TaxTMI 
TaxTMI 
2026 (1) TMI 1406
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....om time to time. 2 The learned CIT(A) erred in not considering the Agreement dated 24.8.2013 signed between M/s Vaibhav Development Corporation and Mr. Vijay Krishnaji Sawant proprietor of Vaibhav Developers on one side as the Vendors and Vanshree Developers, a partnership firm, wherein the appellant was a partner, on the other side as purchasers for Rs. 12 crores in respect of the same immovable property located at Dahisar. 3. The learned CIT(A) erred in not considering Memorandum of Understanding (MOU) entered on 01/11/2017 between Mr. Abbot Anthony Quinny and the Appellant and agreed to renounce all Rights, Title and Interest in the same immovable property located at Dahisar in favor of the Appellant for Rs. 9,00,00,000. It is important to note that out of total consideration of Rs. 9,00,00,000 an amount of Rs. 3,00,00,000 was paid on 31.10.2017 and the said MOU culminated in Conveyance Deed dated 19.09.2019. 4. Order passed is bad in law and contrary to the provisions of the Act. Therefore, the appellant prays to delete the additions of Rs. 18,48,70,810 confirmed by Ld. CIT(A)." 3. The relevant facts in brief are the Assessee, an individual, filed ....
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....dated 24/08/2013, with Vanshree Developers which was registered on 22/11/2013. It is the case of the Assessee that by way of the aforesaid agreement Vanshree Developers acquired the land and took over physical possession also for a total consideration of INR. 12,00,00,000/-. Vanshree Developers recorded this land as stock-in-trade in its books of accounts. Subsequent to reconstitution of Vanshree Developers, the Assessee and his mother continued as partner with 95% share and 5% share, respectively. However, on demise of his mother, the Assessee became the sole surviving partner taking over 100% share on dissolution of Vanshree Developers and in the process becoming the sole owner of land acquired by Vanshree Developers vide dated, 24/08/2013. (d) Meanwhile, Mrs. Marcelina Luis Misquitta passed away on 15/07/1988 leaving behind Mr. Abott Anthony Quinny as her legal heir who was became the executor as well as the beneficiary of her Will. Mr. Abott Anthony Quinny disputed the transfer of ownership of the land. However, the said dispute was settled between the disputing parties and on 13/02/2018 consent terms were filed before the Hon'ble Bombay High Court in terms of which on....
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....aning of section 56(2)(x) for the instant purchase transaction of appellant and ii) said partnership firm of the appellant and appellant himself should be treated as one and same person for the applicability of section 56(2)(x) of the Act. Both the contentions of the appellant hold no merit. 9. xx xx 10. It clear from the above that statute provides for adoption of pre agreed consideration value only in a case, where the amount of consideration, or a part thereof, has been paid by way of an account payee cheque or an account payee bank draft or by use of electronic clearing system through a bank account [or through such other electronic mode as may be prescribed], on or before the date of agreement for transfer of such immovable property. In the instant case, there was no such payment by the appellant in prescribed mode before the date of registration to the seller of the property, Mr. Abbot Anthony Quinny and hence in this case, the provisions of section 56(2)(x) are clearly attracted. 11. One more question arises out of the contention of the appellant is that whether, any agreement betwee....
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....d 28/10/2024, Assessment Year 2018-2019], held that provisions of Section 56(2)(x) of the Act cannot be invoked in the case of transactions of purchase of stock-in-trade. The relevant extract of decision of Tribunal reads as under: 3. Briefly stated, facts of the case are that the assessee, a partnership firm, was engaged in the business of real estate development. For the year under consideration, the assessee filed return of income on 25.06.2018 declaring total income at Rs. 8,18,890/-. The return of income filed by the assessee was selected for limited scrutiny for verification of the fact that purchase value of the property recorded in the sale consideration was less than the value as per the stamp duty value authorities. The statutory notices under the Act were issued and complied by the assessee. In the course of the assessment proceedings, it was noticed that assessee firm had purchased land along with tenants and dwelling house standing thereon vide two agreements each dated 15.03.1978 for a total consideration of Rs. 4,25,000/- for building and Rs. 3,25,000/- for land respectively. The large portion of the land is still occupied by unauthorized hutments which are ....
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....Ld. CIT(A) accordingly sustained addition of Rs. 8,79,263/- as against the addition Rs. 80,34,09,000/- made by the Assessing Officer. 6. Aggrieved, both the assessee and the Revenue are in appeal before the Tribunal by way of raising grounds as reproduced above. 7. Before us, the Ld. counsel for the assessee has filed a Paper Book containing pages 1 to 298. 8. We have heard rival submission of the parties and perused the relevant material on record including Paper Book pages 1 to 298 filed by the assessee. We find that the Ld. CIT(A) has considered the property as stock-in-trade which has not been disputed by the Revenue. The relevant finding of the Ld. CIT(A) is reproduced as under: "12.1.4 DECISION have carefully examined the rival contentions. It is pertinent to note that the Appellant is engaged in the business of real estate development The Appellants submission that the captioned property as purchased in 1978 has been treated as stock in trade and accepted as such in assessment proceedings in those years is evident from the perusal of assessment orders and its financial statements. The Appellant still shows the said land as its stock in tra....
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....he nature of the capital asset of the recipient. In said case, the assessee purchased a piece of land as its stock-in-trade, therefore, addition made by the Assessing Officer invoking provisions of section 56(2)(x) of the Act was set aside. The relevant finding of the Co-ordinate Bench of the Tribunal is reproduced as under: "10. I have considered the rival contentions and carefully gone though the orders of the authorities below. The provisions of section 56(2)(x) were introduced as a counter evasion mechanism to prevent laundering of unaccounted income. The provisions were intended to extent the tax net to such transactions in kind. The intent is not to tax the transactions entered into in the normal course of business or trade, the profits of which are taxable under specific head of income. Therefore, the definition of property has been amended to provide that section 56(2)(vii) will have application to the "property" which is in the suture of a capital asset of the recipient and therefore would not apply to stock in trade, raw material and consumable stores of any business of such recipient. However, a property is defined in a very specific my which includes agricultur....
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....Co-ordinate Benches of the Tribunal have held that provisions contained in Section 56(2)(x) of the Act cannot be invoked in the case of purchase of stock-in-trade. On perusal of Balance Sheet of the Assessee for the relevant previous year we note that asset under consideration has been recorded under the head 'Other Current Assets' and not under the head 'Capital Assets'. It is the contention of the Assessee that the Assessee has been holding the same as stock-in-trade. During the course of hearing the Learned Departmental Representative pointed out that the financial statements submitted by the Assessee were not audited and therefore, the Revenue should be granted another opportunity. Further, we note that the findings returned by the Assessing Officer and the CIT(A) are predominantly in relation to period/mode of acquisition of asset in question by the Assessee. While the Balance Sheet supports the stand taken by the Assessee, we note that there is no factual finding returned by the Assessing Officer or the CIT(A) in this regard. Taking into consideration the submissions made by both the sides, and facts & circumstances of the present case were deem it appropriate to remit this i....