TaxTMI 
TaxTMI 
2017 (11) TMI 189
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....d that the property bearing No. 1-9-64 to 66, Pedda Thokatta, Bowenpally, Secunderabad was gifted to the assessee by her husband Mr. B.N. Reddy vide gift deed bearing No. 677 of 1981, dated 02/03/1981. The AO noted that due to financial requirements, the assessee had entered into 'sale cum general power of attorney' with Veera Malla Kistaiah and others on 28/09/2007 and received an amount of Rs. 46,00,000/- from them and subsequently, they have backed from the transaction and demanded the money back. The AO observed that as the cash was not available with the assessee and to raise a bank loan, assessee along with GPA Holders had transferred the property in the name of assessee's husband Mr. B.N. Reddy vide sale deed dated 27/01/2010 and received loan of Rs. 50 lakhs from Repco Homes and paid the money back to the GPA Holders. Assessee stated before the AO that the above transaction took place for the sake of creation of a document to enable the bank to sanction loan. However, AO did not accept the contention of the assessee and computed the long term capital gains of the assessee at Rs. 50,05,850/- and added the same to the income of the assessee. 2.2 Further, AO noticed that as....
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....rrectly the tax liability of an assessee in accordance with law, if, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that anon-taxable item is taxed or a permissible deduction is denied, there is no reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record in respect of that item. There is no reason to restrict the power of the Tribunal u/s 254 only to decide tire grounds which arise from the order of CIT(A). Both the assessee as well as the Department have a right to file an appeal/cross objections before the Tribunal. Tribunal should not be prevented from considering questions of law arising in assessment proceedings although not raised earlier". As already submitted the additional ground raised by the appellant is going to the root of the issue i.e., in the given facts and circumstances of the case whether the assessee was liable for tax under the head long term capital gain. In the light of the decision of the Supreme Court the same may be considered for admission and the issue raised through additional grou....
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....111l/210 dated 25-01-2010. The executants of the sale deed were Sri Veera Malla Kistaiah and 4 others i.e., Sale cum GPA holders. The sale consideration was Rs. 52,54,700/-. Taking the above documents into consideration the AO in his assessment order made various comments. Submissions are made with regard to the comments of the AO contained in the assessment order as under: 1. At para 2.2. the AO mentioned that the AR of the assessee furnished certain explanation with regard to transaction now under consideration i.e., document dated 27-01-2010 and proceeded further by making certain observations: a. The AO observed that Smt. Marri Swaroopa has transferred the property to her husband Sri B.N.Reddy through a registered sale deed (obviously document dated 27-01-2010) and all the rights were transferred to Sri B.N.Reddy. The AO further observed that the transaction was to raise loan from the banks and as per the Transfer of property Act, transfer of rights over a property tantamount to sale of property only. As already submitted the document dated 27-01-2010 was executed by Sri Veera Malla Kistaiah and 4 others i.e., Sale cum GPA holders and Smt. Ma....
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....dated 25-01-2010 clearly indicate that they became absolute owners of the property in the light of sale cum GPA dated 28-092007 on payment of sale consideration of Rs. 46 lakhs. The contents of the sale cum GPA also clearly indicate that all rights in the property were vested with Sri Veera Malla Kistaiah and 4 others in the light of document dated 28-09-2007 . The AO basing on certain circumstances concluded that Sri Veera Malla Kistaiah and others were loan creditors and therefore long term capital gain should be assessed in the hands of the assessee Smt Marri Swaroopa. The document under consideration of the AO in the present assessment is sale deed dated 27-01-2010. A perusal of the said sale deed indicate the following as transferors and transferee: Transferors 1. Sri Veera Malla Kistaiah 2. Sri T. Veera Malla Hanumanth Rao 3. Sri Veera Malla SahJanarayana 4. Sri Veera Malla Anjaneyulu 5. Sri Manchukonda Kiran Kumar Transferee 1. Sri M.Badri Narayana Reddy In the recital of the said sale deed it was mentioned as under: Smt. Marri Swaroopa Reddy W/o Sri Marri Badrinarayana Reddy aged about....
