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TMI Blog2016 (6) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue. 3. The assessee has raised the following grounds of appeal:- 1) On the facts and the circumstances of the case and in law the Ld. C.I.T. (A) - Aurangabad was not legally correct to hold as per para 8.4 of the order that in future the appellant may recover some amount out of sale consideration of Rs. 45,30,000/- which has been fraudulently grabbed by the Power of Attorney Holder. It be held accordingly. 2) On the facts and the circumstances of the case and in law and in view of Ground No.1 above the Ld. C.I.T. (A) erred in directing that the amount of Rs. 45,30,000/- is to be taxed as Capital gain in the hands of the appellant on "protective basis". The decision is opposed to law. It be quashed. 3) On the facts and the circumstances of the case and in law and having accepted by Ld. C.I.T. (A) that the amount of consideration of Rs. 45,30,000/- was diversion at source by the Power of Attorney holder the question of its taxability in the hands of the appellant at this stage does not arise at all. The directions being contrary to the provisions of law be set aside. 4) On the facts and the circumstances of the case and in law it be declared that the assessment is v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd 2(2), Aurangabad. Considering this, ITO, Ward 4, Ratnagiri submitted detailed report on the action taken by him to the ITO, Ward 2(2), Aurangabad vide letter dated 22.02.2006 along with statement recorded of the assessee as also the statement recorded of Shri A.F. Patel along with corresponding papers serially numbered 1 to 67. After interrogation, the assessee filed revised return of income on 17.01.2006 accepting the sale consideration of Rs. 52,80,000/- and after deducting cost of acquisition and also improvement cost of Rs. 44,30,000/- had declared income from long term capital gains at Rs. 5,27,543/- in the revised return of income. Along with return of income, the assessee also enclosed two TDS certificates issued by Municipal Council, Chiplun for Rs. 60,720/- each accepting the sale transactions. During the course of assessment proceedings, the assessee filed second revised return of income on 31.03.2007 in which the assessee in addition to the salary income, has shown capital gains of Rs. 3,61,311/-. In the re-revised return, the assessee has claimed sale consideration to Rs. 7,50,000/- The Assessing Officer considered at length the assessee having filed different return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Before the CIT(A), the assessee furnished written submissions, which are incorporated at pages 10 to 20 of the appellate order. The CIT(A) noted that the assessee had purchased the agricultural land in the year 1999 for total sale consideration of Rs. 2,61,000/-. The assessee came into contract with Shri A.F. Patel, who was local person from Chiplu n and was also a member of Chiplun Municipal Council. The said Municipal Council wanted the land for dumping garbage and resolution was passed by the Council on 05.06.2004 for purchase of the said land. The assessee had given registered Irrevocable General Power of Attorney dated 05.06.2004 to Shri A.F. Patel in respect of the said land and had also entered into an agreement to sell dated 05.06.2004 for the sale of land to Shri A.F. Patel for total sale consideration of Rs. 7,50,000/-. On the basis of aforesaid documents, Shri A.F. Patel transferred the said land to Chiplun Municipal Council vide sale deed dated 30.12.2004 for total sale consideration of Rs. 52,80,000/-. The possession of the land was also handed over in June, 2004. The GPA holder and the purchaser of land as per the agreement to sale, dated 05.06.2004, Shri A.F. Patel h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) that the assessee had filed a civil suit in the Civil Court of Ratnagiri against Shri A.F. Patel and Chiplun Municipal Council claiming that the GPA holder had acted fraudulently and received consideration of Rs. 51,58,560/- after TDS and the said amount should be handed over to the assessee. It is also claimed by the assessee in the said civil suit that as Shri A.F. Patel had entered into an agreement with Municipal Council of Chiplun and had received the consideration, income tax on the said transaction was to be paid by him. In view thereof, the CIT(A) thus, was of the view that the capital gains in respect of consideration received by the assessee to the extent of Rs. 7,50,000/- is to be taxed in the hands of assessee as long term capital gains. The taxable capital gains was worked out in the hands of assessee at Rs. 4,27,943/- after reducing the indexed cost of acquisition of Rs. 3,22,057/-. The CIT(A) further held that the remaining amount of sale consideration of land amounting to Rs. 45,30,000/- was to be taxed in the hands of Shri A.F. Patel as business income being income from adventure in the nature of trade and as income in another head as decided by the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring was issued to the assessee, who again did not appear on the date of hearing nor any application for adjournment was moved. In the absence of same, we proceed to decide the present appeal. Another point to be noted is that the assessee in the rerevised return of income has declared the sale consideration at Rs. 7,50,000/- is to be taxed in his hands. First of all, it may be noted that the agreement to sell was executed between the assessee and Shri A.F. Patel and the possession of land was handed over to Shri A.F. Patel and an Irrevocable Power of Attorney was executed. The CIT(A) has vide para 8.1 given his finding that Shri A.F. Patel has also taken the possession and handed over the possession of land to Chiplun Municipal Council. In the statement recorded on oath of Shri A.F. Patel, he had said to have paid some amount in cash to the assessee. Where the transaction is relatable to sale of land and the same has been registered on 30.12.2004, wherein the GPA holder had signed on behalf of assessee, the sale is complete and hence, the income from long term capital gains is to be assessed in the hands of assessee. However, in the facts of the present case, where the land though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee by following procedure laid down under the Act. Consequently, the grounds of appeal raised by the assessee that the addition has been made in the hands of assessee on protective basis has no merit since the CIT(A) has directed that pursuant to the decision of Civil Court, the necessary action should be taken under section 150 of the Act in accordance with law. Upholding the same, we dismiss grounds of appeal No.1 to 3 raised by the assessee. 9. Now, coming to the issue in ground of appeal No.4. The assessee is aggrieved by non-issue of notice under section 143(2) of the Act. 10. The learned Departmental Representative for the Revenue referred to the para 5 of assessment order, wherein it has been mentioned that notice under section 143(2) of the Act was issued on 16.10.2006 which was duly served upon the assessee on 20.10.2006. In response to which, the assessee personally attended on 21.10.2006 and thereafter, on various dates up to August, 2007. Further, the assessee attended along with the learned Authorized Representative for the assessee from 28.09.2007 to 20.12.2007. In view of notice under section 143(2) of the Act being issued to the assessee and the assessee havin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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