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A. Rami Reddy Versus The Income Tax Officer, Ward-2, Hindupur

2017 (9) TMI 575 - ITAT HYDERABAD

Apportionment of sale consideration among the owners on property jointly sold - Capital gain computation - Adoption of value of sale consideration for the purpose of computing the capital gains in respect of property sold jointly - Held that:- There can be several reasons as to why some of the owners had agreed for the lesser amount of consideration depending upon location of physical shape of the land held by them or the proximity to the main road etc. But, in our considered opinion, this fact .....

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t more consideration that what was stated in deed was received, no higher consideration can be adopted for the purpose of capital gains. Further onus always lies on the Revenue to prove the existence of the material from which inference can be drawn that higher consideration was in fact received. In the present case, there was no material to draw interference that higher consideration was received than what was stated in the sale deed. It is not even the case of AO that the provisions of Section .....

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by assessee is directed against the order of the learned Commissioner of Income Tax (Appeals)-Kurnool, dated 30-01-2015 for the AY. 2006-07. The appellant raised the following Grounds of Appeal: 1. The order of the CIT (A) dated 30-01-2015 is perverse, illegal and contrary to the facts and circumstances of the case and the law on the subject. 2. There should be an explicit direction in the order u/s 263 to the ITO to make a fresh assessment. The important words in Section 263 are "Cancelli .....

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misconceived drawing inspiration from the words in the order u/s 263 "as to the taxability of the transactions" and equated them to a direction to the ITO to make a fresh assessment. 5. The capital gain arising from the transfer of capital asset is to be worked out in accordance with the provisions of Section 48 of the Income Tax Act, 1961. Therefore for the purpose of computation of capital gains, the amount of ₹ 8,33,000/- only is to be adopted. 6. The CIT (A) has turned blind .....

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ds taken by the CIT (A) from the order of the ITAT dated 23-05- 2014 and quoted in the page 6 of her order are not RatioDecidendi. They represent the loud thinking of the ITAT. They are only casual observations which are not binding on the Income Tax authorities. 8. ITAT has not given any order as to the quantum of consideration received by the assessee for computing the assessee's liability for the capital gains. The C1T(A) has not at all understood the order of the ITAT. 9. For these and o .....

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30/- and agricultural income at ₹ 42,500/-. Obviously, the return was filed beyond the prescribed time. Subsequently, a notice u/s. 142 of the Income Tax Act [Act] was issued. Assessment was completed u/s. 143(3) r.w.s. 147 on 31-03-2009 accepting returned income of ₹ 2,10,330/- and agricultural income of ₹ 42,500/-. Subsequently, the CIT-Tirupati exercising the power of revision vested with him u/s. 263 of the Act had set aside the assessment vide order dt. 27-03-2012 on the g .....

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angalore. They have jointly sold this property for a total sale consideration of ₹ 1.50 crores vide Sale Deed No.6219/2008-2009 registered on 18.07.2005 at Bangalore. The sale proceeds are to be shared by the three owners of the land as per their share of the property in the ratio of 12/34 : 15/34 : 7/34 respectively. Thus as per this ratio the share of the assessee i.e. 12/34 out of ₹ 1.50 crores comes to ₹ 66,17,647/-. As against this, the assessee has offered a receipt of &# .....

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7; 8,33,000/-. The AO has failed to examine how this ₹ 44,61,117/cannot be taxed in the hands of the assessee for assessee being owner of that portion of the land. (ii) On the reverse side of the Page '1' of the Sale Deed, it is noticed that the vendor has paid an amount of ₹ 13,56,000/- towards stamp duty and registration on a sale consideration of ₹ 1.50 crores. The SRO value of the sale property is not clearly seen from the Sale Deed to be examined u/s.50C of the Act .....

