TaxTMI 
TaxTMI 
2016 (11) TMI 1656
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....Colony, Main Road, Shahjahanabad, Ward No.13, Bhopal. 2. That, without prejudice to the above, on the facts and in the circumstances of the case, the ld. CIT(A) grossly erred, both on facts and in law, in confirming the impugned addition in an erroneous status of Persons inasmuch the subject property as purported to be acquired on behalf of a joint Hindu Undivided Family of which the appellant was merely one of the members and it was never acquired by or on behalf of the appellant in his individual capacity. 3. That, without prejudice to the above, on the facts and in the circumstances of the case, the ld. CIT(A) grossly erred, both on facts and in law, in confirming the addition on account of long-term capital gain amounting to Rs. 50,19,080/- in the appellant's hand from sale of a residential house situated at House No.1, Islami Gate to Sindhi Colony, Main Road, Shahjahanabad, Ward No.13, Bhopal, without considering the material fact that the appellant or any of his representatives never lawfully owned and/or possessed the subject residential house before the sale thereof. 4. That, without prejudice to the above, on the facts and in the circumstances of the case, the ld.....
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....possession of his successor. Therefore, it was contended that the assessee had neither the possession nor the legal title in the said property. It was further contended that the assessee had entered into an agreement to sale on 01.06.2007 for a consideration of Rs. 5 lakhs in favour of Shri Mohd. Khalil. His general Power of Attorney is also given in the name of Shri Mohd. Imran for getting the sale deed registered ( paper book. Page 50 -53). However, Shri Mohd Imran meanwhile died. Shri Mohd. Khalil had subsequently sold this house property to Shri Mohd. Mahfooz for a consideration of Rs. 12 lakhs and entered into a registered sale deed on 27.03.2010 for a total consideration of Rs. 12 lakhs. In the registered deed Shri Rajesh Gupta, the assessee has been shown as seller and Shri Mohd. Mahfooz has been shown as purchaser. It was contended that the assessee had signed the sale deed as a seller on behalf of Shri Mohd. Khalil, due to death of Shri Mohd. Imran, General Power of Attorney holder. It was contended before the AO that the assessee could not take possession of the house as it was in possession of Shri Liaqat Khan. It was further submitted that subsequently the Hon'ble C....
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....old means the right or interest in it. It has been held by various Courts that tenancy right is a capital asset and surrender of tenancy is a transfer. The ld. CIT(A) has also supported his view by citing decision in the case of Bafna Charitable Trust vs. CIT, (1998) 230 ITR 864 (Bom), wherein it was held that mortgage is a capital asset, because there is a transfer of interest in the property from mortgage to mortgage. The ld. CIT(A) further held that any interest in immovable property is also a capital asset as held in the case of CIT vs. Tata Services Limited, (1980) 122 ITR 594 (Bom), wherein the Hon'ble Bombay High Court held that u/s 2(14) of the Income-tax Act, 1961, a capital asset means property of any kind held by an assessee, whether or not connected with his business or profession. The word "property" used in Section 2(14) of the Act is a word of the widest amplitude and the definition as reemphasized this by the use of word "of any kind". Any right, which can be called property will be included in the definition of capital asset. A contract for sale of land is a capable of specific purpose. It is also assignable. Therefore, a right to obtain conveyance of immovable....
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....f Property Act, 1882, the sale of immovable property having a value of 100 rupees and upwards can be made by registered sale deed in exchange for a price. Thus, the assessee was holding "capital asset" in the form of interest in such property as envisaged in Section 2(14) of the Act. The said capital asset was transferred by Sale Deed registered on 27.03.2010. The transfer had taken place of the capital asset as defined in Section 2(47) of the Act. Therefore, the assessee was liable for tax under the head capital gains on the profit arising from the transfer of the capital asset i.e. the said property. The ld. CIT(A) noted that sale consideration as per registered sale deed is shown at Rs. 12 lakhs, whereas as per deeming provision of Section 50C of the Act, where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of Section 48 of the Act, be deemed to be the full val....
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....ough Registered Sale Deed placed at paper book page no. 54-62 of the paper book. It was submitted that Stamp Valuation Authority valued the property at Rs. 50.60 lakhs and based upon such valuation, the AO made the impugned addition. Subsequently, Mohd. Mahfooz filed a petition before the 3rd Additional District Judge, Bhopal, against the successor of Shri Liaqat Khan for obtaining the legal possession of the said house. The Hon'ble District Court in its decision pronounced on 01.03.2013 held that the successor of Shri Liaqat Khan viz. Waheedullah Khan, Hanif Khan and Shami Khan, the Respondents in the said petit6ion were lawfully occupier and owner of the said property and also held that Smt. Jaitoon Bi and Smt. Roshan Arara from whom the father of the assessee purchased the property under the registered Sale Deed dated 25.03.1971 were not legally entitled to execute in sale deed in favour of the assessee. Therefore, the Ld. Counsel for the assessee contended that the purchase of the subject property by the assessee from Smt. Jaitoon Bi and Smt. Roshan Aara through the purchase deed dated 25.03.1971 has been held illegal. Therefore, once the purchase has been held illegal, its....
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....ed by the purchaser. The assessee has also executed a General Power of Attorney on 01.06.2007 in the name of Shri Mohd. Imran, according to which the General Power of Attorney holder is entitled to execute sale deed in respect of aforesaid property in the name of any person as per para 6 of the said General Power of Attorney agreement. This General Power of Attorney was valid for one year from the date of execution dated 01.06.2007. We further find that the assessee has entered into a registered sale deed on 27.03.2010 with Shri Mohd. Mahfooz for a total consideration of Rs. 12 lakhs. A perusal of the Registered Sale Deed dated 27.03.2010 shows that the assessee has admitted to have received Rs. 12 lakhs in cash in the presence of witnesses and there is no amount remained to be received. This means that the assessee has received Rs. 12 lakhs in cash by executing this registered sale deed. It is also mentioned at page 3 of the registered sale deed that the seller had physical possession of House No.1 having area of 4572 Sq.ft. and has also legal ownership on the same on which there is no loan, debts are taken and no one other is a partner or shareholder in respect of the said proper....
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....under the head "Long Term Capital Gains" for transfer of the capital assets. We further find that subsequently 3rd Additional District Judge Court in its decision pronounced on 01.03.2013 held that the successor of Shri Liaqat Khan, namely, Waheedullah Khan, Hanif Khan and Shami Khan, the Respondents in the petition, were lawfully occupier and owner of the said property. The Hon'ble Court at para 12 of the order also held that Smt. Jaitoon Bi and Smt. Roshan Aara from whom the father of the assessee purchased the property under the registered sale deed dated 25.03.1971 was not legally entitled to execute in the sale deed in favour of the assessee. We find that this finding of the Hon'ble Court is an interim order and final order is yet to be passed subsequently. However, the assessee has not brought to our notice till date that any final order has been passed by the Hon'ble Court in this regard. Therefore, we are of the opinion that the assessee has transferred a capital asset being the land and building. Therefore, provisions of Section 50C would be very much applicable. The decision in the case of Shri Atul G. Puranik vs. ITO, (2011) 11 ITR 0120 (Mum Trib.), Kancast (....