TaxTMI 
TaxTMI 
2016 (10) TMI 529
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....le consideration of Rs. 61,00,000/- towards sale of agricultural land, and his share has been utilized in house construction/repairs. However, the profits on sale of such lands were not included in total income holding that the lands under sale are agricultural lands and as such do not constitute capital assets. During the course of the assessment proceedings, the Assessing Officer (AO) found that assessee purchased lands at Mansanipally Village, Maheswaram Mandal, R.R.Dist., in the month of November, 2005 to the extent of Ac 4.02 Guntas, for a consideration of Rs. 12,22,500/- and an acre of land in January, 2006, for a consideration of Rs. 3,00,000/- vide the Agreement for Sale cum GPA and sold total area of Ac.3.02 Guntas @ Rs. 20,00,000/- per acre in the month of September, 2007. Then the AO proposed to treat the profits arising of such transactions as Short Term Capital Gains, for which assessee objected on two counts, viz., (i) the said lands are agricultural lands; (ii) only a minor part of the sale consideration was received by him, with major portion of such consideration going to the consenting party with whom he entered into an oral agreement earlier; The AO brushed ....
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....rties have categorically admitted the receipt of Rs. 34.85 lakhs out of Rs. 41.00 lakhs and Rs. 17.00 lakhs out of Rs. 20.00 Iakhs, which were the sale considerations received for sale of Ac. 2.02 Guntas and Ac. 1.00 Guntas land respectively, and A.O failed to appreciate these facts . 5.3 Perused the submissions of the appellant and the observations of the A.O along with the other facts that have been brought on record. As could be seen from the facts, the appellant's main contention was the lands under reference were agricultural lands and cannot be considered as the capital asset within the purview of provisions of Sec. 2(14)(iii) of I.T. Act. Rest of the arguments are only alternative in nature. As regard to the treatment of land as capital asset, it was never argued by the appellant that it was fetching him the agricultural income and carrying on the agricultural operations. Further, the said land property is located at Mansanipally village of Maheswaram Mandalam falling within the limits of HMDA notified Authority, as per G.O.No. 274 dated 20.04.2007, which is not disputed by the assessee, seriously. It is also relevant to mention here that the appellant himself was cla....
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....H.No. 16-11-739, Gaddiannaram, Dilsukhnagar, Hyderabad. It is also a fact that the appellant neither denied such investment nor explained the alternate sources for such investments, in case the entire consideration of Rs. 61,00,000/- was not received by him, as claimed during the assessment proceedings. Based on the circumstances and facts of the case, it can only be presumed that the appellant has received the entire consideration of Rs. 61,00,000 as mentioned in return of income, with Rs. 9,15,000 received from the vendee towards the sale transactions dated 30.09.2007 and the balance amounts (Rs. 61,00,000-Rs.9,15,000) from the consenting party who has acquired the rights in the said property prior to the sale deeds dated 30.09.2007. It was not the case of the appellant to prove that the rights, that too major rights in the property under reference were transferred to the consenting party without any consideration and also invested the amounts in the properties as specified. Under the circumstances, it proves that the appellant received the entire consideration of Rs. 61,00,000/- towards the sale/transfer of his rights over the property in absence of any other information as r....
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....10. We have considered the rival contentions and perused the documents placed on record and various case law. Application of various case law will arise only when the facts are clear. In the instant case, AO and CIT(A) has gone on presumption that assessee is owner of agricultural lands which are within the HMDA limits. Ld. CIT(A) tried to modify the above stating that he was only holding rights in property but ultimately confirmed the stand of AO. As seen from the two sale deeds, the following are stated in the recitals: 1. "The deed of sale is made and executed on this 30th day of SEPTEMBER 2007 at Maheshwaram, R.R. District. Sri Badavath Krishna, S/o. Balya aged about 33 Yrs, Occ: Agriculture, R/o. Uppugadda Thanda, Mansanpally Village, Maheshwaram Mandal, R.R. Dist., A.P. Represented by AGPA holder: Sri P. Venkat Reddy, S/o. P. Kanakal Reddy, aged about 56 Yrs, R/o. H.No. 739/a/1/1, Gaddi Annaram, Dilsukh Nagar, Hyderabad District. (Herein after called the VENDOR which expression of the VENDOR shall mean and include all his legal heir's successor's executors, administrators, legal representatives, nominees, and assignees etc., AND M/S SAI CHAITANYA HOUSING (P) Ltd (....
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....ual owners separately is not clear. The facts as per the deeds are that both the parties received the consideration separately which is not in dispute. 10.2. Even though assessee and said company has sold 2.02 acres of land out of the extent purchased/agreed to purchase as per page 2 of the deed indicate separate extents of Ac. 1.27 Guntas, Ac. 1.28 Guntas and Ac. 0.27 Guntas being the Patta Nos. 398, 301 & 401 respectively of different title deeds. Which part of the above Ac. 4.02 Guntas was parted with is not clear. Ld. CIT(A) has already directed AO to examine this aspect and rework the cost of acquisition to 3.02 Acres only. But the impugned land is not clearly demarcated and whether assessee holds the balance or not require examination. 10.3. Unless assessee owns the land, the issue whether the sale of agricultural land will give rise to capital gain or not cannot be examined. Moreover, the applicability of HMDA Act also depends on owning the land. If assessee has only certain rights on land, then the nature of ownership is different. Unless the AGPA is examined, this aspect cannot be adjudicated. 10.4. With reference to the consideration received also assessee has clearly ....