TaxTMI 
TaxTMI 
2020 (8) TMI 84
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....of Rs. 130 Crores, to Rs. 102,52,21,675/-. 3. Brief facts relating to the case are that the assessee society was established by the Punjab Government on 07/07/1994 and registered under the Registration of Societies Act, XXI of 1860 by the Registrar of Firm and Societies, Punjab, Chandigarh vide No. 916 dt. 10/10/1994. The assessee society was also registered as charitable society under section 12A of the Income Tax Act, having been granted registration on 01/11/2000. The CIT withdrew the registration granted under section 12A of the Act, with effect from 2004-05 ,but it was subsequently restored back by the Tribunal vide its order dt. 29/09/2015. 4. During the assessment proceedings for the impugned year the A.O. noted that the assessee had shown Rs. 156 Crores as current liability ,against receipt from Punjab Urban Development Authority(PUDA) against land. Enquiries were made relating to the same and the A.O. noticed that the impugned amount had been received on account of and by virtue of a TripartiteAgreement entered into by the assessee with Punjab Urban Development Authority and the Director Research and Medical Education, Punjab, on 30/04/2002. The A.O. noted that under the....
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....e and the Revenue have now come up in appeal before us raising the following grounds: Grounds raised by the Assessee are as under: 1. That the worthy CIT(A) erred in facts and in law in confirming the action of the learned Assessing Officer in computing Long Term Capital gains on alleged sale of Land amounting to Rs. 420 crores by the appellant to PUDA by invoking the provisions of Section 2(47) of the Income Tax Act,1961 read with Section 53A of the Transfer of property act based on Tripartite Agreements made on 30.04.2002, as amended by agreements dated 01.07.2011 and 07.08.2012 and sustaining the addition of Rs. 102,5,22,1675/= 2. That the worthy CIT(A) failed to appreciate that he appellant society was not the owner of land in question on which the worthy CIT(A) has made additions invoking the provisions of section 2(47) r.w.s. 53A of the transfer of property act. 3. That the worthy CIT(A) erred in confirming application of section 2(47) r.w.s 53A of the Transfer of Property Act and confirming addition of Rs. 1.02,52,21,675/- in the case failing to appreciate that the Tripartite Development agreement was not registered agreement. 4. That the CIT(A) erred in not followi....
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....the Ld.CIT(A) u/s 11 of the Act, being amount paid to the Government under the agreement. 8. The assessee has raised the following arguments while contesting the addition made of unutilized capital gains in its hands : 1) That the land on which the assessee allegedly earned capital gain did not belong to it but to the government and therefore there arose no question of the assessee earning any capital gain. 2) That the amount received in fact represented grants from the government. 3) That in any case capital gain if any accrued in earlier year when the agreement transferring possession of land to PUDA for further development and sale was entered in 2002 . 4) That addition on account of non application/utilization of capital gain for charitable purposes could not be made u/s 11(1A) of the Act,on account of impossibility of utilization since the impugned amount had not been received by the assessee at all. 9. The Revenue on the other hand,represented through Ld.DR, has referred to the agreement for purchase of land from Punjab Agricultural University dt 30-05-2000 pointing to the fact that the assessee was required to pay half of the price of the land, to buttress its argu....
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....ent was revised on 01-07-11 and the expected sale proceeds of the land revised to Rs. 420 Crs. Further an amount of Rs. 100 cr was paid to the State Government out of the proceeds of sale under this revised agreement. Another revision of the agreement was done on 07-08-12 and further payment of Rs. 30 Crs was made to the State Govt. under it. 13. Taking up first and dealing with the primary issue whether any capital gain arose to the assessee under the tripartite agreements,the contention of the Ld.Counsel for the assessee is that no capital gain arose to the assessee since it was not the owner of the land.We find that this contention relates to a matter of fact and for which purposes both the parties have referred to the tripartite agreement dt.30-04-2002 and the agreement under which land was originally purchased dt .30-05-2000 .It would be relevant to go through these agreements ,copies of which were placed before us. The contents of the initial Tripartite agreement dt. 30/04/2002 are as under: AGREEMENT This Tripartite Agreement is executed at Chandigarh on this 30th day of April Two Thousand Two between the State of Punjab through the Principal Secretary to Government of ....
