P Venkat Reddy, Hyderabad V. Addl.CIT, Range-9, Hyderabad

ITA 12/HYD/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6373 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 04-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 03-01-2014
• Court: TRIBUNAL
• Department Lawyers: A SEETHARAMA RAO
• Assessee Lawyers: V RAGHAVENDRA RAO
• Keywords: Capital asset; Additional evidence; Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 12/HYD/2014 ASSESSMENT YEAR: 2008-09 P. VENKAT REDDY, HYDERABAD [PAN: AGEPP3161D] VS ADDL. COMMISSIONER OF INCOME TAX, RANGE-9, HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI V. RAGHAVENDRA RAO, AR FOR REVENUE : SHRI A. SEETHARAMA RAO, DR DATE OF HEARING : 04-07-2016 DATE OF PRONOUNCEMENT : 19-08-2016 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF TH E COMMISSIONER OF INCOME TAX (APPEALS)-VI, HYDERABAD, DATED 29-08-2013 ON THE ISSUE OF CAPITAL GAINS BROUGHT TO TA X DURING THE YEAR ON SALE OF CERTAIN LANDS CLAIMED TO BE AGRICUL TURAL LANDS. 2. THE APPEAL MEMO WAS FILED WITH A DELAY OF TWENTY SIX DAYS INCLUDING INTERVENING HOLIDAYS. BOTH ASSESSEE AND HIS COUNSEL GAVE AFFIDAVITS EXPLAINING THE CAUSE OF DELAY . CONSIDERING I.T.A. NO. 12/HYD/2014 P. VENKAT REDDY :- 2 -: THE SAME, WE ARE OF THE OPINION THAT THERE IS SUFFICIENT CAUSE IN FILING APPEAL BELATEDLY. WE HEREBY CONDONE THE DELA Y AND ADMIT THE APPEAL. 3. BRIEFLY STATED FACTS ARE THAT ASSESSEE, AN INDIVIDU AL, HAD FILED THE RETURN OF INCOME ADMITTING THE TOTAL INCOME AT RS. 12,41,930/-, WITH A NOTE IN RETURN OF INCOME INDICATIN G THAT HE RECEIVED A SALE CONSIDERATION OF RS. 61,00,000/- TO WARDS SALE OF AGRICULTURAL LAND, AND HIS SHARE HAS BEEN UTILIZED I N HOUSE CONSTRUCTION/REPAIRS. HOWEVER, THE PROFITS ON SALE OF S UCH LANDS WERE NOT INCLUDED IN TOTAL INCOME HOLDING THAT THE LANDS UNDER SALE ARE AGRICULTURAL LANDS AND AS SUCH DO NOT CONSTITUTE CAPITAL ASSETS. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER (AO) FOUND THAT ASSESSEE PURCHASED LANDS AT M ANSANIPALLY VILLAGE, MAHESWARAM MANDAL, R.R.DIST., IN THE MONTH O F NOVEMBER, 2005 TO THE EXTENT OF AC 4.02 GUNTAS, FOR A CONSIDERATION OF RS. 12,22,500/- AND AN ACRE OF LAND IN JANUARY, 2006, FOR A CONSIDERATION OF RS. 3,00,000/- VIDE THE AGREEMENT FOR SALE CUM GPA AND SOLD TOTAL AREA OF AC.3.02 GUNTAS @ RS. 20,00,000/- PER ACRE IN THE MONTH OF SEPTEMBER, 2007. THEN THE AO PROPOSED TO TREAT THE PROFITS ARISING OF SUCH TRANSACTI ONS AS SHORT TERM CAPITAL GAINS, FOR WHICH ASSESSEE OBJECTE D ON TWO COUNTS, VIZ., (I) THE SAID LANDS ARE AGRICULTURAL LANDS; (II) ONLY A MINOR PART OF THE SALE CONSIDERATION WAS R ECEIVED BY HIM, WITH MAJOR PORTION OF SUCH CONSIDERATION GOING TO THE CONSENTING PARTY WITH WHOM HE ENTERED INTO AN ORAL AGREEMENT EARLIER; I.T.A. NO. 12/HYD/2014 P. VENKAT REDDY :- 3 -: THE AO BRUSHED ASIDE SUCH CONTENTIONS ON THE GROUND TH AT THE LANDS UNDER REFERENCE FALL IN HMDA JURISDICTION AS PER G.O. NO. 274, AS SUCH SAID