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2015 (11) TMI 866 - AT - Income TaxAssessability of long term capital gain in respect of four properties sold by the assessee in the hands of HUF - assessee has challenged the jurisdiction of the Assessing Officer on the ground that the provisions of Section 2(47)(v) of the Act is applicable on this transfer, Section 50C is not applicable on this transaction and year of assessability is A.Y. 2003-04 and not for A.Y. 2004-05 - Held that - On the basis of alleged agreement to sell and deed of registration, it is proved that alleged agreement to sell are different. Even alleged agreement to sell is presumed to be genuine as per the terms and conditions, the alleged agreement to sell is not existed on the date of registry. As both the parties have not performed terms and conditions of the alleged agreement to sell in prescribed time and prescribed manner. Therefore, it is a breach of contract. Even area as well as remaining consideration are not matching in the alleged agreement to sell and deed of registry of various dates. Therefore, sale consideration considered by the ld Assessing Officer for the purposes of computation of capital gain as per Section 50C is rightly assessed. Section 50C inserted by the Finance Act, 2000 w.e.f. 01/4/2003, therefore, same is squarely applicable on the transfer made during the financial year 2003-04 relevant to A.Y. 2004-05. The assessee claimed that these properties were covered U/s 2(47)(v) of the Act does not stand to support the assessee s case wherein number of discrepancies were noted above, as such alleged agreement to sale cannot be enforced by the court of law as time and manner prescribed in these alleged agreement to sell has much before and not followed by both the parties expired. The ld Assessing Officer has taken the consideration on the basis of deed U/s 50C, therefore, whatever construction was made on these lands were treated by him as belonged to assessee at the time of transfer as no documentary evidences were submitted by the assessee at the time of assessment that these lands has been got transferred on the basis of alleged agreement to sell in different year to different persons and they constructed building thereon. If these facts were correct, the purchaser might have filing income tax return and also paying the municipal tax and might have installed telephone/electricity connection on it but no evidences were produced before the Assessing Officer. Further in the property No. 5 i.e. Hathi Babu Ka Ahata, Kachhi Basti, Jaipur was given by the assessee s father on rent, which was continued upto registry of this property i.e. up to 31/3/2003. The assessee also challenged the assessability of this property No. 5, Hathi Babu Ka Ahata, Kachhi Basti, jaipur on the ground of assessability year but on verification of the record it was found that remaining stamp duty was paid by the assessee on 02/4/2003. In case of Raj Rani Devi Ramna Vs. CIT (1992 (5) TMI 11 - PATNA High Court) it has been held that the parties had clearly intended that desired execution and registration of sale deed, transfer by way of the sale would become effective only on payment of entire sale consideration and in this background of fact it had to be held that there was no transfer of land covered by the three sale deeds in question during the period under consideration making the assessee liable for capital gain tax U/s 45. As per registered deed, the assessee got ₹ 50,000/- at the time of registry before Sub-Registrar, Jaipur who has signed the registry on 02/4/2003. Therefore, the assessee got consideration as per terms and agreement of the registered deed on 02/4/2003. Accordingly, the assessability of this capital gain on account of transfer of this property is liable to be assessed in A.Y. 2004-05. The ld CIT(A) was wrong in deciding the assessment of four parties under the head HUF as argued by the ld DR, these properties were sold in the capacity of individual and the assessee had claimed status as individual. No where it has been claimed that these properties were belonged to HUF, therefore, the status of assessability of these four immovable properties referred by the ld CIT(A) is to be held assessable in the capacity of individual not HUF. Further only one witness has been signed on alleged agreement to sell dated 09/8/1975 of property at Hathi Babu Ka Bagh, Jaipur and transferer written in the agreement as Avani Kumar Mukherjee, son of Shri Satkori Mukherjee whereas singed by Athak Kumar Mukherjee . There is no witness on alleged agreement to sell dated 28/8/1975 to property but no address of the property and transferer written in the agreement as Avani Kumar Mukherjee, son of Shri Satkori Mukherjee whereas singed by Athak Kumar Mukherjee . In both the alleged agreements to sell singed by Athak Kumar Mukherjee. The assessees have not produced any evidence that these transactions have been disclosed by the assessees at the time of alleged agreement to sell in respective years in their respective income tax returns. Accordingly, the assessee s appeal is dismissed and revenue s appeal is allowed. - Decided against assessee. Whether property is assessable under Chapter 4(iv) of the Act, which is liable to be assessed U/s 11(1a) of the Act - Held that - The assessee claimed benefit of Section 11 but it has to be registered Trust and property is to be held wholly for the charitable and religious purpose thereafter benefit of Section 11(1a) can be availed by the assessee as such this issue was not raised before the lower authority and assessee has not produced any evidence regarding the application of capital gain for the religious or charitable purpose by obtaining registration U/s 12A of the Act from the competent authority, therefore, this ground of appeal is dismissed.- Decided against assessee.
