TaxTMI 
TaxTMI 
2024 (7) TMI 893
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....the following issue :- "Deduction/ Exemption from Capital Gains, Investment in immovable property & deduction against income from other sources." 4. During the course of assessment proceedings, statutory notice was issued to the assessee & in reply assessee furnished necessary information & documents. After considering the reply of the assessee & in the absence of evidences in support of claim of deduction of Rs. 1,75,00,000/- made by the assessee against the income of Rs. 1,75,00,000/- shown under the head "income from other sources", the Assessing Officer completed the assessment on a total income of Rs. 1,89,05,860/- by observing as under :- "3. On careful perusal of the submission & all the supporting documentary evidence furnished by the assessee, it is noticed that: 1. the assessee received amount of Rs. 1,75,00,000/- on execution of the sale-deed as consenting party. As stated, he received the amount for removing the litigation regarding reservation on the land etc. 2. the possession of the land was handed over to the purchaser, 3. transfer of property was effected as per section 2(27) of the IT Act as well as 53A of the Transf....
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....e said amount. Even there has been a police complaint and a court case filed but inspite of that the appellant has not refunded the amount received. Therefore, the AO is right in holding that the appellant should have refunded the amount when the transaction did not materialize or the appellant could not render the desired service specified in the sale deed. On verification of the facts of the case, it is seen that the appellant does not have the intention of refunding the amount received as consenting party. If the appellant gets the relief at this stage, the amount received by the appellant of Rs. 1,75,00,000/- would go untaxed as the transaction in question would not be captured either on TDS portal or the information from sub-registrar etc. In this case the correct option for the appellant would have been to refund the amount to the purchasers and make the claim accordingly which perhaps would garner some merit in the appellant's case. As the appellant has received the said amount and as the appellant has not refunded the same inspite of passage of 6 years from the date of receipt and even though according to him the transaction has not materialized, which shows that the appell....
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....,00,000/- were agreed to be paid to the assessee being consenting party which was scheduled to be paid in instalment by the purchaser, after assessing the status of the file of EWS reservation. It was further submitted by the counsel of the assessee that EWS reservation lifting work was not completed in full therefore out of total consent money of Rs. 4,75,00,000/- an amount of Rs. 1,75,00,000/- only was paid to the assessee by the purchaser & the balance amount of Rs. 3,00,00,000/- was not paid to the assessee, but was kept in a joint FD in the name of assessee & the purchaser. It was also informed that TDS on whole of the consent money was deposited on the PAN number of the assessee. It was also contended before the bench that the sale deed was executed on 17-05-2016 & peaceful possession of the property was handed over to the purchaser, but after a period of nearly 3 years i.e. on 03-05-2019 an order was passed by District Superintendent Land Records, Pune with regard to the impugned property, restoring the names of earlier owners in place of Radha Bai Vitthalrao Kawade & Gaurav Vitthalrao Kawade, who happens to be the transferor of the impugned property of which the assessee wa....
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.... from paper-book, computation of income of the assessee, for the year under consideration, was also produced before the bench. It was specifically submitted before the bench that the credit of TDS of Rs. 1,75,000/- was not claimed by the assessee & therefore related income of Rs. 1,75,00,000/- received by him should also not be taxed during the period under consideration. 9. LD counsel further relied on the ratio laid down by Hon'ble Apex Court in CIT vs. Balbir Singh Maini, [2017] 398 ITR 531 (SC) that where the transaction has not materialized, then no profit or gain which arises from the alleged transfer of capital asset could be brought to tax under section 45 r.w.s. 48 of the Act. LD counsel of the assessee also placed reliance on the decision passed by a coordinate bench of this Tribunal in the case of Rohan Projects vs. Dy. Commissioner of Income Tax in ITA No.306/PUN/2015. In support of all the above contentions raised, two paper-books containing 147 pages were also furnished before the bench. In the light of these submissions, LD counsel of the assessee requested to delete the addition of Rs. 1,75,00,000/- under the head "income from other sources" made by the AO & conf....
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....rk was not completed the assessee was only paid Rs. 1,75,00,000/- & remaining Rs. 3,00,00,000/- were deposited in Joint FD in the name of one of the purchaser & assessee. The purchaser paid the amount without deducting statutory TDS of Rs. 4,75,000/- @ 1% on Rs. 4,75,00,000/-, therefore, the assessee himself paid Rs. 4,75,000/- to the purchaser as a reimbursement towards payment of TDS. The TDS credit of Rs. 4,75,000/- was duly appearing for the period under consideration on the PAN number of the assessee. We find that in the computation of income assessee himself has shown Rs. 1,75,00,000/- as income for coordination and settlement under the head "income from other sources". The assessee thereafter claimed deduction of Rs. 1,75,00,000/- u/s 57 of the IT Act, as coordination & settlement expenses. During the course of assessment proceedings it was found by the AO that the assessee has claimed the entire income of Rs. 1,75,00,000/- as deduction towards expenses but no evidence was furnished in support of the expenditure so incurred/claimed. Therefore, the Assessing Officer in the absence of any evidence in support of expenses incurred, denied the claim of such expenses which resulte....
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....ed by the assessee against the purchaser for not making balance payment to the assessee being consentor. It is also found that till date even after 8 years the assessee has not refunded the amount to the purchaser & also contesting civil suit against the purchaser for receiving the balance payment of Rs. 3,00,00,000/-, this clearly shows that the assessee is not willing to refund the amount to the purchaser. It is also found that there was a clause in the sale deed that in the event of dispute the parties will approach to the arbitrator, but the assessee did not opt this option, because, since beginning it was known to him that the property is disputed & the arbitrator will not give decision in his favour. It is therefore observed by the bench that the assessee was working with mala-fide intention & does not have clean hands & now also wants to defraud the revenue by not making payment of due taxes in the guise of pending litigation. It is also observed by the bench that the assessee also tried to misguide the income tax department by claiming deduction in the name of coordination & settlement expenses for which he does not have any supporting documents. It is also held, that the c....
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....as already appearing on the portal in Form 26AS in the shape of principal amount & its TDS. The assessee himself chose to declare only Rs. 1,75,00,000/- this year & remaining amount was carried forward by him to next year. If the income was not accrued to him, the assesse could very well carry forward the whole of the amount appearing on the portal to next year but it was not done & only Rs. 3,00,00,000/- was carried forward to next year & Rs. 1,75,00,000/- was shown as income of the year under consideration. In this regard, we find that it has already been decided by Hon'ble Apex Court in many cases including the case of Commissioner of Income Tax vs. Shiv Prakash Janak Raj And Co. Pvt. Ltd., (1996) 222 ITR 583 (SC), that the concept of real income cannot be employed so as to defeat the provisions of the Act & the Rules. Where the provisions of the Act & the Rules apply, it is only those provisions which must be applied & followed. There is no room nor would it be permissible for the court to import the concept of real income so as to whittle down, qualify or defeat the provisions of the Act & the Rules. In the instant case, the assessee himself has decided that what is to be show....