TaxTMI 
TaxTMI 
2026 (10) TMI 324
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....ation that the assessee executed sale deeds to the tune of Rs. 5,30,82,350/-, the AO issued notice u/s. 148 of the Act. In response to the said notice, the assessee filed return of income declaring the same as disclosed in the original return of income. The AO issued notices u/s. 142(1) of the Act and the assessee filed its submissions. The AO held the said submissions are not acceptable and added the compound value of the land transferred by the assessee as determined by the stamp valuation authority u/s. 43CA of the Act vide its order dated 28.09.2021 passed u/s. 147 r.w.144B of the Act. The ld.CIT(A) confirmed the same. As aggrieved, the assessee is before us. 4. The ld.AR, Shri. D. Anand, Advocate, submits the only issue in this appeal is as to whether the ld.CIT(A) erred in confirming the order of AO in invoking the provisions of section 43CA of the Act. He submits the entire addition u/s. 43CA of the Act proceeds on the assumption that the assessee transferred developed plots to Mr. G. Ramji, without receiving any consideration merely because the registered conveyance deeds mention the expression "Nil Consideration". He argued vehemently that the ld.CIT(A) have proceeded o....
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....the income in its books, it acquires beneficial ownership and control. He referred to assessee's accounting treatment and submits whether the cost of land and development expenditure were recognised and corresponding sales were reported in the profit and loss account. He argued vehemently that the assessee has not acted as a mere intermediary but rather as a beneficiary and active participant in the transfer and monetization of land parcels. He submits that the assessee was a party to the registered documents which resulted in the transfer of plots to third party through registered sale deeds and the consideration received was not in cash but in the form of developed plots given in exchange. He argued that the said arrangement clearly constitutes the barter transfer and under the tax laws such a transfer is a taxable event at the time of exchange, regardless of whether the benefit is received in cash or in kind. He submits that the transfer is complete on the date of execution of registered deed and the tax liability u/s. 43CA of the Act arises on the said date, not deferred to the point of monetization through resale. Further, he argued that it is a settled legal principle that tw....
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....os. 08.12.2014 (page 8-12 of paper book) Sale Deed No Survey No. (Ramji) Plot No. Total Extent (in sq.ft) Area owned by Ramji (in sqft) Page no in paper book 1 2947/2015 89/11 355 646 420 26, 27 & 32 (Sc-B) 2 3455/2015 89/11 351 592 565 42, 42 & 48 (Sc-B) 3 3453/2015 89/11 352 538 515 55 & 61 (Sc-B) 4 3546/2015 89/11 260 1932 1,679 68, 69 &74 (Sc-B) 5 4055/2015 89/11 223 1163 998 81, 82 & 87 (Sc-B) 6 5747/2015 89/11 258 2169 1,325 94 & 100 (Sc-B) 7 5748/2015 89/11 359 742 311 108 & 113 (Sc-B) 8 6629/2015 89/11 222 1344 872 121 & 127 (Sc-B) 9 6645/2015 89/11 357 646 194 137 & 143 (Sc-B) 10 7054/2015 89/11 283 646 179 150 & 156 (Sc-B) 11 7476/2015 89/11 358 646 249 163, 164 & 196 (Sc-B) 12 7478/2015 89/11 349 742 411 177, 178 & 183 (Sc-B) 13 9477/2015 90/8 99 2277 2,231 193 & 198 (Sc-B) 14 221/2016 89/11 237 1163 481 205, 206 & 211 (Sc-B) 15 1107/20....
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.... G. Ramji to Mr. S.V. Shriramulu as reflecting in first table above. On further examination of market value in the said sale deeds, we note that the market value adopted in each of the said deeds demonstrates that the lands exchanged were of equivalent value, meaning thereby, consideration of the sale deed divided by extent of land conveyed in the sale deed. Further, we find the fair market value/document value adopted in all the conveyances was uniformly at 1500 per sq.ft which establishes the exchange was affected on an equal value basis without any understatement or excess consideration. Therefore, we find force in the arguments of the ld.AR that the conveyances contemplated under the Memorandum of Understanding were merely instruments for effecting rearrangement of ownership amongst the original landowners and did not constitute commercial sales. Further, no monetary consideration was received by the assessee or by the land owners under these mutual conveyances which were executed solely to implement the pre-existing contractual arrangement recorded in the above said Memorandum of Understanding. 9. Having held so above, the only issue for our consideration is as to whether A....
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....fer deeds in favour of the assessee's customers/nominees in respect of equivalent plots. We find every transfer made by the assessee was matched by a corresponding transfer made by Mr. G. Ramji under the same contractual arrangements. Therefore, the very foundation of which the provisions of section 43CA of the Act have been invoked, that the assessee transferred land without consideration is actually, in our opinion, not correct. Further, we note once it is accepted that the impugned transfers were supported by valid and valuable consideration in the form of reciprocal transfer of equivalent land, the addition made by the AO which was confirmed by the ld.CIT(A) under the deeming fiction u/s. 43CA of the Act is not justified. 11. Further, on an examination of the provisions u/s. 43CA of the Act, which clearly explains that the said provisions comes into operation only whether the consideration received or accrued as a result of the transfer is less than the value adopted or assessed or assessable by the stamp valuation authority. We note that to make the provisions u/s. 43CA of the Act applicable, there are two conditions i.e. actual consideration received or accrued and stamp d....