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TaxTMI 
TaxTMI 
2025 (8) TMI 907
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....ase as well as in law, action of reopening of assessment u/s 148 of the Act together with consequential order under section 143(3) r.w.s. 147 of the Act are bad in law and deserves to be quashed. 2. Learned Commissioner of Income Tax (Appeals) erred in confirming the order of Assessing officer making an addition of Rs. 20,57,000/- as deemed Short Term Capital Gain for AY 2011-12 on the plea that the said Capital Gain had accrued in AY 2011-12. Appellant submits that in view of the facts and circumstances of the case as well as in law, order of the Learned Assessing officer making addition of Rs. 20,57,000/- as Short Term Capital gain in AY 2011-12 is bad in law and deserves to be deleted as deemed Short Term Capital gain had accrued in AY 2004-05 and not in AY 2011-12. 3. Learned Commissioner of Income Tax (Appeals) erred in confirming the order of Assessing officer levying tax @ 30% instead of @ 20% applicable to Long term Capital gain on sale of immovable property. Appellant submits that in view of the facts and circumstances of the case as well as in law, the tax rate applicable on Long Term Capital Gain ought to be 20% instead of 30% charged ....
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....essee submitted that it had received Rs. 3 lakh from the purchaser on 03.01.2004, and the vacant position of the gala was handed over to Mr. Parkash Bhagwan Canser on 31.03.2004. It was further submitted that Mr. Prakash Bhagwan Canser has been paying all the taxes and outgoings of the gala w.e.f. 01.04.2004. The assessee, without prejudice, also submitted that if the transfer is considered to have taken place in the financial year 2010-11, then the value for the purpose of payment of stamp duty under section 50C of the Act should be assessed as on 31.03.2004 since the sale consideration got fixed on 05.02.2004, i.e. the date of execution of MOU. As the assessee has raised objections regarding the stamp value, the matter was referred to the DVO for the valuation of the property. The DVO vide its report dated 19.12.2016 valued the property as on 05.2.2.2004 for Rs. 20,57,000/-. As the assessee did not produce any document regarding the purchase of the property and only a sale agreement was furnished, and the assessee also did not declare any capital gains during the year under consideration, the Assessing Officer ("AO") vide order dated 24.12.2016 passed under section 143(3) r.w.s. ....
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....resentative ("learned DR"), vehemently relying upon the order passed by the lower authorities, submitted that the property was kept as a security by the assessee with a bank and the said lien was released only in the financial year 2010-11, and therefore, no question arises of sale of the property to Mr. Prakash Bhagwan Canser prior to 26.10.2010. The learned DR submitted that only after the aforesaid cancellation, the assessee became an absolute owner of the property and transferred all the rights of the property to the purchaser through the sale deed, which was executed on 09.12.2010. The learned DR also emphasised on the aspect that in the financial year 2003-04, the assessee received only Rs. 3 lakh from the purchaser, and more than half of the consideration was received in the financial year 2010-11. Therefore, the learned DR submitted that the capital gains arising from the sale transaction of the immovable property can only be taxed in the financial year 2010-11, i.e., the year under consideration in the present appeal. 7. We have considered the submissions of both sides and perused the material available on record. In the present case, there is no dispute regarding the f....
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....e said property for a total consideration of Rs. 12,51,000/-. As per the assessee, since in the financial year 2003-04, not only was the aforesaid MOU executed but the vacant and peaceful possession of the said immovable property was also handed over to Mr. Prakash Bhagwan Canser, therefore, any gains arising from the transaction are only taxable in the assessment year 2004-05. At this stage, it is pertinent to note that neither before AO nor before the learned CIT(A), the assessee could bring on record any document to establish that the gains arising from the aforesaid transaction were declared by it in the assessment year 2004-05. Even in the proceedings before us, no such document was furnished on behalf of the assessee. Be that as it may, on the basis of the fact that the said immovable property was kept as collateral security by the assessee with the Bank of Maharashtra for credit facility to Dhote Offset Techno Craft Pvt. Ltd. and the said lien was cancelled on 26.10.2010 and only thereafter the sale deed was executed on 09.12.2010, the Revenue treated the transaction as taxable in the year under consideration. It is evident from the record that during the reassessment procee....
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....cant and peaceful possession of the said gala to the purchaser w.e.f. 31.03.2004, and the purchaser agreed to discharge all outgoings such as society maintenance charges, license fees, etc., after receiving possession. The relevant clauses of the MOU, in this regard, are reproduced as follows: - "NOW THEREFORE THIS AGREEMENT WITNESSETH AS UNDER 1. The party of the first part does hereby declare that the said gala along with the said shares have been pledged as collateral security to the Bank of Maharashtra, Gokhale Road Branch, Mumbai 400 028 for certain finance facilities enjoyed by M/s Dhote Offset Technokrafts Pvt. Ltd, a company registered under the Companies Act, 1956 in which the partners of the first part are the directors. The party of the first part further declares that the original title documents of the said gala are lying in the custody of the aforesaid bankers. 2. The party of the first part also declares that, except the above mentioned charge, there are no other encumbrances and/or liabilities on the said gala and the said shares and it undertakes to clear the said charge on or before 31st March, 2006 and obtain "No charge certifi....
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....opy of the sale agreement, we further find that the assessee acknowledged the handing over of peaceful and vacant possession, and the purchaser acknowledged the receipt of peaceful and vacant possession of the immovable property as per the sale agreement on receipt/payment of the agreed consideration. 11. Therefore, from the combined reading of the MOU dated 05.02.2004 and the sale agreement dated 09.12.2010, we find that it has not been mentioned anywhere that the peaceful and vacant possession of the immovable property was handed over to the purchaser in the financial year 2003-04. Further, as noted above, vide MOU, both parties agreed that only after realising of the immovable property from the charge of the bank, both parties agreed to enter into a sale agreement and execute all such papers, deeds and documents as may be necessary for the transfer of the said immovable property. During the hearing, the learned AR referred to the letter dated 28.06.2016 issued by Mr. Prakash Bhagwan Canser stating that the vacant and peaceful possession of the immovable property was taken by him on 31.03.2004, and since then, all the outgoings have been discharged by him. However, in light of....
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.... to the assessee in the financial year in which the MOU was executed. More than 50% of the sale consideration was paid to the assessee in the year under consideration. Therefore, we are of the considered view that the aforesaid decision of the Coordinate Bench of the Tribunal does not support the case of the assessee, as the same is factually distinguishable. Accordingly, we are of the considered view that since the assessee received the original title document of the property only upon cancellation of lien by the Bank in the financial year 2010-11 and thereafter the sale agreement was executed on 09.12.2010, therefore the capital gain arising to the assessee from the said transaction is only taxable in the year under consideration. As a result, Ground no.2 raised in assessee's appeal is dismissed. 14. In the paper book filed by the assessee, the assessee has placed on record an agreement to sale dated 19.08.1995 entered into between Mr. Valchand Rajmal Bhandari and the assessee, whereby the assessee has purchased the aforesaid property for a consideration of Rs. 12 lakh. Accordingly, we do not find any merits in the findings of the lower authorities and treating the cost of con....