TaxTMI 
TaxTMI 
2015 (11) TMI 732
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....operty and the same was not accounted for. Accordingly, the AO reopened the assessment by issuing notice u/s 148 of the Act. Before the AO, the assessee did not furnish any reply with regard to the various quarries raised by the AO. Hence, the AO assessed the sum of Rs. 80 lakhs as income of the assessee. 4. In the appellate proceedings, the assessee filed various details before the ld.CIT(A) and hence, the ld.CIT(A) called for the remand report from the AO. 5. It was noticed that the assessee and his wife are the directors in a company named as M/s Mourya Realty Pvt.Ltd. The said company held a piece of land in its name. The assessee and his wife sold all the shares held by them in the above said company to another company named M/s Delhiwala Real Estate Pvt Ltd. In that process, the land held by Mourya Realty Pvt Ltd got transferred to M/s Delhiwala Real Estate Pvt Ltd. However, the assessee also entered into an agreement to transfer the land held by M/s Mourya Realty Pvt Ltd at a price of Rs. 3,99,21,000/-. In connection with the transfer of shares/land, the assessee received post dated cheques as well as cash aggregating to Rs. 4,72,78,000/-. The amount of Rs. 80 lakhs un....
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....6, the appellant entered into an agreement for the sale of land owned by M/s Mourya Realty Pvt. Ltd. to M/s Delhiwala Real Estate Pvt. Ltd. for a consideration of Rs. 3,99,21,000/-. Subsequently, the shares of M/s Mourya Realty Pvt. Ltd. were transferred to M/s Delhiwala Real Estate Pvt. Ltd. and the company with its assets (including the land at Udaipur) changed hands and came under the ownership of M/s Delhiwala Real Estate Pvt. Ltd. Material unearthed during a search carried out by the Department on M/s Delhiwala Real Estate Pvt. Ltd., indicated that the said company had paid an amount of Rs. 80,00,000/- to the appellant in cash. The statement of the appellant was consequently recorded on 03.12.2007 wherein he admitted to having received this amount in cash in lieu of the post dated cheques issued to him by M/s Delhiwala Real Estate Pvt Ltd. In view of the fact that there was no response to the notices issued by the A.O. during assessment proceedings, the addition of Rs. 80,00,000/- was made in the hands of the appellant as 'undisclosed income' based on his statement recorded u/s 131. 5.2.2 A perusal of the agreement dated 06.12.2006 reveals that the considerati....
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.... 1000000 654939 16-02-2007 500000 654937 16-02-2007 1000000 Cash 2357000 Total 7357000 5.2.4 During remand proceedings, the A.O. verified the repayment of this excess amount from the concerned banks i.e. State Bank of Bikaner & Jaipurand State Bank of India, Udaipur Branch and found the details of repayment to be correct. Thus it is clear that an amount of Rs. 50,00,000/-, was returned by the appellant to the purchaser. However, the A.O. noted that in the absence of confirmation from M/s Delhiwala Real Estate Pvt. Ltd., the apellant's assertion that Rs. 23,57,000/- has been paid back in cash was not verifiable. 5.2.5 On consideration of the entire conspectus of facts related to the instant case, I find that the core issue is regarding the capital gain that arose on account of transfer of the land owned by and / or transfer of shares of M/s Mourya Realty Pvt. Ltd by the appellant and his wife to M/s Delhiwala Real Estate Pvt Ltd. The nature of transactions undertaken by the appellant clearly reveals that the intent was to transfer the land but in actual practice the ownership of the company holding th....
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....hares of M/s Mourya Realty Pvt.Ltd. Thus the capital gain disclosed by the appellant and his wife, is lower by an amount of Rs. 1,09,785/-, in case the gains are to be taxed on transfer of land per se. 5.2.6 Now the next question, which arises for consideration whether this capital gain is to be taxed in the year of agreement for sale of land or the year in which the date of shares transfer falls? In the impugned order, the AO has taken the date of agreement regarding sale of land i.e. 6.12.2006 as the determining point for taxation of capital gain with reference to the date of agreement for sale of land between the appellant and M/s Delhiwala Real Estate Pvt Ltd and therefore the addition was made in AY 2007-08. As observed earlier, the actual modus operandi for the transaction is through the sale of shares and not the sale of land. As such, the date material to the determination of the year in which capital gain arises is the date of transfer of shares and not the date of the agreement through which the value of land was set out. As the shares of M/s Mourya Realty Pvt Ltd held by the assessee and his wife, Smt. Suman Ludhani, were transferred in May, 2007, the incidence ....