TMI Blog2017 (4) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... s are accordingly confirmed. Whether the capital gain cannot be treated in this year? - Held that:- Since Assessee himself has offered the capital gain during the year, by filing the revised return, which was later regularized u/s 148 of the IT Act, there is no merit in Assessee’s contention on that issue. Since A.O noticed that Assessee did sell property, which was reflected by the company in their books of account, the revised return filed itself is the basis for reopening of the assessment. In view of that, the grounds raised by Assessee on these issues are accordingly rejected. - ITA No. 257/Hyd/2015 - - - Dated:- 31-3-2017 - ITA No. 257/Hyd/2015 31-03-2017 Shri Pathuri Srinivas, Hyderabad Versus The Dy Commissioner of Income Tax, Circle 1(1), Hyderabad SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER For The Assessee : Shri S. Rama Rao For The Revenue : Shri K.J Rao ORDER This is an appeal filed by Assessee against the order of CIT(A)-1, Hyderabad dated 02-12-2014. Assessee has raised the following grounds. 2. The learned Commissioner of Income-Tax (Appeals) erred in confirming the action of the Assessing Officer in initiating the proceedings u/s 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter on 09-06-2011, stating that the revised return filed on 15-12-2010 may be treated as return filed in response u/s 148 of the IT Act. In the revised return Assessee admitted the capital gain as under: Sale(in the month 2008) 80,00,000 Purchase cost 62,00,980 Indexed cost 70,91,705 Income from long term capital gain 09,08,295 3. In the course of scrutiny assessment, A.O noticed that Assessee has entered into an agreement of sale with the said M/s Avenir Power Technologies Pvt. Ltd., on 02-04-2007 and vide clause-12, the physical vacant possession of the building was handed over. Accordingly A.O was of the opinion that the capital gain is to be considered as short term capital gain, as the property was purchased on 20-01-2005. In the assessment order he reworked out capital gain by denying the benefit of indexation cost and short term capital gain has been arrived at ₹ 17,99,020/-. 4. Before the Ld. CIT(A) Assessee contested the date of sale stating that most of the consideration was received and finally Assessee handed over the property, in March 2008 and relied on the clause 4 5 which specifically states that vendors shall deliver vacant possession at the time of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total ₹ 80,00,000.00 (h). It is to be emphasized that the property is not registered in favour of M/s. Avenir Power Technologies Pvt. Ltd. even as on date. However, vide Leave and Licence Agreement dated 17.01.2011 M/s. Avenir Power Technologies Pvt. Ltd. had given the premises on rent to M/ s. Harsco India Pvt, Ltd. for monthly licence fee of ₹ 2.00.000/-. In this leave and Licence Agreement M/s Avenir Power Technologies Pvt. Ltd. was shown as lawful owner having clear, absolute unrestricted title and ownership rights to the property. (i) According to the Assessing officer, the date of purchase is 20.01.2005 and date of sale is 02.04.2007. As the period is less than 36 months the gain was taxed as short term capital gains. However, the assessee treated the gain as Long term capital gain for the reasons; (i) That as on 02.04.2007, the appellant did not offer the possession of the property nor the consideration was received fully. (ii) That there was no transfer of property during the previous year, therefore, no capital gain arose during the year. Alternatively, since the entire considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is condition that sale will be completed only at the end of receipt of consideration, the date of agreement should not be considered as date of sale and accordingly Assessee rightly considered the capital gain as long term capital gain. 6. Ld. DR however relied on the orders of the authorities and particularly referred to the fact that the Managing Director of the company and Assessee are one and same, therefore the letter dated 26-03-2008 should not be considered as genuine one. It was further submitted that most of the considerations was received by August 2007, as stated in the order of the CIT(A). 7. In reply Ld. Counsel however submitted that Assessee has not received balance consideration from the company and the transaction was not completed, therefore the sale is to be considered as complete only at the end of the year and the possession was handed over specifically. 8. I have considered the rival contentions and perused the documents placed on record in the form of paper book. The only dispute in this case is date of sale, as that determines the nature of capital gain and consequent interest levy. Admittedly Assessee has entered into an agreement on 02-04-2007, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been placed on record. However, the loan amount obtained by Assessee was being discharged from the account of the company and major payments were paid by way of DDs on 28-08-2007, to both GIC housing as well as ICICI and HSBC. This indicates that the most of the sale consideration was received by the Assessee on 28-08-2007. Assessee also not placed on record why the possession was not handed over on 28-08- 2007 and why the same was stated to be handed over on 26-03-2008, when still, full consideration was not received. Assessee s contentions that the possession was handed over on 26-03-2008 also is not verifiable or acceptable in the absence of any other evidence to prove the same. The letter issued by the Assessee to the company, in which he is a Managing Director, cannot be accepted as such in the absence of any corroborative evidence. As already discussed above, even though clause 4 of the agreement indicates that possession will be handed over at the time of registration, there is no registration so far, but possession was handed over according to Assessee. If clause 6 is to be considered, as another one restricting the possession, then entire consideration, barring small amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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