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TMI Blog2015 (7) TMI 768X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction with Shri V. Ramachandra Rao in the financial year 1999-2000 and in case of Shri Jagat Singh in financial years 1995-96 to 1997-98. Thus when the amount in question was received long back, we fail to understand how they can be taxed in the impugned A.Y, even assuming that the said transaction ultimately fructified in the impugned A.Y. Even, otherwise also the ld DR apart from making submissions has not brought any material on record to controvert the factual finding of the ld CIT (A) that the transactions for which the assessee received the commission is different from the transaction with DLF. In view of the aforesaid, we do not find any reason to interfere with the order of the ld CIT (A) in deleting the addition of ₹ 11.50 lakhs and ₹ 2,19,000. - Decided against revenue. Addition of commission received from M/s Mali Florex on sale of land - CIT(A) deleted the addition - Held that:- Addition of ₹ 2.50 lakhs was made at the hands of the assessee relying upon the statement of Mali Florex that it has paid the amount of ₹ 5.00 lakhs to the assessee and Shri Syed Naseer as commission towards sale of land. Though, the AO had mentioned that the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lling upon him to submit his return of income. In response to the said notice, assessee filed his return of income for the year under consideration declaring total income of ₹ 6,68,514. 4. During the assessment proceedings AO noticed that in the relevant previous year, assessee has received an amount of ₹ 20.00 lakhs on account of sale of land situated in Puppalaguda Village in survey Nos.262 to 264 from one Shri Ram Chandra Rao. Against the amount received for sale of the land, it was noticed by the AO, assessee has claimed deduction towards incidental expenses amounting to ₹ 12.00 lakhs. When the AO called upon the assessee to furnish evidence in support of the expenditure claimed, assessee submitted that he had wrongly claimed the amount as incidental expenditure on sale of land, , actually the amount of ₹ 12.00 lakhs was utilised for construction of new house property, hence it should be allowed as exemption u/s 54F of the Act. To support his claim, assessee submitted General Power of Attorney dated 2.4.1994 and 28.12.1995 wherein the assessee and Shri Syed Naseer were appointed as GPA holders of Shri Mohd. Jamaluddin, Mohd. Khairuddin and Mohd. Khari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee along with another defendant Shri Syed Naseer has executed various sale deeds in favour of the defendant No.10 to 19. Such sale deeds were executed based on the power of attorney held by the assessee along with Shri Syed Naseer. 6. Further it was found by the ld CIT (A) that in the judgment delivered by the Loka Adalat it has been clearly mentioned that the payments are made for relinquishment of title rights claimed and interest over the scheduled property. The ld CIT (A) after considering all the facts and materials on record concluded that the amount received by the assessee was in connection with transaction in sale of land or relinquishment of rights over the land. He, therefore, did not agree with the observations of the AO on this issue. In other words he accepted assessee s claim that the amount received was towards transfer of a capital asset. However, while considering assessee s claim of exemption u/s 54F, the ld CIT (A) observed that the assessee has not produced any evidence to substantiate his claim that he has incurred the expenditure for construction of the house as per the conditions of section 54F. He, therefore, upheld the addition of an amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the claim of deduction u/s 54F has restored the matter back to the file of the AO with the following observations: 6. Having heard both the parties and having considered the material on record, we find that group of cases pertaining to the assessees qua the owners of the lands adjoining to the lands of the assessees, were disposed of by this Tribunal by holding as under- 5. We have heard both the parties and perused the material on record. The provisions of section 54F are that if the assessee being a individual or HUF, the capital gain arises from transfer of any long term capital asset not being a residential house and the assessee has, within a period of one year before or two years after the date on which the transfer takes place, purchases or, has within a period of three years after that date constructed a residential house, the capital gain will not be charged to the extent of cost of new asset if the entire net consideration is invested or proportionate to the extent of new asset bears to the net consideration if the conditions laid down u/s. 54F are fulfilled the assessee is entitled for deduction u/s. 54F. Accordingly, the onus is on the assessees to prove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to assessee s claim of deduction u/s 54F to the file of the AO for deciding afresh after due opportunity of being heard to the assessee. 