TMI Blog2017 (2) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... rm capital gain. Addition of Part of sale consideration alleged to have been directly paid by purchaser - Held that:- A perusal of the orders of the Authorities below reveal that the Authorities below without verifying the fact whether the amount of ₹ 23 Lacs have actually been paid by the purchaser to the Mr. Mansoor Abdul Gani Aaga and Smt. Shagufta M. Aaga, has out rightly rejected the contentions of assessee. We deem it appropriate to remit the issue back to the file of Assessing Officer for the limited purpose to ascertain whether the amount of ₹ 8 Lacs and ₹ 15 Lacs have been actually received by Mr. Mansoor Abdul Gani Aaga and Smt. Shagufta M. Aaga, as has been mentioned in the Sale Deed. If the said amount has been received by the aforesaid persons, the same is to be allowed as expenditure u/s 48 of the Act in the hands of assessee from total sales consideration. Accordingly, ground No. 2 raised in the appeal by the assessee is allowed for statistical purposes. - ITA No. 1818/PUN/2014 - - - Dated:- 30-1-2017 - Shri R. K. Panda, AM And Shri Vikas Awasthy, JM Assessee by : Shri Vipin Gujarathi Revenue by : Shri P.L Kureel ORDER Per V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals) erred in confirming the addition of ₹ 23,00,000/- to the consideration of the property under consideration made learned Assessing Officer without appreciating the facts that the consideration of ₹ 23,00,000/- was directly paid by the purchaser to Mr. Mansoor Aaga Mrs. Shagufta Aaga out of the total consideration as per the Sale Deed dated 08.12.2009. The honorable Commissioner of Income Tax ( Appeals) failed to appreciate the fact that appellant was neither entitle to nor has received the said consideration and hence it is not taxable in his hands. The appellant hereby prays that the sale consideration may please be reduce by ₹ 23,00,000/-. 3) The appellant hereby reserves the right to add, alter, amend or delete any grounds of appeal. 3. Shri Vipin Gujarathi appearing on behalf of the assessee submitted that the assessee had inherited property comprising in Survey Number 11/9+14A/1B measuring 82R at village Kondhwa Khurad falling in the municipal limits of Pune. During the period relevant to assessment year under appeal, assessee sold the property/land situated at Kondhwa Khurd, Pune for total consideration of ₹ 3,07,71,470/- and declared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee and the valuation made by the DVO is less than 15 per cent. The ld. A.R Prayed for adopting the value of property at ₹ 3,07,71,470/- i.e as per Sale Deed for the purpose of computing long term capital gain. 4. In respect of ground No.2, the ld. A.R submitted that the Authorities below have erred in coming to the conclusion that the part of sale consideration amounting to ₹ 23 Lacs was paid by the purchaser of land to the assessee. In fact, from the total consideration, part of consideration i.e ₹ 23 Lacs was directly paid by purchaser to Mr. Mansoor Aaga Mrs. Shagufta Aaga. Therefore, no capital gain has arisen to assessee to the extent of sum, directly paid to the aforesaid two persons. The ld. A.R pointed that the land was under litigation. Mr. Mansoor Aaga and Mrs. Shagufta Aaga had acquired part of land by way of sale agreement executed by Ramesh Gopal Jadhav on the basis of forged power of attorney. The assessee in order to settle the protected litigation compromised with Mr. Mansoor Aaga Mrs. Shagufta M. Aaga. The ld. A.R placed on record a copy of compromise decree of Civil Court, Pune drawn on the basis of compromise between the afo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , DVO furnished his report; the Assessing Officer had passed the assessment order. The DVO s report was placed before the Commissioner of Income Tax (Appeals). The DVO determined the value of property at ₹ 3,14,86,000/-. The Commissioner of Income Tax (Appeals) adopted the fair market value of property as determined by the DVO. The contention of the assessee is that since the difference between actual sale consideration and value determined by the DVO is marginal, actual value of sale consideration should be adopted for computing long term capital gain. 8. We find merit in the submission of Ld. A.R. The difference