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....same shall be remitted to the Institute promptly, after deducting the expenses incurred by PUDA on the development of land regarding which duly audited proper accounts will be furnished to the Institute every six months. 2. That while remitting the above sums, PUDA will ensure a minimum monthly remittance of Rs. 2.5 Crores or more, if the revenues from sale of plots exceed the amount in any given month, subject to a minimum of Rs. 70 Crores for a period of 28 months commencing January 1, 2002, whichever is earlier, so as to enable the Institute to meet its financial obligations including those connected with the construction of the buildings of Hospital and Medical College. The amount of Rs. 10.50 Crores already paid shall be adjusted in the minimum guaranteed amount of Rs. 70 Crores. For removal of doubt, the remittances for the months from January to April, 2002 deemed to have been paid. 3. PUDA shall transfer all receipts from the sale of Land, whichever may be in excess of the amounts to be remitted in terms of foregoing covenants, as expeditiously as possible and in any case within 30 days from the receipt thereof. 4. That the development and sale of land will be exclusi....
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....nbsp; Rs. Nil Punjab Agriculture University, Ludhiana is owner of 104 Acre 5 Kanal 1 Maria land and have possession on it. The Khewat/ Khatoni Nos 296/390, 412/559, 515/700 of this land and Khasra Nos.are 12//20(8-0/ 21(8-0), 22(8-0), 23(8-0) 24(8-0), 25(6-13), 27(0-15), 28(1-13), 29(1-7), 13//11(0-13), 20(2-18), 21(5- 13),ll//6/2(3-16), 7/2(1-7), 11/2/1(0-7), 12/2(3-16), 13/2(6-9), 14(8-0), 15(8-0), 16(8-0), 17(8-0), 18(8-0), 19/1(5-18), 22/2(0-17), 23(7-12), 24(7-3), 25(6-18), 26(0-10), 12//2/2(l-7), 3/1(3-7), 4(8-0), 5(4-10), 6(6-8), 7(8-0), 8(8- 0....
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....of 472 Kanal 5 Marias have been given to Punjab Government on the spot whose Khasra No are 12//2O(8-0), 21(8-0), 22(8-0), 23(8-0), 24(8-0), 25(6-13), 27(0-15), 28(1-13), 29(1-7), 13//11(0-13), 20(2-18), 21(5-13), ll//6/2(3-16), 7/2(1-7), 11/2/1(0-7), 12/2/(3-16), 13/2(6-9), 14(8-0), 15(8-0), 16(8-0), 17(8-0), 18(8-0), 19/1(5-18), 22/2(0-17), 23(7- 12), 24(7-3), 25(6-18), 26(0-10), 12//2/2(l-7), 3/1(3-7), 4(8-0), 5(4-10), 6(6-8), 7(8-0), 8(8-0), 10/2(6-9), 11(8-0), 12(8-0), 13(8-0), 14(8-0), 15(7-18), 16(8-), 17(8-0), 18(8-0), 19(6-7), 14//l(5- 4), 10(4-16), 15//l(8-0), 2(8-0), 3(8-0), 4(8-0), 5(7-10), 6(8-0), 7(8-0), 8(8-0), 9(7-8), 10(8-0), 26(0-10), 27(0-12), 16//3/2(5-10), 4(8-0), 5(5-9), 6(8-0), 7(8-0), 8/1(3-14), ll//21/2Min(6-0), 22Min(4-14), 16//l(8-0), 2(7-18), 3/1(1-0), 8/1(3-14), ll//21/2Min(6-0), 22Min(4-14), 16//l(8-0), 2(7-18), 3/1(1-7), 8/2(1-12), 26(1-13), 9(8-0), 10(8-0), 17//4Min(2-ll), 5Min(7-0), 6(8-0), 7/1(7- 7), 8/1Min(2-19) the land whose possession has been given today dated 30 May 2000. Out of this area § the purchaser can sell/use/ construct according to his style and need. Rest land out of which has been showed in red color in map _ the area of wh....
