AI Drafter 
TaxTMI 
TaxTMI 
2018 (2) TMI 257
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....n of the land u/s 50C at Rs. 3.16 Crores on the basis of the report of DVO which is based on the value determined by the Sub-Registrar and not the fair market value of the land as required u/s 50C(2). He has further erred in not appreciating the various objections raised by the assessee on the report of the DVO and also the fair Market value of the land determined by the registered valuer and thereby, upholding the capital gain determined by the AO at Rs. 2,68,37,200/-. 3. The Ld. CIT(A) has erred on fact and in law in considering the cost of purchase/improvement at Rs. 47,62,800/- as against Rs. 56,70,055/- claimed by the assessee. 4. The Ld. CIT(A) has erred on fact and in law in holding that the agricultural land sold by the assessee is a capital asset by not considering that the land was situated beyond 8 Kms of the municipal limits as per Notification No. 9447 dt. 06.01.1994. 5. The assessee crave to amend, alter and modify any of the grounds of appeal. 6. The appropriate cost be awarded to the assessee." 2. Ground No. 1 is regarding the long term capital gain arising from sale of land was treated by the AO as short term capital gain. The....
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....Jaipur Development Authority (JDA) for converting the agricultural land into farm house land. The conversion charges are paid by the assessee and debited in the respective land account. The Jaipur Development Authorities (JDA) accordingly issued conversion of land used in the name of the original land owner on 03.02.2010 and 05.02.2010 respectively. Thereafter to sale deed was executed by the owners of the land in favour of the assessee on 13.04.2010. The assessee sold the farm house land on measuring 18,897.50 sq. yd. on 07.03..2011 to M/s Sona Engineering Pvt. Ltd. for a consideration of Rs. 1,88,97,500/- and land measuring 1.16 hectare converted into 13,594 sq. yd. on 04.05.2011 to M/s Galaxy Greem Power Pvt. Ltd. for a consideration of Rs. 2,30,88,000/-. The capital gain arising from these two sales were offered as long term capital gain for the assessment year 2011-12 & 2012-13 respectively. The ld. AR has referred to clause-5 of the agreement and submitted that the assessee was handed over the physical possession of the land as as per clause 3 of the agreement dated 11.04.2007. The sellers of the land accepted that the sale deed would be executed as directed by the assessee. ....
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.... of section 53A of transfer of property Act cannot be applied in the case the assessee where the property cannot be transferred legally until and unless the same is converted from agricultural land to non agricultural one. The sellers of the agricultural land belongs to Scheduled caste community and therefore, as per section 42 of Rajasthan Tenancy Act 1955 any the sale, gifts or bequeath of the land is prohibited in favour of any person who is not a member of Scheduled caste and schedule Tribe. The purchase agreement dated 11.04.2007 is not legally enforceable and therefore would not constitute transfer of land in question as per the provisions of section 2(47) of the Act. The ld. DR has further submitted that as per Registration Act, 1908 any contract for transfer of immovable property for the purpose of section 53A of transfer of property Act shall be registered if the said contract has been executed on or after commencement of registration and other related law Amendment Act 2001 and therefore, if the agreement for transfer of land is required to be registered. He has relied upon the orders of the authorities below. 5. We have considered the rival submissions as well as rele....
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....e ascertained from a document as a whole. Where the deed of transfer has been executed though in violation of law prescribing for a previous sanction or subsequent validation by a competent authority and though not registered would still attract the application of doctrine of part performance. In the case in hand since, the agricultural land could not be sold in view of section 42 of the Rajasthan Tenancy Act, therefore, the parties entered into an agreement to sale dated 11.04.2007 and thereafter the lands were converted into non agricultural land and more specific Farm House Land on 03.02.2010 and 05.02.2010 and thereafter the sale deed was executed by the vendors on 13.04.2010. As it is clear from these act and events that it is continuous process of transfer which begins with the agreement to sale dated 11.04.2007, conversion of the land use on 03/05.02.2010 and ultimately execution on sale deed on 13.04.2010. The sale deed dated 13.04.2010 is a performance of obligation under the agreement to sale dated 11.04.2007, therefore, the conversion of the land after the execution of agreement to sale is a post facto conversion and the transfer would effects from the date of agreement ....
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....ment instead of altering the same. The Hon'ble Supreme Court in case of Sanjay Lal vs. CIT 365 ITR 389 while considering the question as to whether the date on which agreement for sale was executed could be considered the date on which the property was transfer has held in para 20 to 25 as under:- "20. The question to be considered by this Court is whether the agreement to sell which had been executed on 27th December, 2002 can be considered as a date on which the property i.e. the residential house had been transferred. In normal circumstances by executing an agreement to sell in respect of an immovable property, a right in personam is created in favour of the transferee/vendee. When such a right is created in favour of the vendee, the vendor is restrained from selling the said property to someone else because the vendee, in whose favour the right in personam is created, has a legitimate right to enforce specific performance of the agreement, if the vendor, for some reason is not executing the sale deed. Thus, by virtue of the agreement to sell some right is given by the vendor to the vendee. The question is whether the entire property can be said to have been sold at the....