Issues Involved:
1. Validity of Re-assessment under Section 147/148. 2. Assessability of Long-Term Capital Gains (LTCG) and the year of assessability. 3. Applicability of Section 50C of the Income Tax Act. 4. Validity of Transfer under Section 2(47)(v) of the Income Tax Act. 5. Status of the assessee (Individual vs. HUF). 6. Application of Section 11(1A) for Charitable Trusts. Detailed Analysis: 1. Validity of Re-assessment under Section 147/148: - Grounds of Assessee's Appeal: The assessee contended that the Assessing Officer (AO) did not have valid jurisdiction to make re-assessment under Section 147 due to improper service of notice under Section 148 and failure to provide 'Reasons to believe for escapement'. - Tribunal's Decision: The Tribunal dismissed these grounds as not pressed by the assessee. 2. Assessability of Long-Term Capital Gains (LTCG) and the year of assessability: - Assessee's Argument: The assessee argued that the transfer of capital assets occurred in the assessment years 1976-77 and 1981-82 as per Section 2(47)(v) when the agreement to sell was executed and possession handed over. - AO's Stand: The AO contended that the transfer took place in the assessment year 2004-05 when the sale deeds were registered, and thus, Section 50C was applicable. - Tribunal's Decision: The Tribunal upheld the AO's view that the transfer is effective only upon registration of the sale deeds in the assessment year 2004-05, making Section 50C applicable. 3. Applicability of Section 50C of the Income Tax Act: - Assessee's Argument: The assessee claimed that Section 50C, effective from 01/04/2003, could not be applied retrospectively to transactions initiated before its enactment. - AO's Stand: The AO applied Section 50C, considering the stamp value as the sale consideration for computing LTCG. - Tribunal's Decision: The Tribunal confirmed the applicability of Section 50C to the transactions as the sale deeds were registered after 01/04/2003. 4. Validity of Transfer under Section 2(47)(v) of the Income Tax Act: - Assessee's Argument: The assessee asserted that the transfer of property was completed under Section 2(47)(v) during the years the agreements were executed and possession handed over. - AO's Stand: The AO argued that the transfer is valid only upon registration of the sale deeds. - Tribunal's Decision: The Tribunal ruled that the agreements to sell did not constitute valid transfers under Section 2(47)(v) as the conditions were not fulfilled, and the transfers were effective only upon registration. 5. Status of the Assessee (Individual vs. HUF): - Revenue's Argument: The Revenue contended that the properties were sold by the assessee in an individual capacity, not as HUF. - Assessee's Stand: The assessee claimed that the properties belonged to HUF. - Tribunal's Decision: The Tribunal held that the properties were sold in the capacity of an individual, not HUF, as there was no evidence supporting the HUF status. 6. Application of Section 11(1A) for Charitable Trusts: - Assessee's Argument: The Trust claimed exemption under Section 11(1A) as the property was held for charitable purposes. - AO's Stand: The AO assessed the capital gains under Chapter IV of the Income Tax Act. - Tribunal's Decision: The Tribunal dismissed the Trust's appeal as there was no evidence of registration under Section 12A or application of capital gains for charitable purposes. Conclusion: The Tribunal dismissed the appeals of the assessees and upheld the AO's assessments, confirming the applicability of Section 50C and the assessability of LTCG in the assessment year 2004-05. The Tribunal also ruled that the properties were sold in the individual capacity of the assessee and not as HUF. The Trust's claim for exemption under Section 11(1A) was also dismissed due to lack of evidence.
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