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TMI Blog2023 (1) TMI 1009X X X X Extracts X X X X X X X X Extracts X X X X ..... direction of Collector, Dadra Nagar Haveli, we are fully convinced with the order of ld. CIT(A) that there is no condition precedent in the sale deed dated 12/08/2011. Moreover, such condition was on the seller of land to maintain minimum standard of area of land to safeguard their interest. Therefore, no justification for allowing such expenses while calculation capital gain. Accordingly, we uphold the order of ld. CIT(A) qua this issue. In the result, grounds of appeal raised by assessee is partly allowed. - ITA No. 1311/Ahd/2017 And ITA No. 1312/Ahd/2017 - - - Dated:- 20-1-2023 - Shri Pawan Singh, Judicial Member For the Appellant : Shri Hardik Vora, Advocate For the Respondent : Shri Vinod Kumar, Sr. DR ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER: PAWAN SINGH, JUDICIAL MEMBER: 1. These two appeals by two different assessees are directed against the separate orders of learned Commissioner of Income Tax (Appeals), Valsad [in short, the ld. CIT(A)] both dated 17/03/2017 for the Assessment year (AY) 2012-13. In both these appeals, the assessee(s) has raised certain common grounds of appeal, facts in both appeals are common as both the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee in ITA No. 1312/Ahd/2017) purchased non-agricultural land at Silvassa bearing Survey No. 233/1 admeasuring 33 acres for a sum of Rs. 33.50 lacs which was registered with Sub-Registrar on 11/08/2011. The Assessing Officer further noted that the assessee and his co-owner sold part of this land admeasuring 14.3 acres out of Survey No. 233/1/3 with co-owner for a sum of Rs. 42,90,000/-. Further part of survey No. 233/1/1 admeasuring 3 acres sold by assessee with his co-owner for a consideration of Rs. 9.00 lacs and the transaction was registered on 19/03/2012. The property sold by assessee are non-agricultural land (N.A. land) situated in Silvassa Municipal Area and no capital gain was offered in his return of income. 3. On perusal of other sale and purchase deeds, the Assessing Officer noted that the assessee with Uttamchand Patel purchased non-agricultural land in revenue survey No. 227/2/69/1 admeasuring 21.75 acres of Rs. 22,25,000/- which was registered on 12/08/2011. On further perusal of other sale deed registered on 12/03/2011, the Assessing Officer noted that the assessee sold the said land with his co-owner at Rs. 65,25,000/- which is also non-agricultural land sit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Registration charges Rs. 00,16,481/- N.A. Land charges Rs. 00,30,325/- Cost of improvement Rs. 04,45,800/- Rs. 27,83,406/- Short term capital gain Rs. 37,41,594/- Total short term capital gain (1 + 2) Rs. 54,57,168/- The assessee was having 50% share and remaining was of Uttambahi V. Patel, accordingly, 50% of capital gain of Rs. 27,28,584/- was added to the income of assessee. 4. Aggrieved by the additions, the assessee filed appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee filed his detailed written submissions. The submissions of assessee is recorded in para 3.2 of order of ld. CIT(A). The assessee in his submission submitted the comparison of his working of short term capital gain as well as working of Assessing Officer in the following manner: Particulars STCG Worked out (Rs.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Y) 2010-11 and 2012-13. The assessee further stated that he produced Rajesh K Mehta during the hearing and filed his affidavit. The assessee further stated that Rajesh K Mehta was holding possession of land from last 11 years and he demanded huge amount from assessee and his co-owner, ultimately, it was mutually decided to transfer a piece of land without any consideration. Consideration was mentioned in the sale deed for the purpose of registration. Cheques mentioned on the sale deed were never realised either by assessee or by his co-owner. Such fact was admitted by the said purchaser before the Assessing Officer as well as Joint Commissioner of Income Tax (JCIT). There is no evidence that such sale consideration was passed from Rajesh K Mehta to the assessee. To support such contention, the assessee relied on the decision of Hon ble Bombay High Court in the case of CIT Vs Hemal Raju Sheth (2016) 70 (I) ITCL 362 wherein it was held that any contingent differed consideration could not be taxed in the hands of the until such consideration is actually received or accrued. Such sale deed was executed without consideration would have been blocked for a limited period as Rajesh K Mehta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 24/4/2010 to justify such expenses of Rs. 15.55 lacs. In para 18 of said order, it is referred that the seller s widow Nani Navla and others shall purchase agricultural land i.e. Survey No. 22/2 admeasuring 0.80 hectare out of 1.56 hectare of village Falandi from sale consideration of this land till that time the land records will not be mutated in favour of purchasers. On the basis of such observation, the ld. CIT(A) was of the view that from the said order, it was mandated that widow of Nani Navla will purchase 0.80 hectare of land at village Falandi out of sale consideration of land at S.R. No. 227/2. The assessee purchased land vide sale deed dated 12/08/2011 and the said sale deed nowhere mentioned over and above Rs. 22,25,000/- for 2.75 acres of land for SR No. 227/2. Thus, as per clause (18) of order of revenue department, the assessee was not required to pay any such amount. Such condition was on the sale, that prior to mutation of land in favour of purchaser, only to safeguard the interest of widow of land of plot of S.R. No. 227/2, therefore, there is no justification for claiming such cost of payment of Rs. 15.55 lacs. Therefore, the affidavit about the claiming of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed is to be taxed and not on a hypothetical basis. Since no such amount was received by the assessee, therefore, cannot be considered for taxation. The ld. AR further submits that the assessee along with other co-owner purchased land in Survey No. 227/2/69/1 situated at Moje Dadra Nagar Haveli from Nani Navla Patel and others vide sale deed dated 22/08/2011 for a sale consideration of Rs. 37,80,000/-. As per para 18 of order of Collector, Dadra Nagar Haveli dated 24/04/2010 that the sellers of land shall purchase agricultural land from the sale consideration and till that time land record shall not be mutated in favour of purchaser. Thus, in order to get peaceful possession and complete ownership, the assessee paid Rs. 9.00 lacs to seller i.e. Nani Navla Patel and others to purchase agricultural land in the name of sellers. Such amount was borne equally by assessee as well as other co-owner. To support such contention, the assessee filed copy of order of Collector, Dadra Nagar Haveli dated 24/04/2010, affidavit of seller in Gujarati along with its English translation. 10. On the other hand, the ld. Sr. DR for the revenue supported the order of ld. CIT(A). The ld. Sr. DR f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... copy of his bank statement as well as bank statement of Rajesh K Mehta. On careful perusal of bank statement of Rajesh K Mehta, I find cheque Nos. 395568, 395569 and 395570 all dated 28/03/2012 drawn on Dena Bank was never encashed or realised either from bank account of Rajesh K Mehta or in the account of assessee. Thus, consideration shown in the sale deed was never passed/received by assessee. Shri Rajesh K Mehta has confirmed his fact in his affidavit. Thus, the said amount was not received by the assessee. It is settled position under law that income which has earned or accrued can only be taxed. In my considered view, once it is shown and proved on record that Rs. 9.00 lacs is not received by the assessee, so such income cannot be considered for taxation in the hands of assessee. So the assessee get relief to that extent. 13. So far as other amount which consists of Rs. 15.55 lacs and Rs. 9.00 lacs which was allegedly incurred by assessee for purchasing of land in the name of Nani Navla Patel as per the direction of Collector, Dadra Nagar Haveli, I am fully convinced with the order of ld. CIT(A) that there is no condition precedent in the sale deed dated 12/08/2011. More ..... X X X X Extracts X X X X X X X X Extracts X X X X
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