TMI Blog2023 (5) TMI 467X X X X Extracts X X X X X X X X Extracts X X X X ..... e as sale consideration. The amount of advance was deposited in the joint bank account in the name of assessee, her son and widow wife of late. The amount as per submissions of the assessee and this quantum has not been disputed by the AO and the AO has also took note of said amount in first para of the assessment order. AO has grossly erred in taxing the advance amount under the head capital gain in peculiar circumstances when no transfer of any asset was made by the assessee and her co-owner - In the present case the assessee received advance amount on 06.09.2010 under agreement to sale, which was cancelled on 16.03.2011 and amount of advance was forfeited therefore, provision of section 51 of the Act are applicable and the amount prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsons agreed to sell 107 k 4 m to M/S J.D universal Realtors and developers pvt ltd against consideration of Rupees Ninety-Eight lakhs per acre on 06.09.2010 and took in advance sum of Rs One crore Ten lakhs Through cheque to be divided as per their respective share as mentioned in the agreement to sell dated 06.09.2010. please see agreement to sell Paper Book Page 1 to 5 Since purchaser party was unable get conveyance deed Registration both the parties mutually agreed to cancel their bargain. So, on 16.03. 2011 bargain was cancelled and cancellation of the agreement to sell was specifically recorded on the back of the agreement to sell dated 06.09.2010. Please see back side of paper book page 1 of the agreement to sell. Thus, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no tax liability. Secondly entire three persons advance money attributed to the Assessee. The consequent liability of advance money will arise in future when there arises any need the land under reference is transferred. The Provisions of Sec. 51 (applicable if advance money received and forfeited before 31.3.2014) of the Income-tax Act deal with advance money received for transfer of a capital asset. As per the provisions where any capital asset was on any previous occasion the subject of negotiations for its transfer, any advance or other money received and retained by the assessee in respect of such negotiations shall be deducted from the cost of acquisition of the asset or the WDV or Fair Market Value as the case may be. As such the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) also erred in conferring the same. 4. The ld counsel submitted that as per judgment of the Hon ble jurisdictional High Court in the case of CIT Vs. Reliance International Corporation (P) Ltd 211 ITR 666 (Delhi) and order of ITAT Mumbai Bench in the case of Futura Ployster Ltd Vs. ITO in ITA No. 1459- 1460/Mum/2018 dated 16.07.2020 where the assessee has challenged addition of long term capital gain arising from sale of land on ground that agreement to sale of said land was cancelled subsequently by executing a cancellation deed, in view of the fact that possession of land was never handed over by assessee to third party, on said count alone, provisions of section 2(47)(v) read with section 53A of Transfer of Property Act, 1882, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was deposited in the joint bank account in the name of assessee, her son Raj Kumar and widow Smt. Manju wife of late Vijay Kumar in Axis Bank account No. XXXXX6777. The amount was Rs. 20,00,274/- as per submissions of the assessee and this quantum has not been disputed by the AO and the AO has also took note of said amount in first para of the assessment order. 7. In my considered opinion the AO has grossly erred in taxing the advance amount under the head capital gain in peculiar circumstances when no transfer of any asset was made by the assessee and her co-owners. Thus, I am in agreement with the contention of the ld counsel that no tax liability under the head short term/ long term capital gain arises in the hands of the assessee in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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