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TMI Blog2019 (12) TMI 576X X X X Extracts X X X X X X X X Extracts X X X X ..... ll the property in favour of Durai and associates, the assessee cannot purchase the property unless the agreement to purchase the property in favour of Durai and associates is discharged. In other words, the agreement holder, namely, Durai and associates has to be paid for his pre-existing right to purchase the property. This Tribunal is of the considered opinion that the payment made to pre-existing agreement holder to purchase the property to the extent of ₹ 1,58,00,000/- has to be considered as cost of the property/ purchase price. If this amount of ₹ 1,58,00,000/- paid to the agreement holder, namely, Durai and associates was taken into consideration, admittedly, there was no benefit accrued to the assessee. In fact, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wners of the land. While computing the capital gain, the assessee claimed the amount paid to the agreement holder Durai and associates as cost of acquisition. However, according to the Ld. representative, the Assessing Officer found that the amount paid to Durai and associates are in the nature of brokerage, therefore, it cannot be considered as cost of the property under Section 56(2)(vii) of the Income-tax Act, 1961 (in short 'the Act'). According to the Ld. representative, the guideline value of the property was ₹ 3,96,00,000/-. Since ₹ 1,58,00,000/- was paid to the agreement holder and each co-owner of the property was paid ₹ 49,00,125/-, therefore, the total value of the property was more than the guideline va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wners entered into agreement for sale with third party, how the assessee being purchaser could purchase the property without making payment to the agreement holder who have pre-existing right to purchase the property? The Ld. D.R. submitted that he leaves the matter to the discretion of the Tribunal. 4. We have considered the rival submissions on either side and perused the relevant material available on record. Admittedly, the assessee purchased the property from five co-owners. The assessee admittedly paid to the five land owners to the extent of ₹ 2,40,90,122/-. The assessee has also paid ₹ 1,58,00,000/- to the agreement holder Durai and associates. There is no dispute regarding payment made to the land owners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as cost of the property/ purchase price. If this amount of ₹ 1,58,00,000/- paid to the agreement holder, namely, Durai and associates was taken into consideration, admittedly, there was no benefit accrued to the assessee. In fact, the assessee has paid more than the market value fixed by the Registration Department. Therefore, there is no question of computing any income under Section 56(2)(vii) of the Act. In view of the above, this Tribunal is unable to uphold the orders of the lower authorities. Accordingly, orders of both the authorities below are set aside and the addition of ₹ 1,55,74,678/- is deleted. 6. In the result, the appeal filed by the assessee is allowed. Order pronounced in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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