TMI Blog2009 (11) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... y the AO without showing that the assessee has received more than what is declared or disclosed by him as the consideration. Even from the perusal of the assessment order, we find no material or evidence brought out by the AO which could justify the burden cast on the Revenue to show that the assessee has received more than what is declared or disclosed by him as consideration in the sale deed. Under such circumstances, therefore, we are in agreement with the conclusion drawn by the CIT(A) that no addition is merited in this case by disregarding the full value of the consideration declared by the assessee. The order of the C1T(A) deleting the addition on account of long-term capital gain on sale of 4 Kanal 10 Maria of land is hereby affirmed. Accordingly, the appeal of the Revenue is dismissed. - G.S. Pannu, And MS. Sushma Chowla for the Appellant.: Smt Inoshi Sharma For the Respondent : S.K. Mukhi. ORDER G.S. Pannu, Accountant Member : The two captioned appeals are directed against the respective orders of the CIT(A) dt. 21st May, 2009 and pertain to the asst. yr. 2005-06. Since, the two appeals involve common issues, we find it expedient to dispose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mputed by considering the sale consideration of land at ₹ 5.40.000 per Kanai as against ₹ 1 lac per Kanal declared by the assessee. 4. During the assessment proceedings, the assessee justified the variation in the sale rate for the following reasons : (a)That 4 Kanal 10 Maria of land was situated deep inside the main Rahaon Road, Ludhiana whereas the other land was situated on the main Rahaon Road, Ludhiana itself, showing locational disadvantages. (b)That 4 Kanal 10 Maria of land was of odd dimension. (c)That the size of 4 Kanal 10 Maria of land was very small in comparison to the other land, which has lesser sale potential. (d)That the payment in relation to 4 Kanal 10 Maria was made instantly in cash whereas the payment in relation to the other land was spread over 15 months, thereby resulting in lower sale realization by the assessee. 5. For all the above reasons, the assessee contended that the land measuring 4 Kanal 10 Maria was not as attractive to the buyer as was the other land. Further, the assessee also filed a copy of agreement to sell executed by S/Shri Rajpal Singh and Anand Bhushan whereby land measuring 33 Kanal 14 Maria which was adjac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctual consideration stated by the assessee and substituting an estimated sale consideration. Reliance was placed on the following decisions : (i) CIT v. George Henderson Co. Ltd. [1967] 66 ITR 622 (SC); (ii) CIT v. Gillanders Arbuthnot Co. 1973 CTR (SC) 136 : [1973] 87 ITR 407 (SC); (iii) CIT v. Smt Nilofer I. Singh [2009] 221 CTR (Delhi) 277 : [2008] 14 DTR (Delhi) 108. 7. After considering the submissions of the assessee, the CIT(A) has held that there was nothing on record to show that the full value of consideration in this case was higher than that declared by the assessee. According to the CIT(A), the consideration adopted by the AO can at best be taken to be the market value of the land, which cannot be considered for computing the capital gains in view of the decision of Hon'ble Delhi High Court in the case of Smt. Nilofer I. Singh (supra) as also the judgments of the Hon'ble Supreme Court in the case of George Henderson Co. Ltd. (supra) and Gillanders Arbuthnot Co. (supra). The CIT(A) has further held that in the absence of any evidence to show that the assessee had received higher consideration than that shown in the sale deed, the AO could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities and the relevant material referred to in the course of hearing before us. The crux of the dispute before us relates to the determination of capital gain on sale of land measuring 4 Kanal 10 Maria. The said land has been sold by the assessee vide sale deed dt. 14th March, 2004 for a stated consideration of ₹ 4,50,000. Another portion of land measuring 17 Kanal 18 Maria was also sold by the assessee along with his brother, wherein the sale consideration came to ₹ 5,40,000 per Kanal. For this reason, the AO considered that the actual sale consideration in the sale of 4 Kanal 10 Maria of land was also liable to be considered at ₹ 5,40,000 per Kanal and not ₹ 1 lac per ' Kanal stated in the registered sale deed executed by the assessee. This has resulted in enhanced capital gain in the hands of the assessee of ₹ 19,42,312 on account of sale of 4 Kanal 10 Marla of land. 11. Capital gains are subjected to tax as per Part E of Chapter IV of the Act. Sec. 45(1) provides that any profits or gains arising from the transfer of a capital asset effected in the previous year shall be chargeable to tax under the head 'Capital gains' and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er decision in the case of K.P. Varghese v. ITO [1981] 24 CTR (SC) 358 : [1981] 131 ITR 597 (SC) held that a mere difference between the market value and the consideration stated in the sale deed does not permit the AO to assume a higher sale consideration for the purposes of computing capital gains. In terms of the judgment of Hon'ble Supreme Court in K.P. Varghese (supra) it can be understood that where an AO disagrees with the stated consideration in the sale deed, it would be the onus of the AO to show that the assessee received more than what is declared or disclosed by him as the consideration. At this stage, we may also notice the decision of the Hon'ble Delhi High Court in the case of Smt Nilofer I. Singh (supra) relied upon by the C1T(A) wherein also it is held that the adequacy or inadequacy of the price bargained for cannot be a factor to disturb the full value of the consideration declared in the registered deed. Again, the Hon'ble Delhi High Court emphasized that the said expression does not have a necessary reference to the market value of the asset which is the subject-matter of the controversy. 13. Now, considered in the aforesaid light, in the pres ..... X X X X Extracts X X X X X X X X Extracts X X X X
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