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2015 (11) TMI 1272 - ITAT MUMBAI

2015 (11) TMI 1272 - ITAT MUMBAI - TMI - Income from long term capital Gains - sale of agricultural land - chargeability to tax - Held that:- The said agricultural land was although registered in the name of the assessee but the same was owned by the partnership firm MCS , the assessee being partner of MCS. The sale proceed of the said land was duly deposited in the bank account of the firm,MCS and the due taxes on capital gain arising from the sale of the said agricultural land being Gut no 405 .....

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ed the said capital gain in the income chargeable to tax and paid due taxes to the revenue. We have observed that no prejudice has been caused to the Revenue as the Revenue has got the due taxes although the same has been paid by the partnership firm MCS and the case of MCS was also processed by the Revenue under scrutiny u/s 143(2) read with Section 143(3) of the Act where by the assessing officer of the MCS has duly mentioned about the inclusion of afore-stated income from capital gain of S .....

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, the assessee is entitled for exemption u/s 23 of the Act with respect to one flat while the second flat shall be chargeable to tax as per provisions of section 23 of the Act. We have also observed that the assessing officer has brought to tax income from house property on ad- hoc basis without bringing on record any cogent evidence as to the prevailing market rent in the area for which the property is reasonably expected to be let out as per mandate of Section 23 of the Act. Hence, we restore .....

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6462/Mum/2012 - Dated:- 28-9-2015 - SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Assessee : Shri Sandesh Desai & A Janakiraman For The Revenue : Shri Rajesh Ranjan ORDER Per Ramit Kochar, Accountant Member This appeal by the assessee is directed against the order dated 20.07.2012 of Commissioner of Income Tax (Appeals)(Hereinafter called 1. On the facts and circumstances of the case and in law the Learned Commissioner of Income Tax (Appeal) c .....

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Accounts and Balance Sheet as their asset. c. The sale and capital gains thereof has been disclosed in their income tax return of the said Firm and has been assessed under section 143(3) in the hands of the Firm. 2. On the facts and circumstances of the case and in law the Learned Commissioner of Income Tax (Appeals) erred in treating a single combined house as two distinct properties and thereby taxed the notional income from House Property for a sum of ₹ 1,80,000. The Assessing Officer .....

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arising from sale of property. The assessee explained that the agricultural land being Gut no 405 in Village Bhukum , Taluka Mulshi , District Pune, Maharashtra was sold which is owned by the partnership firm Marine Container Services (hereinafter called MCS )of which the assessee is partner and since the said agricultural land cannot be held in the name of the partnership firm as partnership firm is not separate legal entity, the same is registered in the name of the assessee being partner of t .....

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ed on drawing the cheque for sale consideration in the name of the assessee. The proceeds of sale have been endorsed to MCS and credited in the bank accounts of the MCS. The assessee also submitted the bank account of MCS whereby sale proceeds of the said land was credited . The assessee also submitted the copy of revised computation of income filed by the MCS during assessment proceedings of MCS u/s 143(2) read with Section 143(3) of the Act declaring the capital gain on sale of said agricultur .....

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ed, the assessee filed its first appeal before the CIT (A) and reiterated the submissions as made before the assessing officer. After considering the submissions of the assessee, the CIT (A) rejected the contention of the assessee on the following reasons:- 1. The actual agreement of sale of the land is concluded in the name of the appellant. The sale deed dated 14.11.2008 mentions the name of the appellant as vendor. There is no mention of the name of the firm. The PAN of the appellant has been .....

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and has to be sold to an agriculturist. When legally, firm cannot acquire the land itself in Maharashtra, it can neither be an owner nor can be a seller. Financing the acquisition will not make the firm owner of the land. Hence appellant is the actual owner of the land and also is the seller. 5. Appellant has argued that land was acquired by the firm and payments were made by the firm, Marine Container Service. It is claimed that it appears in the Balance Sheet of the firm. From the perusal of .....

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closing this capital gain. Hence I find that there was no disclosure of capital gain even in the hands of the firm, M/s. Marine Container Services. 7. The Assessing Officer has rightly pointed out that there was no evidence of any authorization by the firm authorizing the partner to buy or sell land in its name. It cannot be independent activity of a single member or partner. The CIT(A) held that the said long term capital gain of ₹ 76,57,948/- is chargeable to tax in the hands of the asse .....

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assessee produced before us the Details of fixed assets owned by MCS to contend that the said agricultural land is appearing in the books of MCS since its acquisition in 2006. The assessee submitted that the said land has been sold during the year for ₹ 100 lacs for which necessary sale documents are produced before us. The assessee contened that the sale proceeds have been received by the assessee and endorsed to MCS and credited in the bank account of MCS. The assessee has produced befor .....

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ced before us the copy of revised computation of income of the firm MCS filed with Revenue where the said capital gain of ₹ 80,00,000/- is duly included by MCS. The assessee produced before us the assessment order u/s 143(3) of the Act dated 09th December 2011 passed by The Deputy Commissioner of Income Tax, 12(2), Mumbai in the case of partnership firm MCS whereby there is specific mention of the filing of revised computation of income by MCS to declare capital gain on sale of the said ag .....

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MCS. 6. The Ld. DR relied upon the orders of authorities below. 7. We have considered the rival submissions and carefully perused the relevant material on record. We have observed that the said agricultural land was although registered in the name of the assessee but the same was owned by the partnership firm MCS , the assessee being partner of MCS . The sale proceed of the said land was duly deposited in the bank account of the firm,MCS and the due taxes on capital gain arising from the sale o .....

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ip firm MCS and the said firm has duly included the said capital gain in the income chargeable to tax and paid due taxes to the revenue. We have observed that no prejudice has been caused to the Revenue as the Revenue has got the due taxes although the same has been paid by the partnership firm MCS and the case of MCS was also processed by the Revenue under scrutiny u/s 143(2) read with Section 143(3) of the Act where by the assessing officer of the MCS has duly mentioned about the inclusion of .....

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The facts of case are that assessee is owner of two adjoining flats bearing no. 1502 and another flat bearing no. 1503, situated at 15th floor in the building known as Rose , Plot No 10, Kharghar, Navi Mumbai . The assessee has claimed interest paid on the housing loan of ₹ 1,50,000/- as loss under the income from house property. During assessment proceedings, the assessee was show-caused by the assessing officer why the assessee has not declared the income from one self occupied property .....

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flat bearing no. 1503, situated at 15th floor in the building known as Rose , Plot No 10, Kharghar, Navi Mumbai. The assessing officer held that the assessee is entitled for exemption in respect of one house property which is used for his residential purposes whereby annual lettable value shall be determined as Nil under the head Income from house property as per Section 23 of the Act. In respect of the other property, however, the income being annual lettable value has to be brought to tax as p .....

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the matter in appeal before CIT(A) and reiterated its submissions. The CIT(A) held that the assessee can treat only one flat as self occupied out of the two flats as per provisions of Section 23 of the Act and the assessing officer has rightly brought to tax by treating the second flat as deemed to be let out. 11. Aggrieved by the order of CIT(A), the assessee is in appeal before us. 12. The assessee reiterated its submissions and contended that these are two adjoining flats and they are self oc .....

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