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TMI Blog2020 (2) TMI 714X X X X Extracts X X X X X X X X Extracts X X X X ..... f we look into the amendment made in the suit, there is no reference of encumbrances on the property purchased by the assessee and there is no claim for recovery of damages etc. for ₹ 36,00,000/- - the compromise document dated 3-12-2012, it is clear that the suit filed by shri Kisan S. Kharat was unconditionally withdrawn and therefore, there was no occasion of making the payment of ₹ 36.00 lakhs to Kisan S. Kharat made by the assessee. From contents of compromise document, it is crystal clear that the suit was withdrawn by Kisan S. Kharat unconditionally and there was no reference of making of the payment by the assessee Shri Hirabai Katore. Besides Hirabai Katore there are other co-defendants in the suit and it is not clear which of the defendants have entered into the compromise with the plaintiff. Moreover, in the sale document, there is clear stipulation that the property is free from any kind of encumbrances. There is one more reason to dis-agree with the contention of the learned A.R. that the amount of ₹ 36.00 Lakhs were paid pursuant to the agreement vide receipt dated 4-12-2012. On cursory glance of the document, it is clear that stamp paper on wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had issued the certificate on 14/12/2011 i.e. much prior to the purchase of property by the assessee on 30.07.2012, hence, there was necessity to make the payment to this person as well. In view of the above, the findings recorded by the lower authorities are in order and no interference is called for. Appeal of the assessee is dismissed. - ITA No.2844/PUN/2016 - - - Dated:- 13-2-2020 - Shri D. Karunakara Rao, AM And Shri Laliet Kumar, JM For the Assessee : Shri B. B. Mane For the Revenue : Shri Pankaj Garg ORDER PER LALIET KUMAR, JM: This appeal preferred by the assessee emanates from the order of the Ld. CIT(Appeals)-2, Pune dated 18.08.2016 for the assessment year 2013-14 as per the following grounds of appeal on record: 1. The learned CIT(A) erred on facts and in law in upholding disallowance selling expenses incurred in respect of sale of land amounting to ₹ 36,00,000/- paid to Mr. Kisan Kharat out of total expenses of ₹ 61,00,000/- without appreciating the facts and evidences submitted before the learned AO as well as the Ld. CIT(A) in this behalf. The learned CIT(A) contented that there is no evidence to establish the nexus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowed the said payment of additional cost of acquisition of land. 2.2. The Ld. AR of the assessee further submitted that Mr. Kisan Kharat, had instituted civil suit for specific performance of agricultural land, and to get released from encumbrances' amount of ₹ 36,00,000/- was paid, otherwise said land could not have been transferred and transaction would have been frustrated. Hence payment to Mr Kisan Kharta was absolutely essential and necessary payment to affect transfer; hence same is part and parcel of cost of acquisition. Therefore the assessee respectfully pleads that same should be allowed as cost of acquisition. 2.3 The Ld. AR of the assessee also submitted that the Assessing Officer has confirmed actual payment to Mr. Kisan, which he has stated on page 4 in Para 4. c) of assessment order as follow: ₹ 36,00,000/- is not at all connected to the transaction of purchase of land by the assessee and in turn sale of said land. Further, necessity of payment to Mr. Kisan has been established through court order dated 3rd December 2012 of Hon'ble Civil Judge Senior Division, Kopargan, which is on page 13 of the Paper Book. In that suit Mr, Kh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm Capital Gain. (iii) The land acquired by the appellant was sold on 11.12.2012 and the so called kararnama with Shri Bharat Chaudhary was entered after the sale deed was completed i.e. on 28.12.2012. If the matter would have been under litigation then the sale deed could not have been registered. (iv) Shri Bharat Chaudhary was the co-owner- of the land along with Shri Bhausahib Ranganath Katore with whom the appellant entered into the purchase deed for total consideration of ₹ 50,00,000/-. Therefore, it is held that total consideration was already paid to Shri Bharat Chaudhary and the subsequent claim of ₹ 2,50,000/- by way of Kararnama dated 28.12.2012 is nothing but an afterthought. (v) Shri Klsan Kharat is nowhere connected with the transaction as he was neither owner of the land nor involved in any other capacity with the land transaction. Just because he filed a civil suit on 08.10.2012 and for withdrawal of the same on 03.12.2012, does not entitle him to receive any payment from the appellant. If such practices are allowed then any person can make any sort of claim by filing the suit. (vi) It has been claimed in the Kararnarna that the entire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of sale consideration received on the sale of ancestral property. Hon ble Bench held that since there was no material to show that there relatives were having any title over property, therefore, assessee was not entitled for claiming deduction while computing capital gains. 4.3.8 The appellant has also placed reliance on some decisions, however the same are distinguishable on facts. In the case cited of CIT vs. Abrar Alvi, the issue was regarding expenditure related to removal of encumbrances. However as per detailed facts mentioned supra, there was absolutely no encumbrance on the property which was sold by the appellant. 4.3.9 As regards the case of CIT vs. Bradford Trading Co., the issue was regarding impediments created due to litigation and without removing those impediments the property could not be transferred. In the present easel the appellant has failed to prove as to how the suit filed by the alleged payee was creating any impediment in the transfer of the property. The suit was filed by Shri Kisan Kharat who had no locus standi with the land in question, as mentioned in detail in the preceding paragraphs. Therefore there was absolutely no legal impediment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012 and 4-12-2012 for an amount of ₹ 12.50 lakhs, ₹ 12.50 lakhs and ₹ 11.00 lakhs respectively 12-12-2012 25-12-2012 ₹ 25,00,000/- was allegedly paid in cash to Bharat B. Choudhari. 5.1 It is a case of the assessee before us that the amount of ₹ 36.00 lakhs was paid to Kisan S. Kharat on account of settlement entered between the assessee and Kisan S. Kharat with a view to improve the title of the assessee. Further, it was the case of the assessee that ₹ 25.00 lakhs was paid by the assessee to Bharat B. Choudhary for pursuing litigation before the Collector and the Civil Court. The learned A.O has considered the contention of the assessee and had not agreed to allow the amount of ₹ 61.00 lakhs to be taken as expenditure incurred by the assessee for improving the title of the assessee. On appeal, the findings given by the A.O was confirmed by the learned CIT(A). 5.2 In our view, in accordance with the law, the period for filing the suit for specific performance under Specific Relief Act, 1963 is provided for three years from the date of agreement. In the present case, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther, we also notice that besides Hirabai Katore there are other co-defendants in the suit and it is not clear which of the defendants have entered into the compromise with the plaintiff. Moreover, in the sale document, there is clear stipulation that the property is free from any kind of encumbrances. There is one more reason to dis-agree with the contention of the learned A.R. that the amount of ₹ 36.00 Lakhs were paid pursuant to the agreement vide receipt dated 4-12-2012. On cursory glance of the document, it is clear that stamp paper on which the affidavit was made, was purchased by Bhausaheb R. Katore and details of alleged payment of ₹ 36 Lakhs in installment given to Kisan S. Kharat, as on 16-6-2012, 3-12-2012 and 4-12-2012 for an amount of ₹ 12.50 lakhs, ₹ 12.50 lakhs and ₹ 11.00 lakhs respectively. The Bench is unable to accept that the payment of ₹ 12.50 lakhs was given on 16.06.2012 by the assessee in cash even prior to institution of the suit by Kisan S. Kharat and admittedly the suit was filed on 8-12-2012 only i.e much after making the payment and purchase of property by the assessee. 5.4 Therefore, the evidence relied upon befo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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