9911796707
TMI Blog2012 (1) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee filed a return of income on 21.7.2006 declaring total income of ₹ 77,180/- from insurance commission and salary income. The said return was processed under section 143(1) of the Act at the returned income. Subsequently, the Assessing Officer issued notice under section 148 of the Act on 27.3.2008 on the ground that certain income chargeable to tax has escaped assessment inasmuch as the assessee did not disclose income on the sale of land at Survey No. 21/1B and 23/1B situated in village Deolali, Dist. Nashik. In response to this notice, assessee filed a reply dated 8.4.2008 submitting that the return originally filed on 2.7.2006 be treated as a return filed in response to notice under section 148 of the Act. 3. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner of Income-tax (Appeals) has deleted the addition as according to him the property cannot be held to be a capital asset and thus it is not a transaction giving rise to capital gains and therefore, the question of invoking the provisions of section 50C of the Act does not arise. Accordingly he deleted the addition made by the Assessing Officer. In this regard para 4 of the order of the Commissioner of Income-tax (Appeals) is relevant, which reads as follows: "4. I have considered the arguments of the appellant and also the reasons given by the AO in this regard. A study of the sequence of events leading to the sale of property as mentioned above indicates that the appellant was interested in the development of the property and not t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eement dated 31.12.2003 to point out that the assessee was depicted as a purchaser in the Sale Deed dated 16.12.2000 only as a nominee of Viraj Estates P. Ltd. (in short VEPL) and that the payments were made by VEPL. That the sale deeds were made for and on behalf of the VEPL in terms of a MOU dt. 21.8.2000 whereby the assessee alongwith two others entered into an agreement to develop the property. It was pointed out that on 2.2.2002 the said MOU dated 21.8.2000 was cancelled while the sale deeds executed by the assessee on 16.12.2000 as a nominee of VEPL remained and therefore, when the impugned Development Agreement dated 31.12.2003 was executed and the same was signed by the assessee with no beneficial interest, which was entirely with V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the nature of income, without adjudicating on the primary plea raised by the assessee that the income from the stated transaction was not arising in the hands of the assessee. In our view, the said primary issue was liable to be determined at the threshold, as our subsequent discussion would show. 8. On 5.1.1993, by way of two separate Agreements of sale VEPL acquired the property at S. No. 21/1/B and 23/1/B, Deolali, Nashik from Dhirajlal Chimanlal Shah & others and Shishir Govardhandas Shah & Others for a total consideration of ₹ 1,80,00,000/-. On 21.8.2000, VEPL entered into a MOU with assessee and two others, namely, S/Shri Sampurnanad Keshav Gavande and Manohar Sridhar Patil whereby assessee alongwith the two other persons w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s hands. The said amount has been calculated by the Assessing Officer after invoking provisions of section 50C of the Act. Pertinently, the Assessing Officer was of the opinion that the ownership of the property did not belong to VEPL, as canvassed by the assessee, though the payments were made by VEPL. As per the Assessing Officer in terms of the registered sale deeds dated 16.12.2000 assessee and two other persons, namely, S/Shri Sampurnanad Keshav Gavande and Manohar Sridhar Patil were the owners of the property and hence the income as a result of the transfer in terms of the Development Agreement dated 30.12.2003 is assessable in the hands of the assessee. 9. Before the Commissioner of Income-tax (Appeals), assessee raised various plea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the facts of the case, income if any, arising as a result of the impugned transaction is assessable in the hands of the assessee or not. It is only after adjudicating the aforesaid primary controversy the Commissioner of Income-tax (Appeals) shall proceed to deal with other issues in accordance with law. 10. In this manner, we conclude by setting aside the order of the Commissioner of Income-tax (Appeals) to be adjudicated de novo keeping in mind the aforesaid discussion. The Commissioner of Income-tax (Appeals) shall allow reasonable opportunity of hearing to the assessee and thereafter pass an order afresh in accordance with law. In the result, appeal of the Revenue is allowed for statistical purposes. Decision pronounced in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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