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2016 (6) TMI 128 - ITAT PUNE

2016 (6) TMI 128 - ITAT PUNE - TMI - Addition made on account of capital gains on protective basis - adoption of sale consideration - Held that:- In the facts of the present case, where the land though on the date of sale deed was in the name of assessee, which fact has been accepted by the Assessing Officer, Chiplun Municipal Council did not pay the consideration for sale to the plot holder, but paid the amount by account payee cheque to Shri A.F. Patel, who was a GPA holder, except for ₹ .....

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the capital gains is to be taxed by adopting sale consideration at ₹ 7,50,000/-. It is further held by the CIT(A) that in case the assessee recovers some amount of sale consideration from Shri A.F. Patel, then the same is to be considered as capital gains in the hands of assessee on protective basis. However, the CIT(A) has further clarified this by saying that where the assessee receives additional consideration in future from Shri A.F. Patel, then the same is to be assessed in the hands .....

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as been made in the hands of assessee on protective basis has no merit since the CIT(A) has directed that pursuant to the decision of Civil Court, the necessary action should be taken under section 150 of the Act in accordance with law - Decide against assessee.

Non-issue of notice under section 143(2) - Held that:- Notice under section 143(2) of the Act was issued on 16.10.2006 which was duly served upon the assessee on 20.10.2006. In response to which, the assessee personally attend .....

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or The Appellant by : None For The Respondent : Shri Sanjay Punglia ORDER PER SUSHMA CHOWLA, JM: This appeal filed by the assessee is against the order of CIT(A), Aurangabad, dated 29.10.2010 relating to assessment year 2005-06 against order passed under section 143(3) of the Income-tax Act, 1961 (in short the Act ). 2. The appeal was fixed for hearing from February, 2012 and was adjourned to various dates at the request of the Counsel for the assessee repeatedly. On the last date of hearing i.e .....

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the facts and the circumstances of the case and in law the Ld. C.I.T. (A) - Aurangabad was not legally correct to hold as per para 8.4 of the order that in future the appellant may recover some amount out of sale consideration of ₹ 45,30,000/- which has been fraudulently grabbed by the Power of Attorney Holder. It be held accordingly. 2) On the facts and the circumstances of the case and in law and in view of Ground No.1 above the Ld. C.I.T. (A) erred in directing that the amount of ₹ .....

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provisions of law be set aside. 4) On the facts and the circumstances of the case and in law it be declared that the assessment is vitiated in law for want of service of statutory/ mandatory notice under S.143(2) of the Act and in view of this the assessment is illegal and without jurisdiction. The assessment be quashed. 5) On the facts and in the circumstances of the case and in law the assessee denies his liability to pay interest u/s. 234-A, 234-B and 234-C of the Act and the same be deleted .....

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lun, Dist. Ratnagiri for ₹ 2 lakhs and had paid stamp duty of ₹ 61,000/-. The assessee entered into an agreement to sell the said land with Shri Ajmal Fazaluddin Patel on 05.06.2004 for consideration of ₹ 7,50,000/-. The assessee also gave an irrevocable General Power of Attorney dated 05.06.2004 to Shri A.F. Patel for the said land. On the basis of said agreement to sell / irrevocable GPA, Shri A.F. Patel sold the land at Chiplun for consideration of ₹ 52,80,000/- vide s .....

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During the course of TDS enquiry by the ITO, Ratnagiri, it was noticed that the assessee has sold the said piece of land to Chiplun Municipal Council and on this basis, the ITO, Ward-4, Ratnagiri issued notice under section 142(1) of the Act to the assessee in connection with taxability of capital gains from the above said transaction. The assessee has failed to comply with the same and thereafter, summons under section 131 of the Act were issued. The assessee furnished return of income on 25.0 .....

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₹ 52,80,000/- and after deducting cost of acquisition and also improvement cost of ₹ 44,30,000/- had declared income from long term capital gains at ₹ 5,27,543/- in the revised return of income. Along with return of income, the assessee also enclosed two TDS certificates issued by Municipal Council, Chiplun for ₹ 60,720/- each accepting the sale transactions. During the course of assessment proceedings, the assessee filed second revised return of income on 31.03.2007 in w .....

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ri A.F. Patel and whether he had further sold to Chiplu n Municipal Council. The assessee in reply, confirmed that he had sold the land to Shri A.F. Patel for ₹ 7,50,000/- on 05.06.2004 and had received part money up to October, 2004 and part of balance money of ₹ 4,60,000/- was received in cash during the period January, 2005 to August, 200 5. In support, the assessee furnished the document on stamp paper dated 01.06.2004 of ₹ 20/- typed in Marathi language known as Agreement .....

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ncil had passed a resolution that administrative approval to purchase the said land on 05.06.2004 and the agreement to sell / GPA was also given to Shri A.F. Patel on 05.06.2004 . The Assessing Officer was of the view that the said agreement / GPA was prepared afterwards i.e. after sale of land to Chiplun Municipal Council on 30.12.2004. The Assessing Officer was of the view that the Affidavit filed by the assessee along with second revised return was self-serving evidence since the assessee had .....

