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TMI Blog2017 (10) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... find fault with this approach of the AO, since the assessee has not filed the legal heir certificate even before us at this stage. But, the assessee can file such certificate even at this stage. Neither the AO nor the CIT (A) have correctly followed the earlier directions of the Income Tax Appellate Tribunal. In view of the same, we deem it fit and proper to remand the issue to the file of the AO with a direction to consider the assessee’s application for bringing all the legal heirs of Shri A. Ramulu on record and to complete the assessments in the hands of the assessee and the other legal heirs de novo after making due inquiries and also after making due inquiries with regard to assessee’s contentions that possession of the property was never handed over to the vendees and that the construction permission has been given to the other co-owners of the property, to come to a conclusion on the question as to whether there is a transfer of the property. - ITA No.543/Hyd/2016 - - - Dated:- 4-10-2017 - Smt. P. Madhavi Devi, Judicial Member And Shri S.Rifaur Rahman, Accountant Member For The Assessee : Shri K.A. Sai Prasad For The Revenue : Shri B. Raja Ram, DR OR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iah and Shri A. Chennaiah and the three groups of persons stated above happened to be the descendants of the original owners. Two companies by name M/s. Sai Sree Financial and M/s. Sai Sree Projects Private Ltd, owned by one Shri M. Sambasiva Rao had engaged Shri Ambati Satyanarayana as a middleman/broker on their behalf for initiating a purchase deal for the entire land of 10164 sq. yards from the above three groups of persons. In September, 1999, the Enforcement Directorate, Govt. of India, had conducted certain inquiries/investigations into the alleged violation of Foreign Exchange Regulation Act, by Shri Sambasiva Rao, the promoter of the two companies mentioned above, and it was found that he had received certain secret commission from a supplier of urea from Turkey without the authority from the RBI and that such secret commission was used by him to purchase the 10164 sq. yards of land located at Nampally, Hyderabad from the above three groups of persons sometime in the year 1995-96. 4. On the basis of the above Departmental information, a search and seizure operation u/s 132 of the Act was conducted in the office of Shri Ambati Satyanarayana in June, 2000 and several incr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der to be passed by the AO in pursuance of the directions of the Tribunal and only if warranted may consider initiating proceedings u/s 263 of the Act again. 7. Consequent to the order of the ITAT, the AO completed the assessment afresh. During such assessment proceedings, the learned Counsel for the assessee filed an application that the assessee, Mr. Ramulu, had died and is survived by three sons (i) Aravind Arya, (ii) A. Veer Raghuveeraya and (iii) A. Jayaveeraya and prayed that all the three persons be brought on record as his legal heirs. The AO however, did not accept this contention of the assessee stating that the assessee did not submit any legal heir certificate. The assessee had also submitted that Late A. Ramulu s share should be apportioned into four portions as the assessee s mother, Smt. Y. Yashodamma had willed her share of the land to one Shri N. Narsimha, who had also offered the capital gain to tax in his hands. The AO did not accept this contention of the assessee also, on the ground that the copy of the will was not produced before her. 8. As regards the actual sale consideration received by Sri A. Ramulu and his two brothers to be only ₹ 54.00 lakh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as sale consideration but this fact has not been considered by the AO. He drew our attention to the various variations in the notings of the seized material as to the actual consideration received by the assessee and also with regard to the registration charges incurred for the purchase of the property by Mr. Sambasiva Rao. He drew our attention to the fact that at one place, registration charges are mentioned as ₹ 1.4 crores, whereas at another place, ₹ 2 crores is mentioned whereas the actual registration charges incurred was ₹ 16.00 lakhs (approximately) only. Therefore, according to him, the seized material is not reliable and cannot be the basis for making any addition. He also submitted that the possession of the property was never handed over to the vendees and therefore, there was no transfer warranting, bringing of capital gain to tax. 11. The learned Counsel also drew our attention to the application made before the AO and also before the Income Tax Appellate Tribunal, informing that Shri A. Ramulu had expired and is survived by three sons, who are to be brought on record as the legal heirs. He submitted that the assessee being one of the sons of Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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