LANDS ARE NO MORE AGRICULTURAL LA NDS, AND THERE IS NO AGREEMENT IN WRITING WITH THE CONSENTING PARTY, TO SHOW THAT THE SAID PARTY HOLDS ANY INTEREST IN SUCH LAND. ACCORD INGLY, THE RESULTANT PROFITS/GAINS ON SALE OF LAND, TO THE EXTENT OF RS. 44,18,960/- BEING THE DIFFERENCE BETWEEN THE TOTAL SALE CONSIDERATION OF AC. 3.02 GUNTAS (RS. 61,00,000/-) AN D THE COST OF ACQUISITION (RS. 16,81,040/-) WAS BROUGHT TO TAX BY THE AO. 4. BEFORE THE LD. CIT(A) IT WAS CONTENDED THAT (A) THE NOTIFICATION ISSUED FOR HMDA DOES NOT APPLY AND (B) THE CONSIDERATION RECEIVED OF RS. 9,15,000/- AS PER THE S ALE DEEDS CAN ONLY BE BROUGHT TO TAX UNDER THE HEAD CAPITAL GAINS. 5. ON CONSIDERING THE DETAILED SUBMISSIONS AND REMANDING THE MATTER TO THE AO, LD. CIT(A) CONFIRMED THE ACTION OF AO WITH CERTAIN DIRECTIONS TO MODIFY THE COST OF ACQUISITI ON. HIS ORDER IS AS UNDER: 5.2 THE APPELLANT'S OBJECTIONS ARE ON TWO COUNTS. O NE IS REGARDING THE TREATMENT OF AGRICULTURAL LAND AS CAPITAL ASSET , WITHIN THE DEFINITION OF SEC. 2(14)(III) OF I.T.ACT, HOLDING THAT THE LANDS UNDER REFERENCE ARE LOCATED IN AREA, WHICH ARE OUTSIDE SCOPE AND AMBIT OF SEC. 2(14)(III) AND THE NOTIFICATION MENTIONED BY THE A.O. HOWEVER, THERE I S NO FURTHER ELABORATION ON THIS ISSUE. REGARDING THE ISSUE OF RECEIPT OF SA LE CONSIDERATION BY THE CONSENTING PARTY, WHICH IS TO THE EXTENT OF RS. 51, 85,000/-, IT WAS SUBMITTED THAT, THE LAND UNDER REFERENCE WERE SOLD EARLIER TO M/S. SAI CHAITHANYA HOUSING PVT. LTD. MUCH BEFORE THE SALE D EEDS DATED 30.09.2007 AND A PORTION OF SALE CONSIDERATION WAS RECEIVED BY THE CONSENTING PARTIES AS INDICATED IN SALE DEED WITH A REFERENCE TO THE ORAL AGREEMENT AND SUCH CONSIDERATION WAS: ALSO CONFIRME D BY THE CONSENTING PARTIES, WHICH WAS SHOWN TO HAVE BEEN TAKEN FOR THE IR TAX PURPOSE. IT WAS I.T.A. NO. 12/HYD/2014 P. VENKAT REDDY :- 4 -: FURTHER SUBMITTED THAT BOTH THE RIGHT HOLDERS VIZ. THE ASSESSEE AND CONSENTING PARTY HAVE REGISTERED SALE DEEDS FOR CON SIDERATION OF RS. 41,00,000/- AND RS. 20,00,000/-, OUT OF WHICH THE S HARE OF THE APPELLANT IS TO THE EXTENT OF RS. 6,15,000/- AND RS. 3,00,000 /RESPECTIVELY, AS AGAINST THE SHARE OF CONSENTING PARTY TO THE EXTENT OF RS. 51,85,000/- AND THE SHARE OF CONSIDERATION FOR EACH PARTY IS INDICA TED IN THE SALE DEED. IT WAS FURTHER CONTENDED THAT THE CONSENTING PARTIES H AVE CATEGORICALLY ADMITTED THE RECEIPT OF RS. 34.85 LAKHS OUT OF RS. 41.00 LAKHS AND RS. 17.00 LAKHS OUT OF RS. 20.00 IAKHS, WHICH WERE THE SALE CONSIDERATIONS RECEIVED FOR SALE OF AC. 2.02 GUNTAS AND AC. 1.00 G UNTAS LAND RESPECTIVELY, AND A.O FAILED TO APPRECIATE THESE FA CTS . 