TMI Blog2011 (12) TMI 552X X X X Extracts X X X X X X X X Extracts X X X X ..... g ₹ 4,30,000/- in the Bonds of Rural Electrification Board. The AO asked the assessee to submit copy of registered deed for sale of land. The assessee has submitted copy of four sale deeds for area of land measuring 0.6695 Hectare as under:- S.No. Name of the purchaser Area Amount of Sale Value for Registry 1 Shri Gyan Singh others 0.1680 116500 435417 2 Shri Poona others 0.1685 117000 436690 3 Shri Vinod Kujbanda others 0.1776 123000 459606 4 Shri Deva Ram others 0.1555 107000 403588 Total 0.6696 463,500 17,35,301 In view of the above it was clear that the sales consideration was less than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... higher sale proceeds to another/different buyers as enumerated in sale deeds , for which the said power of attorney holder Shri Devkinandan Gurjar and Shri Dilip Surana in collusion alongwith Shri Ashok Parikh and Shri Chain Singh Padiyar who are liable and also identifiable persons who made this sham transactions is solely liable for all consequences under the provisions of the Act. The assessee also submitted that without prejudice to above the said land was an agriculture land out of purview of capital gain tax, though the assessee paid capital gain for which pray for refund. Without prejudice to above the value adopted by the stamp valuation authority u/s 50C( I) is exceeds the market value as on 3-9-2003. 5. The AO considered the explanation of the assessee and observed that the facts narrated by the assessee may correct that he sold the property to Shri Ashok Parikh and Shri Chain Singh on 3-9-2003 and on the next day, he issued a power of attorney in the name of Devki Nandan Gujar, who made registry in the name of other persons on the direction of Shri Ashok Parikh and Shri Chain Singh . But these facts do not affect the tax liability on capital gain of the assessee. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of attorney holder executes the sale deed in favour of ultimate purchaser and receives the sale consideration of the property on behalf of the purchaser to purchase the property from the seller. The ld. AR submitted that in the instant case, the modus operandi operated is that the purchaser subsequently sold the property to another purchaser though the seller executes the sale deed. The seller has not received consideration as per registered sale deed. It was therefore, submitted that Section 50C will not be applicable because the assessee has sold the property on the basis of the agreement. The ld.CIT(A) has referred to the fact that the AO has recorded the statement of Shri Ashok Parikh u/s 131 of the Act. Shri Ashok Parikh stated that he has neither executed the agreement with the assessee nor made any payment against such agreement to sell. The AO has also recorded the statement of Chain Singh on 27-7-06 u/s 131 of the Act. In it , he stated that he executed the agreement to sell of ₹ 7.51lacs for purchase of agricultural land of the assessee but the said agreement could not be materialized as he could not make payment for want of funds. 2.4 The assessee submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suring 0.6696 Hectars for ₹ 4,63,500/-but the registering authority adopted the value at ₹ 17,35,301/- for stamp duty purpose. Therefore, it is clear that the power of attorney holder sold land measuring 0.6696 hectare only and not the whole land. Therefore, the AO was not justified in proportionately adopted the value at ₹ 27,08,000/-. Further AO allowed indexed cost of acquisition for one registry dated 25-2-1980 of ₹ 53.465/- and by increasing 10%, the AO adopted the cost of acquisition at ₹ 58,800/- on the ground that the purchased vide registry dated 26-2-1980 was in the name of Shri Mukesh Kumar, the son of the appellant. 37. On going through the facts of the case I found that the AO was justified in adopting the sale consideration u/s 50C of the Act. However, the AO should have taken area of land sold as per the documents registered at 0.6696 hectare. Therefore, the AOwas not justified in proportionately adopting the sale consideration on whole land of 1.045 Hectare which is only on presumption and not in accordance with the provisions of section 50C. The DVO taken the value at ₹ 27,08,000/- for 1.045 hectare on the basis of valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gurjar and Shri Dilip Surana on 4-09-2003. The power of attorney holders were authorized to sell the agricultural land for which the assessee entered into an agreement of sale with Shri Ashok Kumar Parikhi and Shri Chain Singh. In this power of attorney, there is no mention of sale agreement made by the assessee. The persons in whose names the sale agreement was executed are also not witnesses. This power of attorney holder thereafter sold the land to the party who are not the same for which assessee entered into sale agreement. It is true that on this sale deed, one of the party in whose name this agreement was executed was also witness. This means that those parties never objected to the sales made by the assessee through his power of attorney holder. The AO has recorded the statement of Shri Ashok Kumar Parikh u/s 131 of the Act. He stated that same agreement was prepared but after making physical inspection of the property, he took decision of not purchasing this property. The AO recorded the statement of Shri Chain Singh. He also stated that the agreement was executed but they were not able to make payment and therefore, property was sold by the assessee to other party. Lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue. 4.0 Now we take up the grounds of appeal of the Revenue. 5.1 The first ground of appeal of the Revenue is against relief allowed by the ld.CIT(A) in respect of consideration to be considered u/s 48 of the I.T. Act. 5.2 This issue has been considered by us while disposing off the appeal of the assessee. Following our finding in the appeal filed by the assessee, we hold that the ld.CIT(A) was justified in directing the AO to adopt the sale consideration of ₹ 17,35,301/-. 6.1 The second ground of appeal of the Revenue is that the ld.CIT(A) has erred in treating the sale consideration at Nil for the land measuring 0.3754 hectare as two registries were not produced before the AO. 6.2 The ld.CIT(A) in para 37 of his order has observed that the assessee has not sold the entire property. The land mentioned in Araji No. 1838 has not been sold. The AO has also not collected any material to show that the assessee has sold entire property. 6.3 Before us, the Revenue has not placed any evidence to show that the assessee has sold entire land. We therefore, feel that the ld.CIT(A) was justified in considering the capital gain in respect of land to the extent of 0. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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