TaxTMI 
TaxTMI 
2018 (1) TMI 697
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....of Rs. 11 lakhs vide document dtd. 05/09/2006 whereas the market value of the property as per the registration authorities comes to Rs. 53.24 crores. of income, reassessment proceedings u/s 147 of the Income-tax Act, 1961 ( in short 'the Act') were initiated with the prior approval of the Addl. CIT, Range - 3, Hyd. Accordingly, notice u/s 148 was issued on 18/03/2014 and served on the assessee. In response to the said notice, the assessee vide letter 02/04/2014 stated that he had already filed return of income for AY 2007-08 on 01/10/2007 and sought reasons for reopening the assessment. Reasons were accordingly furnished vide letter dated 25/06/2014 along with notice u/s 143(2). series of agreements/sale deeds in respect of the said property under consideration. The details of the agreements in the order of dates in are as follows: "A : DATE: 05-11-1967 Four persons, Viz., Sri Koganti Madhusudhan Rao, Sri Koganti Bhavani Shankar Rao, Sri Jasti Lakshmaiah and Smt.N.Annapurna Devi (herein after referred to as Mr.KMR & 3 others or 4 co-owners, for the sake of convenience) all from Kuchipudi Village, Amrathalur (M), Guntur District purchased 7 acres (On actual measurement, this wa....
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.... the earlier agreements were not executed. (v) since the issues are sorted out, the vendors will be obliged to renew the above said agreements in respect of 8 acres of land (vi) that all the vendors admit sale of land 'of 8 acres (vii) that out of 8 acres of land, land of Ac 3.33 cents, the possession of which was already handed-over as recorded and acknowledged in the agreement of sale on 29-09-1980. (viii) that the balance land of Ac 4.67 cents was also delivered to the purchaser and the purchaser in possession of the same. For the sake of convenience, the relevant paras are reproduced: " .... 3. That out of the said extent of Ac.8.00 land in Survey Number 194/1, an extent of Ac.3.33 cents had already been finally made over and possession delivered by the vendors to the purchaser as recorded and acknowledged in the agreement of sale dated 29-9-1980; 4. That the possession of the other extent of Ac. 4.67 cents of land in the Survey Number 194/1 is also being delivered to the purchaser formally today under this agreement of sale, although the purchaser is virtually in possession and enjoyment thereof by virtue of the General Power of Attorney dated 29-09-1980 ....
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....oject sponsored by the Govt. and after the change of purpose in the exemption order viz. G.O. Ms. No. 4586 dated 10-10-1980 in favour of the purchaser and for the purpose he may apply for. The aid amount will be paid within one year from such date; 8. The vendors do hereby declare, agree and covenant that they are delivering the possession to the purchaser of the remaining extent of land which, according to them measures Ac. 4.67 cents subject, however, to actual survey measurement and finding of the said land by such survey and subject to the conditions referred to above. 9. That in order to implement and to fructify this agreement of sale also in respect of this extent of Ac. 4.67 cents of land, the vendors are also executing a General Power of Attorney (a comprehensive one including the power in respect of the said extent of Ac.3.33 cents referred to above) empowering the purchaser to do all things necessary for the purpose of securing permissions, exemptions and all necessary clearances required under any enactment whatsoever relating to the said land and for the purpose of getting the sale deed or deeds executed finally as would be provided for in detail in the said Gene....
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.... the 4 owners purchased the property from Sri Mirza Ali Moza Raza and there were series of unregistered agreements I POAs followed by registered GPA in favour of Sri DSR, which is irrevocable on 07-03-1990. G: DATE: 20-11-1995 This is a sale agreement between 4 owners represented by GPA holder, Sri DSR and M/s NDL Estates (P) Limited, for sale of Ac.4.16 cents of land (21296 sq.yds), for a consideration of Rs. 1,27,77,600. The amounts were paid as under: (i) Rs. 11 lakhs to the sellers through GPA holder, Sri DSR : An amount of Rs. 11 lakhs was paid by cheque No.682240 dated 04-03-1995 drawn on Allahabad Bank, Hyderabad to DSR. (ii) Rs. 30 lakhs to be paid on or before 30-06-1996, the remaining amount of Rs. 81,77,600 to be paid on or before 30- 11-1996, subject to clearance of lay-out by Hyderabad Urban Development Authority and Municipal Corporation of Hyderabad, failing which the purchaser will pay interest @ 18%. (iii) in any case, the entire price shall be paid before 31-12- 1996, failing which the agreement stand cancelled and the sellers refund the amounts before June, 1997. (iv) the possession of the property will be handed-over on payment of price and nec....
