TaxTMI 
TaxTMI 
2017 (8) TMI 366
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....009-10, the assessee has sold immovable property vide sale deed dated 27.08.2008. The A.O further, observed that the assessee and his brother Nitin M. Faria, acquired the said property from one Shri. Rajiv Ganpat Rakvi, for a consideration of Rs. 68,83,930/-, including stamp duty and registration charges vide sale deed dated 11.05.2007. The A.O further observed, the said property has been sold to M/s. Ishwar Land Pvt. Ltd., vide sale deed dated 27.08.2008 for a consideration of Rs. 3,42,78,125/-. It was further observed that since, short term capital gain admitted by the assessee is inconsistent with purchase and sale amounts of property, the A.O issued a show cause notice and asked the assessee to furnish necessary details of short term capital gain along with copies of sale deed to justify computation of short term capital gain. 3. In response to show case notice, the assessee vide letter dated 31.08.2011 submitted that he had purchased a plot of land along with his brother Nitin M. Faria, from one Shri Rajiv Ganpat Rakvi, vide sale deed dated 11.05.2007 for consideration of Rs. 68,83,930/-. The said property has been sold to one Shri Praveen H. Thakkar, vide memorandum of under....
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....with Shri Praveen H. Thakkar, is not a legally enforceable contract, if not sham transaction, the capital gain of Rs. 2,31,44,125/-, claimed to belong to Shri. Praveen H. Thakkar, is held to result in application of income without any over riding title to Shri. Praveen H. Thakkar. The fact that, Shri. Praveen H. Thakkar, has considered the short term capital gain of Rs. 2,31,44,125/-, as is income and accepted the tax liability cannot by itself change the legal position. With these observation, recomputed short term capital gain by taking into account sale consideration of Rs. 3,42,78,125/-. 5. Aggrieved by the assessment order, the assessee proffered an appeal before the CIT(A). Before the CIT(A), the assessee has reiterated his submission made before the A.O. The assessee further submitted that he had properly computed short term capital gain from sale of land as per the documents evidencing transfer of land in favour of Shri. Praveen H. Thakkar, for a consideration of Rs. 1 crore. The assessee further submitted that he had furnished necessary documents evidencing consideration of remaining amount of sale consideration and resultant profit in the hand of Shri. Praveen H. Thakkar....
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....een H. Thakkar, over and above of Rs. 1 crore, as agreed upon. Shri. Praveen H. Thakkar has computed short term capital gain on the said sale consideration and offered to tax in his return of income filed for the relevant assessment year. All these facts were not disputed by the A,O. The A.O, computed short term capital gain by considering sale deed between the assessee and M/s. Iswar Land Pvt. Ltd., merely on the ground that intermediary MOU between the assessee and Shri. Praveen H. Thakkar, was unregistered. The CIT(A) further, observed that merely because the agreement dated 29.07.2008, between the assessee and Shri Praveen H. Thakkar, was unregistered, no inference can be drawn in view of the other documentary evidences available on record which are capable of verification. With these observations, directed the A.O to delete additions made towards recomputation of short term capital gain. The other two alternate grounds raised by the assessee has been rejected in view of the fact that the assessee has succeed in ground no. 1. Aggrieved by the CIT(A) appeal order, the revenue is in appeal before us. 7. The Ld. D.R submitted that the Ld. CIT(A) erred in deleting additions made b....
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....d to result in application of income without any over riding title to Shri. Praveen H. Thakkar. The fact that the Shri. Praveen H. Thakkar, has considered short term capital gain in his individual capacity, cannot by itself change the legal position. Therefore, opined that the assessee is liable to pay capital gain on the total sale consideration received from M/s. Iswar Land Pvt. Ltd. 9. It is the contention of the assessee that he had rightly computed short term capital gain by taking into account sale consideration as per MOU with Shri. Praveen H. Thakkar. The assessee further contended that he had sold the impugned land for a consideration of Rs. 1 crore by way of MOU dated 29.07.2008, in turn the said land has been sold to M/s. Iswar land Pvt. Ltd., for consideration of Rs. 3,42,78,125/-. The assessee further, contended that he had considered sale consideration of Rs. 1 crore and the remaining sale consideration of Rs. 2,42,78,125/-, has been considered by Shri. Praveen H. Thakkar. The assessee has filed all the details evidencing the above transaction. The assessee also filed an affidavit from Shri. Praveen H. Thakkar. 10. Having heard both the sides and considered material....