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TMI Blog2025 (1) TMI 1343X X X X Extracts X X X X X X X X Extracts X X X X ..... rm namely M/s. Sumangal Reality Creators. The return of income for AY 2012-13 was filed on 29.02.2012 declaring total income of Rs. 6,09,610/-. Subsequently, the case was reopened u/s. 147 of the Act on the basis of information received by the AO that the assessee had not disclosed capital gain to the extent of Rs. 3,89,25,000/-. It transpired that a land was purchased by the assessee along with Smt. Hemlataben N Parmar for a consideration of Rs. 1,45,75,000/- from Shri Rajendra D Patanwadia and others which was registered on 07.12.2011. Later on, the assessee and other co-owner Smt. Hemlataben N Parmar had given the rights of development of the said land to M/s. Sumangal Reality Creators, the partnership firm, vide notarized Banakhat dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee had filed an appeal before the First Appellate Authority, which was decided by the Ld. CIT(A), vide the impugned order and the appeal of the assessee was allowed. 4. Now, the Revenue, aggrieved with the order of the Ld. CIT(A), has filed the present appeal before us. The following grounds have been taken in this appeal: 1. "Whether the Ld. CIT(A) erred on facts and circumstances of the case and in law in deleting the Short Term Capital Gain computed at Rs. 3,16,37,500/- without appreciating the fact that the assessee has purchased the land-in-question in her personal capacity and also has transferred rights to develop in her personal capacity, therefore liable to Short Term Capital Gain? 2. Whether the Ld. CIT(A) erred on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hts in favour of partnership firm the other co-owner Smt. Hemlataben N Parmar was paid Rs. 50,00,000/- and also allocated four flats in the project which was worth Rs. 93,40,000/-; whereas no payment was received by the assessee. According to the Ld. CIT-DR when the assessee had acquired the land in her individual capacity, she must be compensated for relinquishment of her rights in the land in favour of the partnership firm for development of the project thereon. Therefore, the balance sale consideration of Rs. 3,89,25,000/- was rightly considered by the AO as belonging to the assessee. The Ld. CITDR submitted that if the entire payment for purchase of land was made by the partnership firm there was no necessity for paying compensation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat since the land was purchased in the name of two ladies, the development agreement had to be made with them in order to develop of project by partnership firm. Accordingly, the development agreement dated 23.12.2011 was entered into and other co-owner Smt. Hemlataben N Parmar was compensated for initial payment made by her husband to the land owner. As regards the assessee, there was no question of any compensation to her for the reason that the entire payment for purchase of land was made by the partnership firm and the assessee was only a name- lender. 7. As regarding the applicability of section 50C of the Act, the Ld. AR submitted that there was no transfer of land in the present case and the assessee had only assigned the developme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , is reproduced below: 5. Statement of land-owner Shri Rajendra D.Patanwadia was recorded on 16.2.2016. He has stated in his statement that he had orally sold this land to Shri Narendra Parmar, husband of Smt. Hemlataben Parmar for consideration of Rs. 71,00,000/-. This fact is also confirmed by Smt. Hemlataben Parmar in her statement dated 15.2.2016 & 24.2.2016 wherein she had stated that till 2011 they paid total amount of Rs. 59,00,000/- to Rajendra Patanwadia and the remaining amount of Rs 12,00,000/- was paid subsequently by two installments in cheque. He has further stated that he received an amount of Rs. 29,50,000/- through cheque and a flat valued Rs. 25,00,000/- from Shri Urmi Shah, partner of Sumangal Realty Creators as a consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wners. Therefore, the development agreement was entered into by the partnership firm and Smt. Hemlataben N Parmar was paid Rs. 50,00,000/- and also allotted four flats. There was no question of compensating the assessee as no investment was made by her in her individual capacity. She was only a name-lender on behalf of the partnership firm and all the investments in the land were made by the firm and not by the assessee. Therefore, there was no question of making any payment to the assessee for assigning the rights in the property to the partnership firm for development of land. 10. The AO had applied the provision of section 50C of the Act on the transfer of development rights by the assessee and the other co-owner to the partnership firm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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