5.3 PERUSED THE SUBMISSIONS OF THE APPELLANT AND TH E OBSERVATIONS OF THE A.O ALONG WITH THE OTHER FACTS THAT HAVE BEE N BROUGHT ON RECORD. AS COULD BE SEEN FROM THE FACTS, THE APPELLANT'S MAIN CONTENTION WAS THE LANDS UNDER REFERENCE WERE AGRICULTURAL LANDS AND C ANNOT BE CONSIDERED AS THE CAPITAL ASSET WITHIN THE PURVIEW OF PROVISIO NS OF SEC. 2(14)(III) OF I.T. ACT. REST OF THE ARGUMENTS ARE ONLY ALTERNATIVE IN NATURE. AS REGARD TO THE TREATMENT OF LAND AS CAPITAL ASSET, IT WAS NEVER AR GUED BY THE APPELLANT THAT IT WAS FETCHING HIM THE AGRICULTURAL INCOME AN D CARRYING ON THE AGRICULTURAL OPERATIONS. FURTHER, THE SAID LAND PRO PERTY IS LOCATED AT MANSANIPALLY VILLAGE OF MAHESWARAM MANDALAM FALLING WITHIN THE LIMITS OF HMDA NOTIFIED AUTHORITY, AS PER G.O.NO. 274 DATE D 20.04.2007, WHICH IS NOT DISPUTED BY THE ASSESSEE, SERIOUSLY. IT IS A LSO RELEVANT TO MENTION HERE THAT THE APPELLANT HIMSELF WAS CLAIMING THE SA ID PROPERTY AS RIGHT OF THE ASSESSEE WHICH WAS ACQUIRED AS PER THE AGREEMEN T FOR SALE CUM GPA AND WAS DISPOSED AS SAME RIGHT IN THE SAID PROPERTY , ALONG WITH THE CONSENTING PARTY, FOR A CONSIDERATION WHICH HAS BEE N SHARED BY THEM ON THE BASIS OF RATIOS, WHICH IS ONLY KNOWN TO THEM. T HIS FACT OF SALE OF RIGHTS IN THE LAND UNDER REFERENCE, WAS REFERRED TO IN THE SUBMISSIONS OF THE APPELLANT REFLECTING THE TRUE NATURE OF ASSET UNDER REFERENCE. UNDER THE CIRCUMSTANCES, I HAVE NO HESITATION IN HOLDING THAT THE PROPERTY UNDER REFERENCE IS A CAPITAL ASSET AND THE PROFITS ASSOCI ATED WITH SUCH SALE GIVES TAXABLE INCOMES TO THE OWNERS. ACCORDINGLY, THE GAI NS ON SALE OF THE PROPERTY ARE LIABLE TO BE ASSESSED AS SHORT TERM CA PITAL GAINS AND THE ACTION OF THE A.O IS UPHELD, IN THIS REGARD. 5.4 AS REGARD TO THE QUANTUM OF SALE CONSIDERATION RECEIVED, IT WAS THE ARGUMENT OF THE APPELLANT THAT HE HAS RECEIVED ONLY A PART OF THE SALE CONSIDERATION BEING A AGPA HOLDER AND CONSIDERED HI MSELF AS JOINT RIGHT HOLDER, ALONG WITH THE CONSENTING PARTY WHO HAS REC EIVED THE MAJOR PORTION OF THE SALE PROCEEDS, FINDING A MENTION IN THE SALE DEEDS ON SHARING AND CONFIRMED BY CONSENTING PARTY, IS ONLY LIABLE FOR TAXES ON THE SALE CONSIDERATION OF RS. 9,15,000/-. INDEED, THIS FACT HAS A MENTION IN THE SALE DEEDS AND CONFIRMED BY THE CONSENTING PART Y. BUT, THE MISSING I.T.A. NO. 12/HYD/2014 P. VENKAT REDDY :- 5 -: LINK IN THESE TRANSACTIONS IS HOW THE CONSENTING PA RTY HAS ACQUIRED THE RIGHTS IN THE SAID PROPERTY FROM THE APPELLANT, WIT HOUT ANY WRITTEN DEED/AGREEMENT AND WITHOUT PAYMENT OF ANY CONSIDERA TION. IT IS DIFFICULT TO BELIEVE THAT THE APPELLANT HAVING PURCHASED THE PROPERTY AT RS. 3,00,000/- LAKH PER ACRE IN YEAR 2005 HAS SOLD AT T HE SAME RATE IN THE YEAR 2007, IF IT IS TO BE BELIEVED THAT HE HAS ONLY RECEIVED RS. 9,15,000/TOWARDS HIS SHARE OF SALE CONSIDERATION, W HICH WAS THE PEAK PERIOD IN REAL ESTATE AT HYDERABAD. FURTHER, IT IS ALSO DIFFICULT TO BELIEVE THAT MAJOR SHARE OF THE RIGHTS IN THE PROPERTY WOUL D BE HANDED OVER TO A THIRD PARTY WITHOUT ANY CONSIDERATION AND WITHOUT A NY AGREEMENT IN WRITING. IT IS ALSO RELEVANT TO MENTION HERE THAT T HE APPELLANT VOLUNTARILY MENTIONED IN THE RETURN OF INCOME, INDICATING THE S ALE CONSIDERATION RECEIVED BY HIM FOR SALE OF LANDS, WAS RS. 61,00,00 0/- AND THE SAME WAS SHOWN TO HAVE BEEN INVESTED IN THE SPECIFIED ASSET, I.E., THE EXISTING PROPERTY OF THE APPELLANT LOCATED AT H.NO. 16-11-73 9, GADDIANNARAM, DILSUKHNAGAR, HYDERABAD. IT IS ALSO A FACT THAT THE APPELLANT NEITHER DENIED SUCH INVESTMENT NOR EXPLAINED THE ALTERNATE SOURCES FOR SUCH INVESTMENTS, IN CASE THE ENTIRE CONSIDERATION OF RS . 