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TMI Blog2016 (5) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... we are of the opinion that the authorities are justified in treating the consideration received by assessee as ‘income from other sources’ and denying the deductions claimed u/s. 54EC and 54F which are applicable only when there is capital gains. - Decided against assessee - I.T.A. No. 1424/HYD/2015 - - - Dated:- 7-4-2016 - SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER For The For Assessee : Shri Amrit Kumar Kota, AR For The Revenue : Shri Jagadish Babu, CIT-DR ORDER PER B. RAMAKOTAIAH, A.M. : This is an appeal by assessee against the order of the Commissioner of Income Tax (Appeals)-4, Hyderabad dated 13-10-2015. Assessee has raised the following ground, which is material for consideration: a. The Commissioner of Income Tax (Appeals)-Iv erred in confirming the Sale consideration received as Income from Other Sources instead of Income from Long Term Capital Gains . 2. Briefly stated, assessee is an individual and has offered capital gains claiming deduction u/s. 54EC 54F of the Income Tax Act [Act]. The assessment u/s. 143(3) was completed on 29-12-2011 by accepting the returned income of ₹ 2,57,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The contention that the assessee has interest/title in the said property by virtue of sale of agreement dated 4.7.1994 is not legally tenable as the property was subsequently registered in favour of others and the agreement has ceased to exist. 4. Though, it is an undisputed fact on record that the assessee received ₹ 40 Lakhs as per his own admission, is entitled to a constructed area of worth of ₹ 60 lakhs, this receipt of money and constructed areas does not pre-suppose that assessee was having interest/title over the property along with his brothers. There may be umpteen reasons for payment of money and for giving constructed area to assessee by the developer. But the fact remains that the assessee received ₹ 1 crore from the developer though he is not owner of the property. In the light of these facts and documentary evidence, the amount receivable by the assessee is not assessable as capital gain and no deduction u/s. 54F 54EC are not allowable. Under the facts and circumstances of the case, the amount of ₹ 1 Crore received by the assessee has to be assessed as Income from Other Sources . This order of the Ld. CIT was not contested by ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Kotha janamma registered the same land by executing the sale deed on 27th day of March 1995 to NChandrasekhar Rao s/o Sri Late N Rajaiah, Sri R. Madhusudan sip Sri Late N Rajaiah, Sri N.R.Murali Krishna s/o Sri Late N Rajaiah. The said three parties are own brothers of Mr. Krishna Murthy. Since Mr. NR.Krishna Murthy entered the agreement of sale his name was excluded in the sale deed . The land was registered in the name of said three parties was the same land for which Mr. NR.Krishna Murthy entered an agreement of sale . There is neither duplication nor separate registration of different lands. Mr. N.R. Krishna Murthy, along with three brothers jointly relinquished their rights in favour of M/s Team One Builders and agreed to receive ₹ 4crores as consideration. As a part of the said settlement an amount of ₹ 1,60,00,000/- paid by M/s Team One Builders by way by Cheque No. 116226, 116227, 116228, 116229 each of ₹ 40,00,000/received by all the four brothers from INC Vyshya Bank Ltd., Himayatnagar Branch, Hyderabad. All the four brothers were having interest/title in the said property through sale agreement dated 04-07-1994 and sale deed dated 27-03-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. There is no concealment of information and facts. 5. There is no revenue loss to the department in the case of assessee. Therefore, we request your Hon'ble selves to go through the facts and spirit of the facts and complete the assessment . 5. Ld. CIT(A) however, did not agree with assessee s submissions and dismissed the appeal by stating as under: 4. I have carefully considered the facts of the case, assessment order and the submissions of the appellant. In this case, the entire capital gain is of ₹ 92,40,479/- arising out of the transaction. The appellant's share is only 1/4th of the total transaction of ₹ 4.0 crores ie., ₹ 1 crore only (Rs. 40,00,000 by cash + ₹ 60,00,000 in constructed area 6,050 sq. feet). The appellant claimed the total capital gain received in cash of ₹ 1,00,00,000/- only. During the course of appeal proceedings, all the details filed before the Assessing Officer were also filed before me which includes the copy of Addl.District and Sessions Judge Court order dated 25-06-2008. As per the Court order dated 25-06-2008, the court decided the three plaintiffs namely Sri N.Chandra Shekar Rao, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... three persons as stated above in which assessee s name is not there. The said deed was registered for a value of ₹ 1,80,000/- in 1995 and assessee has not placed any evidence on record that the said sale consideration (purchase consideration) was paid by assessee nor any evidence to show that he has contributed 1/4th share for purchase of the property. As seen from the petition before the Addl. District Session Judge, Ranga Reddy District as placed in page 7 8 of the Paper Book, the parties as plaintiffs are: i. N. Chandra Sekhar Rao; ii. R. Madhusudhan; iii. N.R. Murali Krishna; and iv. N.R. Krishna Murthy The claim made as recorded in the order dt. 25-06-2008 was as under: Claim: This Suit filed u/s. 26 r/w. O-7 R-1 2 CPC filed by the plaintiffs praying this court to declare that the plaintiffs 1 to 3 are absolute owners and possessors of suit schedule property and consequently by way of injunction, direct the defendants, their agents, their henchmen and their assignees etc., not to interfere in the suit schedule property. (or) To direct the defendant No. 1 to execute the regular registered sale deed by receiving the balance sale consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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