2016 (10) TMI 695

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....under the head capital gains. The action is unjustified and unwarranted as there is no transfer of land." 3. Brief facts are that in this case, information was received by the revenue department from Hon'ble Bombay High Court and it was directed therein to conduct necessary enquiries. It was pointed out by the Hon'ble High Court in Notice of Motion NO.3778 of 2007 in suit No.2763 of 2007 that the plaintiff Shri Prashant Navnitbhai Parekh, etc. had paid Rs. 50 lakhs in cash towards sale of some property to defendant, Shri Ghanshyam Harjivandas Patadia, on the insistence of Shri Ghanshyam Harjivandas Patadia that his accounts were frozen by the I.T. Department. As the defendant held power of attorney pertaining to the property under consideration and due to some dispute and revoking of power of attorney, the property was not transferred to the plaintiff, whereas it was claimed by them to have made payment of Rs. 50 lakhs in cash out of total Rs. 52.5 lakhs consideration. It was observed in the assessment order that the subject matter of assessment order is only for verification as per the directions of the High Court, regarding how the defendant has accepted such huge amou....

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....thers (Defendants) has directed to investigate and pursue appropriate action against respondent; Shri Ghanshyambhai H. Patadia who has accepted cash of Rs. 50 lakhs from plaintiff, Prashant Navnitbhai Parekh (AGPPP6105N) and Rajesh Mahashankar Joshi (AIVPJ7180M) on executing an agreement dated 21.3.2005 in relation to property admeasuring about 25000 sq.mtrs. for which Ghanshyambhai h. Patadia had Power of Attorney. In order to verify the fact whether the receipts were disclosed in the return filed with the dept. a notice dt 18.03.10 was issued to the assessee under section 133(6) of the IT Act 1961 with approval of CIT-25, and duly served on the assessee on 19.03.10 requiring him to furnish relevant details on or before 24.03.10. However, there is no compliance from the assessee . The assessee has also not filed the ROI for the period under consideration. And hence In order to give effect on the information and directions contained in an order passed by the Hon' ble High Court approval may be granted for reopening the assessment for the A Y. 2005-06. " 6. Later, the assessee filed only a letter in response to 133(6) dated 18.3.2010 in which he stated as follows: "As I rec....

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....fer of Property Act could not said to have been fulfilled, no transfer of any property ought to have taken place. 10. It was further submitted during the remand proceedings before the Assessing Officer as under: a) During the year under assessment assessee has made a sale deed for plot of land dated 21st March 2005 for a sum of Rs. 52, 50, 000/- with Mr. Prashant Naveet Parekh. b) As the purchasing party i.e. ( Mr. Prashant Naveet Parekhhas cheated assessee by not paying the above sum, so deed of Cancellation has been made dated 10th February 2006. c) FIR has been lodged against Mr. Prashant Naveet Parekh dated 12th February 2006 FIR No. 55/06, Year 2006, Kandivali Police station (Mumbai). d) The above plot land has been compulsorily acquired by the Government of India with New Survey No. 378 under Salt Section. e) The proposed buyer has also filed a suit against the seller for the refund of the earnest money of Rs. 50,00,000/- together with the interest at the rate of 18% per annum as specified in the petition filed by the buyer (para. d page no 3) f) The case is still pending for in Bombay High Court for its final Order. 11. The Ld. Counsel for the assesse....

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.... was not received by the assessee as the same was to be received at the time of execution of conveyance deed. For your ready reference, we submit the following case law on immovable property: Title to immovable property of value over rupees one hundred gets transferred only on the execution of the sale deed. A mere Agreement to sell would not constitute a sale. - (1957) 32 ITR 190 (SC) Provident Investment Co. Ltd. (1985) 152 ITR 744 (Mad) Jayalakshmi Rajendran All that the intended Purchaser acquires under such agreement is an equity to obtain specific performance. (1986) 161 ITR 92 (Bom) R.R. Sood Delivery of possession of immovable property cannot by itself be treated as equivalent to conveyance of the 'immovable property and title to land and building and plant and machinery cannot pass to the buyer till conveyance is executed and registered:- (1965) 57 ITR 185 (SC) Alapati Venkatararamiah Mere delivery of possession accompanied by realization of sale' consideration does not divert the vendor of the ownership of the property and, therefore, it continues to belong to the vendor and can be included in his net wealth. (1986) 162 ITR 888 (SC) Nawa....