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interest income from Canara Bank, the assessee has debited an amount of ₹ 16,500/- towards other expenses restricted to ₹ 15,192/- thereby and arrived at a taxable interest of Rs. Nil. It is not clear as to how ₹ 16,500/- expenditure is to be incurred for realizing this bank interest. This is clearly a lapse on the part of the Assessing Officer resulting an erroneous and prejudicial orders. 5. The assessee has purchased 10 Guntas of land at Kodigehalli, Yelahanka Hobli, Bangalo .....

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and with drawal of ₹ 20 lakhs in favour of one Mr. Ashok were not verified . 4. The explanation offered by the assessee during the course of proceedings u/s. 263 of the Act was not accepted by the learned Commissioner and therefore, the assessment had been set aside with a direction to make enquiries as to the taxability of the above transaction. Pursuant to this order, AO passed assessment order u/s. 143(3) of the Act r.w.s. 263 of the Act dt. 28-03-2013 at a total income of ₹ 22,80 .....

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land sold by them was 64 guntas. (A.Rami Reddy 12 guntas. Smt.G.Venkta Subbamma 45 guntas and I.Venu Gopal Reddy 7 guntas.) While computing the short term Capital gains the assessee stated that he received a sum of ₹ 8,33,000/- only towards his share of sale consideration. According to the sale document the assessee should have received a sum of ₹ 28,12,500/- towards his share. (1,50,00,000X12/64) When it is put to the assessee why he admitted lesser consideration, he stated that, ac .....

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n guntas whereas the extent of land sold by Sri.A.Rami Reddy was 12 guntas and Smt.Venkata Subbamma was 45 guntas which is more than Sri.I.Venu Gopal Reddy. Therefore it cannot be believed that major amount was paid to Sri I.Venu Gopal Reddy. Hence proportionate sale consideration according to the share of Sri.A.Rami Reddy was taken as actual consideration received by A.Rami Reddy. The market value of the property sold by Sri.A.Rami Reddy according to Sub-Registrar's office records are ͅ .....

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s. Therefore 50% of the expenditure claimed is disallowed which works out to ₹ 54,475/- . 4.1. In short, AO adopted proportionate sale consideration of ₹ 1,50,00,000/- received on account of sale of property situated at Hebbal sold vide sale deed No. 6219/2008-2009 in the proportion of extent of land held and sold by him without accepting the contention of the appellant that pursuant to the old agreement between appellant and Smt. Ghattamaneni Venkata Subbamma and Shri I. Venu Gopal .....

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sessment had stated that there was oral agreement amongst all the three sellers to make payment of ₹ 1,33,34,000/- to Sri I.Venu Gopal Reddy seems to be illogical as there is no convincing explanation submitted by the appellant as to why such disproportionately high amount has to be paid to Sri I.Venu Gopal Reddy, especially when Sri I.Venu Gopal Reddy owns the least share of land of 7 guntas. Further, the Hon'ble ITAT while dealing with appeals against 263 order held as under: "T .....

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of these three vendors. The value of consideration is attributable to each of the property is to be payable to the corresponding vendor. It is noted by the CIT that the basis of consideration of each property is not in accordance with the share of their property. Being so, there is error in offering capital gain by the assessee in respect of his share in the property. " Therefore, all the Grounds of Appeal raised by the assessee on the issue of capital gain are dismissed as there is no meri .....

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easons for un-equal apportionment of the consideration received in respect of the property which is jointly sold. The fact that the MoU amongst the co-owners not produced had no relevance since the terms of MoU are already incorporated in the registered Sale Deed. He placed reliance on the decision of the CIT Vs. Shivakami Co. (P) Ltd., [159 ITR 71] (SC) in support of the proposition that unless there is evidence that more than the consideration stated in the executed deed was received, no highe .....

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ons and perused the material on record. In the present case, the dispute is only with regard to adoption of value of sale consideration for the purpose of computing the capital gains in respect of property sold jointly along with Smt. Ghattamaneni Venkata Subbamma and Shri I. Venu Gopal Reddy situated at Hebbal for a total consideration of ₹ 1,50,00,000/-. There is no dispute as regards the total consideration received. The dispute is only with regard to apportionment of the sale considera .....

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