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Suman Kadam Versus ITO, Ward 2 (4) , Thane and Vica-Versa

2016 (9) TMI 749 - ITAT MUMBAI

Capital gain on the transfer of plot - year of assessment - Held that:- The issue shall have to be determined on the anvil and touch stone of section 2(47)(v) of the Act r/w s. 53A of the Transfer of the Property Act, 1882. The assessee having returned capital gains (for the current year) despite having not received her share even during the current year is thus aware that the income by way of capital gains is assessable on accrual basis, stating resolution of the legal dispute during the curren .....

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le there is nothing on record toward the same, with, rather, even most of the ‘facts’ stated by the ld. counsel being not borne out by the record. Then there is the question of whether the transferee has performed or was willing to perform his part of the contract (sec. 53A of the TP Act). If so, why is it that the payment was withheld, and for years, or given, as stated, to the assessee’s brother-in-law, and when? Answers to these and other related questions would decide whether the capital gai .....

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Assessee : Shri Vijay Shah For The Revenue : Shri Debabrata Baidya ORDER Per Sanjay Arora, A. M.: These are cross Appeals, i.e., by the Assessee and the Revenue, arising out of the Order by the Commissioner of Income Tax (Appeals)-2, Thane ( CIT(A) for short) dated 27.2.2014, partly allowing the Assessee s appeal contesting its assessment u/s.143(3) of the Income Tax Act, 1961 ( the Act hereinafter) for the assessment year (A.Y.) 2008-09 vide order dated 31.12.2010. 2. Explaining the background .....

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,000/- (PB pgs. 39-56). Taking us through the recitals and the terms of the said agreement, it was sought to be emphasized that the entire consideration was to be received within 12 months of the execution of the agreement. The payment was, in fact, received in due course of time. A power of attorney was also executed for the purpose in favour of the buyers. In fact, the buyers assigned the development rights to another, M/s. Rashmi Gruh Nirman Ltd., vide an agreement for development and sale da .....

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urrent year from Shri Ramakant Mahadev Kadam, a co-owner and brother of the assessee s husband. The amounts had been retained by the latter due to some differences and legal disputes between the two. The assessee returned the entire capital gain amounting to ₹ 24,29,117/-, i.e., as attributable to her 1/4th share (valuing ₹ 26.25 lacs) for the current year, also claiming deduction u/s. 54-F thereon in respect of investment in a residential house. The returning of the capital gain on .....

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per contra, why was the relevant property handed over to the buyer without receiving full consideration in its respect. The relief u/s. 54-F has also been restricted qua capital gain arising on only one plot of land (i.e., single capital asset), while the provision carries no such restriction. 3. We have heard the parties, and perused the material on record. It shall be relevant to, before we proceed to adjudicate the issues arising, recount the background facts of the case. The assessee returne .....

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during the assessment proceedings, sought to withdraw her disclosure of capital gain on plot number 99. The same was considered not acceptable by the Assessing Officer (A.O.) in-as-much as the assessee had not done so per a revised return, i.e., as prescribed by law. How could the assessee have given possession of the plot without receiving full consideration in its respect? If the possession had indeed been given, why is that the assessee did not return the capital gain for the relevant year, .....

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scheduled bank, i.e., to the extent not utilized up to the date of filing the return of income for the relevant year. The commencement and completion dates of the residential house were also not furnished and, in any case, not established. In appeal, the ld. CIT(A) found the assessee eligible for her claim for exemption u/s. 54F as, on the basis of evidences furnished and admitted, the same were found by him as non-residential. Further, even if considered residential, the same are only partly ow .....

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sessee s books in its respect. The total investment up to 31.3.2010 (Rs.44.05 lacs), i.e., the last date for filing the return of income u/s. 139(4) for the current year, was taken into account for the purpose. Reliance toward the same was placed on CIT vs. Jagriti Aggarwal [2011] 339 ITR 610 (P&H); Kishore H. Galaiya vs. ITO [2012] 137 ITD 229 (Mum); and Jagtar Singh Chawla vs. Asst. CIT (in ITA No. 4923/Del/2010 dated 30.6.2011), since affirmed in CIT vs. Jagtar Singh Chawla (in ITA No. 71 .....

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come-tax Act, 1961 out of the total claim of ₹ 52,67,919/-. 2. The Hon'ble Commissioner of Income Tax (A) -II, Thane has erred in law and in facts by confirming the additions of long term capital gain made by the assessing officer amounting to ₹ 24,29,117/- on sale of one fourth share in the land bearing survey no 99 in earlier assessment year 1995-96 erroneously offered for taxation in A.Y. 2008- 09, an year under appeal, although none of the ingredients of Section 45 read with .....

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art relief u/s. 54F allowed by the ld. CIT(A) in-asmuch as the same was done by admitting new evidences without observing the mandatory procedure prescribed under rule 46A (of the Income Tax Rules, 1962) and seeking A.O. s report thereon. We shall take up the assessee s appeal first. The first issue, raised per Grounds 2 and 3, is whether the capital gain on the transfer of plot no. 99 arises to the assessee during the current year, or does it so for any other year, as (say) A.Y. 1995-96. The se .....

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not survive or is held as void ab-initio, the tax paid by way of self-assessment tax could not be refunded to the assessee. However, just because the assessee has filed the return, he cannot be saddled with a tax liability in-as-much as there is no estoppel against law (refer: CIT vs. Durga Prasad More [1971] 82 ITR 540 (SC)), and it is only the correct income, assessable for a year, which could be brought to tax for that year (CIT vs. British Paints India Ltd. [1991] 188 ITR 44 (SC)). The purvi .....

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egal dispute/s led to the withholding of the payment of ₹ 58.25 lacs (out of the total consideration of ₹ 105 lacs), and which stands resolved during the current year (refer assessee s reply, reproduced at para 2 of the assessment order), so that it is prima facie indicative of the income (by way of capital gain) arising during the current year. The assessee claims that the possession was allowed forthwith, i.e., on the execution of the sale and development agreement dated 15.12.1994 .....

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tion. What was the dispute/s, i.e., its nature? When was the balance amount (Rs.58.25 lacs) received, and by whom? The same, as it appears, is received without any compensation for time, even as funds have opportunity and time cost, and the same stands presumably received after over 13 years. Why? That apart, how could the assessee s share (Rs.26.25 lacs) be given to, as stated, Ramakant Kadam, her brother-in-law, she being a separate and distinct person, an owner (to the extent of 1/4th) in her .....

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as the reason for considering the same as having accrued/arisen thereat. If not during the current year, when did the same get resolved and, further, what is the basis or the evidence to consider it as so? No details with regard thereto stand furnished at any stage; the assessee changing her stand to claim that no gain in fact arose during the current year. The complete details need to be brought forth, and its impact considered in light and in the context of the provisions of law, while there i .....

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arisen to the assessee during the relevant previous year and, if not, when. The matter is accordingly restored to the file of the assessing authority for fresh adjudication with regard to whether any part of the capital gains on transfer of plot no. 99 arise to the assessee during the relevant year. The AO shall decide issuing definite findings of fact. We decide accordingly. As regards the question of exemption u/s. 54F, the second issue, assessee has not brought forth any reason to disturb th .....

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vidences. The same, we observe, are in relation to: a) Nature of the house properties owned by the assessee - residential or nonresidential; b) Nature of ownership - absolute or partial; and c) Investment in new residential house on time scale (up to 31/3/2010) The relief by the ld. CIT(A) shall therefore be subject to the verification by and the satisfaction of the AO with regard to the assessee s claims made qua the same. With regard to part or (co-) ownership, we may though clarify that the s .....

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