TaxTMI 
TaxTMI 
2015 (2) TMI 939
X X X X Extracts X X X X
X X X X Extracts X X X X
....n for acquisition and culminates with grant of final award, which is contrary to the legal interpretation that capital gain/loss within the meaning of Sec. 2(47) of the Act, arises on the date of transfer of asset and it does not extend to the whole of the financial year like other heads of income. (iii) allowing the benefit of exemption U/s 10(37) of the Act, despite the fact that assessee incurred no expenditure on agricultural operation and it was not possible to carry out agricultural operation without any expenditure. (iv) directing to apply Fair Market Value for the computation of capital gain instead of Reserve Price Declared by the JDA, ignoring the fact that on acquisition of land, many privileges and amenities associated with the land are taken away in the process and therefore, 'Reserve Price' is fixed at more amount than 'Fair Market Value' to compensate the same. (v) allowing the benefit of exemption U/s 10(37) of the Act, which was not claimed by the assessee in her return of income." Grounds in Cross Objection "1. Under the facts and circumstances of the case, the learned CIT(A) has erred in dismissing the forth ground of the assessee that the learned ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r Rs. 44,00,000/- out of which the assessee share was 50% and she received Rs. 22,00,000/- copy of sale deed is enclosed herewith. (Page No. 3 to 8) 5. The other property sold during the year was to Smt. Kalpana Jain, Smt. Mala Gupta and Smt. Nirmala Gupta for Rs. 22,50,000/- out of which the assessee's share was 50% and she received Rs. 11,25,000/- from his property. Copy of sale deed is enclosed herewith. (Page No. 9 to 15) 6. For sale of above properties the assessee has paid brokerage to M/s Gendi Real Estate Pvt. Ltd., Jaipur Rs. 50,000/- which was a proportion between both the properties in the ratio of area sold. The area sold was 625 sq.mt. Residential area for Rs. 11,25,000/- and commercial area 400 sq.mt. for Rs. 22,00,000/-. Copy of receipt of brokerage payment is enclosed herewith (Page No. 16). 7. The above both properties sold by the assessee were purchased in financial year 2005-06 alongwith Smt. Pushpa Sharma. The assessee was 50% co-owner of this property. This property was purchased for Rs. 42,00,000/- and Rs. 2,56,000/- was incurred on stamp duty and other misc. expenses. The assessee's contribution was Rs. 22,28,000/- for purchase of this property for 5....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erty hence, no capital gain tax is payable on sale." On 30/11/2011, the learned AR again appeared before the Assessing Officer and submitted his explanation, which is also reproduced as under:- "that the property in question on which the assessee has declared capital gain income was reproduced by the assessee on 21/04/2005, the copy of purchase deed was submitted. This land was agricultural land and the assessee has used this land for agriculture purposes in F.Y. 2005-06, 2006-07 and 2007-08. The JDA has acquired this land under section 44 of JDA Act, 1982 (a law created by Rajasthan Govt.) and in consideration thereof the assessee was allotted commercial land and residential plots by lottery dated 21/08/2008 and 22/05/2008. So the new assets in the form of commercial plots and residential plots came into the existence and the date of allotment was in case of commercial plots was 22/05/2008 and some plots in 03/10/2008 on which the assessee has declared capital gain income and paid capital gain taxes by assuming the value of old assets (agriculture land) as acquisition cost of property sold. In this regard our humble submission is that we have wrongly taken the cost of acq....