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....from future liability on this sale transaction. And out of above sale consideration, the vendee paid a sum of Rs. 50 lakhs to the vendor by way of Housing Loan Sanction to the vendee by the Repco Homes Finance Ltd. vide by their cheque No.414891 of Rs. 10 lakhs in favour of the vendor No.1 Veera Malla Hanumanth Rao, Cheque No.414893 of Rs. 10 lakhs in favour vendor No.3 Veera Malla Satyanarayana, Cheque No.414894 of Rs. 10 lakhs in favour of vendor No.4 Veera Malla Anjaneyulu, Cheque No.414895 of Rs. 10 lakhs in favour of vendor No.5 Manchukonda Kiran Kumar all cheques dated 25-01-2010 drawn on Karur Vysya Bank Ltd., S.R.Nagar Branch, Hyderabad. And remaining amount of Rs. 2,54,700/- paid by vendee to vendors towards full and final sale consideration in respect of sale of said property". For the purpose of purchase of the property Sri B.N.Reddy obtained a loan from Repco Homes Finance Ltd and paid consideration to various Sale cum GPA holders as mentioned above. Thus, it is clear that Sri B.N.Reddy purchased the property from Sri Veera Mallaiah and others by obtaining a loan from Repco Finance Ltd. In that process the name of the assessee never mentioned ....
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....rued to the assessee liable for tax in the light of sale deed dated 25-01- 2010. In the light of the above facts and circumstances of the case as the conclusion of the AO with regard to levying of tax on long term capital gain in the hands of the assessee in the light of sale deed dated 25-01-2010 has no basis the addition made by the AO may be deleted. Without prejudice to the above claim the assessee's alternative claim as under: The assessee received the property through registered gift deed vide document No. 677/81 dt. 22-03-1981 from her husband Sri Marri B.Narayana Reddy for the house bearing No. 1-9-64 Pedda Tokatta, Bowenpally, Secunderabad, admeasuring 426 Sq. yards with existing tiled house valued at Rs. 35,000/-. Subsequently, she entered into an Agreement of Sale cum GPA with Sri Veera Malla Kistaiah and 4 others vide document No.764/2007 dated 28-07-2007 for the same properrf. Later on Sri Veera Malla Kistaiah and 4 others (as a GPA hoIder) have executed a registered sale deed vide document No. 111/210 dt. 25-01-2010 in favour of Sri Badri Narayana Reddy(husband of Smt. Marri Swaroopa). The property which was transferred to Sri B....
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.... with regard to the addition of Rs. 50,55,888/- made by the AO mainly based on the fact that Smt. Marri Swaroopa transferred property to her husband Sri B.N.Reddy through registered sale deed and the appellant received money from Sri B.N.Reddy. In this case, the appellant submitted during the appeal proceedings that, vide gift deed dated 22-03-1981, the property was gifted by Sri M.B.N.Reddy in 'favour of Smt. Marri swaroopa vide registered document dated 28-072007. The appellant entered into sale cum general power of attorney with Sri Veera Malla Kistaiah and 4 others on 29-08-2007 and they have backed from transaction and taken back the money which was paid to Smt M. Swaroopa. Therefore, the transaction has no role to play and finally the conclusion is Smt. Marri swaroopa has sold the property to Sri B.N.Reddy and thereby long term capital gains are arrived. Thus these four GPA holders sold the property again to Sri M. B.N.Reddy, vide document No.111/210 dated 25-01-2010. On verification of the documents of the final sale deed dated 25-01- 2010, I found that the appellant has not signed the document. This document was signed by Sri Veera Malla Kistaiah and others and they sol....
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....ments which are the basis of making addition and heavily relied on by the AO are sale deed dated 25/01/2010 and sale-cum-GPA, dated 28/07/2007. Both these documents are registered. It is pertinent to note that the assessee has entered into sale-cum-GPA with Mr. Kistaiah and others and agreed for a consideration of Rs. 47 lakh and received 46 lakhs. W ith regard to balance of Rs. 1 lakh, there is no evidence of any receipt nor there is any sale deed to complete the transaction as per the above agreement. Since, the assessee has received major portion of sale consideration and as per the various clauses of the agreement, the GPA holders will govern the property and receive the rent. It shows that the administration of the property was already passed on to the GPA holders. Accordingly, the assessee has no control over the property. 8.1 Secondly, on verification of the sale deed dtd. 25/01/2010, it clearly indicates in page 2 of the agreement as follows: WITNESSETH: "Whereas, the Vendor is the sole and absolute owners and possessors of clear marketable title. House Bearing Nos. `-9-64 to 66 (Excluding 2nd floor) together with undivided share of land admeasuring 286....