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TMI Blog2012 (7) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... nsequence, when as per the assessee s own submission (reproduced at Para 5.5 of the CIT(A) s order, there was no formal agreement of sale in this case and a mere receipt of the initial advance of ₹ 7.5 lakhs can not be treated as an agreement for sale, particularly when the sale deed executed by the son of Sh. A.P. Bajaj on 08.11.2005 (after the death of Sh. Bajaj) does not make any mention of any earlier agreement of sale and when there is no evidence/indication of the date, if any, on which possession of the land was given to the buyers in pursuance of any agreement of sale executed during the life time of Sh. A.P. Bajaj. (ii) The Ld. CIT(A) has erred in law and on facts in treating the amount of ₹ 1,05,00,000/- received by the assessee from her brother as a gift within the meaning of Sec. 56 (2) (v) of the I.T. Act 1961 and not as a part of the sale consideration received in pursuance of the will of Sh. A.P. Bajaj. 3. The Ld. DR submitted that the issues raised in the additional grounds do not require consideration of fresh material out side the record for its adjudication and these are also legal in nature hence the same may be allowed for the adjudication. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arding treatment of sum of ₹ 1,07,25,000/- as short term capital gain and allowance / disallowance of exemption u/s 54 EC in respect of the sale of the impugned property could be examined in A.Y. 2005-06 only and not in the A.Y. 2006-07. The Ld. CIT(A) has accordingly deleted the addition of ₹ 1,07,25,000/-. 7. In support of the grounds and additional grounds the Ld. DR has placed reliance on the assessment order. He also tried to distinguish on facts the decisions relied upon by the Ld. CIT (A). The Ld. DR submitted that in the case of CIT Vs. Vishnu Trading and Investment Company (2003) 259 ITR 724 (Raj) the possession of the property under sell was handed over, whereas in the present case possession of the property was not given. Similarly in the case of M. Syamala Rao Vs. CIT (1998) 234 ITR 140 (AP), the possession of the property under sell was handed over. These decisions are thus not relevant under the distinguishable facts of the present case. The Ld. DR submitted further that assessee s interest in the property as per condition in the will arose when brother Sh. Promod Bajaj decided to sell the property. 8. On the issue as to whether the receipt of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (assessee) even though she is well settled in her family as a token of her sentimental right in his estate. Sh. A.P. Bajaj passed away on 24.11.2004 Sh. Promod Kumar Bajaj sold the property vide sale deed registered on 17.11.2005. The sale consideration shown in the sale deed is ₹ 3,57,50,000/-. As per the will 30% of the sale amount i.e. ₹ 1,07,25,000/- was paid in two instalments by Sh. Promod Kumar Bajaj to the assessee. The assessee received ₹ 72,00000/- during A.Y. 2005-06 and ₹ 35,25,000/-during A.Y.2006-07. The assessee claimed the receipt as long term capital gains and also claimed exemption u/s 54 EC which have been disallowed by the AO. The AO held that the assessee has only acquired an intangible asset in the form of 30% share of the sale consideration because of the fact that her brother has decided to sell the property and has sold the same. The AO held that this right of the assessee to receive the money has been created on the date of sale i.e. 12.8.2005 which is nothing but the date of acquisition of this right. It was held by him that since the sale has also taken place on the same date, therefore, intangible capital asset is a short term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne qua non is that the receipt or accrual must have originated in a transfer within the meaning of Section 45 read with Section 2 (47) of the Act. Similar ratio has been laid down by the Hon ble Delhi High Court in the case of CIT Vs. R. Dalmia (Supra). We are of the view that an asset is primarily proprietary whereas a right is predominantly personal in nature. An asset is to be a capital asset as its own value. It is this characteristic on an asset that can give rights to capital gain or loss. On the contrary, money is medium of trade, it has purchasing power but it does not have its own intrinsic value, it cannot be traded for more or less than the return denomination. Besides, in the present case the assessee did not incur any cost to acquire the right to receive 30% sale consideration, therefore, computation provisions cannot be applied as per the decision of Hon ble Supreme Court in the case of CIT Vs. B.C. Sriniwasa Setty (1981) 128 ITR 294 (SC). Thus we hold that the present case does not fall within the ambit of charging Section. Under this circumstances in our view the AO was not justified in making the addition of ₹ 1,07,25,000/- as a short term capital gain in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndividual or a Hindu undivided family from any person on or after the 1st day of September, 2004 [but before the 1st day of April, 2006], the whole of such sum; Provided that this clause shall not apply to any sum of money received- (a) from a relative; or (b) . (c) Under a will or by way of inheritance; or (d) in contemplation of death of the payer; Explanation- For the purpose of this clause, relative means- (i) . (ii) brother or sister of the individual; 13. Under above facts and circumstances we are of the view that the Ld. CIT (A) has rightly come to the conclusion that assessee is entitled to get the benefit provided u/s 56 (2) (v) of the Act. The same is upheld. Additional ground no. (ii) is thus rejected. Ground no. 2 The AO estimated the annual value of properties lying vacant u/s 23 (1) (a) at ₹ 14,21,082/- as against the declared notional income of ₹ 7,48,172/-. The contention of the assessee remained that the properties could not be let out in spite of possible efforts and was lying vacant. The assessee also pointed out that under similar facts an identical issue has been decided in favour of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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