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TMI Blog2022 (8) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... om the above statement, it is also very clear that dealings are only between the purchaser of the property and tenants occupied in that premises - purchaser has not given any details/break-up for arriving the figure of ₹.7.40 crores/₹.6.65 crores, which it was aggrieved to pay for vacation of tenants of the premises or how many tenants have occupied in that premises. Under the above facts and circumstances, we are of the considered opinion that whatever amount paid by the buyer to the tenant for the vacation of tenancy should not be taxed in the hands of the owner of the capital asset. Adoption of value of the property sold by the assessee - AO shall, either adopt the value of the property under section 50C of the Act or DVO valuation of the property. Without any evidence, the AO cannot adopt the value other than the above. In this case, AO has neither referred for the valuation of FMV to the DVO nor considered the guideline value adopted for the stamp duty purposes by the SRO - Admittedly, there was no search and seizure operation carried out in the premises of the assessees. There was absolutely no evidence to show that the assessee have received on-money for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised by the assessee are as follows: 1. The order of the Commissioner of Income Tax (Appeals) is erroneous, arbitrary and against the settled principles of law. 2. The Commissioner of Income Tax (Appeals) erred in confirming the addition which was made by taking only a portion of the statement recorded by the Assessing Officer. 3. The Commissioner of Income Tax (Appeals) erred in not extending the benefit of cross examination even though a statement recorded from the buyer is heavily relied upon to complete the assessment. 4. The Commissioner of Income Tax (Appeals) erred in confirming the addition without appreciating the fact that the Assessing Officer had not invoked section 50C of the Income Tax Act, 1961 to take guideline value as the value for the purpose of computing capital gain. 5. The Commissioner of Income Tax (Appeals) erred in confirming the addition without appreciating the fact that the tenancy right is the capital asset and therefore the amount paid by the buyer to the tenant for the vacation of tenancy can be taxed only in the hands of the tenant and not in the hands of the owner of the capital asset. 6. The Commissioner of Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ACIT, Central Circle- IV(2), Chennai vide letter No. Conf./Information/Cent.Circle/IV(2)/13-14 dated 28.01.2014 enclosing a copy of the sale deed and sheet numbered 40 45 describing the payment made by M/s. Saravana Selvarathnam Retail Private Limited, Chennai to the four family members wherein it was stated that an amount of ₹.2,39,21,100/- was paid as on-money. After considering the submissions of the assessees, the Assessing Officer completed the assessments in all the four cases by adding the on-money for the purpose of computation of Long Term Capital Gains at ₹.87,58,114/- in case of each of the family members. The Assessing Officer also brought to tax the undisclosed interest receipt in case of assessees Shri A. Imtiaz and Smt. Halima. On appeal, by dismissing the ground of denial of receipt of on-money and confirming the assessment order as well as deduction claimed under section 54 and disallowance of interest income, the ld. CIT(A) has directed the Assessing Officer to recompute the indexed cost and partly allowed the appeals of the assessees. 3. On being aggrieved, all the assessees are in appeal before the Tribunal. The ld. Counsel for the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ues for M/s. Sarvana Selvarathnam Retail Private Limited, Chennai wherein he stated the details of payment as under: 4400 sq.ft. = 10.09174311 @ 35 lakh per cent Market value of the property = ₹.3,53,21,100 Less: Guideline value paid in DD = ₹.1,14,00,000 Balance = ₹.2,39,21,100 Less: Already paid = ₹. 86,00,000 Balance paid = ₹.1,53,21,100 The above statement was accepted and confirmed by the Managing Director Shri S. Saravana Arul, M/s. Saravana Selvarathnam Retail Private Limited, Chennai by furnishing his reply on 04.09.2011. 5.2 The above assertion of the Assessing Officer is found to be incorrect for the reason that the purchaser of the property has not at all mentioned the above payment details in the reply dated 04.09.2011 of Shri S. Saravana Arul, Managing Director, Saravana Selvarathnam Retail Pvt. Ltd. and for ready reference, the reply letter dated 04.09.2011 is reproduced verbatim as under: 4th September, 2011 The Deputy Director of Investigation, Unit II, 108, Mahatma Gandhi Road, Chennai 600 034. Dear Sir, Sub: Search proceedings U/s. 132 of Income Tax Act, 1961, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses, which was noted in the sized document by the Department and the purchaser has admitted to have made payment amounting to ₹.6.65 crores for vacation of tenants of the premises, which means, the purchaser has purchased encumbered property and in order to clear the encumbrances, the purchaser paid lump-sum amount to the tenants/occupants of the property. Moreover, in the above statement, in nowhere it was mentioned that the above sum of ₹.6.65 crores was paid either to the seller or through the seller of the property. From the above statement, it is also very clear that dealings are only between the purchaser of the property and tenants occupied in that premises. However, the purchaser has not given any details/break-up for arriving the figure of ₹.7.40 crores/₹.6.65 crores, which it was aggrieved to pay for vacation of tenants of the premises or how many tenants have occupied in that premises. Under the above facts and circumstances, we are of the considered opinion that whatever amount paid by the buyer to the tenant for the vacation of tenancy should not be taxed in the hands of the owner of the capital asset. 6. The next point for consideration is w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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