TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 1916
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.... facts by confirming the action of AO who assessed long term capital gain at Rs. 17,13,051/- by denying exemption u/s 54 in sheer disregard of evidences filed before both AO and first appellate authority. 3. Ld. CIT(A)-3 has erred in law and on facts by confirming the action of AO by assessing a sum of Rs. 8666666/- (difference of stamp value and actual sale consideration) as undisclosed income under the head other sources u/s 56((2)(vii) in spite of the evidences that the agreement to sell was executed in 2005 which was admitted/confirmed by Hon'ble Delhi High Court while delivering decision on specific performance of the contract. 3. Brief facts of the case:- During the year, it is submitted by the assessee that he had sold an immovable property being D-4, 1st Floor, Vivekanandpuri, Lucknow, for Rs.45,95,177/-in December 2013and earned a Long Term Capital Gains of Rs.17,13,051/- and purchased a new residential house being N-1, Kailash Colony, New Delhi, 2/3rd Undivided share of basement (front portion) and 2/3rd undivided share of ground floor (front portion),for Rs.45,33,334/- vide sale deed dated 23.12.2013. It was further submitted the said capital gains was utilised fo....
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....ama Pada Banerjee and the final payment will be taken over at the time of registration/possession of the above said property and the registration will take place within 90 days from the date of the said receipt. The said 'Receipt' placed at page no.43 of the paper book, is reproduced as under:- 3.1. Thereafter, as noted in the sale deed dated 23.12.2013, Shri Shayama Pada Banerjee died on 20.03.2005 leaving behind his last Will and testament, dated 08.02.2021, duly registered as Document No. 1040, in Additional Book No. III, Volume No. 917, on Pages 14 to 18, on 09.02.2001, in the office of the Sub-Registrar, New Delhi, whereby and whereunder he devised and bequeathed the aforesaid portions of the said property unto 1) Mrs. Meera Mukherjee, wife of Mr. D.K. Mukherjee, 2) Mrs. Krishna Moitra, wife of Mr. Samir Moitra and 3) Mr. R. N. Banerji son of Mr.Shyama Pada Banerji, absolutely and forever. The said 'Agreement to Sell' vide 'Receipt' placed on page 43 of the paper book went into litigation as Shri R.N. Banerjee, S/o Shri Syama Pada Banerjee alleged that the 'Agreement to Sell/Receipt dated 21.02.2005' was a forged and a fabricated document in this case and the defendants No.2 ....
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....a sum of Rs.21 lakhs totalling Rs.42 lakhs towards their share of sale consideration. The Hon'ble Court in para-8 of the said order also held that while passing the present order that the Court had not expressed any opinion on the merits of the case and/or the legality/validity of the 'Agreement to Sell dated 21.02.2005' relied upon the by the assessee (plaintiff) and disputed by the defendant-1 Shri Raghunath Banerjee, son of late Shri Shyama Pada Banerjiee. The relevant para-8 of the said order is reproduced as under:- "8. Needless to state that while passing the present order, the Court has not expressed any opinion on the merits of the case and/or the legality/validity of the Agreement to Sell dated 21.02.2005, relied upon by the plaintiff and disputed by the defendant No.1." 4. Further, there was an another transaction made by the assessee during the year in respect of sale of shares of Sankalp Advisory Services Private Limited, on which, it earned Long Term Capital Gain of Rs.51,52,564/- and further earned a Short Term Capital Loss of Rs.54,39,625/- on sale of shares of Radford Global Limited which was not declared in his return of income filed by him on 16.07.2015. The As....
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....sessee. Its claim for exemption w/s 54 of the Act on such long term capital gain is rejected as stated above. The long term capital gain is computed as below: Sale consideration Rs.45,95,177/- LessIndexed cost of acquisition Rs.28,82,162/- Assessed long term capital gain Rs.17,13,015/- This above assessed long term capital gain for Rs.17,13,015/- is added to the income of the assessee has not declared in its return. In view of the facts and circumstances of the case, I am satisfied that the assessee company has furnished inaccurate particulars of its income, therefore, penalty proceedings u/s 271(1)(c) of the Act is initiated separately for failure to disclose the true particulars of income as mentioned above." 6. Aggrieved with the said order, the assessee preferred an appeal before the Ld. CIT(A). However, the Ld. CIT(A) confirmed the action of the AO in computing the Long Term Capital Gain of Rs.17,13,1035/- on sale of House no.-D-4, 1st Floor, Vivekanandpuri, Lucknow and denying the deduction u/s 54(1) or 54(2) as claimed by the assessee. The relevant discussion by the Ld. CIT(A) in para 2.3 to 2.5 is reproduced as under:- "2.3 I have carefully considered the subm....
