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TaxTMI 
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TaxTMI 
2017 (12) TMI 1259
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....6,04,000/-. Assessee filed return of income in the impugned assessment year offering Long Term Capital Gain on sale of property consisting of two parts, (i) 5-7-72/A (1035 Sq. Yds) and (ii) 5-7-70/B (1193 Sq. Yds) aggregating to 2,228 Sq. Yds., in Survey No. 119, Sangeet Nagar, Musapet Village falling in Kukatpally municipality of Hyderabad. Assessee, however, has shown an amount of Rs. 4,01,04,000/- as sale consideration on which capital gain was calculated. AO was of the view that the difference of Rs. 1,15,00,000/- i.e., ultimately sold by M/s. Emami Nirman Pvt. Ltd., should be the sale consideration in the hands of assessee and accordingly, brought the amount to tax. This is not an addition u/s. 50C of the Act but adoption of Fair Market Value on the basis of the sale deed entered on 09-07-2009. The AO also disallowed the exemptions/expenditure claimed by assessee amounting to Rs. 50 Lakhs being payments made for evicting the tenants and Rs. 20,05,000/- paid as commission to agents and claim of Rs. 91,85,356/- towards indexed cost of acquisition to arrive at the taxable income of Rs. 4,47,34,200/- after allowing the expenses of Rs. 4,50,300/- towards registration charges and de....
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....ideration shown as receipts by the assessee stand quantified at Rs. 4,01,04,000/- as the sale consideration agreed to have been paid by the agreement holder. Further, the exchange of the amounts between the two sister concerns, through book entries or transfer of the amounts does not alter the transaction, which has been accepted as the consideration of Rs. 1,15,00,000/- received by the consenting party. There is no evidence brought on record, to show that the agreement holder, as a confirming party to the sale deed, denied to have received the amounts under reference and as such amounts cannot be treated as the sale consideration in the hands of appellant. The amount which was not received by the assessee cannot be considered as sale consideration having passed it on to the consenting party, and such amounts are deductible against the gross sale consideration. Hence, the addition of Rs. 1,15,00,000/-, by virtue of disallowance of expenses claimed u/s. 48(i), do not survive. Accordingly, this ground of appeal is treated as allowed". 3.1.1. Revenue is aggrieved and raised the Ground No. 2(a) on this issue. Disallowance of payments to tenants : 3.2. Assessee has claimed expenses....
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.... There was no indication of the dispute with the tenants as per the agreements with M/s. Emami Nirman Pvt. Ltd and the blame for cancellation of agreement was put on the agreement holder who has become a confirming party, later. Where the agreements were executed, possession was given vide the agreements dt. 18.07.2007 and 19.07.2007, there was no basis for claiming the expenses as compensation paid to tenants in the year 2009. Even, on further facts, the appellant failed to prove the genuineness of transaction by failing to produce the parties and explaining the said transactions through verifiable information. Hence, on facts, there was no nexus of the expenses to the transaction under reference and as such there is no basis for the claim. Thus, the judicial decisions relied upon by the appellant, do not come to her rescue. Thus, based on the facts, it clearly proves that the property under reference was handed over physically in July, 2007, without any indication of disputes or demands from the tenants and there by the claim of expenses on that count in the subsequent period, amounts to an after thought as such the claim is not maintainable. Hence, the claim of expenses u/s. 48(....
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....ssion was charged on the sale consideration of Rs. 4,04,04,000/- on which the net capital gains were charged and apparently there is no wrong in such basis. Under the circumstances, i am of the opinion that having paid commission through the bank account, and relatable to transaction under reference indicate that the appellant has discharged onus to indicate that expenses are related to such sale receipts and as such allowable expense in absence of any contrary information available to the assessing officer. Hence, it is reasonable to hold that the payment of the commission of Rs. 20,05,000/- is allowable. This ground of appeal is treated as allowed". 3.3.2. Revenue is aggrieved with this and raised ground No. 2(b) on this issue. Disallowance of indexed cost of acquisition : 3.4. While computing the taxable capital gains, assessee claimed cost of acquisition of property at Rs. 91,85,357/-. AO disallowed the amount but allowed only an amount of Rs. 4,50,300/- being stamp duty paid. Assessee objected for such disallowance and submitted valuation report and working of indexed cost. It was submitted that total area was 14,000 Sq. Ft and portion of property was dismantled subsequen....
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....egard indicates the existence of reasonable big structures and buildings, which appear partly demolished between the date of agreements and sale deed. It is also a fact that the assessing officer has gone by the documents alone and could have verified the existence of such structures, through the concerned authorities such as municipal corporation etc. In fact, the notice issued by the GHMC dt. 01.10.2007 indicate the area under property assessment is 7334 sft, located in property bearing D.No. 5-7-70/6 (1193 sq.yards ) and without including the structure on property bearing D.No.5-772/A (1035 Sq.Yards). The cost of acquisition, thus was questioned and rejected merely based on the relevant documents without further verifying' the facts, which indicate otherwise. Thus, based on the facts, rejection of value based on valuation report, by the assessing officer, is not justified and the appellant is entitled to claim the indexed cost of acquisition based on valuation report which was not rejected by the assessing officer. However, there appears an arithmetical mistake in the valuation report, wherein the depreciation wrongly @25% on the RCC structured building was omitted to be ded....
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....ction 50C are attracted to the capital gains, it was submitted that the stamp duty value was much less than what assessee has entered into agreement in July, 2007 and even at the time of registration also the value as per registration authorities was much less so the provisions of Section 50C are not attracted. 6.1. With reference to Revenue appeal, Ld. Counsel submitted that all the facts have been appropriately considered by the Ld.CIT(A) after giving due opportunity to AO in the remand report and so the ground on Rule 46A violation does not survive. While supporting the order of CIT(A) on issues which he has given relief to assessee; it was prayer of the Ld. Counsel that the amount of Rs. 50 Lakhs paid to tenants should be allowed on the basis of evidence furnished before the authorities. 7. We have considered the rival contentions and perused the orders and Paper Book placed on record. As seen from the agreements of sale entered by assessee with M/s. Emami Nirman Pvt. Ltd., the transaction happened in July, 2007 by way of two separate agreements of sale cum GPA and the total consideration received on those agreements was the amount as received by assessee at Rs. 4,01,04,000/-....