TaxTMI 
TaxTMI 
2017 (9) TMI 575
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.... ITO to make a fresh assessment. 3. The CIT(A) should have followed the judgement of High court of Gauhati in the case of CIT vs Shankar Rajkhowa (93 Taxman 720) copy of which has been filed before her and relied upon. 4. The CIT (A) misdirected herself and misconceived drawing inspiration from the words in the order u/s 263 "as to the taxability of the transactions" and equated them to a direction to the ITO to make a fresh assessment. 5. The capital gain arising from the transfer of capital asset is to be worked out in accordance with the provisions of Section 48 of the Income Tax Act, 1961. Therefore for the purpose of computation of capital gains, the amount of Rs. 8,33,000/- only is to be adopted. 6. The CIT (A) has turned blind eye to the written submissions inspite of being extracted in her order. There must be something more than bare suspicion to support the assessment under Section 143(3) [Dhakeswari Cotton Mills ltd Vs. CIT, (1954) 26 ITR 775, 782 ( SC) ] No material was brought on record and put to the assessee to establish that sale consideration actually received was Rs. 28,12,500/-. The ITO is not justified in law and on facts in treating the amount of Rs....
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....re of the assessee i.e. 12/34 out of Rs. 1.50 crores comes to Rs. 66,17,647/-. As against this, the assessee has offered a receipt of Rs. 8,33,000/- only. This is explained as the assessee along with Smt. G.V. Subbamma have agreed to pay part sale consideration of Rs. 1.25 crores. To I. Venugopal Reddy (Vendor '2'), but not offered any evidence or reasons for such an illogical arrangement. It is not examined by the Assessing Officer as to how this arrangement of paying Rs. 1.25 crores to Sri I. Venugopal Reddy and as to how the sale consideration receivable has been truncated from Rs. 52,94,117/- to Rs. 8,33,000/-. The AO has failed to examine how this Rs. 44,61,117/cannot be taxed in the hands of the assessee for assessee being owner of that portion of the land. (ii) On the reverse side of the Page '1' of the Sale Deed, it is noticed that the vendor has paid an amount of Rs. 13,56,000/- towards stamp duty and registration on a sale consideration of Rs. 1.50 crores. The SRO value of the sale property is not clearly seen from the Sale Deed to be examined u/s.50C of the Act. The AO in the absence of clarifying on the SRO's value and the sale consideration sh....
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....ntas. (A.Rami Reddy 12 guntas. Smt.G.Venkta Subbamma 45 guntas and I.Venu Gopal Reddy 7 guntas.) While computing the short term Capital gains the assessee stated that he received a sum of Rs. 8,33,000/- only towards his share of sale consideration. According to the sale document the assessee should have received a sum of Rs. 28,12,500/- towards his share. (1,50,00,000X12/64) When it is put to the assessee why he admitted lesser consideration, he stated that, according to the oral agreement between himself and Smt.Venkta Subbamma agreed to pay major sum to Sri. I.Venu Gopala Reddy and he also stated that he cannot receive so much of amount, if he sells the property separately and independently. Therefore they paid major sum 10 Sri. I.Venu Gopal Reddy. The assessee did not produce or file any evidence in support of their oral agreement. It is also not believable that a major sum was paid to Sri. I.Venu Gopal Reddy whose extent of land sold was only seven guntas whereas the extent of land sold by Sri.A.Rami Reddy was 12 guntas and Smt.Venkata Subbamma was 45 guntas which is more than Sri.I.Venu Gopal Reddy. Therefore it cannot be believed that major amount was paid to Sri I.Venu Gopal....
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.... basis for payment. However, we are unable to appreciate on what basis the consideration is determined to each person. When these parties joined together to sell the properties mentioned herein above, the consideration shall be in proportionate to the value of the respective property what they sold. It cannot be on any unilateral basis of these three vendors. The value of consideration is attributable to each of the property is to be payable to the corresponding vendor. It is noted by the CIT that the basis of consideration of each property is not in accordance with the share of their property. Being so, there is error in offering capital gain by the assessee in respect of his share in the property. " Therefore, all the Grounds of Appeal raised by the assessee on the issue of capital gain are dismissed as there is no merit in the contention of the appellant. Therefore, the addition made by the Assessing Officer of Rs. 22,44,305/- as short term capital gain on sale of land is confirmed". Being aggrieved, appellant is before us in the present appeal. 5. Ld. Counsel for assessee vehemently argued that the sale consideration mentioned in the Conveyance Deed is a conclusive pro....