TaxTMI 
TaxTMI 
2025 (1) TMI 754
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....ived certain properties. The AO considered the transactions to be in the nature of capital gains and calculated the same which was challenged before the DRP by filing objections, but, the DRP had sustained the findings of the AO and, accordingly, the final assessment order was passed against which the following grounds are raised:- "1. That under the facts and circumstances, invoking of Sec. 147 and consequential proceedings u/s. 148 culminating into Asstt Order u/s. 147 / 144C is without Jurisdiction, illegal and unsustainable in law as well as on merits. 2. That in the absence of prior approval as required u/s. 151, the whole proceedings are without jurisdiction. 3. That without prejudice the approval of appropriate authority, if do not show the application of mind while granting approval, such approval should not be taken as a valid approval, so as to allow the AO to proceed for initiating further proceedings u/s. 147 and notice u/s, 148 4. That the proceedings U/s, 147 / 148 are without jurisdiction and bad in law 5. That the impugned order is bad in law for non service of notice U/s 143(2) within statutory time limit. 6. Th....
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.... as assessee share. 8.1. That under the facts and circumstances of the case, the Ld AO had erroneously made an addition of Rs. 9,53,342/-. 8.2. The Ld. AO grossly erred in treating the payment made for credit card as perquisites." 3. At the time of hearing the appeal on 03.04.2024, the ld. AR of the assessee had argued only on the question of irregular exercise of jurisdiction by the AO as there was no service of notice u/s 143(2) within the statutory time limit and assessment was not completed in due time. However, what comes up is that the assessee had filed return on 10.03.2022 in response to notice u/s 148 of the Act, since the assessee had not filed the return of income for the relevant year. The notice u/s 143(2) was issued on 08.09.2022. The assessment order shows that a reference was made to the District Valuation Officer on 29.03.2022 for determining the fair market value of properties. Thus, the due date of completion of assessment by 31.03.2022 stood extended till 30.09.2022 and the AO had passed draft assessment order on 28.09.2022. 4. Thus, on these facts, the Bench was of the considered view that there is no question of irregular exercise of ju....
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....axed in your hand as income as per the provisions of the Income Tax Act, 1961. Further, you are requested to submit the following details: 1. Conveyance deeds of all the properties you received by way of said compensation deed. 2. Audited Balance Sheet and P&L statements of Lexland Securities Pvt Ltd, Hotel Country India Pvt. Ltd. and M/s RNG Enterprises Pvt. Ltd. for the F.Y. 2007-2008, 2008-2009, 2015-2016. Please elaborate your relationship with these three companies. 3. Please provide details of payments made by you or any other party to Bhushan Ship Anand Kadam and others for purchase of piece of lands Goa and Karnataka vide memorandums of understanding, alongwith bank statements highlighting these transactions Please submit the above details within the time stipulated in this notice and no adjournment will provided. Failure to do so shall lead to proceedings being completed on the basis of material available on record. 7. It further comes up that by letter dated 21.09.2022, the assessee had replied to this notice and in regard to the transactions being examined by the AO, the assessee had replied as follows:- "Sir,....
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....they purchased only 2590 sq. mtr which in turn resulted that the assessee alongwith other co¬owners were not able to take possession of the property. (d) Thereafter, another Memorandum of understanding was executed on 02.03.2009 in substitution of earlier MOU dtd. for a consideration of Rs. 13,72,00,000/-. All properties to be purchased remained the same except for property mentioned in Para - (c ) above. (e) . It was revealed that properties at - 84,000 Sq. Mtrs at Majal Village of Savantwada Circle in Carwar Taluka of North Karnataka. - 1,28,000 Sq. Mtrs at Majal Village of Savantwada Circle in Carwar Taluka of North Karnataka. Were meant to be consolidated, sea facing and located only in one village i.e. Majali Village of Savantwada Circle in Carwar Taluka of North Karnataka but it was revealed that lands were not only scattered but in fact situated in 4 different villages namely Bargal, Shirve, Mallapur and Majali. (f) It was further revealed that the seller of property namely Mr. Bhushan Kadam and Mr. Atul Kadam had applied for mutuation of property at Islands along with 3 sheds constructed thereon situated at Majal Vil....
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.... the said property in the name of the Purchaser. (q). Thus, no actual transfer of sale consideration has taken place while registration of sale deed in favour of assessee or its nominees. (r). Without prejudice, the assessee share in the properties awarded is only to the tune of payment made by assessee (i.e. around 25%) and rest belongs to other co-owners. Thus, properties awarded in lieu of compromise deed /High Court order should not be taxed." 7.1 Further, by letter dated 27.09.2022, copy of which is placed at pages 187- 200 of the paper book, the assessee had made further assertion as follows:- "B. Further, some important points are submitted hereunder: > The assessee is a purchaser / awardee in the land/ properties in question, therefore, there is no question of receiving any amount. > The properties in question are being transferred to assessee without any real payment being made by assessee, therefore, no payment / consideration has been occurred in the present financial year, therefore, there is no question of any income earned / unexplained income of the assessee in the present financial year. > All the pay....
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..... Thus, going through the case of the AO as stands approved by the DRP, the only contention of the ld. AR that the assessee is a purchaser, therefore, capital gains cannot be taxed has no substance. It is specifically admitted that the properties were received in furtherance of the compromise to get quashed the criminal proceedings against Bhushan Shiv Anand Kadam and without assessee paying anything. The AO had examined the dispute by also lifting the corporate veil and giving a finding that the properties acquired by other entities were also in fact received by the assessee only. The AO has considered the value of different properties received by the assessee as income. The AO has taken into account the sale consideration mentioned in the sale deeds as the value of the property earned in lieu of compromise of the cases and release of accused on bail. Further considering the fact that the assessee had established to have paid Rs.1,20,00,000/- on 04.08.2007 and Rs.30 lakhs on 06.04.2009, to acquire this right of compensation as cost of acquisition of the rights, calculated the capital gains as follows:- "Sale value of the property (assessee's share) Rs.18,37,12,495/- Less:....