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TMI Blog2015 (6) TMI 920X X X X Extracts X X X X X X X X Extracts X X X X ..... so as to bring entire capital gain tax in the impugned year. Moreover, there was a statement from Manager of VAPL recorded by A.O. during survey which indicate that there were lot of unsold plots and detailed statement was recorded about sale of various plots and how the monies are accounted. This indicates that the said VAPL is only acting as an agent in sale of property and it did not acquire the property. Therefore, stand of CIT that the land/property in question was sale cannot be accepted. Lastly, the CIT himself accepted that gains on sale of Medchal land has to be assessed under the head "Long term capital gains". The gain is taxable at the rate of 20% only. Whether it is taxed in A.Y. 2007-08 or in later years, the tax rate is at 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l land developed was ac.63.10 guntas and 112. Sq. yards equivalent to 306242 sq. yds. As per the HUDA approved plan, the net plot area was 167802 sq. yds and the same was sold/ agreed to sale and the details are as under : Land in sq.yards Whom the land was sold to Sale consideration 60743 Victory Avenue P Ltd @ ₹ 1800oer sq. yard Rs.10,93,55,600 67563 i.Sri V. Brahmananda Reddy(20706 sq.yards) ii.M/a.Lakshmi Venkateswara Estates P Ltd (26,879 sq.yards) iii. Sri P. Srinivasa Sarma (19978 sq.yards) iv. Other curstomers (834sq.yds) Rs.5,35,00,000 3. Survey operation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o make such changes as would indicate that the assessee is now in the business of real estate. Hence, the assessment order u/s 143(3) r.w.s.147 dt.19.11.201O is found to be in order as far as the sale of 67563 sq. yds to Mr. V. Brahmananda Reddy and others for a consideration of ₹ 5,35,00,000 is concerned. However, as mentioned earlier, there is a second limb to this land transaction. Vide agreement for sale-cum-GPA, the assessee and his group have sold 60742 sq. yds of land to a company incorporated with express purpose of developing the land, plotting the same and selling it to prospective buyers. This agreement for sale-cum-GPA was entered into with VAPL on 26.2.2007, wherein it is clearly mentioned that the possession for entire 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration for 60742 sq. yds of lend, The' Assessing Officer has accepted this computation of capital gains and hence his order is held to be erroneous in as much as it is prejudicial to the interests. of revenue. The assessment order dt.29.11.201O is hence set-aside with a direction to the Assessing Officer to compute the capital gains arising from sale of 60743 sq. yds of land to VAPL by holding that the capital gains on the entire parcel of land has arisen in AY 2007-08 and hence the entire sales consideration of ₹ 10,93,55,600 should be brought to tax in AY 2007-08. In the case of the assessee, his proportionate share out of total sales consideration of ₹ 10,93,55,600 should be adopted against which the cost of acquisition a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement. Thus on facts the agreement cannot be considered as sale agreement so as to bring entire capital gain tax in the impugned year. Moreover, there was a statement from Manager of VAPL recorded by A.O. during survey which indicate that there were lot of unsold plots and detailed statement was recorded about sale of various plots and how the monies are accounted. This indicates that the said VAPL is only acting as an agent in sale of property and it did not acquire the property. Therefore, stand of CIT that the land/property in question was sale cannot be accepted. Lastly, the CIT himself accepted that gains on sale of Medchal land has to be assessed under the head Long term capital gains . The gain is taxable at the rate of 20% onl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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