TaxTMI 
TaxTMI 
2013 (7) TMI 516
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....raised by the assessee in ground No.1 of the C.O. that there was no cost of acquisition and hence, there cannot be any capital gain on the sale of land in question, it was submitted by the Ld. A.R. that various decisions in support of this contention were cited before Ld. CIT(A), the details of which are available on page 112 of the paper book and on the same decisions reliance is being placed before us also. In addition to this, reliance was placed on the following judicial pronouncements:- i) 83 ITD 273 ITO Vs Uppala Venkat Rao (Hyd.) ii) 70 TTJ 919 G N Ghorpade (HUF) Vs DCIT (ITAT Pune) iii) Tax Appeal No.10 of 2010 dated 28.06.2011Shri Rama Multitech Ltd. (Guj.) 2.2 As against this, Ld. D.R. supported the orders of authorities below. He placed reliance on the following judicial pronouncements: i) 281 ITR 19 (Guj.) CIT Vs. Manoharsinhji P Jadeja ii) 222 ITR 799 (Ktk) Emrald Valley Estates Ltd. Vs CIT iii) 106 ITD 153 (Ahd.) Vijaysinh R Rathod Vs ITO, Vapi 2.3 We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below and the judgements cited by both the sides. We find that the mode of pur....
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....it is admitted fact that the assessee was the tenant of the property in question and because of this fact only, the assessee became the owner of this land property upon coming into force of the Devstan Inam Abolition Act, which means the tenancy rights were converted into ownership right and hence, the provisions of Section 55(2)(a) as per which in the case of tenancy right, the cost of acquisition is required to be take as 'nil' because only tenancy right having nil cost of acquisition was converted into ownership right, the ownership right sold by the assessee is also having nil cost of acquisition. Hence, this argument of the assessee that there will be no capital gain because there is no cost of acquisition, has no merit. 2.6 In view of the above decision, as per which the assessee's case is covered against the assessee by the provisions of Section 55(2)(a) of the Income tax Act, 1961, various decisions cited by both the sides have no application in the present case since the facts in those cases are different where the issue was not covered by the provisions of Section 55(2)(a) of the Income tax Act, 1961. Still, we feel that at least we should examine the applicability of ....
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....d by the appellant were found. Accordingly, the search was also carried out at the appellant's premises on same day. At the time of search, the appellant was of the age of 82 years and was earning income from rent, interest and agriculture. 4.1 The Assessing Officer has stated that at the time of search from the premises of Savvy Group of cases, following documents were found relating to sale of land by the appellant. "1. Memorandum of Understanding dated 23.9.2006 between Shri Govindbhai Ambalal Patel and Savvy Infrastructure Ltd. 2. Banakhat (unsigned) between Shri Govindbhai Ambalal Patel and Smt. Chetnaben Mukeshbhai Patel as promoter of Savvy Homes Co.Op. Housing Society (Proposed) showing rate of Rs.9500 per sq. yd. and the total value of 15488 sq. yds. at Rs. 14,71,36,000/-. 3. Duly notarized banakhathh dated 17.1.2007 between Shri Govind Ambalal Patel and Smt. Chetnaben Mukeshbhai Patel as promoter of Savvy Homes Co.Op. Housing Society (Proposed). Here the rate shown is Rs.5685/- per sq. mt. and valule of 12950 sq. mts, (equivalent to 15488 sq. yds.) is shown at Rs.7,36,20,750. 4. Sale deed dated 3.2.2007 between Shri Govind Ambalal Patel and Savvy Homes Co.o....
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....received any cash for the transaction. However, this explanation has not been accepted by the A.O. stating that the entire land was sold to Savvy Home Co-op. Housing (proposed) and that since entire area of the land was transferred, it is established that the assessee has received the entire consideration of Rs.14,71,36,000/- as per the MOD dated 23-9-2006. The same is treated as actual consideration received by the appellant. 4.3 The assessing officer has further stated that in the course of hearing before him, the appellant had filed written submissions claiming that no capital gain was taxable in respect of the said land as it had no cost. It was claimed that the land was received by appellant as of old tenure upon coming into force of Devastan Inam Abolition Act. The appellant had also given revised return with this claim. However, this revised return has not been accepted by the A.O. stating that the proceedings were getting time barred. It is further stated that the appellant had himself shown capital gain in the return of income. It is also stated that the asset is not self generated asset. 4.4 In the return of income, the appellant had claimed that for the purpose ....
