TMI Blog2022 (5) TMI 1422X X X X Extracts X X X X X X X X Extracts X X X X ..... ention of the learned Counsel for the assessee that there is no basis whatsoever to assess their share of capital gain in the hands of the assessee even on protective basis. DR has not been able to rebut or controvert this position. We, therefore, find no infirmity in the impugned order of the learned CIT(A) deleting the addition made by the AO in the hands of the assessee on protective basis on account of share of other co-owners in the capital gain as the same was clearly chargeable to tax in their respective hands in individual capacity. The same is accordingly upheld dismissing the appeal of the Revenue. Main contention raised by assessee is that no consideration whatsoever was received by the assessee on transfer of her share in the immovable property in question - There is also nothing on record to show that the property in question was transferred by Shri Ganpatbhai K. Patel to Shri Hamad Ali on 15.07.2000 within the definition of Section 2(47) of the Act. The said property is actually transferred within the meaning of Section 2(47) of the Act only on 29.07.2011 when the sale deed was executed and registered; and, as clearly mentioned in the sale deed, the transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned CIT(A) in the case of Smt. Arunaben K. Patel, other co-owner of the property. Appeal of the assessee is partly allowed. - ITA No. 2968/Ahd/2017, ITA No. 157/Ahd/2018 - - - Dated:- 11-5-2022 - SHRI P.M. JAGTAP, VICE-PRESIDENT AND SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER Assessee by : Shri A.C. Shah, AR Shri Bhadresh Gandhakwala, AR Revenue by : Shri R.R. Makwana, Sr. DR O R D E R PER P.M. JAGTAP, VICE-PRESIDENT : These two appeals, one filed by the assessee being ITA No.2968/Ahd/2017 and other filed by the Revenue being ITA No.157/Ahd/2018, are cross appeals which are directed against the order of learned Commissioner of Income-Tax (Appeals)-7, Ahmedabad ( CIT(A) in short) dated 23.10.2017 passed for Assessment Year 2012-13. 2. The relevant facts of the case giving rise to these appeals are that the assessee is an individual who filed her return of income for the year under consideration on 01.02.2013 declaring a total income of Rs.3,80,100/-. The said return was initially processed by the Assessing Officer under Section 143(1) of the Income-tax Act, 1961 ( the Act in short). The assessment, however, was subsequently reopened by hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bhai Kevaldas Patel had received the sale Consideration of Rs.54,26,000/-. Further, the premium paid for the conversion of the land of Rs.2,28,24,000/- is to be deducted from the sale consideration. Further, the amount paid to Hamadbhai Alibhai of Rs.2,29,00,000/- should be taxed in the cash of Hamadbhai Alibhai. 6. It is submitted by the assessee that Smt. Ramilaben G. Patel was not owner of the property and also she had not received any consideration in the sale of property. Hence, no capital gain is chargeable in the hand of assessee Smt. Ramilaben G. Patel. Therefore, the proceeding initiated u/s.147 should be dropped. 3. After taking into consideration the submission made by the assessee as well as the material available on record, the Assessing Officer arrived at the following conclusions:- 1. So far as premium paid to government of Rs.2,28,24,000/- for the conversion of land in to juni sharat is concern, it is stated that the said amount is required to deducted for the sale consideration. 2. In respect of sale consideration as per agreement for sale made on December, 2000 paid to Shri Ganpatbhai K. Patel, it is stated that the copy of agreement for sale has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmy person and not real purchaser. This can be presumed because no evidences have been produced for the agreement of sale executed between Shri Ganpatbhai Patel and Hamadbhai Alibhai. The evidence for payment of cash of Rs.54,26,000/- as per agreement for sale have also not proved. Further, the payment of Rs.2,29,00,000/- paid as per sale deed also not been proved as per detailed discussion made (supra). In view of the above facts, it is held that Hamadbhai Alibhai is not real purchaser and hence, no deduction can be given from the purchase consideration in respect of payment made to Hamadbhai Alibhai. 4. On the basis of above conclusions, total Long Term Capital Gain arising from the sale of immovable property by the assessee and other coowners was worked out by the Assessing Officer at Rs.3,36,92,800/- after deducting premium paid to Government amounting to Rs.2,28,24,000/- and Indexed Cost of Acquisition amounting to Rs.35,32,500/- from the sale price of the property at Rs.6,00,49,300/- as adopted in accordance with the provisions of Section 50C of the Act. Accordingly, 1/3rd share of the assessee in the said capital gain at Rs.1,12,30,933/- was assessed by the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade at all since none of the legal heirs has received any consideration. They are only signing party on behalf of father Shri Gunpatbhai who passed away in 2010. Therefore, the entire addition both on substantive basis and on protective basis is not as per law and is not proper. Your honour is prayed to delete the addition made and allow the appeal. 5.2 I have carefully considered the assessment order, facts of the case and the submissions made by the appellant. It is seen from the same that the appellant is one of the four heirs of Ganpatbhai K. Patel, who died intestate and therefore in my view she can only be taxed in respect of her share in the property which is 25%, The appellant cannot he taxed for the shares of her brothers and sister. It is seen from the material available on record that the sister of the appellant i.e. Arunaben M. Patel has been charged with capital gain tax. However, the AO is directed to send the requisite information in respect of the appellant s brothers to the concerned AO. The protective assessment of Rs.2,21,61,868/- made in the appellant s case is deleted. This ground of appeal is partly allowed. The learned CIT(A), however, confirmed the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms conditions of banakhat dated 15.07.2000 in the sale deed dated 29.07.2011, and hence it is concluded that the transaction was completed in A.Y. 2012-13, the year in which effective handing over of the impugned asset on sale took place. 