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TMI Blog2016 (2) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... ered sale deed dated 16.04.2007 and, therefore, the assessee is liable to pay the long term capital gain on sale of the capital asset on DLC rate of the property at ₹ 11,40,453/-. Accordingly, this issue is decided against the assessee. Applicability of provisions of section 53A of the Transfer of Property Act - Held that:- Provisions of section 53A of the Transfer of Property Act is not attracted as the assessee has failed to produce the written contract between the assessee and Shri Praveen Kumar Jain, pursuant thereof in part performance of the contract, the possession of the property was handed over to Shri Praveen Kumar Jain. Therefore, the issue is decided against the assessee. Entitlement to benefits under 54F - Held that:- The comparison of the two registered sale documents clearly shows that the property which was earlier sold by the assessee to the purchaser, namely Praveen Kumar Jain was later on transferred by Shri Praveen Kumar Jain to the assessee by registered sale document. Both the transactions i.e. one between the assessee and Praveen Kumar Jain dated 16.04.2007 and another between Praveen Kumar Jain and assessee dated 23.02.2008 have taken place withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore us, the assessee has not filed any fair market value of the property to the estimation of the assessee. Further, the assessee has not challenged the value adopted by the stamp valuation authority either at the time of selling the property to Shri Praveen Kumar Jain or at the time of purchasing the property from Shri Praveen Kumar Jain. In our view the ground of the assessee is required to be dismissed and accordingly we dismiss the ground of the assessee. - ITA No.340/JP/2013 - - - Dated:- 29-1-2016 - SHRI T.R.MEENA, AM SHRI LALIET KUMAR, JM For The Assessee : Shri Mahendra Gargiey (Advocate) For The Revenue : Shri Kailash Mangal (JCIT) ORDER PER SHRI LALIET KUMAR, J.M. This is an appeal filed by the assessee against the order or ld. CIT (A)-III, Jaipur dated 9th January, 2013 for the A.Y. 2008-09. The assessee has raised the following grounds :- 1. The impugned additions and disallowances made in the order u/s 143(3) of the Act dated 16.12.2010 are bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be deleted. 2.1 ₹ 10,30,497/- : The ld. CIT(A) erred in law as well as on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the LTCG ₹ 10,30,497/- be deleted in full. 3. The ld. AO further erred in law as well as on the facts of the case in charging interest u/s 234A, 234B 234C of the Act. The appellant totally denies its liability of charging of any such interest. The interest so charged, being contrary to the provisions of law and facts, kindly be deleted in full. Ground No. 1 : 2. At the time of hearing, ground no. 1 is not pressed by the ld. A/R of the assessee, therefore, the same is dismissed as not pressed. Ground No. 2 : 3. Regarding ground no 2, the relevant facts are that the assessee while filing the return of income on 09.03.2009 has not declared the income under the head capital gains. On receipt of information from CIB Wing of the Income Tax Department that assessee has sold a plot for ₹ 1,05,000/- which was valued at ₹ 11,40,453/- for the purpose of stamp duty, the assessee was asked vide notice u/s 142(1) dated 06.10.2010 to explain why the sale consideration of the asset may not be treated as ₹ 11,40,453/- as per the provisions of section 50C of the Act and to file computation of capital gain. In compliance, the assessee vide letter d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence, the ld. CIT (A) dismissed the ground of the assessee. 5. Now the assessee is in appeal before us. 5.1. The ld. A/R for the assessee has submitted that though the AO has pointed out that the assessee has sold a residential plot on 16.04.2007 situated at Prithvi Raj Nagar Scheme, Jaipur for a consideration of ₹ 1,05,000/- which was valued by the Stamp Valuing Authority at ₹ 11,40,453/-, the assessee has not declared the long term capital gain under the head Income from Capital Gains in his return of income. Therefore, the AO called upon the assessee as to why section 50C be not applied as per DLC rate. The assessee has filed the reply on 18.11.2010, 30.11.2010 and 06.12.2010. In the reply dated 18.11.2010, the assessee has submitted that the assessee sold an immovable property on 16.04.2007 at the cost of ₹ 1,05,000/- to Shri Gyan Chand Jain. This asset was acquired by assessee 03/06/1996. Photo copies of both these assets are being enclosed with this letter for your kind consideration. The assessee acquired the immovable asset i.e. one plot on 03/06/1996 from Meenawala Society, Jaipur. The assessee transferred this plot on 16.04.2007. The copies of Pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as was prior to 16.04.2007. The parties also agreed to observed necessary legal formalities in this regard. The assessee agreed to compensate Shri Praveen Kumar Jain towards the use of the sale consideration received by it and also agreed to bear the necessary expenses. Accordingly, the assessee agreed to pay liquidated damage of ₹ 1,95,000/-. Consequently to the cancellation deed, again a document rebutting back the ownership over the said plot from Shri Praveen Kumar Jain to the assessee was executed and got registered on 23.02.2008. Thus, it will be observed that because of this cancellation the subjected transaction of transfer back and the legal position, the rights and obligations of the parties restored back to the same position and condition as it existed prior to 16.04.2007. On the basis of above said submissions, the assessee has submitted that there is no transfer of capital asset taken place in the A.Y. 2008-09 and even if it is alleged that there is some transfer of capital asset, the said capital asset was restored back to the assessee vide a fresh deed dated 23.02.2008 registered in favour of the assessee. The ld. A/R further relied upon the definition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the assessee that the subjected land was the subject matter of litigation in SB CWP No. 6709/2002 and