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....uld be reversed and that of the A.O. should be restored. 3.4 As against this, Ld. A.R. supported the order of Ld. CIT(A). Regarding MOU available on pages 30-46 of the paper book, it was submitted that this MOU is not for sale of property but in fact, as per clause 7 of this MOU on page 41 of the paper book, it was agreed that for the purpose of developing the land in question, a new partnership firm is to be formed jointly by the parties of one part Shri Govindbhai Ambalal Patel and his other partners and on the other par i.e. Savvy Infrastructure Co. Ltd. He submitted that this agreement is not for sale of land in question but for contributing of said land to the partnership firm as the capital contribution and therefore, the same cannot be the basis for adopting the sale vale of the land in question. 3.5 He also drawn our attention to the copy of the agreement to sell of the land in question which is dated 17.01.2007 as per English version available on pages 47-78 of the paper book and it was pointed out that the price was fixed after negotiation @ Rs.5685/- per sq. mtr. for the land area of 12950 sq. mtrs and the total value was worked out at Rs.7,36,20,250/- and hence, n....
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...... Chetnaben M Patel for a consideration of Rs.1471.36 lacs. In para 7 of the same MOU, it is noted that for the purpose of developing the land in question, a new partnership firm is to be formed jointly by the assessee and his other partners Shri Rajnibhai Ambalal Patel, Mukeshbhai Keshavlal Patel and Shri Kalpeshbhai Atmaram Patel and the second part M/s. Savvy Infrastructure Co. Ltd. From this MOU, the true meaning of this MOU is not consistent as to whether it is for the purpose of sale of land in question for the given price of /Rs.1471.36 lacs or whether it is for the purpose of transferring the land in question to a new partnership firm to be formed jointly by the assessee along with his three partners of one part and the other part M/s. Savvy Infrastructures Co. Ltd. Again on page 8 of the same MOU it is stated that a token amount given towards sale price by the party on other part to the first part is to be treated as given to the new partnership firm by the other part. This has increased the confusion as to whether this MOU is for formation of a new partnership firm or it is for sale of land simplicitor. Although only one name is given as party of one part i.e. the assess....
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....ntentions of the Ld. A.R. that this MOU is not a sale simplicitor of the land in question but the same is mainly towards contribution as capital to the new partnership firm by the assessee and although a high value of land was considered for this purpose, but the fact that the assessee was to bear 50% expenses of the partnership firm along with cost of land, the assessee was eligible for only 45% of the profits and therefore, the value considered in the MOU cannot be considered as the sale price of the land in question. 3.10 The basis of the revenue for adopting the amount of Rs.1471.36 lacs as total sales consideration of the land in question was this MOU only and except this MOU, no other evidence even circumstantial evidence has been found even in the course of search carried out only 11 days after the date of sale deed to corroborate this allegation that the assessee has received sales consideration in cash of Rs.735.15 lacs. If this much huge cash was received by the assessee, something must be found in the course of search either unaccounted cash or unaccounted investment or any other paper etc., which may have indicated such a huge cash transaction. This is also not the c....
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....gned and hence it cannot be the basis for conclusion reached by Assessing Officer. As such, based on both these documents, no presumption about passing of cash can be reached, it is also found that at the same time, appellant's premises were subjected to search and statement of appellant was recorded on 14-2-2007, wherein he had in clear terms stated before the search officer that the sale price was around Rs.7.14 crores and on further question, he had specifically stated that no cash was received against sale of such land. Apart from this, at the time of search, cash of only Rs.1,50,000/- was found from the appellant's premises which was also explained from the withdrawals from bank account and further no evidence about any other unaccounted assets or receipt of cash was found during the course of search from the appellant's premises. It is also noticed that no specific evidence is referred to by the A.O. that the appellant was paid any amount in excess of the prices of Rs.7.36 crores as per the documents. The appellant has also specifically pointed out that the price as per the documents is also accepted for stamp duty purpose and it is not disputed by that authority. Considering....
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....ted 21.09.2012 and also on another Tribunal decision rendered in the case of Rajendra H Seth in I.T.A.No. 1495/Ahd/2007 dated 11.11.2011. He submitted copies of these tribunal decisions. He also submitted that the registered valuer report is available on page 108 - 111 of the paper book. 4.3 We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below and the tribunal decisions cited by the Ld. A.R. We find that in the case of Rajendra H Seth (supra), this finding is given by the Tribunal in para 10.1 of its order that when the value declared by the assessee as on 01.04.1981 is supported by valuation report of a registered valuer and the A.O. has taken different valuation without obtaining valuation report from the DVO, such value taken by the registered valuer cannot be substituted by the A.O. merely on the basis of general inquiries without obtaining a report from DVO. Similarly, in the case of Pramila M Desai (supra) also, it is held by the tribunal that the report of the registered valuer being a technical person, cannot be substituted without obtaining DVO's report or any other report of a technical person. H....