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TMI Blog2018 (11) TMI 199X X X X Extracts X X X X X X X X Extracts X X X X ..... officer. The second allegation of the AO is that the vendor has no role in determining the quantum of payment to the unauthorized occupants (confirming parties). We note that since it was a tripartite agreement entered into among the assessee, purchaser and the unauthorized occupants(confirming parties), the quantum of the compensation was agreed upon jointly. The compensation was agreed upon by the parties and the same was directly paid by the purchaser to the unauthorized occupants (confirming parties). The assessing officer has failed to bring any cogent evidence on record to show that amount of ₹ 41,00,000/- has not been paid by purchaser to these unauthorized occupants. We do not find any force in the stand taken by the assessing officer as well as CIT(A), therefore, we delete the addition made by the assessing officer to the tune of ₹ 21,35,057/-. No infirmity in the computation of long term capital gain made by the assessee hence we accept the long term capital gain computed by the assessee to the tune of ₹ 1,82,577/-, and we direct the assessing officer to consider ₹ 1,82,577/- as long term capital gain declared by the assessee. - Decided in f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eemed FVC under section 50C of the Act should be adopted as deemed FVC in computing long term capital gains in the hands of the confirming parties. 2. That the assessee craves leave to add, amend, modify, rescind, supplement or alter any of the grounds stated here-in-above either before or at the time of hearing of the appeal. 3. At the time of hearing the ld. Counsel for the assessee informed the Bench that assessee does not press Ground No.1(c), therefore, we dismiss the Ground No.1(c) as not pressed. 4. The brief facts qua the issue are that the assessee with his other three coowners, during the FY 2009-10, sold his ancestral property, and as per copy of registered sale deed i) at 27A Shib Krishna Daw lane, P.S. Phoolbagan, Kolkata- 700054 measuring 43 cottahs of land with 10 very old (49 year) dilapidated asbestos shaded residential units measuring 14,100/-sq ft and, ii) at 27D Shib Krishna Daw Lane, Kolkata- 700054 measuring 2 cottahs of land with one old dilapidated semicommercial asbestos shaded room measuring 1000/- sq. ft. The aforesaid property excluding the asbestos shaded construction was leased out to one Khirode Prasanna Tarafder on 27.08.1960 for a perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. He mentioned the sales deed and stated that the sale was executed by the vendor, the purchaser and the confirming parties and the total consideration of ₹ 2,41,00,000/- and payment to confirming parties an amount of ₹ 41,00,000/- were agreed upon by all the parties. But nothing found in the deed of sale that payment of ₹ 41,00,000/- to the confirming parties were agreed upon by the assessee. Actually, the vendors had no role in determination the quantum of payment to the confirming parties who decided the matter with the purchaser. 7. The ld AO then analyzed the provisions of Section 48 of the I.T. Act, (in the light of the above facts) which states that: The income chargeable under the head Capital Gains shall be computed by deducting from the full value of consideration received or accruing as a result of transfer of the capital asset the following amounts namely: expenditure incurred wholly and exclusively in connection with such transfer . But the assessee with other members of the vendor did not incur the expenditure, the payment of ₹ 41,00,000/- was made by the purchaser, M/s Penion Developers (P) Ltd, who incurred the expenditure. It is obvi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s paid to the unauthorized occupants was also rejected by the ld. CIT(A). 9. Aggrieved by the order of the ld. CIT(A), the assessee is in appeal before us. 10. The ld. Counsel for the assessee submitted before us that the sale deed was entered into between three parties. The first party being the assessee and other coowners, the second party being the purchaser and the third party being the unauthorized occupants. Hence, the total consideration to be paid by the purchaser for purchase of the property was agreed upon among the co-owners including the assessee, the unauthorized occupants and the purchaser. The total consideration of the property sold was agreed at ₹ 241 Lac. Out of the above consideration, a sum of ₹ 200 Lac was attributable to the share of the assessee and other co-owners of the property. The remaining amount of ₹ 41 Lac. was paid to the unauthorized occupants. As such, each of the above parties was liable to pay tax in respect of the proportionate share of the total consideration received by them. The stamp duty value of the aforesaid property was determined at ₹ 3,46,64,309/- though the actual consideration received by the co- owne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of section 50C of the Act is not applicable to the unauthorized occupants, the aforesaid deduction of the proportionate share of the stamp duty value of the unauthorized occupants cannot be taken into consideration. Further, the Ld CIT(A) also confirmed the action of the AO in not giving the deduction of ₹ 41 Lac in arriving at the deemed value of consideration of the property on the alleged ground that there is no provision in section 50C of the Act to reduce the value of consideration of the property paid to unauthorized occupants in order to arrive the deemed value of consideration of the property. 12. The Counsel submitted that the co-owners including the assessee along with the unauthorized occupants were parties to the sale of the property. Though the title to the property was transferred by the assessee and other co-owners to the developer, the possession of the property was handed over by the unauthorized occupants to the purchaser in lieu of the consideration received for a sum of ₹ 41 Lac. Had the unauthorized occupants were not there then the assessee along with the other coowners would have received the entire sale consideration agreed upon by the purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he property and the persons who had pre-occupied the property, known as, unauthorised occupants illegally with the developer. We note that the unauthorized occupants were occupying the property by virtue of a lease deed entered into by their predecessor with the ancestors of the assessee on 27.08.1960 for a period of 20 years. However, the said parties continued to be in possession of the property even after the expiry of the lease term without appropriate legal authority. The assessee and his co-owners had been attempting to evict the aforesaid persons for a long time but were unsuccessful in doing so. Further a suit was filed against the unauthorised occupants before the 1st Judge at Sealdah Court which remained unresolved. Ultimately, the assessee and other family members decided to sale the property to a developer in order to reduce the litigation related expenses and as such the tripartite agreement was entered into by them. The total sale price of the property was fixed at ₹ 2,41,00,000/-, out of that a sum of ₹ 41,00,000/- was directly paid by the buyer (developer) to the unauthorized occupants and balance of ₹ 2,00,00,000/- ( ₹ 2,41,00,000- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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