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TMI Blog2014 (4) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... ually incurred this amount for getting the encumbrance free plot and how it has been quantified. The deed of conveyance is completely silent on this point that the assessee was liable for incurring such an expenditure or the purchaser shall incur this amount which shall be reduced from the total sale consideration agreed upon between the parties - If it has not been mentioned in the conveyance deed that it is axiomatic that the sale consideration mentioned in the conveyance deed is the actual consideration receivable by the assessee - No evidence or details have been submitted by the purchasers with regard to expenses incurred - The content of the letter also raises a doubt in the wake of the fact that how only the assessee is responsib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deed in this regard. 2. Facts in brief: The assessee had filed its return of income at Rs. 59,250 on 25th July 2005. The said return of income was processed under section 143(1) and thereafter, the case was re opened under section 147 by issuance of notice dated 28th March 2011, under section 148 of the Act, on the ground that the assessee had not offered any tax on capital gains in respect of transfer of a capital asset. The assessee, in response to the notice under section 148, filed its return of income on 26th April 2011, declaring total income of Rs. 32,09,989, which comprised of income under the head short term capital gain , long term capital gain and income from other sources . The Assessing Officer, on a perusal of computa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have agreed and confirmed that sum of Rs. 15 lakhs would be incurred by the purchaser towards vacating the encroachment, earth filling, etc. The assessee was bound to indemnify the purchaser with regard to the encumbrances in respect of the plot of land in terms of the lease dated 30th April 2004. The assessee had actually received only sum of Rs. 31 lakhs and, therefore, the full value of consideration for the purpose of computation of capital gain should be taken at Rs. 31 lakhs instead of Rs. 46 lakhs. The learned Commissioner (Appeals), after considering the assessee s submission, which have been dealt by him from Page 4 to 6 of the appellate order, agreed with the contention of the assessee and held that there is no allegation or fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total consideration mentioned is Rs. 46 lakhs and schedule of payment has also been given therein. There is no clause as such that seller is liable for getting the clearance or to vacate the encroachment. The letter, which has been submitted, is dated 31st March 2005, which is almost after one year, the said letter is merely a self serving document without any corroborative evidence as to how the assessee had incurred sum of Rs. 15 lakhs. Thus, he strongly relied upon the findings of the Assessing Officer. 6. The learned Counsel for the assessee, on the other hand, submitted that even though the liability of the seller to get the proper access to the plot and vacating the encroachment, earth filling, etc., have been stipulated in the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 46 lakhs, but in fact he has received only Rs. 31 lakhs as Rs. 15 lakhs was incurred on getting the plot free from encroachment and proper access to the plot and also earth filling. In support of this contention, a letter dated 31st March 2005, has been placed on record signed by both the parties, which was filed before the learned Commissioner (Appeals). The said letter mentiones that it has been mutually agreed between the parties that they have to incur Rs. 15 lakhs towards vacating the encroachment, earth filling and getting access cleared on the plot. The said expenditure has been incurred by the purchaser. Based on this letter, the learned Commissioner (Appeals) has accepted the assessee s contention and also shifted the onus on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the purchaser will deduct the cost incurred by him from the sale consideration. If it has not been mentioned in the conveyance deed that it is axiomatic that the sale consideration mentioned in the conveyance deed is the actual consideration receivable by the assessee. Another very important fact which is emerging from the conveyance deed is that the plot belongs to two persons i.e., Mr. Tokersehbai Shivji Shah (HUF) and Mr. Dungarshivbhai Jagashi Shah (HUF), who are the joint sellers in the conveyance deed. The seller had agreed to pay sum of Rs. 46 lakhs to the assessee and Rs. 45 lakhs to the other owner. If there are two owners, then how the liability of Rs. 15 lakhs which has been allegedly incurred by the purchaser rests upon the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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