clearly spelt out in the registered sale deed. (ii) rejecting the AO s plea that in view of decision of Hon'ble Supreme Court in the case of Goetze India Ltd. vs. CIT, 284 ITR 323, the assessee could not claim deduct .....

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the details of transactions of immovable property covered under AIR information. No such information was furnished by the assessee. It was gathered that the assessee had sold a house property situated at Krishna Tower, Dhuleshwar Garden, C-Scheme, Jaipur on 26- 04-2008 for ₹ 75,72,988/-. The AO gave reasonable opportunity of being heard to the assessee on this issue and asked to calculate the capital gain arising on sale of the property which has not been shown in the return. The assessee .....

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or charging the stamp duty. The AO had taken this value for computing the capital gain as per Section 50C of the Act. The assessee alongwith Smt. Shashi Gajaria purchased the plot No. 57, Dhuleshwar Garden, Jaipur from Smt. Indira Ashok Gajaria on 28/29-11-1997 as per the sale deed executed with the Sub-Registrar, Jaipur. Subsequently, they entered into an agreement with a developer M/s. Blue Sky Build Estate (P) Ltd. for construction of a complex. It is a portion of complex which has now been s .....

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/Impov. ₹ 31,19,049 Additional payment made to Seller at the time of Registry 27/11/1997 ₹ 951000 ₹ 16,72,151 Cost of improvement 2002-03 ₹ 475706 ₹ 418218 2003-04 ₹ 145424 ₹ 127850 2004-05 ₹ 71529 ₹ 62885 ₹ 608953 Rs.5400153 ₹ 5400153 Nil The AO observed in the computation of capital gains now filed during the course of assessment proceedings, the assessee had made a claim that the plot no. 57, Dhuleshwar Garden, Jaipur was purch .....

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rticulars of description of property given was also not correct. The AO therefore, asked the assessee to produce the original sale agreement in order to make further verification. However, the assessee failed to submit the original sale agreement on the pretext that same was not available. Therefore, the AO proposed to disallow the indexed cost acquisition in the year 1980. The assessee submitted reply vide letter dated 22-11-2011 which has been reproduced by the AO at pages 4 and 5 of the asses .....

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scription of the property given in the so called sale agreement is Plot No. 56 (Chappan), Dhuleshwar Garden, Jaipur which is incorrect. (iv) There is no evidence with the assessee to show that the said property was in its possession except the copy of undated, un-witnessed and unregistered document, which is not acceptable. (v) The so called sale agreement is not registered with the Registration Authorities. As per the provision of Section 17 of the Indian Registration Act, 1908, any document wh .....

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e deed dated 28-11-1997 and 29-1-1997 duly registered with the Sub-Registrar-II, Jaipur in respect of the property in question, which clearly specifies the receipt of full sale consideration and handing over of actual physical possession. The registered sale deed dated 28-11-1997 clearly specifies that And whereas the buyer has paid the total sale consideration of ₹ 4,95,000/- (Rs. Four lac Ninety five thousand five hundred only) to the seller in the mode and manner as follows:- (i) ₹ .....

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the time of execution of this sale deed before the Sub-Registrar, Jaipur City In this way, the buyer has paid all and entire sum of sale price to the seller. The receipt whereof the seller acknowledges herein this deed of sale. NOW AFTER HAVING RECEIVED ALL AND ENTIRE SALE PRICE, THE SELLER HAS SOLD OUT, DISPOSED OFF, CONVEYED AND TRANSFERRED 1/4TH UNDIVIDED PART OF THE SIAD IMMOVALE PROPERTY TO THE BUYER DESCRIBED IN GRATER DETAIL IN THE SCHEDULE-1 hereinunder and the property of which this par .....

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PART OF THE SAID PROPERTY ALSO CONSISTS OF ALL RIGHTS, INTERESTS EASEMENT TO BE VESTED IN THE BUYER. Further, the registered sale deed in respect of the other 1/4th part of sold property dated 29-11-1997 also specifies that And whereas the seller has desired to sell out undivided 1/4th part of the said immovable property described herein below in schedule -1 for the sale price of ₹ 4,95,500/- (Rs. Four Lac Ninety Five Thousand Five hundred only) And whereas the buyer has paid the total sa .....

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sum of sale price to the seller. The receipt whereof the seller acknowledges herein this deed of sale. NOW AFTER HAVING RECEIVED ALL AND ENTIRE SALE PRICE, THE SELLER HAS SOLD OUT, DISPOSED OFF, CONVEYED AND TRANSFERRED 1/4TH UNDIVIDED PART OF THE SAID IMMOVALE PROPERTY TO THE BUYER DESCRIBED IN GREATER DETAIL IN THE SCHEDULE-1 hereunder and the property of which this part has been sold shown by yellow colour in the site plan enclosed to this deduction of sale which is an indispensable part and .....

