9911796707
TMI Blog2012 (7) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... er judgements. X X X X Extracts X X X X X X X X Extracts X X X X ..... he mediators be treated as outflow in the hands of the appellant group and the net consideration received be taxed in the hands of the appellants groups. 3(e) Without prejudice to the ground Nos. 2(a), (b) and (c0 above the learned First Appellate Authority is not justified in apportioning the alleged additional consideration among the appellant and his two brothers ignoring the shares and ownerships of their three sisters. 4. The learned First Appellate Authority is not justified in rejecting the claim of exemption u/s. 54B to the extent of Rs. 53,57,386 ignoring the receipts issued by the vendors of the land. 6. The learned First Appellate Authority is not justified in confirming that the appellant and his family have only certain disputed rights over the land and therefore, are not eligible for exemption u/s. 54B of the Income-tax Act, ignoring the evidences indicating ownership and active possession of the appellants group for the last several years. 7(a) The learned First Appellate Authority is not justified in restricting the claim of exemption u/s. 54F to the extent of Rs. 35,97,815 as against Rs. 59,89,760 claimed, ignoring the receipts issued by the vendors. 7(b) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n received is only a for relinquishment of disputed rights over the land in question, the said consideration received cannot be taxed under any head of income for the following reasons: a) Admittedly the assessee is not a dealer in lands/real estate hence the question of taxing the same as business income does not arise and was at least not the case of the department also. b) The consideration received has no cost of acquisition and hence there is no gain on transfer, which is chargeable to tax under the head capital gain u/s 45 of the Income Tax Act. c) Reliance is placed on the ratio laid in the following cases. CIT vs. B.C. Srinivasa Setty (128 ITR 294) (SC) CIT vs.vSmt. M. Agama (165 ITR 386) (AP) B. Ramakrishnaiah vs. ITO (39 SOT 379) (ITAT Hyderabad) d) In all the above cases, the judicial authorities have held that the amounts received in respect of transfer of capital assets, cannot be taxed under the head capital gains if there is no cost of acquisition. In all the decisions, the relevance of charging section u/s 45 and the provisions of computation under sec. 48 were discussed. e) The relevant observations and findings of the Hon'ble Apex Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was said to be relinquished or surrender was a right in the asset. The giving up of the right to claim specific performance by conveyance of immovable property held to be relinquishment of capital asset and it was transfer of capital asset within the meaning of the Income-tax Act. The assessee gave up his right to claim specific performance. By the termination of his oral agreement and allowing the vendor to sell the property to any person at any price, the assessee had given up or relinquished his right of specific performance and what he has received is the consideration for relinquishing that right that assessee was paid sum of Rs. 1.5 crores. This transfer attracts the tax on capital gain if there is a cost involve to acquire that right. In the present case, it was not possible to envisage its cost. In any case, such cost has not been specifically determined or brought on record by Assessing Officer. Though, the parties involved stated that there was an advance payment of Rs. 1 lakh by the assessee to the vendor, there was no iota of documentary evidence supporting this other than statement from the parties. Therefore, the amount of Rs. 1.5 crores, though it is a capital rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to time has roped in only specified assets as noted herein before. In the circumstances, the amendment instead of working to the advantage of the Revenue goes to indicate that the Legislature does not want to bring within the purview of the tax net all assets (except the specified assets) which do not have cost of acquisition and the entire sale consideration cannot be treated as profits and gains chargeable under the head "Capital gains" by adopting the cost of acquisition as nil". i) Hence, viewed from any angle it is humbly submitted that the amounts received by assessee for relinquishment of disputed right cannot taxed since the said rights have no cost of acquisition. j) Even though the assessee group had in its returns admitted capital gains, they are not precluded from raising this legal issue which goes to the roots of the case. It is pertinent to submit here that operations u/s 132 of the !.T. Act were conducted on 17-10-2007, i.e., less than two months from the date of registration of the Agreement of Sale-cum-GPA. And all the bank accounts of the assessee-group were placed under prohibitory orders. The Investigating Officials worked out the probable capital gains and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e powers under the Act". (Emphasis supplied). m) The assessees' rights/entitlements to raise new grounds which are legal in nature are up held by the Apex Court in the following cases. 1. Jute Corporation of India (187 ITR 688)(SC) 2. National Thermal Power Corporation Ltd (229 ITR 383)(SC) n) In the light of the above submissions, it is prayed that the Hon'ble Income tax Appellate Tribunal be pleased to hold that the amounts received on relinquishment of disputed rights over the assets is not liable for capital gains tax, since there is no cost of acquisition. o) If the Hon'ble Income Tax Appellate Tribunal is pleased to consider this legal issue in favour of the assessee group, the other issues raised by the assessee group need not be adjudicated. In case the additional Ground is not acceptable to the Hon'ble Income Tax Appellate Tribunal, the submissions on the other grounds issue wise are as under. 9. The DR strongly opposed admission of the additional ground. 10. We have heard both the parties on this issue. In our opinion, there is a reasonable cause for raising additional ground by the assessee before us for the first time. Considering the arguments of the AR, it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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