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TMI Blog2024 (5) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... thi language, shows that this document is titled at its top as To Develop Property to sell purpose Agreement . Appellant assessee has been described as owner and in possession over the said land and after converting the land in question from agricultural to non-agricultural purposes, appellant assessee executed the said agreement in favour of the company by the delivery of possession along with rights of construction in order to prepare plots with intent to sell to third party purchasers. Para 3 of aforesaid agreement further states that the appellant owner also executed power of attorney with irrevocable rights in favour of the company on the same date i.e on 23.03.2016 itself. However, no such power of attorney is on record. The perusal of the entire contents of the aforesaid development agreement shows that it contains all ingredients of a sale. None of the aforesaid two documents speak as to whether the appellant assessee was authorized by the said company to purchase the said land on behalf of the company. The account books of the company merely indicate the name of the appellant along with 4 others with different amount as long term borrowings and do not clarify the above fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred as "Act"] by the Ld. Commissioner of Income-tax (Appeals)/NFAC in appeal No. 1/10402/2018-19, wherein the Ld. CIT(A) has confirmed the addition of ₹ 1,45,60,000/- as capital gain in the appellant's total income added by AO vide assessment order dated 28.12.2018. 2. The brief facts leading to this appeal state that the assessee filed his return of income for A.Y. 2016-17 on 29.07.2016 declaring his total income as ₹26,33,430/-. The case of the assessee was selected for scrutiny under CASS. In response to the statutory notices, the assessee submitted before Assessing Officer [AO] that he entered into development agreement with M/s. Indo Asian Buildcon Pvt. Ltd. [hereinafter referred to as the "company"] on 23.03.2016 with respect to the land (Gut No. 274) at Dhakne as plot Nos. 1 to 39, admeasuring 14,000 Sq.mtr & delivered possession for development and construction over the land for the consideration (compensation) of ₹2,51,000/-. The said land was earlier purchased by the appellant assessee vide purchase agreement dated 29.11.2013 for the consideration of ₹20,00,000/- (AO has shown as 21,00,000/-). The AO found that the government valuation/stamp dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said land on behalf of the company? 8. The Ld. Representative for the appellant has argued that he is director of the company submitting that the land, at which the capital gain arose, was purchased by the appellant assessee on behalf of the company. Entire consideration at the time of purchase of the said land was paid by the company itself. A „development agreement‟ was executed on 23.03.2016 between appellant assessee and the company. According to the terms of the agreement, the possession of the land was handed over to the company for development and construction work etc.. The capital gain could not have been added in the total income of the appellant for the relevant AY. Further submitted that section 50C of the Act is not applicable in the facts of the present case. Prayed to delete the addition of capital gain from the income of the appellant assessee for the relevant A.Y. 2016-17 and to set aside the impugned order. 8.1 Ld. Representative for the appellant assessee has referred consolidated order dated 16.09.2016 passed by ITAT, Mumbai in ITA No. 5330/Mum/2009 & ITA No. 5331/Mum/2009, Voltas Ltd. Mumbai V. ITO WD 7(3)(4), Mumbai & ITA 5320/Mum/2009, ITO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the company along with the possession along with all rights in the land for the consideration of Rs. 2,51,000/- vide cheque No. 9062 of Kotak Mahindra Bank. There is no MOU between the assessee and the company to infer that the said land was purchased by the assessee on behalf of the company. The consideration was far less than the government valuation of Rs. 1,66,60,000/-. AO has rightly applied section 50C of the Act. Ld. DR has requested to confirm the order of the Ld. CIT(A) and to dismiss the appeal. 9.1 The Ld. DR has referred order dated 27.07.2016 passed by the Mumbai bench of this Tribunal in ITA No. 5075/Mum/2010 the ACIT 25(3) Mumbai v. M/s Dattani Development Kandivali(W), Mumbai, wherein the Ld. Tribunal has held in relevant Para 10 of its order as under: "10.……………………………………………..Thus, the land which was sold during the previous year by the assessee, thus keeping in view our above discussions in the light of facts and circumstances of the case, was a capital asset within the provisions of Section 2(14) of the Act and the valuation of the land as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue's appeal is dismissed. 13. As regards to the second issue regarding adoption of market value as per the provisions of section 50C of the Act, we are of the view that in the present case assessee received consideration in two-folds i.e partly cash and partly in kind Le. by way of property in the shape of flats in the re-developed property. Such transactions are thus a combination of sale and exchange. ……………………………………………..We find that as per development agreement the market value of assessee's share is Rs. 2,31,41,000/- Further, assessee has received the sum of Rs. 11.20 lacs due to fall in free area committed by the developer i.e committed area of 4,000 sq. Ft. as against the same received area is only 3776 sq. Ft. The assessee has computed market value as per agreement at Rs. 34.36 lacs which is the total area of 3776 sq. Ft. as attached in the agreement. Accordingly, the market value of 224 sq. Ft. is Rs. 2,03,830/- only. In view of the above, we are of the view that the value declared in agreement (including all transaction) will be higher than the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid two documents speak as to whether the appellant assessee was authorized by the said company to purchase the said land on behalf of the company. The account books of the company merely indicate the name of the appellant along with 4 others with different amount as long term borrowings at its pars 2.3 and do not clarify the above fact in specific terms. Undisputedly, the Maharashtra State Laws, agricultural land could be acquired only by farmers. The appellant assessee purchased the said land as a farmer on 23.03.2016. The appellant could not show any memo of understanding with the company so as to infer that he purchased the said land on behalf of the company. The facts of the referred cases of this Tribunal in Voltas and the facts order of Punjab and Haryana High Court in Ram Kumar Duhan, ibid, are not identical to the facts of the instant case. The first point is accordingly decided in negative against the appellant assessee. 13. On the second point of consideration, the applicability of section 50C of the Act has to be examined. The relevant part of the section reads as under: "50C.(1) Where the consideration received or accruing as a result of the transfer by an assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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