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.... The undisclosed long term capital gain of Rs.51,52,564 / - has not been contested by appellant before the first appellate authority, i.e. it has accepted the addition of Rs. 51,52,564/- on account of long term capital gain related to penny stock. In this context the preponderance of probability of one appellant inadvertently failing to declare its long term capital gain on sale of residential immovable property and long term capital gain on sale of shares appears to indicate that it was an intentional failure of omission on the part of the assessee to declare fully and truly its income from sale of residential property at D-4, Vivekanand Puri, Lucknow which is the subject matter of this appeal besides the long term capital gain of Rs. 51,52,564/- arising from sale of shares. 2.5 The provisions of section 54 would be attracted in this case only if the capital gain arising from the transfer of long term capital asset at D-4,Vivekanand Puri, Lucknow was invested within the conditions specified in section 54(1) or 54(2) as the case may be. In view of the fact that the property at D-4, Vivekanand, Puri, Lucknow was sold in FY 2013-14, by no stretch of imagination can the long term ca....
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....; i) Rs. 1,00,000/- vide Cheque No.663229, dated 28.08.2013; j) Rs.6,40,000/ - vide Cheque No.674405, dated 17.12.2013; xxxxxxxxxxxxxx o) Rs. 10,90,000/- vide Cheque No.674404, dated 23.12.2013; 8.1. According to the ld. Counsel for the assessee, the property being House no.-D-4, 1st Floor, Vivekanandpuri, Lucknow was sold in December, 2013 and the final cheque no.017194 dated 12.12.2013 drawn on HDFC Bank Hazratganj Lucknow Branch was received by the assessee.. The ld. AR referring to the above details as submitted on page no.52 of the paper book stated that the above payment of Rs.22.30 lakhs was paid after 12.12.2012 within one year before the date of transfer i.e. on 23.12.2013, the sale deed of the N-1, Kailash Colony, New Delhi property. 9. We have heard both the parties and perused the materials available on record. In this case, the Assessing Officer has not disputed the sale of Lucknow property claimed to have been sold in December, 2013 for a sale consideration of Rs.45,95,177/-. Further, the Assessing Officer has also not disputed the fact regarding the payment of Rs.22.30 lakhs within one year from the date of purchase in respect of Delhi property. The only obj....
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....he transfer of the original asset took place, or which is not utilised by him for the purchase or construction of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme36 which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset : Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then,- (i) the amount not so utilised shall be charged under sec....
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....ession of property being N-1 Kailash Colony, New Delhi was neither allowed to be retained by the assessee and rather the possession was taken on the date of registration of the sale deed i.e. 23.12.2013, which is mentioned at point no.2 at page no.53 of the paper book being the sale deed dated 23.12.2013 in respect of the Delhi property. The relevant submission of the assessee in para no.2 of its written submission and para 2 of the sale deed dated 23.12.2013 in respect of Delhi property regarding handing over the possession are as under:- Relevant extract of the written submission "Therefore, in 2005, possession of property was neither allowed nor retained by appellant. Rather, the possession was taken on the day of registration of the sale deed i.e. 23.12.2013. (Point No. 2 at page no. 53 of PB). Thus it was not a transfer within the definition of Section2(47)(v) of Income Tax Act, 1961. Para-2 of the Sale deed dated 23.12.2013 "That the symbolic possession of the said share of the said portions of the said property has been delivered by the VENDORS to the VENDEE, who shall have all the rights to get the physical possession of the undivided 2/ 3rd share of the said proper....
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.... that though the sale deed is for Rs.45,33,334/- the circle rate valuation of the property is for Rs.1,32,00,000/-. Hence the consideration for which this property has been received is less than the stamp duty value of the property by an amount of Rs. 86,66.666/-. Reference is drawn to the provisions of section 56(2)(vii)(b) which is being reproduced here for ready reference: (vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009,- (a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum; (b) any immovable property,- (i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; (ii) for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration: Provided that where the date of the agreement fixing the amount of consideration for the transfer of immovable property and the date of registration a....
