9911796707
TMI Blog2024 (11) TMI 1305X X X X Extracts X X X X X X X X Extracts X X X X ..... te Shri Ram Prakash Goel was allotted land at Kaushambi which was 56% equivalent of land acquired vide government order no. 809/9-A-3-2202-45 L.A./90 dated 15.03.2002 issued by Chief Secretary, Government of Uttar Pradesh. 4. The assessee's, late husband vide the said allotment letter became entitled to the land in question measuring 3474.74 sq. mts. in Kaushambi which was earmarked and sanctioned as plot no. SH-1 in Kaushambi residential scheme measuring 3475 sq. mts. by GDA vide letter No. 174/12/L.A.A./2012 dated 17.01.2013 against payment of development fee Rs. 1,02,51,250/-, lease rent of Rs. 12,33,515.30 and freehold charge of Rs. 2,46,703.06, totaling to Rs. 1,17,31,468/36. The assessee had entered into an MOU on 08.04.2013 with M/s. Meenal Housing Pvt. Ltd. in respect of the plot no. HS1 in Kaushambi earmarked vide letter dated 17.01.2013 against a consideration of Rs. 14,76,76,450/- plus development expenses and other expenses. In pursuance of the understanding with the assessee being part of consideration towards the sale of the plot no. HS1 in Kaushambi to it, M/s. Meenal Housing Pvt. Ltd. had paid following amounts to the assessee or on her behalf :- Date Amount (Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us development expenses (Rs.1,17,32,000) and other expenses. The assessee in order to make the property in question free from any existing or possible disputes negotiated with M/s Meenal Housing P. Ltd. for the cancellation of the MOU which was cancelled vide an agreement dated 20.10.2015 for a lump sum amount Rs. 8,08,75,000 including amount paid by them to the assessee directly or on her behalf totaling to Rs. 3,47,32,000/- and thus an amount of Rs. 4,61,43,000 (8,08,75,000 minus 3,47,32,000) was paid to M/s Meenal Housing P. Ltd. for improvement in the right and title of the land in question to facilitate the sale to M/s Royce Developers P. Ltd. at a consideration of Rs. 20,91,00,000. The copies of the MOU and the Cancellation Agreement alongwith the receipt issued by Meenal Housing Pvt. Ltd. were filed before the AO. 7. The assessee sold the residential Vacant Plot No.- GH-18B, situated at Sector-3, Residential Colony Vaishali, Ghaziabad, Teh. & Distt. Ghaziabad (UP) measuring 3475 Sq.Mt. for a consideration of Rs. 20,91,00,000 on 20.10.2015. The deemed value of consideration under section 50C of the Income-tax Act, 1961 (for short 'the Act') was of Rs. 26,29,88,000 which was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner of Income Tax (Appeals) is bad in law as well as on the facts and in the circumstances of the case. 2. That the learned Commissioner of Income Tax (Appeals), has erred in rejecting the Contention of the appellant that adequate opportunity of being heard was not provided by the ld. AO. 3. That the learned Commissioner of Income Tax (Appeals), has erred in upholding the decision of the assessing officer of treating the long term capital gain as short term capital gain by wrongly considering the year of acquisition as FY 2014-15 instead of 15.03.2002 i.e., the date confirming the order of allotment of the land in question vide order no. 2793/9- AA-3- 96/45 LA90 dated 16.07. 1996 against a compensation of Rs. 20,83,903/-. 4. That the learned Commissioner of Income Tax (Appeals), has erred in confirming the disallowance of Rs. 4,61,43,000/- being amount paid to M/s. Meenal Housing Pvt. Ltd. towards cancellation agreement dated 20.10.2015 of MOU dated 08.04.2013 for purchase of land in question by M/s. Meenal Housing Pvt. Ltd by holding that the appellant has failed to establish that the said amount paid to M/s. Meenal Housing Pvt. Ltd had any connection with the transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imed as cost of improvement which is not acceptable as it is not related to acquisition or improvement of land. This payment has no connection / direct nexus with transfer of said land from GDA to assessee. * The section 48(i) of the Income Tax Act clearly says that the expenditure incurred should be wholly and exclusively be in connection with such transfer. The reliance is placed on decision of the Hon'ble Apex court while following its decision in the case of RM. Arunachalam (supra) held that "where the mortgage is created by the assessee himself, then the expenditure incurred by the assessee to repay the mortgage debt cannot be held to be the cost of acquisition or cost of improvement allowable under section 48(ii) of the income-tax Act." * And on the decision of the Hon'ble ITAT Ahmedabad in Maradia Wire Rods Ltd. v. Income-tax Officer, Ward-4(4), Ahmedabad "Section 48, read with section 55, of the Income-tax Act, 1961 - Capital gains - Computation of - Assessment year 1999-2000 - Assessee was allotted two industrial plots by GIDC -During relevant assessment year, assessee sold those plots -Assessee's claim was that penalty paid to GIDC for non-use of industrial plots ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 228(Kar) * Hon'ble Punjab & Haryana High Court in the case of Mrs.Madhu Kaul v. CIT &Anr.