2017 (9) TMI 1948 - AT - Income Tax

Tribunal allows appeal, directs full claim approval, considers pre-sale deed payments as evidence

The tribunal allowed the appeal for statistical purposes, remanding the case to the AO for further verification and consideration in accordance with the ... Capital gain computation - provisions of section 50C - additional ground raised to adopt the rate invoking provisions of Sec.50C as on the date of agreement - HELD THAT:- Assessee has received part of the sale consideration much prior to the execution of the sale deed, is supported by the Bank statement - we are inclined to admit the additional evidence filed by the assessee. Since the payments are by way of cheques, it has to be presumed that there was an oral agreement of sale between assessee and the vendees, pursuant to which, they have paid some amount to the assessee by cheques. The oral agreement has been acted upon and therefore, the provisions of section 50C as on the date of oral agreement have to be considered as held by us in the case of Smt. Mumtaz Begum [2015 (11) TMI 1515 - ITAT HYDERABAD]. In the case before us, there is no date of oral agreement and therefore, the payment of advance on 1.7.2011 should be considered as the date of oral agreement. Further, the Legislature had amended the provisions of section 50C w.e.f. 1.4.2017 and in the case of Smt. Chalasani Naga Ratna Kumari [2016 (12) TMI 1406 - ITAT VISAKHAPATNAM] has held the said amendment to be applicable retrospectively - we deem it fit and proper to admit the additional ground of appeal and also the additional evidence and remand the same to the file of the AO for verification and consideration in accordance with law. Assessee’s appeal is treated as allowed for statistical purposes. Issues:- Appeal against CIT (A)'s order for A.Y 2012-13- Dismissal of grounds against initiation of proceedings u/s.147- Adoption of rate invoking provisions of Sec.50C- Dismissal of additional ground on the legal position of agreement- AO's restriction on improvements to Rs. 5,00,000Analysis:1. The appeal pertains to the A.Y 2012-13 against the order of the CIT (A) confirming the AO's decision. The assessee raised several grounds of appeal challenging the order on various aspects.2. The CIT (A) dismissed the grounds against the initiation of proceedings u/s.147. The assessee contended that the notice u/s.148 was issued prematurely, but the CIT (A) upheld the AO's decision. However, the assessee chose not to press this ground during the hearing.3. The appellant raised an additional ground seeking to adopt the rate invoking provisions of Sec.50C. The contention was that the SRO value on the date of the agreement should be considered, not on the date of the sale deed. The CIT (A) rejected this ground, leading to the appeal before the tribunal.4. Another additional ground was raised on the legal position that an agreement can be oral, supported by the payment of advances through cheques. The CIT (A) dismissed this ground, which was contested by the appellant.5. The AO restricted the improvements claimed to Rs. 5,00,000, which the CIT (A) confirmed. The appellant argued that the AO lacked technical expertise to determine the value of the structure and that the improvements were decades old. The tribunal found merit in this argument and directed the AO to allow the entire claim of improvement.6. During the hearing, the appellant presented evidence that part of the sale consideration was received before the execution of the sale deed. The tribunal admitted this additional evidence, considering the payments made by cheques as indicative of an oral agreement between the parties.7. The tribunal relied on precedents and legislative amendments to determine that the provisions of section 50C should be applied based on the date of the oral agreement. Considering the evidence presented and legal interpretations, the tribunal allowed the appeal for statistical purposes and remanded the case to the AO for further verification and consideration in accordance with the law.8. The tribunal's decision was pronounced in an open court on 29th September 2017, providing relief to the appellant based on the detailed analysis and legal interpretations presented during the proceedings.