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.... of the vendee and therefore, some right which the appellants had, in respect of the capital asset in question, had been extinguished because after execution of the agreement to sell it was not open to the appellants to sell the property to someone else in accordance with law. A right in personam had been created in favour of the vendee, in whose favour the agreement to sell had been executed and who had also paid Rs. 15 lakhs by way of earnest money. No doubt, such contractual right can be surrendered or neutralized by the parties through subsequent contract or conduct leading to no transfer of the property to the proposed vendee but that is not the case at hand. 22. In addition to the fact that the term "transfer" has been defined under Section 2(47) of the Act, even if looked at the provisions of Section 54 of the Act which gives relief to a person who has transferred his one residential house and is purchasing another residential house either before one year of the transfer or even two years after the transfer, the intention of the Legislature is to give him relief in the matter of payment of tax on the long term capital gain. If a person, who gets some excess amount u....
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....nguished and some right had been created in favour of the vendee/transferee, when the agreement to sell had been executed. 24. Thus, a right in respect of the capital asset, viz. the property in question had been transferred by the appellants in favour of the vendee/transferee on 27th December, 2002. The sale deed could not be executed for the reason that the appellants had been prevented from dealing with the residential house by an order of a competent court, which they could not have violated. 17 25. In view of the aforestated peculiar facts of the case and looking at the definition of the term 'transfer" as defined under Section 2(47) of the Act, we are of the view that the appellants were entitled to relief under Section 54 of the Act in respect of the long term capital gain which they had earned in pursuance of transfer of their residential property being House No. 267, Sector 9-C, situated in Chandigarh and used for purchase of a new asset/residential house." Thus, it was held by the Hon'ble Supreme Court that when agreement to sale in respect of immoveable property is executed a right in personae is created in favour of the vendee and thereby the ve....
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....n the meant time the Government issue notification of acquisition of the land for the road purpose and therefore, at the time of sale of the land in question was under the process of the acquisition by the Government and consequently the fair market value of the land is affect by the acquisition notification and will be less than the normal rates of the land. He has also referred to the Circular No. 3385 dated 14.07.2014 and submitted that the Government has clarified DLC rate application on the agricultural land used for farm houses however, the DVO has denied the applicability of the said circular as it is subsequent to the date of sale. Hence, the ld. AR has submitted that the registered valuer has determined the fair market value of the land by considering all these factors which should have been accepted by the authorities below. 10. On the other hand, ld. DR has submitted that the DVO determined the valuation after considering the objection of the assessee as well as the valuation report of the registered valuer submitted by the assessee. The fair market value of the property has to be determined on the date of sale deed and therefore, the circular dated 14.07.2014 was not....
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....ning the fair market value. Needless to say the assessee be given an opportunity of hearing before deciding this issue. 12. Ground No. 3 is regarding disallowance of cost of improvement. The AO while computing the capital gain has allowed the cost of purchase at Rs. 47,42,800/- and cost of improvement at Rs. 20,000/- aggregating to Rs. 47,62,800/- as against Rs. 56,70,055/- claimed by the assessee. The AO restricted the claim of cost of improvement on the ground that on verification of the ledger account it is found that only an amount of Rs. 20,000/- was incurred after acquisition of the property vide sale deed dated 13.04.2010. Thus, the AO has disallowed the expenditure which was incurred prior to the sale deed and after the date of agreement to sale dated 11.04.2007. The ld. CIT(A) has confirmed the action of the AO. 13. We have heard ld. AR as well as DR and considered the relevant material on record. Since, this issue of date of acquisition of the land in question has been decided by us by holding that the assessee has acquired the land vide agreement dated 11.04.2007 and therefore, the expenditure incurred for improvement of the land after the said date of acquisition ....
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....s per Notification No. 9447 dt. 06.01.1994. 4. The assessee crave to amend, alter and modify any of the grounds of appeal. 5. The appropriate cost be awarded to the assessee." 16. Ground No. 1 is regarding the treatment of long term capital gain as short term capital gain. This issue is common as raised by the assessee in ground No. 1 of the appeal for the assessment year 2011- 12. In view of our findings on this issue for the assessment year 2011- 12 the same stands adjudicated in favour of the assessee. 17. Ground No. 2 is regarding the fair market value determined by the DVO and adopted by the authorities below. This issue is also common to the issue raised by the assessee in ground No. 2 for the assessment year 2011-12. In view of our findings on this issue, this issue stands adjudicated in terms of our findings and accordingly, set aside to the record of AO/DVO. 18. Ground No. 3, at the time hearing, the learned counsel for the assessee has stated at bar that the assessee does not press ground no. 3 and the same may be dismissed as not pressed. The ld. DR has raised no objection if ground no. 3 of the assessee's appeal is dismissed as not pressed. Ac....
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.....डी.à¤à¤«.सी. बैंक लिमिटेड जयपà¥à¤° का इस लेखà¥à¤¯à¤ªà¤¤à¥à¤° को निषà¥à¤ªà¤¾à¤¦à¤¿à¤¤ करते समय पà¥à¤°à¤¾à¤ªà¥à¤¤ कर लिये है जिनको पà¥à¤°à¤¾à¤ªà¥à¤¤ करना पà¥à¤°à¤¥à¤® पकà¥à¤· विकà¥à¤°à¥‡à¤¤à¤¾à¤—ण इस लेखà¥à¤¯à¤ªà¤¤à¥à¤° में सà¥à¤µà¥€à¤•à¤¾à¤° करते है। शेष राशि सà¥à¤µà¤¿à¤§à¤¾à¤¨à¥à¤¸à¤¾à¤° बरवकà¥à¤¤ पंजीयन लेना तय हà¥à¤† । यह कि दà¥à¤µà¤¿à¤¤à¥€à¤¯ पक....