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TMI Blog2015 (7) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... in the relevant agreements were as under : Sy.No. Advaiah Krishna Maisamma Agamaiah 662 Ac.3.22 -- Ac.3.22 Ac.6.22 663 Ac.4.20 -- Ac.4.20 - 668 - Ac.1.32 - - 671 Ac.3.20 Ac.2.20 - - Consideration 47,70,000 17,20,000 32,20,000 26,20,000 3. Since none of the four assessees had filed the returns of income for the year under consideration declaring the long term capital gains arising from the sale of their lands, notices under section 148 were issued by the A.O. to them on 31.03.2011. In response to the said notices, all the assessees filed their returns of income on 12.05.2011 declaring total income at NIL. During the course of assessment proceedings, it was submitted on behalf of the assessees before the A.O. that the corresponding lands representing their ancestral property in Yellareddy (v), Keesara (M), Kapra Revenue Division were actually agreed to be sold way back on 31.12.1994 to M/s. Janapriya Engineers Syndicate. It was also submitted that possession of the land in Survey Nos.662 and 663 was also handed over to M/s. Janapriya Engineers Syndicate, as per the Irrecoverable Power of Attorney -cum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to tax in the year under consideration. The reasons given by the Ld. CIT(A) to come to this conclusion as contained in paragraph Nos.6.3 and 6.4 of her impugned order are reproduced below : "6.3. I have considered the facts on record and the submissions of the A.R. The agreement of sale dated 31.12.1994 and the confirmation letter of the purchaser clearly establish that the possession had been handed over during the F.Y. 1994-95 itself. The A.O. has not brought any evidence on record to show that the assessee's claim as evidenced by these two documents is incorrect. In view of this, Section 2(47)(v) applies to the assessee's case and it is held that the capital gains on the sale of land was chargeable to tax in the A.Y. 1995-96 itself and not in the A.Y. 2004-05. 6.4. The subsequent payment of consideration to the assessee and the execution of sale deed are also of no consequence since the only issue relevant for application of section 2(47)(v) is the date of handing over of possession in terms of section 53A of the Transfer of Property Act. It is, therefore, held that the Assessing Officer's decision in bring to tax, capital gains on the sale of land in the A.Y. 2004-05 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sferee/purchaser having taken the possession of the land on 31.12.1994 itself in part performance of the said contract, we are of the view that the land in Survey No.662 and 663 was transferred by the assessees to the purchaser in the previous year relevant to A.Y. 1995-1996 itself within the meaning of clause (v) of sub-section(47) of section(2) read with section 53A of the Transfer of Property Act. This position is not even disputed even by the learned D.R. at the time of hearing before us. 7. The learned D.R. however has contended that in so far as the land in Survey No.668 and 671 is concerned, there was no agreement or contracts in writing entered into by the assessees with the purchaser in the previous year 1994-1995 and in the absence of such agreement/contracts to transfer the land, there was no transfer of the said land in the previous year 1994-1995 within the meaning of clause (v) of section 2(47) read with section 53A of the Transfer of Property Act even if it is agreed that the possession of the said land was taken by the transferee in that previous year. We find merit in this contention of the learned D.R. As per the provisions of section 53A of the Transfer of Prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Revenue in the appeal filed in the case of DCIT vs. Turquoise Investment and finance Ltd., (2008) 299 ITR 143 (MP) before the Hon'ble Madhya Pradesh High Court as question No.3. "3. Whether the Income Tax Appellate Tribunal was justified in law in recording a finding on an issue which was not raised by the assessee either before the A.O. or before the CIT(A) but was raised for the first time before the Tribunal and that too in an appeal filed by the department.?" 8.1. The Hon'ble Madhya Pradesh High Court answered the above question along with the related question No.4 in favour of the assessee after recording the following observations : "Coming to questions Nos. 3 and 4, whether the issue could be raised by the assessee before the Income-tax Appellate Tribunal for the first time and having dismissed the cross-objection, the Income-tax Appellate Tribunal could proceed to give a finding on the same, learned counsel for the assessee has invited our attention to the decision of the CIT Appeal Ex./CIT(A) in I. T. A. No. 112 of 2003 in which reference has been made to the decision of the Hon'ble Madras High Court in CIT v. Vr. S. R. M. Firm (1994) 208 ITR 400, but he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s clearly referred to and spelt out by their Lordships in their decision in National Thermal Power Co. Ltd. [1998] 229 ITR 383, the Tribunal cannot be precluded from considering the questions of law arising in an assessment proceeding not raised earlier, and restricted to issues arising out of appeal before the Commissioner. 9. The issue involved in the present case as to whether the assessee as a respondent can raise a new issue, which was not raised by him either before the A.O. or before the Ld. CIT(A), for the first time before the Tribunal as a respondent in the appeal filed by the department thus is squarely covered in favour of the assessee by the decision of the Hon'ble Madhya Pradesh High Court in the case of DCIT vs. vs. Turquoise Investment and finance Ltd., (supra) and there being no decision of any High Court that has been brought to our notice by the learned D.R. taking a contrary view, we respectfully follow the said decision of the Hon'ble Madhya Pradesh High Court and admit the additional grounds filed by the assessee. 10. As the issue involved in the additional grounds raised by the assessee has been raised for the first time before the Tribunal and neither the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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