9911796707
TMI Blog2016 (4) TMI 863X X X X Extracts X X X X X X X X Extracts X X X X ..... SHRI VIKRAM SINGH YADAV, AM For The Revenue : Shri Raj Mehra, JCIT -DR For The Assessee : Shri G.M. Mehta, CA ORDER PER R.P. TOLANI, JM:- The Revenue has filed an appeal against the order of the ld. CIT(A)-I, Jaipur dated 19-11-2014 for the assessment year 2011-12. The assessee has field the cross objection. 2.1 The ground raised by the Revenue in its appeal is as under:- Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) has erred in deleting the addition of ₹ 2,44,55,016/- on account of capital gain ignoring the fact that the capital gain was rightly assessed in the assessment year 2011-12 as the property in question was transferred during the F.Y. 2010-11. 3.1 The assessee has a C.O. supporting the order of ld. CIT(A) and raising alternate ground for allowing exemptions qua investments u/s 54EC: 1. That the ld. CIT(A) was legally correct in passing the order appealed against after considering the facts of the case incorporated in the registered sale deed and after applying the law laid down by Hon'ble Patna High Court (201 ITR 1032); 2. Alternatively ld. CIT(A) should considered and allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Buyer from indulging in any mischief of approaching JDA for dubious conversion of impugned land into urban land by obtaining a certified copy of purchase deed dated 17.01.2011 from office of Sub- Registrar. The vendee thereafter was constrained to make full payment in the year relevant to A.Y. 2012-13. A fresh deed termed as compensation cum undertaking agreement dated 11.07.2011 was entered in to with the Buyer effecting a proper sale and transfer of ownership rights. Since the impugned sale was factually and legally effected in A.Y. 2012-13, the appellant rightfully offered for taxation the long term capital gains in her return of income in A.Y. 2012-13. Ld. AO was of the view that the sale was completed in AY 2011-12 itself, therefore, proponed the year of taxability from AY 2012-13 to AY 2011-12. 4.2 Aggrieved, the assessee carried the matter before ld. CIT(A) who reversed the action of the AO and held that the LTCG were taxable in AY 2012-13, by following observations: In view of facts and circumstances of the case as mentioned above, AO is not correct to take hypothetical income on capital gain for A.Y. 2011-12 when appellant, on the basis of sale consideration receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxation of LTCG. Reiterating the facts it is contended that total sale consideration of ₹ 2,93,55,828/- for sale of impugned agricultural land was initially paid by the Buyer through post dated cheques of April 2011 and May 2011 (A.Y. 2012-13), as under: Amount Cheque No. Dated Drawn on (Bank) 50,00,000 002286 08.04.2011 Jaipur Thar Gramin Bank 43,55,828 002288 14.04.2011 Jaipur Thar Gramin Bank 50,00,000 002290 22.04.2011 Jaipur Thar Gramin Bank 75,00,000 002292 28.04.2011 Jaipur Thar Gramin Bank 75,00,000 002294 04.05.2011 Jaipur Thar Gramin Bank 2,93,55,828 Total sale consideration receivable by the appellant. As clearly stipulated by clause (9) at page No. (4) of the registered deed, sale and transfer of impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deed dated 17.01.2011 from office of Sub-Registrar (annexure C). After adopting all these measures the Buyer realized there fallacy and weakness of there stand, consequently they yielded to the terms of sale deed. As a natural course on receiving full payment of sale consideration in the period relevant to A.Y. 2012-13, a fresh deed termed as compensation cum undertaking agreement dated 11.07.2011 was entered in to with the Buyer by which the sale was completed and rights of ownership in the property transferred. Therefore, the appellant rightly offered the capital gain in her return of income for the A.Y. 2012-13 in accordance with law. It is contended that sale and transfer in impugned land being completed in FY 2011-12 relevant to AY 2012-13, ld. AO was not justified in unjustifiably pre-poning the year of taxability of LTCG in AY 2011-12 by distorting the facts, misinterpreting the legal provisions and on hypothetical considerations. Ld. CIT(A) rightly appreciated the relevant facts, circumstances, evidence on record and interpretation of law, there is no infirmity in this order. Reliance is placed on the law laid down by following judicial precedents: (i) Smt. Raj Rani De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T (Central) (1971) 82 ITR 835 (SC) and Godhra Electricity Co. Ltd. Vs. CIT (1997) 225 ITR 746 (SC). Order of ld. CIT(A) is relied on that the LTCG are taxable in AY 2012-13 as returned by the assessee. 4.6 Apropos CO ld. Counsel contends that if assessee s taxability for LTCG is allowed in AY 2012-13 then the grounds raised in CO will become infructuous. 4.7 On merits of the alternate grounds raised in CO, it is submitted that the appellant had made to following investment in Bonds of National Highway Authority of India under section 54EC and in purchase of new agricultural land within time allowed under law as per enclosed proofs: For sale of agricultural land which was completed on 11th July 2011 as stated above through undertaking cum compensation deed (though registered with Sub-Registrar on 17th January 2011), the assessee is legally entitled for deduction of ₹ 50,00,000/- under section 54EC for investment in Bonds of National Highway Authority of India (cheque realized on 15.07.2011 and ₹ 85,59,386/- under section 54B of IT Act (purchase of new agricultural land within 2 years). These facts were already within knowledge of the ld. AO through copy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich falls in AY 2011-12, the assessee parted with her possession on receipt of postdated cheques. The document of sale deed was registered. Since the possession was parted and document registered it amounts to a complete sale or alternatively a part performance of sale of property together with possession which is a transfer in terms of sec. 2(47). Therefore the LTCG on sale of impugned land is taxable in AY 2011-12. Per contra assessee has demonstrated that: i. There was no intention to part with ownership of the property. Such rights together with possession were provisionally transferred with a clear stipulation in deed itself that sale transaction and ownership in property will be complete only on realization of postdated cheques. Covenant further provided that in case of no realization the sale deed will stand null and void. Thus a purely conditional sale cannot be hypothetically assumed to be complete when it is neither intended by parties not borne out from any evidence. ii. This is corroborated by the fact that pending realization of cheques the original registered documents were retained by the assessee as lien over the properties ownership and possession. iii. Le ..... X X X X Extracts X X X X X X X X Extracts X X X X
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