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.... Undoubtedly therefore the fact is that the land transferred to PUDA under the Tripartite agreement belonged to the Government and not the assessee. The mere fact that assessee made payment of half price of Rs. 15 Crs,or that it was entitled to proceeds from sale of land would in our view not alter the position. There arises therefore no occasion for treating the amounts due to the assessee under the tripartite agreement.as being sale consideration for land belonging to it and therefore ,we hold that no capital gain was earned by the assessee. 15. In fact ,we agree with the Ld.Counsel for the assessee that the nature of the remittance of sale proceeds to the assessee was only by way of grants by the government . This is evident from the tripartite agreement.The initial part of the agreement, which gives a background of the facts leading to the entering into of agreement between the three parties, mentions that the State Government intended setting up a hospital and medical college in Jalandhar, for which purpose it created the assessee society PIMS. That further to augment the resources of the assessee society, the Government made an arrangement for mobilizing funds to be made ava....
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....n the State of Punjab Whereas in order to implement the decision taken by the State Government to start a Medical College and Hospital at Jalandhar, a Society under the name and style of Punjab Institute of Medical Sciences Jalandhar (hereinafter referred to as the Institute) has been incorporated. Whereas the amended objects of the Society is "To set up, establish, promote, manage or associate with, any other Institution or Centre in the State of Punjab devoted to education, training, research and related infrastructure in various branches of health sciences and working for the advancement of scientific knowledge aimed at enhancing the quality of patient care." Whereas PIMS Medical College & Hospital is now being managed and operated under Private Public Partnership by the concessionaire i.e. RIMS Medical & Education Charitable Society, on 99 years lease. Whereas PIMS Society has to develop and upgrade health related infrastructure and promote education/training and research by managing/associating with other institutions and centres in the State of Punjab. Whereas PUDA lias already released Rs. 156 crore to PIMS Society. PIMS Society aiso requires additional kinds to the ....
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....to Punjab, Department of Medical Education & Research, Chandigarh (herein after referred to as the State Goverrnment) of the FIRST party, The Punjab Institute of Medical Sciences, Jalandhar - a society registered under the Societies Registration Act through its Member Secretary (Director PIMS Society) (hereinafter referred to as the Society, which expression shall, unless repugnant to the context, include its successors and assignees) of the SECOND party, and Punjab Urban Planning and Development Authority, a statutory body constituted under the Act of Legislature, through its Chief Administrator, hereinafter referred to as PUDA, which expression shall, unless repugnant to the context, include its successors and assignees, of the THIRD party. Whereas the Government had decided to setup a Medical College and Hospital at Jalandhar for the improvement of health services and augmenting medical education in the State of Punjab Whereas in order to implement the decision taken by the State Government to start a Medical College and Hospital at Jalandhar, a -Society under the name and style of Punjab Institute of Medical Sciences Jalandhar (hereinafter referred to as the Institute) has ....
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....ale of the balance land. 3. That after taking into, account present and future needs of PIMS Society, Rs. 130,00 crore lying with PUDA, (out of which Rs. 100 crore has already been released during, the financial year 2011-12) now, Rs. 30 crore lying with PUDA would be surplus & this amount be deposited in Government treasury by PUDA directly during the financial year 2012-2013 for funding health projects. 16. As is evident from the above, the supplementary agreements outline the manner in which the increased amount collected by sale of the land was to be remitted to the assessee society, taking note of further requirement of resources by the assessee society and also the fact that the value of the land acquired by the Government and transferred to PUDA for sale had increased to an estimated value of Rs. 420 Crores. The supplementary agreement outline that a minimum amount is to be transferred to the assessee on yearly basis to meet its recurring expenditure.Further taking note of the expanded amended objective of the assessee society to provide helath care facilty and medical education alongwith other institutions/centres, it notes that after meeting the requirement of the asses....