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....-2-14 to ITO (Intelligence) Guntur). J : DATE 11-09-2009 The original owners cancelled the GPA given to Sri DSR vide Registered GPA Document No.705 of 1990 dated 07-03-1990. It is mentioned in this document that the GPA holder has misutilised the powers conferred upon him, therefore, the GPA dated 07-03-1990 is cancelled. This cancellation deed is registered. K : DATE: 29-12-2010 An un-registered Tripartite Memorandum of Understanding was entered between original owners, M/s NDL Infratech Ltd (formerly known as NDL Estates (P) Ltd) and Sri DSR. M/s NDL Infratech Ltd paid an amount of Rs. 1.02 crores to the 4 owners. This document is unregistered The details of payment are as under: S.No. DD No. Date In favour Amount (Rs.) 1 046719 29-12-2010 K.MADHUSUDAN RAO 9,00,000 2 046720 29-12-2010 K.SRIDHAR 9,00,000 3 046721 29-12-2010 P.RADHIKA 7,50,000 4 046722 29-12-2010 K.BHAVANI SHANKARA ROA 14,50,000 5 046723 29-12-2010 U. JYOTHSNA 6,00,000 6 046724 29-12-2010 K.KRISHNA MOHAN 5,00,000 7 046716 29-12-2010 N.ANNAPURANA DEVI 9,00,000 8 046717 29-12-2010 N.CHITTARANJAN 8,50,000 9 046718 29-12-2010 N.SUDHAKAR CHOUDARY 8,00,000....
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....eating it as a profit arrangement between the parties which has no locus standi in the eyes of law. 2.2 Further, AO had obtained SRO value from the Stamp Authorities, which was at Rs. 25,000/- per sq.yd. Accordingly, he long term capital gain in the hands of the assessee. 3. Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A). 4. After considering the submissions of the assessee and various documents placed on record, the CIT(A) allowed the appeal of the assessee by observing as under: 5. I have carefully gone through the series of documents, submissions of the appellant, submissions made by 4 owners before income-tax authorities. As mentioned above, there have been series of unregistered / registered documents over a period of 60 years time. The deeds were subject to fulfilment of certain conditions / payments of certain amounts which were neither fulfilled nor paid fully. Ultimately, the original owners denied that they have signed on any document except the Memorandum of Understanding dated 29-12-2010. Ultimately, the 4 owners entered an Memorandum of Understanding with M/s NDL Infratech (P) Limited on 29-12- 2010 and received the payment as ....
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....ssion of the property in question from 29/09/1980. 6. Any other ground(s) that may be urged at the time of hearing." 6. Ground Nos. 1 & 6 are general in nature and ground Nos. 2 to 5 are directed against the action of the CIT(A) in deleting the addition gain. 7. Considered the rival submissions and material facts on record. assessee with the owners of land from the year 1967 till date. After above agreements are, that four coowners, namely, Shri K. Madhusudhan Rao, Sri K. Bhavani Shankar Rao, Shri J. Lakshmaiah and Smt. Annapurna Devi (hereinafter they are referred to as "Mr. KMR and others") who are hailing from Kuchipudi Village, Amrathalur (M), Guntur Dt., purchased 8 acres of non-agricultural land in Survey No. 194/1, Begumpet Revenue (V), Balanagar (M), R.R. District from Sri Mirza Ali Moosa Raza vide registered sale deed No. 2568/1967, dt. 05/01/1967 for an amount of Rs. 28,000/-. Mr. KMR and others entered into an agreement of sale-cum-GPA with the assessee in two separate agreements of sale of 3.3 acres and 4.67 acres. As per the consideration. As per the second agreement dated 29/09/1980, for the balance land of 4.67 acres, they handed over the possession of the land....