[(2014) 363 ITR 54 (P&H)] * Hon'ble Punjab & Haryana High Court in the case of Vinod Kumar Jain v CIT &Ors. [(2012) 344 ITR 501 (P&H)] * Hon'ble Bombay High Court in the case of CIT v. Tata Services Limited [(1980) 122 ITR 594 (Bom).] * Hon'ble Bombay High Court in the case of Principal CIT v. Vembu Vaidyanathan [(2019) 413 ITR 248 (Bom.)] * Hon'ble ITAT Bangalore, C Bench in the case of Sri Mahendrasingh Ramsingh Jadav Vs. ITO in ITA No. 32/Bang/2018 dated 16.03.2021 In the Above mentioned judgements it is held that assessee gets title of property on the basis of allotment letter and payment of instalment was only a follow up action and taking delivery of possession is only a formality. * Hence the assessee had got the right in the property on 15.03.2002. * There was no obligation on the assessee to pay the amount of Rs. 20,83,903/- and this fact is confirmed from letters dated 17.01.2013 and 17.06.2014 of GDA and also the stamp of the registering authority on the back of first page of stamp paper where the consideration is mentioned as Rs. 1,17,32,000/- which does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and connect between the payment of Rs. 25,00,000/- and the transfer of the property to the purchaser resulting in income by way of capital gains. There was proximate link and the expenditure incurred was in furtherance and to effectuate the transfer/sale of the property and was not remote and unconnected. Expenditure of Rs. 25,00,000/-, therefore, has to be treated as expense incurred wholly and exclusively in connection with the transfer of immovable property and, hence, allowable as a deduction under clause (i) of Section 48 of the Act. However, we would like to clarify that Rs. 7,50,000/-which was paid by Anil Kumar Sharma and subsequently refunded, cannot be allowed as a double deduction. In other words, refund of Rs. 7,50,000/-would mean that the earlier payment made by Anil Kumar Sharma was squared off. The assessee had in fact incurred expenditure of Rs. 25,00,000/-which was paid to Anil Kumar Sharma to forego and give up his right under the agreement to sell dated 10th April, 1989. 27. Aforesaid ratio and findings should not be interpreted to mean that wherever an assessee has paid an amount under an earlier agreement-to-sell in terms of the settlement or even a court dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per. He relied on the findings of AO at page 2 of the assessment order. 18. Considered the rival submissions and material placed on record. We observed that the original lands were owned by late husband of the assessee, Ram Prakash Goel in Kaushambi area of Ghaziabad. It is a fact on record that abovesaid lands were acquired by Ghaziabad Development Authority in the year 1984. It is also fact on record that because of acquisition of abovesaid lands, GDA was to grant equivalent piece of land in Kaushambi vide Government Order No.2793/9-A-3-96-45 L.A./90 dated 16.07.1996. The abovesaid order of 1996 was a subject matter of dispute and finally on 15.03.2002, late husband of the assessee was allotted land at Kaushambi which was 56% equivalent of the total lands acquired by the GDA vide Government Order No.809/9-A-3-2202- 45 L.A./90 dated 15.03.2002 issued by the Chief Secretary, Government of Uttar Pradesh. As per the abovesaid allotment letter, late husband of the assessee entitled to the land admeasuring 3474.74 sq. mtrs. In Kaushambi which was acknowledged by GDA vide letter No.174/12/L.A.A./2012 dated 17.01.2013 against the payment of development fee of Rs. 1,02,51,250/-, lease re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igning a MOU with the assessee and it is also a fact on record that Meenal Housing Pvt. Ltd. paid the above fees to GDA directly. Therefore, the assessee is eligible to claim indexed cost on cost of purchase as on 30.03.1987 and the payment of development fees etc. to GDA on 07.02.2013. With regard to payment made to Meenal Housing Pvt. Ltd., the assessee has made to Rs. 4,61,43,000/- as compensation to clear the title from all encumbrances and the abovesaid payment of Rs. 4,61,43,000/- is nothing but a charge on the property as a lien. Therefore, the abovesaid payment has to be allowed as cost directly connected to the sale of the above land and stamp duty borne by the assessee of Rs. 9,67,5000/-. Therefore, we direct the AO to allow the claim of the assessee to the extent of above cost of improvement and cost of expenditure directly linked to the sale of the property. Accordingly, grounds raised by the assessee are allowed. 20. With regard to exemption claimed by the assessee u/s 54EC of the Act, since the issue under consideration is already addressed by ld. CIT (A) by remitting the issue back to the file of AO to verify the relevant bonds and allow the same after verification. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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