the Hon ble Jurisdictional High Court vide order dated 09.04.2003 has passed Stay Order thereby restraining building activity in the plot in question. In our view, the said order instead of helping the contention of the assessee goes against the assessee. Firstly, the order was passed on 09.04.2003 by the Hon ble Jurisdictional High court and thereafter much water has flown. The transaction in hand is on 2007 and prior thereto as alleged by the assessee an agreement to sale was entered between the assessee and the purchaser ,on 29.04.2006, when the entire sale consideration was given. Thus before executing the sale deed dated 16.04.2007 the purchaser was having sufficient time i.e. from 30th April, 2006 to 16.04.2007 to verify the genuineness, title, possession and other aspects in respect of the property. After passing of approximately one year, the purchaser Shri Praveen Kumar Jain has gone ahead for purchasing the property. Not only this, as per the sale deed dated 16.04.2007, the purchaser has borne all the expenses for registration of the sale deed. In our view, as the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al ground was added in the existing ground to this effect in the following manner : Rs. 10,30,497/-: The ld. CIT (A) erred in law as well as on the facts of the case in confirming the assessment of Long Term Capital Gain (LTCG for short) of ₹ 10,30,497/- in this year whereas as per u/s 2(47)(v) r/w Sec. 53A of the Transfer of Property Act, 1882, legally speaking, no transfer took place in this year. The assessee having received the entire sale consideration and parted with the full control and possession of the plot on dated 29.04.2006 (falling in AY 2007-08) it cannot be said that a transfer took place in this year giving rise to a liability of LTCG. The addition, therefore, so made is completely without jurisdiction, bad in law and hence kindly be deleted in full. The ld. A/R has drawn our attention to section 2(47) read with sec. 53A of the Transfer of Property Act to canvas his argument that no capital gain accrued in A.Y. 2008-09. For that purpose he has drawn our attention to para 2.3 of the order of ld. CIT (A) to the following effect :- 02.3. I have duly considered the submissions of the appellant and the material available on records. It is noticed from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract: PROVIDED that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof. From the bare reading of the provisions, it is clear that provisions of section 53A of the Transfer of Property Act is not attracted as the assessee has failed to produce the written contract between the assessee and Shri Praveen Kumar Jain, pursuant thereof in part performance of the contract, the possession of the property was handed over to Shri Praveen Kumar Jain. Therefore, the issue is decided against the assessee. Ground No. 2.3.1 2.3.2 : 7. We shall be deciding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all not be charged under section 45 ; (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45: -----------. Explanation : For the purposes of this section, - Net consideration , in relation to the transfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. The appellant shall be entitled to the exemption u/s 54F of the Act, depending upon the amount of investment. In this case, by the admission of the ld. AO himself, the appellant after selling the subjected plot, purchased a new plot on 13.02.2008 and invested ₹ 3 Lacs, the appellant has fulfilled the condition here itself in as much as against the total sale consideration of ₹ 1,05,000/- he had already purchased a residential plot of land for ₹ 3 Lacs i.e. more than the sale consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned as ₹ 3,00,000/- whereas in the earlier sale consideration received by the assessee was ₹ 1,05,000/-. Thus the assessee had paid ₹ 1,95,000/- more for getting back the title in respect of the same property on 23.02.2008. If we examine the issue, the in the light of above facts, in our view, there is no income which can be subjected to tax as the income which was received by selling the property was ₹ 1,05,000/- and the amount paid for purchase of the said property was ₹ 3,00,000/-. The full value consideration in the case of selling the property to Shri Praveen Kumar Jain was required to be considered as ₹ 11,40,453/- in accordance with sec. 50C. However, the same yardstick is required to be applied when it comes to sale consideration paid by the assessee. In our view, for the purpose of the cost of the new asset, the same principle, in the peculiar facts and circumstances is required to be applied. The assessee cannot be axed twice. In fact, if we see the fate of transactions, the genuineness of the transaction is loud and clear and is apparent though we have held that the transfer has taken place between the assessee and Shri Praveen Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... common knowledge that the said area is highly disputed as was under acquisition and exposed to continuous litigation before the Hon ble Rajasthan High Court. Consequent to this, various transactions of purchase/sale in all the colonies/societies falling in Prithviraj Nagar were suspended by the property dealers and parties other than some exceptional cases. No valid construction was legal and practically possible and also was not legally permissible. In these circumstances, there was no question of approval of land by the JDA. 1.2 There apart, the plot was not in accordance with Vasthu, which is an important consideration now a days. 1.3 The size of the plot i.e. the part sold under consideration was 30 feet on one side with the length of 140 feet of 6 inches i.e. a long plot with a narrow frontage which is not considered to be good size for the construction of a residential house. For an ideal construction, the owner normally uses upto 60-70 feet or at the best 90 feet in the length and therefore, the remaining almost half of the plot i.e. 50 feet would be a waste. Since at the back, there was no open road therefore, such remaining land could be used for a Godown only ..... X X X X Extracts X X X X X X X X Extracts X X X X
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