between the fair market value determined by the DVO and actual sale consideration is ₹ 7,14,530/-i.e slightly more than 2 per cent of the sale consideration. The co-ordinate Bench of the Tribunal in the case of Rahul Construction V/s. DCIT (supra) has held that where difference between the sale consideration declared by the assessee and fair market value as determined by the DVO u/s 50C is less than 10 percent, the Assessing Officer was not justified in substituting the value determined for sale consideration disclosed by the assessee. The Co-ordinate Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0,55,000 as Aagainst the actual sale consideration of ₹ 19,00,000/- disclosed by the assessee. We, therefore, set aside the order of the CIT(A) and direct the A.O. to take ₹ 19,00,000/- only as the sale consideration of the property. The grounds raised by the assessee are accordingly allowed. 9. The ld. A.R of the assessee has further placed reliance on the decision of Hon ble Patna High Court in the case of Bimla Singh V/s. CIT (supra) wherein Hon ble High Court has held that difference between the cost of construction shown by the assessee and as determined by the Assessing Officer being less than 15 per cent, the same is to be ignored for the purposes of addition. The Hon ble Delhi High Court in the case of CIT V/s. Sadna Gupta 352 ITA 595 held that unless and until there was some other evidence to indicate that extra consideration had flowed in transaction for purchase of property, report of DVO could not form basis of any addition on part of revenue. In absence of any evidence no reliance could be placed on the report of DVO for making addition. 10. Thus, in view of the fact that the difference between sale consideration and the market value determined by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he seller No. 1 and the seller No.2 and 3 have arrived at a compromise on the prolonged litigation and accordingly on account of investment in the illegal transaction, court case expenses and compensation, the seller No.1 had and has agreed to pay an amount of ₹ 8,00,000/-( Rupees eight lakhs only) and ₹ 15,00,000/- ( Rupees fifteen lacs only) to the seller No. 2 and 3 respectively and accordingly in the same Civil Suit the sellers herein have filed a compromise purshis on receipt of the total amount as stated in schedule of payment. Accordingly the seller No. 2 and 3 are signing the present sale deed along with the seller No. 1 in favour of the purchaser. 12. A further perusal of Clause-12 of the Sale Deed which gives the details of the sale consideration and the manner of payment of consideration reveal that ₹ 8 Lacs has been paid to seller No.2 i.e Mr. Mansoor Abdul Gani Aaga vide pay order No. 016361 dated 03.12.2009 drawn on Vishweshwar Sahakari Bank Ltd, Branch Pune and ₹ 15 Lacs have been paid to seller No. 3, Smt. Shagufta M. Aaga vide pay order No. 016359 dated 03.12.2009 drawn on Vishweshwar Sahakari Bank Ltd, Branch Pune on the instruction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. Similar view has been taken by the Hon ble Jurisdictional High Court in the case of CIT V/s. Miss Piroja C. Patel reported as 242 ITR 582 and in the case of CIT V/s. Abrar Alvi (supra). 15. A perusal of the orders of the Authorities below reveal that the Authorities below without verifying the fact whether the amount of ₹ 23 Lacs have actually been paid by the purchaser to the Mr. Mansoor Abdul Gani Aaga and Smt. Shagufta M. Aaga, has out rightly rejected the contentions of assessee. We deem it appropriate to remit the issue back to the file of Assessing Officer for the limited purpose to ascertain whether the amount of ₹ 8 Lacs and ₹ 15 Lacs have been actually received by Mr. Mansoor Abdul Gani Aaga and Smt. Shagufta M. Aaga, as has been mentioned in the Sale Deed. If the said amount has been received by the aforesaid persons, the same is to be allowed as expenditure u/s 48 of the Act in the hands of assessee from total sales consideration. Accordingly, ground No. 2 raised in the appeal by the assessee is allowed for statistical purposes. 16. In the result, appeal of the assessee is partly allowed in the aforesaid terms. Order pronounced on Mon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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