X X X X Extracts X X X X
X X X X Extracts X X X X
....bearing Khasara No. 437 area 0.22 hectare, 432/2873 area 0.12 hectare and khasara No. 432, 436/2871, 433/2872 in total 7.84 hectare land was purchased for Rs. 42 lacs and registration cost Rs. 2,55,200/-. 2.1 The JDA vide vide notification No. P.6(29)Navi/3/2004 dated 27/10/2005 signed by the Principal Secretary of the State was issued for acquisition of land and in lieu of surrender without any consideration, compensation would be issued to the extent of 20% of residential and 5% commercial land. On 30/5/2006, the joint owner of this land i.e. Smt. Pushpa Sharma and assessee Vinita Agarwal surrendered the land before the Land Acquisition Officer. The content of the letter is reproduced as under:- On 02/11/2006, the Amin of JDA office had reported as under:- On 03/11/2006, reservation letter issued in furtherance of allotment letter to be issued in pursuance to notification order No. P.6(29)Navi/3/2004 dated 27/10/2005. According to reservation letter, the assessee was allotted 20% residential and 5% commercial land as compensation of surrender of land without any consideration following the above notification of acquisition by the JDA. On 30/12/2006 subsequent to the issu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....consideration received on compulsory acquisition of the land of the assessee by the JDA and short term capital gain was worked out by the Assessing Officer as under:- A. Cost of acquisition Rs. 44,56,000/- ½ Share of the assessee Rs. 22,28,000/- Sale Consideration Value of compensation- Residential area 7840 sq.mt.X2800 (reserve rate) = Rs. 2,19,52,000/- Commercial Area 1960 sq.mt. x 5600 (reserve rate) = Rs. 1,09,76,000/- Total amount of compensation Rs. 3,29,28,000/- Short term capital gain Rs. 3,07,00,000/- B. During the relevant previous year, the assessee and her co-owner sold 1250 sq.mt. of residential plot No. 624 for Rs. 22,50,000/- on 03/10/2008 and 800 sq.mt. of commercial plot No. 169 on 24/12/2008 for Rs. 44,00,000/-. Thus, the total share of the assessee becomes Rs. 33,25,000/- (1125000 + 2200000). Short term capital gain/loss on the sale of the above plot is worked out as under:- Total sale consideration Cost of acquisition Rs. 33,25,000/- Of residential plot of 625 sq.mt. x 2800 = ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssee by observing that basically issue pertained to the completion of the acquisition proceedings. The notification was issued on 27/10/2005 to acquire the land by the JDA for development of SEZ. However, this notification was not an order of acquisition. The Assessing Officer was of the opinion that the appellant had surrendered her rights in the said land vide letter dated 30/05/2006 to the Land Acquisition Officer. However, he found that it was a simply an unconditional offer for surrender of land and in absence of clear title or defects in the title of the property, this offer was liable to be rejected by the State Government. Many a times, the land requisitioned U/s 3 is not acquired by the State Govt. and it is released from acquisition and the possession is also returned to the owner. The requisition of the land is not a transfer because the ownership remains with the owner. The Assessing Officer was of the opinion that the transfer was complete when all the rights in the said land had been relinquished. Further reservation letter had been issued to the assessee on 3/11/2006 (within 11 months from the date of notification). However, he found that in the present case, the pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....accessibility of capital gain in assessment year and made award by the Collector and took the possession of land. (iii) For A.Y. 1970-71, Appala Narsamma Vs. CIT (168 ITR 17), for acceptability of capital gain. (iv) For A.Y. 1978-79, CIT Vs. Pandari Laxmiah (223 ITR 671), for vesting of land took place on the date of award. (v) For A.Y. 1971-72, CIT Vs. Cachar Native Joint Stock Co. Ltd. (223 ITR 754), for determination of compensation amount, the question of determination of capital gain did not arise. (vi) For, A.Y. 1974-75, CIT Vs. Subodh Kumar Jain (221 ITR 802) for computation of capital gain and awarding of compensation and taking possession of land by the Sanchalak. The learned CIT(A) further held that the assessee filed the copy of khasra Girdawari for agricultural operation to show that the crops of Chola and Bazra were grown in the said land as per Revenue record. It was argued by the assessee before him that other co-owner namely Smt. Pushpa Sharma was mainly handling the agricultural operations on the land jointly owned. The assessee also submitted that mere inclusion of lands in industrial zone without any infrastructure development did not and could not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o. (v) and decided in favour of the assessee. Further, he also held that it is the agricultural land and is not a capital assets as per provisions of Section 2(14) of the Act. Further calculation of the capital gain of residential plot and commercial plot allotted to the assessee on the basis of reserve rate on the basis of land acquisition at village Jhai, Khatwada, Bagru, Khurd, Palri and Bhambhoria whereas the assessee's land was situated in village Kalwad, Tehsil- Sanganer, therefore, it has been held that the Assessing Officer was not justified in adopting the reserved price of other villages to case of assessee. Therefore, he accepted the consideration shown by the assessee as on selling of the part of both lands i.e. residential and commercial plots. Therefore, he also deleted the addition, which was difference between the price calculated by the Assessing Officer and on which part land has been sold by the assessee. 