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....ble High Court of Delhi and filed a petition, praying inter-alia that a decree of specific performance may be passed in favour of the plaintiff (assessee), in respect of the premises No. N-1 Kailash Colony, New Delhi, in terms of the agreement to sell Dated 21-02-2005 executed by the deceased father of the defendants. The Honourable High Court of Delhi vide order No. C.S.(O.S) No: 195/2008 Dated 01/05/2013 permitted the Vendors to execute sale deeds in respect of their respective 1/ 3d undivided share in the said property (total 2/3rd undivided share) in favor of the Vendee and whereas the VENDORS in compliance of the above referred judgment and decree have agreed to irrevocably sell, convey, transfer, and assign to the VENDEE and the VENDEE has agreed to purchase the 2/3 undivided share for a total consideration of Rs. 45,33,334. (Above facts are mentioned in the judgment given to your good self on the last hearing). 4. By ignoring the proviso of the Section 56(2)(vii)(b). That proviso reads as follows. Provided that where the date of the agreement fixing the amount of consideration for the transfer of Immovable Property and Date of registration are not the same, the stamp dut....
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....chase document. The circle rate value of this property is Rs. 1,32,00,000/- as on 21.12.2013. However this sale was possible only in pursuance of the order of Hon'ble Delhi High Court vide order No. C.S. (O.S.) No. 195/2008 dated 01.05.2013 which upheld the agreement to sell dated 21.02.2005 between appellant and the father of the vendors for a value of Rs. 68 lakh. On the date of agreement dt. 21.02.2005 the assessee had made payment of Rs. 2 lakh through cheque No. 845466 dt. 21.02.2005 drawn on Union Bank of India, Kailash Colony Branch, New Delhi. The assessee is contradicting itself by stating before the AO that the date of purchase of property at N-1, Kailash Colony, New Delhi in 21.12.2013, while, placing reliance on the order of Delhi High Court in its own case with regard to the sale of property that uphold the transfer date on purchase of this property on 21.02.2005 i.e. date of agreement of assessee with the deceased father of the vendor. The consideration of the present transaction of Rs. 45,33,334/ - is as per the sale deed dt.21.12.2013 filed during appeal proceedings. This is 2/ 3rd of Rs. 68 lakh which was agreed between the appellant and father of the vendor vi....
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....e the amount of consideration referred to thereof, has been paid by any mode other than cash on or before the date of the agreement for the transfer of such property. It was submitted by the ld. AR that both the two conditions are satisfied in the case of the assessee and therefore the addition of Rs.86,66,666/- should be deleted. 14. The ld. Sr. DR relied upon the orders of the authorities below. 15. We have heard both the parties and considered the materials available on record. On perusal of the facts stated by the Ld. AR and not contested by the ld. Sr. DR, the first and second proviso to section 56(2)(vii)(b) of the Act squarely applies in the case of the assessee in as much as the date of agreement i.e. 21.02.2005 though under challenge by Shri R.N. Banerjee as discussed above for the sale of the N-1, Kailash Colony, New Delhi, property and its date of registration i.e. 23.12.2013 are different and further as per second proviso as stated in the sale deed dated 23.12.2013 an amountRs.2,00,000/- through cheque no.845466 dated 21.02.2005 drawn on Union Bank of India, Kailash Colony, Delhi, was paid by the assessee to Late Shri Shyama Pada Banerjee, who was the absolute owner o....
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.... agreement may be taken for the purpose of this provision. Admittedly, the irrevocable PoA was registered in the year 2008 fixing the price of the property at Rs.21.00 lac, even though the actual transfer took place in the year 2015. Prescription of the second proviso is admittedly fulfilled in the instant case in as much as the assessee paid a sum of Rs.1.00 lakh as part payment prior to the date of the Agreement in the year 2008 through banking channel. In view of the foregoing discussion, it is held that the mandate of the main part of section 56(2)(vii)(b) does not apply to the facts of the instant case as it is covered by the first and second provisos in as much as the assessee entered into an agreement fixing the amount of consideration for the purchase of immovable property in the year 2008 but the actual registration took place in 2015 and further the assessee paid a part of the consideration by cheque in the year 2008 before the date of the Agreement. In such circumstances, it is the stamp value on the date of Agreement in the year 2008, which should be applied for the purpose of the sub-clause and not the stamp value as in the year 2015. Stamp value of the property as on ....