10. In the result, both the appeals of the assessee are allowed for statistical purposes. 1396/Hyd/2010- Revenue s appeal 11. In this appeal, Department has raised four effective grounds. In Ground No.1, Department has challenged the decision of the ld CIT (A) in deleting the additions of ₹ 11.50 lakhs and ₹ 2,19,000 representing the advances received from Shri V. Ramachandra Rao and Shri Jagat Singh respectively. 12. Briefly the facts are, during the assessment proceedings, AO on the basis of information on record found that the assessee has received an amount of ₹ 11.50 lakhs as commission from Shri V. Ramachandra Rao during the financial year 1999-2000 in respect of lands sold during the A.Y under consideration to DLF Group of companies. AO opined that though the commission of ₹ 11.50 lakhs was received by the assessee during financial year 1999-2000, but since the sale transaction of the property was finalized during the A.Y under consideration, the income accrued to the assessee during the current y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration. Accordingly he deleted the addition. As far as the amount of ₹ 2,19,000 received from Shri Jagat Singh is concerned, the ld CIT (A) again observed that not only the amount was received in the financial year 1995-96 to 19997-98, but the transaction for which the amount was received is different from the transaction in relation to the land sold to the DLF. Accordingly he deleted the addition. 13. We heard both the parties. After perusal of the materials on record, we do not find any infirmity in the order of the ld CIT (A). The AO himself admits that the commission amount was received by the assessee in case of transaction with Shri V. Ramachandra Rao in the financial year 1999-2000 and in case of Shri Jagat Singh in financial years 1995-96 to 1997-98. Thus when the amount in question was received long back, we fail to understand how they can be taxed in the impugned A.Y, even assuming that the said transaction ultimately fructified in the impugned A.Y. Even, otherwise also the ld DR apart from making submissions has not brought any material on record to controvert the factual finding of the ld CIT (A) that the transactions for which the assessee received the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.00 lakhs by Mali Florex to the assessee and Shri Syed Naseer was not conclusively proved and since the assessee had categorically denied of having received any such amount from Mali Florex, there is no justification to uphold the addition of ₹ 2.50 lakhs at the hands of the assessee on protective basis. Accordingly, he directed the AO to delete the addition. 16. We have heard both the parties and perused the materials on record. As could be seen, addition of ₹ 2.50 lakhs was made at the hands of the assessee relying upon the statement of Mali Florex that it has paid the amount of ₹ 5.00 lakhs to the assessee and Shri Syed Naseer as commission towards sale of land. Though, the AO had mentioned that the amounts were paid through cheques, but as per discussion made by the ld CIT (A), it appears, that Mali Florex in course of the assessment proceedings stated that the amounts were paid through bearer cheques. As it appears, before making the addition, AO has not made any inquiry to find out whether the cheques were actually encashed by the assessee. Assessee has not only denied of having received the amount in question at the stage of assessment and before the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s appeal Department has raised four effective grounds. In Ground No.1, Department has challenged the decision of the ld CIT (A) in deleting the additions of ₹ 11.50 lakhs and ₹ 1,25,000 representing the commissions received from Shri V. Ramachandra Rao and Shri Jagat Singh respectively. This issue is identical to issue raised by the Department in Ground No.1 of ITA No.1396/Hyd/2010 in case of Late P. Dilip Kumar. Following our decision in Paragraph 13 of the order, we uphold the order of ld CIT (A) by dismissing the ground raised. 2. The next issue raised by the Department is against the decision of the ld CIT (A) in deleting the addition of an amount of ₹ 2.50 lakhs being commission received from M/s Mali Florex on the sale of land. This issue is identical to the issue raised by the Department in Ground No.2 of Department s appeal in ITA No.1396/Hyd/2010 in case of Late P. Dilip Kumar. Following our decision in Para 16 (Supra), we uphold the order of ld CIT (A) on this issue by dismissing the ground raised by Department. In view of our decision hereinabove, there is no need for adjudicating Ground Nos. 3 4 separately. 3. In the result Department s appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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