4. Now the Revenue is in appeal as well the assessee is in C.O. before us. The learned Sr. D.R. supported the order of the Assessing Officer and argued that the learned CIT(A) has not applied the correct law in deciding the issue before him. As per Section 2(....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he deduction U/s 10(37) of the Act even which has not been claimed through the revised return. Therefore, he prayed to confirm the order of the learned CIT(A). The learned A.R. has not pressed the cross objection filed by the appellant. 6. We have heard the rival contentions of both the parties and perused the material on record. It is fact that the assessee purchased agricultural land on 15/5/2005, which was acquired by the JDA in pursuant to notification dated 25/10/2005. In lieu of the acquisition of land, reservation letter was issued on 3/11/2006 to the assessee for the allotment of certain area of residential and commercial plots. Vide letter dated 30/5/2006 both the co-owners had surrendered the agricultural land before the Land Acquisition Officer and requested to allot 25% of land acquired (20% residential and 5% commercial) developed plot as per JDA rule. The Amin on 2/11/2006 on ordersheet recommended compensation to the Tehsildar. On 3/11/2006, reservation letter was issued in pursuant to notification order dated 27/10/2005 and the assessee was allotted 20% residential and 5% commercial land in compensation of surrender of land. Both the co-owners were prevented from....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ia;]" It is a fact that the assessee has relinquished her right in the land by letter dated 30/05/2006 to the JDA. The learned CIT(A) has not considered Section 2(47) wherein other mode of transfer has been prescribed under the Income Tax law. According to it, the exchange/relinquishment of assets or the extinguishment of any right therein has been provided a mode of transfer. The learned CIT(A) has applied general law, even case law referred by him was relevant to old law or pertained to earlier amendment made U/s 2(47) of the Act, which are squarely not applicable on the case of assessee. The transfer is complete even the assessee relinquished her rights in the land. The case law applied by the learned CIT(A) on the assessee's case were on assessability of compensation in the year. Here the moot question was to decide when transfer got completed, the compensation is to be assessed in the year in which it has been received. For determining whether the assessee was using the agricultural land for agriculture purposes during the period of two years immediately preceding the date of transfer, the date of transfer is material effect. When the assessee relinquished their rights in l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ned Assessing Officer has erred considering the short term capital gain whereas the assessee has earned long term capital gain. 5. Under the facts and circumstances of the case the learned Assessing Officer has further erred in determining the short term capital gain income at Rs. 3,00,35,000/- against the declared income. 6. The assessee craves your indulgence to add amend or alter all or any grounds of appeal before or at the time of hearing." Even before us, the learned AR has not raised any technical ground and also this ground has not arisen on the basis of C.O., accordingly, we reverse the order of the learned CIT(A) and confirm the order of the learned Assessing Officer. 7. In the result, the revenue's appeal is allowed and C.O. of the assessee is dismissed. (Order pronounced in the open court on 9.1.2015) ============= Document 1 सेवा में, शà¥à¤°à¥€à¤®à¤¾à¤¨à¥ à¤à¥‚मि अवापà¥à¤¤à¤¿ अधिकारी, नगर विकास योजनाà¤à¤‚ जय....
X X X X Extracts X X X X
X X X X Extracts X X X X
....µà¥€à¤¨à¤¤à¤® की पà¥à¤°à¤¤à¤¿ पतà¥à¤° के साथ पà¥à¤°à¤¸à¥à¤¤à¥à¤¤ कर निवेदन है कि उपरोकà¥à¤¤ अवापà¥à¤¤ à¤à¥‚मि के बदले राजà¥à¤¯ सरकार की परिपतà¥à¤° व जयपà¥à¤° विकास पà¥à¤°à¤¾à¤§à¤¿à¤•à¤°à¤£ के निरà¥à¤£à¤¯ अनà¥à¤¸à¤¾à¤° 25 पà¥à¤°à¤¤à¤¿à¤¶à¤¤ (20 पà¥à¤°à¤¤à¤¿à¤¶à¤¤ आवासीय व 5 पà¥à¤°à¤¤à¤¿à¤¶à¤¤ वà¥à¤¯à¤¾à¤µà¤¸à¤¾à¤¯à¤¿à¤•) विकसित à¤à¥‚खणà¥à¤¡ के आवंटन पतà¥à¤° पà¥à¤°à¤¾à¤°à¥à¤¥à....
X X X X Extracts X X X X
X X X X Extracts X X X X
....‚ खातेदारन पà¥à¤·à¥à¤ªà¤¾ शरà¥à¤®à¤¾ पतà¥à¤¨à¥€ विनोद शरà¥à¤®à¤¾ व विनिता अगà¥à¤°à¤µà¤¾à¤² पतनी उमेष अगà¥à¤°à¤µà¤¾à¤² के दà¥à¤µà¤¾à¤°à¤¾ सà¥à¤ªà¥‡à¤·à¤² इकोनोमिक जोन हेतॠगà¥à¤°à¤¾à¤® कलवाड तहसील सांगानेर जोन-11 की अवापà¥à¤¤à¤¾à¤§à¥€à¤¨ à¤à¥‚मि खसरा नं. 410,433,434,436,437,432 / 2873 कà¥à¤² किता 6 कà¥à¤² रकबा 6.74 डेकà¥à¤Ÿà¥‡à¤¯à¤° संपूरà¥à¤£ के बाबत मà¥....