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TMI Blog2016 (12) TMI 494X X X X Extracts X X X X X X X X Extracts X X X X ..... e of lands to M/s. Darshan Builders on 29-6-2001 and thereby permitted the developers to develop residential buildings at their own cost, risk and expenses; (ii) the transfer of the piece of lands was completed during the previous year relevant to A.Y. 2002-03 since the possession was given in part performance of contract in the nature of development agreement dated 29-6-2001; (iii) the Appellant has passed domain and control of the immovable property by grant of an irrevocable authority and licence and as such the date of agreement of development dated 29-6-2001 would be constitute the date of transfer of the capital asset; and (iv) no consideration was received by the Appellant from Tulsi Gruh Nirman & Associates during the previous year and as such no income has accrued or arised to the Appellant during the previous year. (v) In reaching to the conclusion and confirming such addition the ld. CIT(A) omitted to consider relevant factors, considerations, principles and evidences while he was overwhelmed, influenced and prejudiced by irrelevant considerations and factors. 2.a) On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in holding (wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd were sold by the assessee to M/s. Darshan Builders in the year 2001 itself against consideration of Rs. 45,50,000/-. However, in the F.Y. 2009-10, the said M/s. Darshan Builders has sold the land to M/s. Tulsi Gruh Nirman for Rs. 1.71 crores and the said M/s. Darshan Builders has offered the capital gains on the entire amount of Rs. 1.71 crores. The AO, however, stated that since the assessee had transferred the entire rights in the property by virtue of development agreement dated 29.06.2001, the Long Term Capital Gain should have been offered to tax in A.Y.2002-03, calculated at Rs. 14,17,026/- Alternately, in case the capital gain was to be offered to tax in A.Y. 2010-11 on execution of Deed of Conveyance, since the assessee received only 27% of total sale consideration of Rs. 1.71 crores, and in such case the Long Term Capital Gain would be worked out at Rs. 45,50,000 -- 27% of Rs. 46,47,981 = Rs. 32,95,045/-. However, since the assessee had not returned the capital gains in A.Y. 2002-03 even as the property had been transferred in that year as per sec. 2(47) of the Act, the question had arisen as to whether the sale consideration of Rs. 45,50,000/- was to be taxed in A.Y. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch transfer was taxable in A.Y. 2002-03, relying upon the judgment of Hon'ble Bombay High Court in the case of Chaturbhuj Dwarkadas Kapadia v. CIT 260 ITR 491 (Bom) wherein it was held that in case of passing of domain and control of the immovable property by grant of an irrevocable authority or licence, the date of agreement of development will constitute the date of transfer of the capital asset. I find that the AO is also not averse to said contention of the appellant since he himself has stated that ideally the assessee should have returned the capital gain during the A.Y. 2002-03 only. However, it is a fact that the appellant failed to offer the income to tax in the A.Y. 2002-03 on the pretext of wrong advice received by appellant from his Tax Consultant at that time. 6.2 In the present A.Y. 2010-11, the assessee offered the income to tax on execution of Deed of Conveyance dated 27-10-2009, wherein admittedly the appellant became a party to the Agreement in accordance with the terms of Development Agreement dated 29-06-2001 only for the sake of convenience because in the Government records the piece of land still remained in the name of the appellant, though the Developm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowable expenditure even u/s 57(iii) of the Act. Secondly, as regards the Indexation of said cost and treatment of net consideration as Long Term Capital Gain (instead of Income from Other Sources), I am of an opinion that in view of the appellant's act of trying to conceal its income on several counts as stated above, and also to recoup the loss of revenue for late offering of the assessable income to tax for 8(eight) long years, the appellant should not be granted any such benefit. Therefore, the appellant is entitled to get a relief of Rs. 7,35,440/-. 6.4 Without prejudice, in case it is held that the said income of the appellant is to be taxed as Long Term Capital Gain with Indexation of the cost, the indexation should be made only up to A.Y. 2002-03, since after that the appellant was the owner only for the name sake, as admitted by the appellant itself. 6.5 Further, without prejudice, in case it is held that the said income of the appellant is to be taxed as Long Term Capital Gain with Indexation of the cost up to A.Y. 2010-11, the sale consideration should be assessed on the market value of said land, by invoking the provisions of Sec. 50C of the Act. The appellant h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e records. The ownership of the land was standing in the name of the assessee up to the assessment year 2010-11. There was no means or ways for the Revenue Authorities to note that the assessee has sold the land in the year 2001. It was only when the assessee himself disclosed the sale in the assessment year 2010-11 on execution of the sale deed that the matter came to the knowledge of the Revenue Authorities. The assessee himself has shown the capital gain/loss treating that the transfer has taken place in the assessment year 2010-11. Now the assessee is estopped from his own act and conduct to say that the transfer has taken place in the year 2001 relevant to assessment year 2002-03. Moreover, no one can be allowed to take the benefit of his own wrong. 8. Now the second question arises as to what should be the amount of sale consideration which should be taxed in the hands of the assessee as capital gains. Admittedly, the assessee has received only a sum of Rs. 45,50,000/- as per the agreement dated 29.06.01. It is not the case of the Revenue that the assessee has received any amount over and above the said amount of Rs. 45,50,000/-. Hence, we do not find any merit in the findin ..... 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