AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (9) TMI 613
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....ee claimed deduction under Section 54 F amounting to Rs. 62,47,576 against the long term capital gains of Rs. 63,96,328 arising from the sale of share of M/s. Perfect Buildwell Pvt. Ltd., by investing an amount of Rs. 63 lakhs in the purchase of residential building at Village Fatehpur Beri, Tehsil Hauz Khas, New Delhi by an agreement to sell dated 22nd July 2006. The Assessee was also having a residential house property at Gadaipur, Mehrauli, value of which was shown as Rs. 60,000. The Assessee showed that he was earning less income from the said property. 3. For the AY 2007-08 the Respondent-Assessee again claimed deduction under Section 54F amounting to Rs. 2,21,69,090 against the long term capital gains of Rs. 3,74,47,787 on sale of shares of Valleyview Probuild Private Limited ("VPPL"). Copies of the agreement to sell dated 22nd July 2006 in respect of residential building at Village Fatehpur Beri and an unregistered sale deed (agreement to sell dated 10th April 2007) in respect of residential property at Gadaipur had been filed in support of the claim that the said properties were purchased on those respective dates, i.e., 22nd July 2006 and 10th April 2007. Proceedings bef....
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.... of the Assessee and his father Mr. Prem Nath Nagpal by the Municipal Corporation of Delhi ("MCD") which showed that the house was built on Khasra No. 75, 76 and 90 in Gadaipur on the lands jointly owned by the Assessee and his father although for the sake of convenience, two separate purchase deeds were executed. It was stated that the mere fact that both the owners have purchased portions of land out of Khasra No. 75, 76 and 80 of Gadaipur by executing two different deeds did not change the character of the house at Gadaipur which was built build on the undivided portion of land of both the co-owners. The Assessee would remain the owners of 15% shared interest in the house whether or not a consolidated purchase deed was executed or separate sale deeds were executed. In support of his contentions, the Assessee cited decisions of the Supreme Court in CIT v. T.N. Aravinda Reddy (1979) 120 ITR 46, Banarasi Dass Gupta v. CIT (1987) 166 ITR 783 (SC), the decision of the Allahabad High Court in Shiv Narain Chaudhary v. CWT 108 ITR 204 and two decisions of the Tribunal. The order of the AO 6. The AO did not accept the above explanation. The AO observed that 5000 equity shares of VPPL w....
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....he date of acquisition, i.e., 25th October 2005. Further it was unusual for the Respondent-Assessee to be in possession of the copies of share transfer form signed by the transferee unless in the light of the fact that the Respondent and his brother, between them held by the entire shareholding in VPPL and "used their position to concoct the above evidence." 8. The AO further concluded that no evidence had been produced by the Respondent-Assessee to show that he was only 15% co-owner of Gadaipur house. A copy of the building sanctioned plan/drawing had not been produced despite requests. It was not ascertainable whether the construction was on the parcel of land belonging to the Assessee or whether the land belonging to father remained vacant or vice versa or the structure occupied parts of the land belonging to both. The Abhibhog Certificate showed that there are two separate units on ground floor and first floor, meant for independent use/enjoyment by the Respondent-Assessee and his father. Therefore, the Assessee had already owned two residential houses, i.e., Fatehpur Beri and Gadaipur on the date of purchase of the residential property from his father. Consequently, the AO de....
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....dence under Rule 46A of the Income Tax Rules, 1963 ("Rules") to the AO for his comments. By a remand report dated 19th July 2010 the AO objected to the admission of the additional evidence. The CIT (A), after considering objections, decided to admit the additional evidence in the interests of justice. 11. The CIT (A) then felt that some more evidences were required for coming to the conclusions and asked the Assessee to file the following documents: "(i) Annual returns filed with Registrar of Companies (ROC) for the year ending on 31st March 2006 and 31st March 2007 of Valley View Probuild Pvt. Ltd. (ii) Details filed with the ROC regarding sale of shares to Sh. Kapil Nagpal by Shyam Kumar Bagga. (iii) Complete Audited Balance Sheets as on 31st March 2006 and 31st March 2007 of Valley View Probuild Pvt. Ltd. (iv) Complete details of computation of Income of the appellant for the A.Y. 2007-08 and 2006-07 and his complete Balance Sheets as on 31st March 2006 and 31st March 2007. (v) Computation of Income of Prem Nath Nagpal and his balance sheets as on 31st March 2006 and 31st March 2007. (vi) Affidavit from Sh. Prem Nath Nagpal to prove that the constructed propert....
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....hasra Nos. 75 and 90 was used only for growing vegetables. It also showed that a "kothi" (residential house) existed on the portion of land "Khasra No. 76" exclusively owned by Mr. Prem Nath Nagpal, father of the Assessee. (h) Consequently, the claim of the Assessee under Section 54F could not be rejected on the ground that he was an owner of more than one residential house as on 8th November 2006. (i) In view of the decision of the Supreme Court in CIT v. Podar Cements (P) Limited [1997] 226 ITR 625 (SC), the Assessee could claim exemption on the basis of the agreement to sell only without it being registered. The agreement to sell showed that a substantial payment of Rs. 2 crores was made on the date of the agreement itself. The balance payment of Rs. 22 lakhs was made on 17th April 207 and the possession was simultaneously handed over to the Appellant. (j) The share of 15% was determined mutually by the parties "just for sharing the rental income from the letting out of the entire property along with adjoining land." The Abhibhog certificate issued by the MCD only showed that there were two independent units meant for use by the Appellant and his father. It did not prove....
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....here was no actual transfer in the name of the transferee, Mrs. Falguni Nayar, till her name was entered in the share register. Moreover, there is a receipt dated 8th November 2006 executed by Mr. Kapil Nagpal acknowledging the receipt of the balance consideration for the shares from Mr. Nayar and confirmation endorsed by Mr. Nayar on that date was not that "I have received the above original share certificate along with share transfer deed form for 5,000 shares from Shri Kapil Nagpal s/o Shri Prem Nath Nagpal r/o U-11, Green Park Extension, New Delhi on this day of 8th November 2006." 18. After analysing the documentary evidence produced by the Assessee, the CIT (A) concluded that the actual transfer of the shares took place only on 8th November 2006 and that therefore, the Assessee had held shares for more than one year. The further consequential finding that long term capital gains resulted cannot be said to be perverse. Question (ii) is answered in favour of the Assessee and against the Revenue. Question (i) 19. Turning to question (i) whether the exemption under Section 54F could be availed of by the Assessee, it requires to be first noticed that in light of the decision of....