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2015 (7) TMI 605 - AT - Income TaxAddition for long term capital gains - CIT(A) deleted the addition - Held that - In the present case, there was however no such contract in writing entered into in the previous year 1994-1995 in respect of land in Survey Nos.668 and 671 singed by the assessees from which the terms necessary to constitute the transfer could be ascertained with reasonable certainty and the oral agreements stated to be entered into by the assessees, in our opinion, cannot be said to have resulted in transfer of the land as envisaged in the provisions of section 2(47)(v) of the Income Tax Act read with section 53A of Transfer of Property Act even though it is accepted that the possession of the said land was taken by the transferee in that year. At the time of hearing before us, Ld. Counsel for the assessee has not been able to raise any material contention to dispute this position. We uphold the impugned orders of the Ld. CIT(A) passed in the case of Smt. Allam Maisamma and Mr. Allam Ayalaiah (L.R. of late Allam Adavaiah) holding that their respective lands in survey Nos.662 and 663 having been transferred in the previous year relevant to A.Y. 1995-1996 within the meaning of section 2(47)(v) read with section 53A of the Transfer of Property Act, the addition made by the A.O. on account of capital gain in the year under consideration was not sustainable. The impugned order of the Ld. CIT(A) passed in the case of Mr. Allam Krishna holding that there was a similar transfer of the land belonging to him in survey No.668 and 671 in A.Y. 1995-1996 however is set aside in the absence of any contract for transfer in writing and the matter is restored to the file of the A.O. for the limited purpose of examining and deciding the new issue raised by the assessee for the first time before the Tribunal by way of additional grounds. In so far as the case of Mr. Alam Ayaliah L.R. of late Allam Adavaiah is concerned, the impugned order passed by the Ld. CIT(A) is upheld only to the extent whereby she held that there was a transfer of land belonging to him in survey No.662 and 663 within the meaning of section 2(47)(v) read with section 53A of the Transfer of Property Act in the previous year relevant to A.Y. 1995-1996 and therefore, the capital gain attributable to such transfer was not chargeable to tax in the year under consideration. The said order of the Ld. CIT(A) holding that there was similar transfer of land belonging to assessee in survey No.671 in A.Y. 1995-96, however, is set aside in the absence of any contract for transfer in writing and this matter is restored to the file of the A.O. for the limited purpose of examining and deciding the new issue raised by the assessee for the first time before the Tribunal. - Decided against revenue.
Issues Involved:
1. Whether there was a transfer of lands by the assessees as on 31.12.1994 within the meaning of the definition of 'transfer' as given in clause (v) of sub-section (47) of Section 2 of the Income Tax Act. 2. Whether the capital gains arising from such transfer were chargeable to tax in the assessment year (A.Y.) 1995-1996 or in the year under consideration (A.Y. 2004-2005). 3. Whether the assessees can raise new issues before the Tribunal for the first time, which were not raised either before the Assessing Officer (A.O.) or before the Commissioner of Income Tax (Appeals) [CIT(A)]. Detailed Analysis: Issue 1: Transfer of Lands as on 31.12.1994 The primary issue was whether the transfer of lands by the assessees to M/s. Janapriya Engineers Syndicate occurred on 31.12.1994 within the meaning of 'transfer' under Section 2(47)(v) of the Income Tax Act, read with Section 53A of the Transfer of Property Act. The Tribunal noted that the Irrevocable General Power of Attorney-cum-Agreement of Sale was entered into by the assessees for lands in Survey Nos. 662 and 663, and the purchaser took possession on 31.12.1994. This constituted a transfer within the meaning of Section 2(47)(v) read with Section 53A. However, for lands in Survey Nos. 668 and 671, there was no written agreement in the previous year 1994-1995, and thus, the oral agreements did not meet the requirements of Section 2(47)(v) read with Section 53A. Issue 2: Chargeability of Capital Gains The Tribunal upheld the CIT(A)'s decision that the capital gains arising from the transfer of lands in Survey Nos. 662 and 663 were chargeable to tax in A.Y. 1995-1996, not in A.Y. 2004-2005. The possession of these lands was handed over in 1994, making the transfer effective in A.Y. 1995-1996. For lands in Survey Nos. 668 and 671, the Tribunal found that in the absence of a written contract, the capital gains could not be charged in A.Y. 1995-1996 based on oral agreements. Issue 3: Raising New Issues Before the Tribunal The Tribunal addressed whether the assessees could raise new issues before the Tribunal for the first time. It cited the decision of the Hon'ble Madhya Pradesh High Court in DCIT vs. Turquoise Investment and Finance Ltd., which allowed respondents to raise new issues if relevant facts were on record. Following this precedent, the Tribunal admitted the additional grounds raised by the assessees, directing the A.O. to examine these new issues with the available facts and materials. Separate Judgments: - For Smt. Allam Maisamma and Mr. Allam Ayalaiah (L.R. of late Allam Adavaiah), the Tribunal upheld the CIT(A)'s decision that lands in Survey Nos. 662 and 663 were transferred in A.Y. 1995-1996, and capital gains were not chargeable in A.Y. 2004-2005. - For Mr. Allam Krishna, the Tribunal set aside the CIT(A)'s decision regarding lands in Survey Nos. 668 and 671 due to the absence of a written contract and directed the A.O. to examine the new issues. - For Mr. Allam Ayalaiah (L.R. of late Allam Adavaiah), the Tribunal upheld the CIT(A)'s decision for lands in Survey Nos. 662 and 663 but set aside the decision for Survey No. 671 due to the absence of a written contract, directing further examination by the A.O. Conclusion: The Tribunal dismissed the Revenue's appeals for Smt. Allam Maisamma and Mr. Allam Ayalaiah (L.R. of late Allam Adavaiah) and partly allowed the appeals for Mr. Allam Krishna and Mr. Allam Ayalaiah (L.R. of late Allam Adavaiah) for further examination by the A.O. on the newly raised issues. The order was pronounced in the open Court on 10.07.2015.
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