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TMI Blog2017 (1) TMI 1093X X X X Extracts X X X X X X X X Extracts X X X X ..... s NCCL. Even though assessee’s name in the sale agreements is not shown as an owner, but, it is shown as one of the consenting parties. Moreover, assessee has received a portion of the sale consideration from this transaction i.e. ₹ 85.05 lakhs out of ₹ 166.8 lakhs (about 51%) of the total consideration. It shows that assessee is one among the parties, who sold the property to M/s NCCL. In case, the assessee is not the main person in the deal, there is no way the assessee would have received more than 50% of the sale consideration. In our considered view, the assessee is one of the selling parties in the deal and the assessee is eligible to treat this transaction as income from capital gains. Accordingly, the grounds raised by the revenue in this regard are dismissed. Assessee eligibility to claim ₹ 30 lakhs as cost of purchase in stead of ₹ 15.3 lakhs as allowed by the CIT(A) - Held that:- As per the agreement of sale submitted by the assessee, assessee has confirmed the payment of ₹ 15 lakhs to Shri Ali Asghar Ceizure, which was also confirmed by Shri Ali Asghar Ceizure in the same agreement, but, the assessee is supposed to pay ₹ 15 lakhs a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition consists of ₹ 35,70,000/- added on substantive basis and ₹ 49,35,000/- added on protective basis. An expenditure of ₹ 2,50,000/- towards litigation etc. was allowed while assessing the above income. 2.2 On appeal, the CIT(A) confirmed the addition made on substantive basis and deleted the addition made on protective basis. On the issue of nature of this receipt, the CIT (A) confirmed the stand taken by the AO and denied the assessee's claim that this receipt is long term capital gains and not income from other sources. On further appeal, the Hon'ble ITAT Hyderabad A' Bench, Hyderabad vide Order in ITA No. 301/Hyd/2006 dated 26/9/2008, held that the entire receipt of ₹ 85,05,000/- has to be assessed on substantive basis in the hands of the assessee only instead of separately assessing this amount in the hands of all the four parties namely himself, his wife, son and Ali Asghar Ceizure. The issue of nature of this receipt was restored to the file of the AO to re-examine the same. The Hon'ble Tribunal further directed the AO to consider the plea of the assessee regarding the claim of alleged payment of ₹ 30,00,000/- to Sri Ali A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000/- out of total receipts of ₹ 1,66,80,000), the purchase price of the assessee needs to be restricted to 51% of the amount of ₹ 30,00,000/- as per the agreement for sale for sale dated 09.04.1986, mentioned herein above. Thus, the deemed purchase price paid and payable amounts to ₹ 15,30,000 and accordingly, since the assessee had paid an advance of ₹ 15,00,000 on 09.04.1986, and the remaining amount was paid after realization of sale proceeds, indexation is applicable on ₹ 15,00,000 only and the deemed amount paid after sale proceeds received being ₹ 30,000 (in the place of ₹ 15,00,000 originally agreed to, but because the sale proceeds were shared by others, accordingly the deemed purchase price to the assessee is worked at ₹ 15,30,000) on which no indexation is possible. Now the main question whether the receipt of sale proceeds in the hands of the assessee constitute capital gains or business income. The CIT(A) observed that as rightly argued by the AR and as it transpires from the records, the assessee paid advance and took possession of the impugned land and spent amounts to safeguard it from encroachers/ other ruffians, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interests need to be evaluated under law. 7. Ld. DR submitted that M/s NCCL purchased the property situated at Banjana Hills in seven sale agreements, which are part of the paper book. She submitted that the assessee is not a owner of this piece of land, which was sold to M/s NCCL. She brought to our notice some of the agreements entered between vendor and vendee in which in first two agreements assessee s name is nowhere seen in the agreements. In other agreements, it was mentioned as consenting party. She submitted that as per the findings of the AO, assessee is not the owner of the property nor an agent. It is submitted that the assessee has produced a copy of the agreement of sale before the CIT(A) to claim that assessee has bought disputed land from Shri Ali Asghar Ceizure on 10th April, 1986. It is to be noted that this agreement of sale is not a registered document, cannot be taken at face value. She vehemently argued that assessee has, no doubt, received considerable portion of the sale consideration, it cannot be termed as income from commission nor from income from capital gains, but, it can only be treated as income from other sources. Ld. DR relied on the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perty as well as bringing the disputed parties on the table successfully to complete the sale with M/s NCCL. Considering the above facts, no doubt, the assessee is not the owner of the property since the assessee has not purchased the property by proper deed, but, undisputedly has paid consideration of ₹ 15 lakhs to Shri Ali Asghar Ceizure and was having absolute control over the disputed property in his possession all these years, it shows that the assessee had absolute control over the property by which he is also a part of owner and also assessee had played the role of a owner in the agreement of sale between the disputed parties and M/s NCCL. Even though assessee s name in the sale agreements is not shown as an owner, but, it is shown as one of the consenting parties. Moreover, assessee has received a portion of the sale consideration from this transaction i.e. ₹ 85.05 lakhs out of ₹ 166.8 lakhs (about 51%) of the total consideration. It shows that assessee is one among the parties, who sold the property to M/s NCCL. In case, the assessee is not the main person in the deal, there is no way the assessee would have received more than 50% of the sale consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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