9911796707
TMI Blog2016 (6) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... that in case the assessee recovers some amount of sale consideration from Shri A.F. Patel, then the same is to be considered as capital gains in the hands of assessee on protective basis. However, the CIT(A) has further clarified this by saying that where the assessee receives additional consideration in future from Shri A.F. Patel, then the same is to be assessed in the hands of assessee on substantive basis by taking necessary action under section 150 of the Act in accordance with law. The final conclusion of CIT(A) in this regard is that since the civil suit for recovery of the consideration is pending, then whenever if any amount is received by the assessee, then the same is includable in the hands of assessee under section 150 of the Act. We find no error in the said directions of CIT(A). 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 - Decide against assessee. Non-issue of notice under section 143(2) - Held that:- Notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case and in law and having accepted by Ld. C.I.T. (A) that the amount of consideration of ₹ 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 vitiated in law for want of service of statutory/ mandatory notice under S.143(2) of the Act and in view of this the assessment is illegal and without jurisdiction. The assessment be quashed. 5) On the facts and in the circumstances of the case and in law the assessee denies his liability to pay interest u/s. 234-A, 234-B and 234-C of the Act and the same be deleted 4. The issue in grounds of appeal No.1 and 2 is in relation to the addition made on account of capital gains amounting to ₹ 45,30,000/- on protective basis. 5. Briefly, in the facts of the case, the assessee was working as Deputy Engineer with MIDC, Aurangabad since 1998. The assessee had also worked as an employee of MIDC Chiplun Sub-Division during the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o TDS certificates issued by Municipal Council, Chiplun for ₹ 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 ₹ 3,61,311/-. In the re-revised return, the assessee has claimed sale consideration to ₹ 7,50,000/- The Assessing Officer considered at length the assessee having filed different returns of income and observed that the ownership of land was confirmed by the assessee himself in his statement record under section 131 of the Act and further enquiries were made as to whether the land sold by the assessee to Shri A.F. Patel and whether he had further sold to Chiplu n Municipal Council. The assessee in reply, confirmed that he had sold the land to Shri A.F. Patel for ₹ 7,50,000/- on 05.06.2004 and had received part money up to October, 2004 and part of balance money of ₹ 4,60,000/- was received in cash during the period January, 2005 to August, 200 5. In support, the assessee furnished the document on stamp paper dated 01.06.2004 of ₹ 20/- typed in Marathi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 ₹ 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 ₹ 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 had received cheques of ₹ 51,58,560/- from the Council after deduction of TDS from total sale consideration of ₹ 52,80,000/-. The statement on oath of Shri A.F. Patel was recorded, in which he claimed that he had incurred expenditure on development of the said land sold and had made payments to four subcontractors totaling ₹ 44,30,000/-. Further, Shri A.F. Patel stated in statement on oath that he had paid some amount in cash to the assessee and however, in respect of said payment, no evidence was filed by Shri A.F. Patel. In view thereof, the CIT(A) was of the view that the assessee had not received consideration to the extent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of consideration received by the assessee to the extent of ₹ 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 ₹ 4,27,943/- after reducing the indexed cost of acquisition of ₹ 3,22,057/-. The CIT(A) further held that the remaining amount of sale consideration of land amounting to ₹ 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 Officer according to the provisions of law. Further, since the assessee had filed suit in Civil Court against Shri A.F. Patel and Chiplun Municipal Counci l for recovery of sale proceeds and in case the assessee recovers the same amount of sale consideration from Shri A.F. Patel, the same is to be added in the hands of assessee, therefore, the amount of sale consideration of ₹ 45,30,000/- was held to be considered as capital gains in the hands of assessee on protective basis. The CIT(A) thus, held if the appellant receives additional consideration in future from Shri A.F. Patel as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 on the date of sale deed was in the name of assessee, which fact has been accepted by the Assessing Officer, Chiplun Municipal Council did not pay the consideration for sale to the plot holder, but paid the amount by account payee cheque to Shri A.F. Patel, who was a GPA holder, except for ₹ 7,50,000/-, no other amount has been paid to the assessee. The assessee has 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 had received the consideration of ₹ 51,58, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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