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m capital gains in the hands of assessee at ₹ 49,57,943/-. The claim of the assessee of improvement of expenditure on development, was rejected since the documents were self-made vouchers. 7. Before the CIT(A), the assessee furnished written submissions, which are incorporated at pages 10 to 20 of the appellate order. The CIT(A) noted that the assessee had purchased the agricultural land in the year 1999 for total sale consideration of ₹ 2,61,000/-. The assessee came into contract wi .....

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total sale consideration of ₹ 7,50,000/-. On the basis of aforesaid documents, Shri A.F. Patel transferred the said land to Chiplun Municipal Council vide sale deed dated 30.12.2004 for total sale consideration of ₹ 52,80,000/-. The possession of the land was also handed over in June, 2004. The GPA holder and the purchaser of land as per the agreement to sale, dated 05.06.2004, Shri A.F. Patel had received cheques of ₹ 51,58,560/- from the Council after deduction of TDS from to .....

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that the assessee had not received consideration to the extent of ₹ 52,80,000/- but had actually received consideration of ₹ 7,50,000/- only as per agreement to sell dated 05.06.2004, wherein the consideration was fixed at ₹ 7,50,000/-/. The contention of Assessing Officer that the GPA and the agreement to sell dated 05.06.2004 was an afterthought and had been prepared afterwards i.e. after sale of land to Chiplun Municipal Council on 30.12.2004 was not accepted by the CIT(A) s .....

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. In view thereof, the CIT(A) held that the land was transferred by the appellant to Shri A.F. Patel on 05.06.2004 within meaning of section 2(47) of the Act by entering into Irrevocable GPA and agreement of sale dated 05.06.2004. Further, the assessee himself had filed revised return of income showing sale consideration of ₹ 52,80,000/- and claimed improvement cost for development of the said land sold at ₹ 44,30,000/-. Thereafter, the assessee claims to have filed re-revised return .....

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holder had acted fraudulently and received consideration of ₹ 51,58,560/- after TDS and the said amount should be handed over to the assessee. It is also claimed by the assessee in the said civil suit that as Shri A.F. Patel had entered into an agreement with Municipal Council of Chiplun and had received the consideration, income tax on the said transaction was to be paid by him. In view thereof, the CIT(A) thus, was of the view that the capital gains in respect of consideration received b .....

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f trade and as income in another head as decided by the Assessing Officer according to the provisions of law. Further, since the assessee had filed suit in Civil Court against Shri A.F. Patel and Chiplun Municipal Counci l for recovery of sale proceeds and in case the assessee recovers the same amount of sale consideration from Shri A.F. Patel, the same is to be added in the hands of assessee, therefore, the amount of sale consideration of ₹ 45,30,000/- was held to be considered as capital .....

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sessee during the year under consideration for total sale consideration of ₹ 7,50,000/- as per agreement o sell and Irrevocable GPA executed by the assessee on 05.06.2004. The said land was purchased by Chiplun Municipal Council vide agreement dated 05.06.2004 itself by entering into an agreement with Shri A.F. Patel. The land was sold through registered document dated 30.12.2004, wherein Shri A.F. Patel signed on behalf of the assessee though the name of assessee was mentioned in the land .....

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question of recognizing him. It may be pointed out that in case of land deals, the GPA has to be registered document. The assessee before us has failed to appear and though Paper Book has been filed by the assessee, but the documents are not placed on record. Several opportunities of hearing were given to the assessee, who failed to appeal and sought adjournments through Counsel and thereafter, the Counsel himself withdrew his Power of Attorney. Another notice of hearing was issued to the asses .....

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Patel and an Irrevocable Power of Attorney was executed. The CIT(A) has vide para 8.1 given his finding that Shri A.F. Patel has also taken the possession and handed over the possession of land to Chiplun Municipal Council. In the statement recorded on oath of Shri A.F. Patel, he had said to have paid some amount in cash to the assessee. Where the transaction is relatable to sale of land and the same has been registered on 30.12.2004, wherein the GPA holder had signed on behalf of assessee, the .....

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unt has been paid to the assessee. The assessee has filed a civil suit in the Civil Court of Ratnagiri against Shri A.F. Patel and Chiplun Municipal Council claiming that the GPA holder had acted fraudulently and had received the consideration of ₹ 51,58,560/- after TDS which should be refunded to the assessee. The said civil suit is pending before the Civil Court. In the above said facts and circumstances, the CIT(A) held that in the hands of assessee, the capital gains is to be taxed by .....

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taking necessary action under section 150 of the Act in accordance with law. The final conclusion of CIT(A) in this regard is that since the civil suit for recovery of the consideration is pending, then whenever if any amount is received by the assessee, then the same is includable in the hands of assessee under section 150 of the Act. We find no error in the said directions of CIT(A). In order to give effect to any finding or directions contained in an order passed by any authority in any proce .....

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