TaxTMI 
TaxTMI 
2013 (12) TMI 6
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....ta Colony, Round Circle, Jaipur from one, M/s. Moti Developers, Jaipur on 16-11-2006 for a consideration of Rs.1.21 crores. The purchase was shown as an investment in accounts. On the same day, the assessee entered into another agreement with one, M/s. Ashirwad Builtech Pvt. Ltd. ('ABPL' for short), a Jaipur based company in the construction business, for construction of a multistoried building on the said plots of land, also issuing General Power of Attorney (GPOA) in favour of the developer, allowing possession thereto on the same date itself (i.e., 16-11- 2006). The GPOA though excluded the right to sell. Both the parties were to share the construction equally, i.e., at 50% each. The sale of flats, upon construction, was to be by the ABPL, and the assessee was bound to sign the conveyance deeds as executed, i.e., in favour of the buyers of the flats (third parties). In the view of the AO, there was a transfer within the meaning of section 2(47)(v) of the Act upon entering into with agreement as well as issuing GPOA in favour of and allowing possession to the developer (ABPL). The assessee had, therefore, transferred his interest in land for one half of the built-up area to come ....
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....e assessee's case, on the other hand, is that there is no case for accrual of capital gain inasmuch as all that has transpired is that the assessee has entered into a development agreement, agreeing to share of 50% of the constructed space. It is only when the flats are constructed and possession thereof allowed to the assessee, that the transaction can be said to be complete, giving rise to income, if any. The adoption of ready reckoner rate is also not proper inasmuch as it is not a case of application of section 50C of the Act. In any case, how could capital gain of Rs.27.93 lakhs arise during the course of the same day itself. That is, even if a value is to be ascribed to the transfer, the same could not exceed Rs.1.21 crores, the purchase cost. In fact, the agreement value of the agreement as on the date of the agreement was Rs.89,15,940/-, even as pointed out to the AO during the course of assessment (Paper Book (PB) pages 21-25, at 25). 3.2 We have given our careful consideration to the matter, to find both the sides to be only partially correct, and having misdirected themselves to some extent. In our clear view, it is a case of a transaction in the nature of trade enter....
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....in the assessee's case. The genuineness of the arrangement is not in doubt, and it is to be borne in mind that the transaction being executed on the same date, no increase in value can be lightly inferred. Besides, it also needs to be appreciated that the actual cost of construction would be over a period in future, and is thus not certain. The parties can, thus, only be considered to have made an estimate of the same (construction cost), and on that basis found it to match with the purchase/fair market value of land (Rs.1.21 crores), so that both became equal sharers of the developed property, thereby becoming equal stake-holders in the project. 3.3 The Revenue has emphasized on Clause 12 of the Agreement, whereby the sale of the flats is to be done by the Builder, with the assessee being bound to sign the conveyance deeds. In our view, nothing material turns on this condition. The Builder having acquired only the development rights, being denied the right to sell per the MOU, non-cooperation by the assessee in conveying the built-up area to third parties, which only would generate revenue for both of them, would jeopardize the entire project, placing the assessee in an advanta....
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....stake in the successful execution of the project. The same accordingly stands characterized by us as adventure in the nature of trade for both the assessee and, of course, the Developer. We answer the question arising before us accordingly. The decision in the case reported in Chaturbhuj Dwarkadas Kapadia of Bombay vs. CIT [2003] 260 ITR 491 (Bom) and CIT vs. George Henderson and Co. Ltd. [1967] 66 ITR 622 (SC) relied upon by the Revenue, both of which we have perused, would be under the circumstances, to no moment. Further, in terms of the result, it is only the assessee who would stand to be successful inasmuch as no income arises for being taxed for the current year. We decide accordingly. 4. The facts in relation to second ground are that the assessee availed of unsecured loans for Rs.12 lakh from two parties, i.e., M/s Denim Washers (Rs.8 lakhs) and M/s. Deep Laundary (Rs.4 lakhs). The assessee having failed to produce confirmations from the stated creditors, the same stood added under section 68 of the Act. On a remand report being called for in the appellate proceedings, the loan for Rs.8 lakhs stood proved. Qua the loan of Rs.4 lakhs, the AO was of the view that though c....
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....A). We decide accordingly. 6. The third and final ground by the Revenue is in respect of addition for a sum of Rs.30 lakhs received by him from his sister through the banking channel (i.e., vide DD No.113622 dated 27-11-2006, drawn on Bank of Baroda, Dubai Main Branch)(PB pgs. 89-90). The same was explained by the assessee during the course of assessment proceedings to be by way of a gift from his elder sister, Mrs.Yogini Mayur Sagar, settled in Dubai, U.A.E. for the last 30 years. Her husband's family has been residing in Dubai for the last 40-42 years, and was said to be financially very capable. However, as there is no Income Tax or corresponding tax on income in U.A.E., no financial document or other material could be furnished in support. The AO assessed the same u/s. 68 in view of the non-proving the credit of the owner, drawing on the decision in the case of Sanjeev Batra vs. Asst. CIT [1999] 69 ITD 23 (Del). The said decision again involves an NRI gift for Rs.25 lakhs received by the assessee's minor son. The assessee having failed to establish the genuineness of the gift and the financial capacity of the donor, the addition stood confirmed by the tribunal. In appeal,....
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.... while no evidence toward the same has been produced. A total of 2.50 lac Dirham (Dh.) has been credited to the donar's bank account with Bank of Baroda on 26-11-2006, of which 1.50 lac Dh. is from the joint bank account with her daughters (75000 Dh. each) with Banker Emirates, and 1,00,000 Dh. from a joint account with daughter Tejal M. Sagar with Standard Chartered Bank, Dubai Main Branch. The credits in the bank account with Banker Emirates, as it appears, belong to the daughters, with the assessee being only a joint account holder. Coming to the sum of 1,00,000 Dh., the same forms part of a credit of 1,92,352 Dh. on 25-11-2006 to the bank account with Standard Chartered Bank, which is stated to represent the sale proceeds on a fixed deposit (PB pgs. 87-89). Again, no evidence toward the same has been brought on record. The donor is stated to be in the business of tailoring and fashion designing for the relevant period (by the name Yoginiz Tailoring & Fashion Designing). No balance-sheet, bank statement, etc. of the said business, much less for the relevant period, has been produced. The Standard Chartered Bank account (PB pg.87) is not a regular bank account of a business; the ....