TMI Blog2017 (8) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... er the details available on record, we find that the entire sale consideration of ₹ 3,42,78,125/- is suffered to tax in the hands of the assessee and Shri. Praveen H. Thakkar. We further noticed that from the impugned transactions there is no loss of revenue due to the Govt. exchequer. The A.O ignored intermediary MOU between the assessee and Shri. Praveen H. Thakkar, merely on the ground that the said MOU is unregistered. We do not agree with the findings of the A.O, for the reason that merely because the MOU is unregistered, no adverse inference can be drawn in view of other documentary evidences supplied by the assessee which are capable of verification. The assessee has filed all evidences to prove the transaction in his hands as well as in the hands Shri. Praveen H. Thakkar. Assessee’s version is also strengthened from the fact that at the time initial purchase of land by the assessee and his brother Shri. Pravin H. Thakkar had advanced loan to the assessee’s brother Shri. Nitin M. Faria. A.O was completely erred in ignoring the evidences filed by the assessee to recompute the short term capital gain by taking into account total sale consideration received from M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,83,930/-. The said property has been sold to one Shri Praveen H. Thakkar, vide memorandum of understanding dated 29.07.2008 for consideration of ₹ 1 crore. The assessee further submitted that he had sold the property to Mr. Praveen H. Thakkar, and computed short term capital gain of ₹ 31,16,070/-, after reducing cost of acquisition and expenses of transfer and the resultant capital gain has been offered by myself and my brother. The assessee further submitted that the said property has been sold to M/s. Ishwar Land Pvt. Ltd., vide sale deed dated 27.08.2008, for a consideration of ₹ 3,42,78,125/- and consideration over and above ₹ 1 crore has been received by Shri. Praveen H. Thakkar, and the resultant profit has been offered to tax by Shri Praveen H. Thakkar. The intermediate transaction between purchase and sale of property with Mr. Praveen H. Thakkar, is entered because the finance for purchase of said property has been arranged by Shri Praveen H. Thakkar, and the property has been registered in our name, because there is some restrictions as per the provisions of land revenue Act, applicable in the State of Maharashtra, as per which neither could the ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed necessary documents evidencing consideration of remaining amount of sale consideration and resultant profit in the hand of Shri. Praveen H. Thakkar. The assessee also filed an affidavit from Shri. Praveen H. Thakkar, stating that he had considered the entry sale consideration and computed short term capital gain. All the evidences filed before the A.O are clearly established the fact that there is a intermediary transaction before sale of land to M/s. Iswar Land Pvt. Ltd., and the A.O ignored all evidences to recompute short term capital gain by considering sale deed executed in favour of M/s. Iswar Land Pvt. Ltd. The assessee also made an alternative submission and claims that, in case where the entire sale consideration recorded in the sale deed with M/s. Iswar land Pvt. Ltd., is required to be adopted for determining short term capital gain, then in such a situation, reduction of amount fall to the share of Shri. Praveen H. Thakkar, would be required to be deducted in working out short term capital gain on the sale of said land. The assessee also made second alternate argument and claims that the said land is agricultural land outside the ambit of the term capital asset as d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in ground no. 1. Aggrieved by the CIT(A) appeal order, the revenue is in appeal before us. 7. The Ld. D.R submitted that the Ld. CIT(A) erred in deleting additions made by the A.O for ₹ 1,31,30,098/-, towards recomputation of short term capital gain on sale of impugned land to M/s. Iswar Land Pvt. Ltd. The D.R further, submitted that the A.O brought out clear facts to the effect that the intermediary transaction by way of unregistered MOU between the assessee and Shri. Praveen H. Thakkar, is not enforceable under law, therefore, the A.O has rightly computed short term capital gain in the hands of the assessee towards sale of land to M/s. Iswar Land Pvt. Ltd., by taking into account the sale consideration of ₹ 3,42,78,125/-. The CIT(A), without appreciating the facts has observed that MOU between the assessee and Shri. Praveen H. Thakkar, is a valid document for transfer of impugned land which entails the assessee for computation of short term capital gain on sale consideration of ₹ 1 crore, ignoring the finding of the A.O which clearly proves that the MOU is not enforceable in law. On the other hand, the A.R for the assessee strongly supported order of the CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered by Shri. Praveen H. Thakkar. The assessee has filed all the details evidencing the above transaction. The assessee also filed an affidavit from Shri. Praveen H. Thakkar. 10. Having heard both the sides and considered material on record, we find that the assessee has entered into an unregistered MOU with Shri. Praveen H. Thakkar, and sold the impugned land for a consideration of ₹ 1 crore. As per Clause no. 12 of the said MOU, the parties agreed that any sale consideration received on subsequent sale of the said property over and above ₹ 1 crore could be retained by Shri. Praveen H. Thakkar. Accordingly, the assessee has computed short term capital gain by taking into account sale consideration of ₹ 1 crore, and after reducing the cost of acquisition and expense of transfer, computed short term capital gain of ₹ 31,16,070/-, and disclosed 50% in his return of income. We further observed that the assessee has filed necessary details and also an affidavit from Shri. Praveen H. Thakkar, which indicates that Shri. Praveen H. Thakkar has considered remaining consideration and offered resultant profit for taxation in his return of income. As per the det ..... X X X X Extracts X X X X X X X X Extracts X X X X
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