TMI Blog2020 (5) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... ration. The Bench at the time of hearing raised a specific query to the Ld. A.R. to prove the fact that those lands that were registered on 09.12.2010 by the Power of attorney holder are included in 3.935 acres of land for which purpose the Bench directed the Ld. A.R. to match Survey Numbers thereon. Details requires factual verification from the side of the Ld. A.O. and hence in the interest of justice and fair play, we deem it fit and appropriate to remit this issue to the file of Ld. A.O for adjudication in the light of aforesaid evidences and in the light of aforesaid observations and in accordance with law. The Revenue should ensure that there is no double addition made towards capital gains. The assessee should adduce necessary evidences in support of his various contentions. Accordingly grounds raised by the Revenue are allowed for statistical purposes. - I.T.A.No. 2621/Chny/2019 - - - Dated:- 28-2-2020 - Shri Mahavir Singh, Vice President And Shri M. Balaganesh, Accountant Member For the Appellant : Ms. Vijayaprabha, JCIT, D.R For the Respondent : Mr. R. Pavan Kumar, Advocate ORDER PER M. BALAGANESH, ACCOUNTANT MEMBER: This appeal of the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e regarded as agricultural land for the purposes of section 2(14) of the Act have not been applied by the Ld. CIT(A). 3. The only effective issue to be decided in this appeal is whether capital gains can be assessed on transfer of lands in the hands of the assessee during the year under consideration in the facts and circumstances of the case. 4. The brief facts of the issue are that the Ld. A.O. reopened the assessment for the assessment year 2011-12 on ground that the assessee had sold two immovable properties for total consideration of _.1,46,20,000/- and _.68,01,600/- during the year under consideration. Since capital gains were not reported by the assessee and no return of income was filed by the assessee, notice under Section.148 of the Act was issued to the assessee. The reason for reopening of the assessment was duly communicated to the assessee by the A.O. The assessee during the re-assessment proceedings submitted that he had not sold any property during Financial Year 2010-11 relevant to assessment year 2011-12; that transactions referred in the reasons recorded represent the registration of sale deed made by Power of Attorney of the assessee for certain agricult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee along with minor sons had executed a cancellation agreement dated 21.03.2005 wherein the initial agreement dated 31.12.2003 was nullified and cancelled and assessee returned a sum of _.6/- crores together with the liquidation damages of _.10 lakhs to M/s.Jaya Educational Trust. 6. The A.O. also observed that the original sale agreement dated 21.03.2005 was executed for 3.935 acres of land at Uthandi village, whereas the sale deed executed on 09.12.2010 for the assessment year 2011-12 was only for 172 cents of vacant land for total consideration of _.1,46,20,000/- and 26 cents of vacant land for consideration of _.68,01,600/-. The Ld. A.O. also observed that sale deeds of lands executed on 09.12.2010 are not agricultural lands as per the official web site of the Registration Department, Tamilnadu, as the said lands had been described and classified as House Site and thereby negated the claim of exemption by the assessee. Accordingly, the Ld. A.O. sought to bring to tax the long term capital gains arising on transfer of subject mentioned land and assessed accordingly. On appeal, learned CIT(A) accepted the contentions of the assessee and accordingly granted relief to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.3.3. Before the CIT(A), the appellant s AR has strongly contended against the AO s addition. The AR s contentions are briefly mentioned below: In view of supporting documents, transfer took place on 21-3-2005 when as per Clause -3 of the sale agreement, the full consideration of ₹ 6 Crores was received by the joint owners including the appellant and the possession of the property was handed over to the buyer on the same date. Once possession is handed over and full consideration is received, transfer as per Section 2(47) r.w.Section 53A of the Transfer of Property Act was concluded, pending registration of the sale at instance of the buyer. Subsequently, on 17-10-2007, the buyer obtained POA(Power of Attorney) the appellant on his attaining majority. The land was in fact, an agricultural land as evidenced from the certificate of Village Administrative Officer,, purchase and sale documents. When the transfer of land was scrutinized by the then AO in AY 2005-06 in the hands of the appellant s father, Dr.R.Gunaseelan, a detailed written submission dated 12- 11-2007 was made before the AQ on 19-11- 2007. Based on the detailed submission, the AO of Dr.R.Gunaseelan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty is allowed to be taken or retained - Possession need not be sole and exclusive possession - Possession enabling exercise of General control of property to make use of it enough - Agricultural land - Development Agreement - Developer having general control and custody of land - Sufficient - Irrevocable Power of Attorney in favour ofDeveloper is the Transaction for purposes of Date of Transfer for Capital Gains Tax - Income Tax Act, 1961, ss 2(47)(v), 45 - CBDT Circular No. 495 Dated September 22,1987 . (B) The Hon ble ITAT, Chennai in the case of R.Kalanidhi Vs. ITO [2009] 314 ITR (AT) 266 (Chennai) has held as under: Capital Gains - Exemption - Transfer - Assessee within three years of purchase entering into Agreement to develop property executing power of Attorney in favour of Developer and handing over of possession of half share in property - Total consideration agreed and vendee allowed to enjoy property for purpose it was taken over - Transfer complete - Exemption liable to be withdrawn - Income Tax Act, 1961, as 54, 2(47)(v) - Transfer of Property Act, 1882, s. 53A . 4.3.6. I have considered both the points of view. I have perused the appellant s cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supporting documents submitted by the AR, I am convinced that the transfer of agricultural land was relevant to AY 2005-06 and duly considered in AY 2005-06. Therefore, the AO s addition of LTCG by treating the land as capital asset in this AY 2011-12 is not sustainable. Therefore, the AO s addition of LTCG of ₹ 2.49 Crores is deleted and the appellant s grounds are allowed. ) Aggrieved, the Revenue is in appeal before us. 7. We have heard the rival submissions and perused the material available on record. We find that the only contention of the Revenue is that the sale agreement entered into by the assessee with M/s.Ragas Educational Society on 21.03.2005 for sale of 3.935 acres of lands at Uthandi village was incomplete as the said agreement contemplated completion of registration within 12 months from 21.03.2005, which admittedly did not happen in the instant case. The Ld. D.R. vehemently argued before us that the subject mentioned lands that were transferred by way of registration of sale documents on 09.12.2010 were in respect of 172 and 26 cents of lands which are not included in 3.935 acres of land for which agreement of sale was entered into on 21.03.2005. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Society are also agricultural lands. c) That the subject mentioned lands for which the sale deed is executed on 09.12.2010 are included in 3.935 acres of lands which are part of agreement of sale dated 21.03.2005. d) That in any case, transfer is already completed in assessment year 2005-06 pursuant to handing over of possession of lands; execution of power of attorney and receipt of consideration and hence, no capital gains on sale of very same lands could be assessed in assessment year 2011-12. Accordingly he pleaded that no capital gains at all could be arisen in the hands of assessee in respect of the subject mentioned lands during the year under consideration. The Bench at the time of hearing raised a specific query to the Ld. A.R. to prove the fact that those lands that were registered on 09.12.2010 by the Power of attorney holder are included in 3.935 acres of land for which purpose the Bench directed the Ld. A.R. to match Survey Numbers thereon. In response thereto, Ld. A.R. placed following table before us. Sale deed Document No. Item in the document Survey No. in the document Area in cents ..... X X X X Extracts X X X X X X X X Extracts X X X X
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