4.2.3. The decision to tax sale proceeds of transaction in the hands of legal heirs in the A.Y.2012-13 is also arrived at from the fact that names of legal heirs including the appellant were incorporated in 7/12 land record in A.Y.2012-13 just before the final sale deed was executed on 29.07.2011. The land continued to be in the name of Ganpatbhai K. Patel (deceased) in the land records till A.Y.2012-13. Therefore, the appellant can t avoid the tax liability on this transaction in A.Y.2012-13. Therefore, the AO's stand in this respect to tax the receipt in A.Y.2012-13 is hereby upheld. 4.2.4 Having decided that the proceeds are taxable in the hands of legal heirs, the question now arises as to what portion of the proceeds will be taxed in each. The signature portion of sale deed dated 29.07.2011 is reproduced as under:- Declared today on 29 of the Month of July, 2011 in Ahmedabad. Sd/- (1) (Naginbhai Ganpatbhai Patel himself ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is bad in law inasmuch as there is no escapement of income. 2. The learned CIT(A) has erred in confirming the addition of Long Term Capital Gain (LTCG) of Rs.1,12,30,933/- on substantive basis inasmuch as the assessee has not received any consideration whatsoever and therefore the question of making addition even on substantive basis does not arise. 3. The appellant says and submits that the learned CIT(A) has completely misappreciated the facts and has not followed the CIT(A) order in case of Arunaben K. Patel who is the sister of the assessee on identical facts without given any reasons whatsoever. Grounds raised in Revenue s appeal 1. The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.2,24,61,868/- made on protective basis without appreciating the fact that assessment order have not yet been finalized in the case of co-owners in respect of their share of long term capital gain where the additions were made on substantive basis. 2. On the facts and circumstances of the case, the Ld. Commissioner of Income-tax (A) ought to have upheld the order of the Assessing Officer in respect of above issues. 7. We have heard the arguments of both t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration whatsoever was received by the assessee on transfer of her share in the immovable property in question. He has contended that Shri Ganpatbhai K. Patel, father of the assessee, was the original owner of the property and he had already entered into a sale transaction through banakhat dated 15.07.2000 with one Shri Hamad Ali before his death on 19.10.2010. He submitted that Shri HamadAli further agreed to sell the property to Shri Gopal G. Sutaria / Gopesh G. Sutaria; and, the assessee and other co-owners being legal heir of Shri Ganpatbhai K. Patel executed the sale deed on behalf of their late father merely to complete the transaction. He has contended that the assessee thus did not receive any consideration on execution of sale deed dated 28.07.2011 and she therefore cannot be held liable for any tax on capital gain arising from the said sale. We are unable to accept this contention of the learned Counsel for the assessee. It is observed that no capital gain was offered by Shri Ganpatbhai K. Patel on the sale transaction claimed to be entered through banakhat in the year 2000. As noted by the learned CIT(A) in her impugned order, there was no mention relating to any term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceiving the consideration. 1 3,26,000 Received in cash by Father of party of Second Part, paid by party of the Third part at the time of Banakhat 2 50,00,000 Received in cash by Father of party of Second Part, paid by party of the Third part at the time of Banakhat 3 1,00,000 Received in cash at the time of Agreement by party of the Third part, paid by party of the First part 4 2,28,24,000 Paid by Ch. No.733482 of SBI dated 06.04.2011 as premium to State Government by part of First part 5 1,14,50,000 Paid by P.O. No.999356 of State Bank of India dated 28.07.2011 to party of Third part, by party of the First part 6 1,14,50,000 Paid by P.O. No.999358 of State Bank of India dated 28.07.2011 to party of Third part, by party of the First part Total 5,11,50,000 The legal heirs have received the sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is, she completely overlooked quantification of capital gain as made by her counterpart in the case of Smt. Arunaben K. Patel. After going through the relevant observations/findings recorded by the learned CIT(A) in the case of Smt. Arunaben K. Patel in paragraph Nos. 5.2 and 5.3 of the appellate order dated 20.07.2016, we find that the computation of Long Term Capital Gain arising from the transfer of property by the assessee and other co-owners has been done correctly by him after taking into consideration all the relevant aspects including the valuation adopted under Section 50C of the Act, break-up of consideration of the property as paid to Shri Hamad Ali as the confirming party etc.. We, therefore, modify the impugned order of the learned CIT(A) on this issue and direct the Assessing Officer to recompute the capital gain arising from the transfer of her share of property as assessable in the hands of the assessee as computed by the learned CIT(A) in the case of Smt. Arunaben K. Patel, other co-owner of the property. 11. In the result, the appeal of the Revenue is dismissed, while the appeal of the assessee is partly allowed. Order pronounced in the open Court on 11th Ma ..... 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