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e's submissions, the AO concluded that the assessee was in actual physical possession of the property in question from seller to the buyer (assessee ) only on 28th /29th Nov. 1997 after receiving the entire sale price as clearly spelt out in the sale deed executed on 28/29th Nov. 1997, duly registered with the Sub-Registrar-II, Jaipur City. Therefore, the contention of the assessee that the property sold to her buy the buyer in 1980 and she was having its possession from 1980 is devoid of an .....

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by a registered deduction of conveyance. The assessee later on entered into an agreement with the developer M/s. Blue Sky Buildestate (P) Ltd. for construction of a complex. This agreement clearly mentions that the property was purchased by the assessee alongwith the co-owner on 28th & 29th Nov. 1997. The agreement further specifies that the charges for changing land used will be shared by both the parties according their respective share and in case developer obtains permission for addition .....

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e coowners ½ share of assessee 2002-03 Land conversion and other charges paid to JDA municipality ₹ 87959 ₹ 475706 ₹ 237853 2003-04 Electric installation exp ₹ 274385 ₹ 145424 ₹ 72712 2004-05 Transformer installation exp ₹ 134961 ₹ 71529 ₹ 35764 ₹ 1306905 ₹ 692659 ₹ 346329 The expenditure had been incurred for the whole complex built by the developer out of which only a portion measuring 2670 sq. Ft situated in 3rd fl .....

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ompany. Since the assessee had sold only the third floor measuring 2670 ft , it would be fair and reasonable to work out the indexed cost of acquisition @ 20% of the total indexed cost of acquisition and being its co-owner, she would get the benefit @ 10% of the expenditure on account of improvement as the 53% share in the improvement charges has been met out by the assessee and the other co-owner. On the basis of the above discussions, the long term capital gain worked out by the AO is as under .....

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owable LTCG ₹ 44443 ₹ 3393555 He further held that as to indexed cost of acquisition and indexed cost of improvement, the assessee filed the return on 22-07-2009, the assessee had not made any such claim. The plea of the assessee was not accepted by the AO as the assessee has not shown any capital gain in the return. Therefore, the assessee s claimed was an after thought when transaction detected on the basis of AIR information. Thus in view of Hon'ble Supreme Court judgment in t .....

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ccount of Long term capital gain. 2.3 Now the Revenue is before wherein the ld. DR argued that the ld. CIT(A) has accepted the assessee's evidences without allowing any opportunity to the AO and decided the case in favour of the assessee. The ld. DR submitted that it is a fact on record that the assessee had not produced original sale agreement before the AO. It is also a fact that the assessee had not disclosed this transaction in the return. The AO on the basis of AIR information has issue .....

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to the root cause of the case. Thus the ld. DR prayed that the matter may be set aside to the file of the AO. 2.4 During the course of hearing, the ld. AR of the assessee supported the order of the ld. CIT(A) and submitted his prayers through the written submission as under:- 1. the fact of payment of advance amount of ₹ 75,000/- in Sept. 1980 has not been doubted by the AO and no evidence/ material have been brought on record by the AO to dispute these payments. 2. The fact of the advanc .....

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mance of a contract of the nature referred to in Section 53A of the Transfer of Property Act, 1882. Therefore, the date of acquisition has to be considered as the date of taking possession of the property i.e. May, 1980. 5. The AO has doubted only the enforceability of agreement to sale on the ground that the agreement was not witnessed and was not registered. However, the AO failed to appreciate the corroborating evidence in the shape of registered sale deed which also records the same facts as .....

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ount in that respect. Therefore, the allegation of AO fail on this issue. 6. That the payment of settlement amount of ₹ 19,02,000/- at the time of execution of sale deed has nowhere been doubted by the AO. 7. The assessee has incurred an expenditure on improvement of the property to the tune of ₹ 6,08,953/- (cost of improvement) which fact too has not been doubted by the AO. 8. The AO has wrongly presumed that all other floors of constructed building except IInd floor are in ownershi .....

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tatic at 53:47% It is submitted that all these facts were brushed aside by the AO and he went on to disallow the deduction of cost of acquisition as claimed by assessee. Nevertheless, during the course of appellate proceedings before ld. CIT(A), all these facts alongwith relevant evidences (already submitted before AO) were submitted before ld. CIT(A) and all the allegations of AO were established as baseless before the ld. CIT(A) who after perusing them carefully passed a very reasoned order, a .....

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