61,00,000/- WAS NOT RECEIVED BY HIM, AS CLAIMED DURING THE ASSESSMENT P ROCEEDINGS. BASED ON THE CIRCUMSTANCES AND FACTS OF THE CASE, I T CAN ONLY BE PRESUMED THAT THE APPELLANT HAS RECEIVED THE ENTIRE CONSIDERATION OF RS. 61,00,000 AS MENTIONED IN RETURN OF INCOME, WITH RS . 9,15,000 RECEIVED FROM THE VENDEE TOWARDS THE SALE TRANSACTIONS DATED 30.09.2007 AND THE BALANCE AMOUNTS (RS. 61,00,000-RS.9,15,000) FROM TH E CONSENTING PARTY WHO HAS ACQUIRED THE RIGHTS IN THE SAID PROPERTY PR IOR TO THE SALE DEEDS DATED 30.09.2007. IT WAS NOT THE CASE OF THE APPELL ANT TO PROVE THAT THE RIGHTS, THAT TOO MAJOR RIGHTS IN THE PROPERTY UNDER REFERENCE WERE TRANSFERRED TO THE CONSENTING PARTY WITHOUT ANY CON SIDERATION AND ALSO INVESTED THE AMOUNTS IN THE PROPERTIES AS SPECIFIED . UNDER THE CIRCUMSTANCES, IT PROVES THAT THE APPELLANT RECEIVE D THE ENTIRE CONSIDERATION OF RS. 61,00,000/- TOWARDS THE SALE/T RANSFER OF HIS RIGHTS OVER THE PROPERTY IN ABSENCE OF ANY OTHER INFORMATI ON AS REGARD TO THE SOURCES FOR RS. 61,00,000 INDICATED IN RETURN OF IN COME AND EARNED THE SHORT TERM CAPITAL GAINS ON SUCH TRANSFER. HOWEVER, IT IS RELEVANT TO MENTION HERE THAT THE APPELLANT HAS SOLD ONLY A 2.0 2 GUNTAS OF LAND AT SY.NO.96 OUT OF AC 4.02 GUNTAS PURCHASED IN NOVEMBE R, 2005 AND IT IS NOT KNOWN WHETHER SIMILAR SHARING OF RIGHTS HAS TAKEN P LACE, AND WHETHER THE SALE OF THE REMAINING LAND HAS CONTRIBUTED TO THE T OTAL SALE CONSIDERATION UNDER REFERENCE. FURTHER, THE A.A HAS TAKEN THE COS T 'OF ACQUISITION OF AC5.02 GUNTAS, AS THE COST OF AC 3.02 GUNTAS, IN CO MPUTING THE CAPITAL GAINS WHICH APPEARS NOT FACTUALLY CORRECT. ACCORDIN GLY, THE ADDITION OF RS. 44,18,960/- STAND SUSTAINED/CONFIRMED, SUBJECT TO V ERIFICATION OF PROPORTIONATE COST OF ACQUISITION OF PROPERTY UNDER REFERENCE AND THE STATUS OF REMAINING TWO ACRES OF LAND PURCHASED BY APPELLA NT IN THE YEAR 2005. ACCORDINGLY, THIS GROUND OF APPEAL IS TREATED AS PA RTLY ALLOWED. I.T.A. NO. 12/HYD/2014 P. VENKAT REDDY :- 6 -: 6. ASSESSEE IS AGGRIEVED AND RAISED AS MANY AS SIX GROUNDS WITH SUB-GROUNDS WHICH ARE MAINLY SUBMISSIO NS. 7. LD. COUNSEL FOR ASSESSEE REFERRED TO THE SALE DEE DS AND SUBMITTED THAT ASSESSEES SHARE IN THE SALE OF PROPERTY WAS ONLY RS. 9,15,000/- WHICH HE HAS DISCLOSED IN RETURN AND BEING SALE OF AGRICULTURAL LANDS, THE SAME IS NOT EXIGIBLE TO TAX. H E ALSO FILED ADDITIONAL EVIDENCE IN THE FORM OF VARIOUS CERTIFICATE S TO AFFIRM THAT THE IMPUGNED LANDS ARE AGRICULTURAL IN NATURE. WITH RE FERENCE TO THE CONTENTION THAT THE MUNICIPAL LIMITS OF HYDERABAD DOE S NOT EXTEND TO THE HMDA LIMITS, HE RELIED ON THE FOLLOWING CO-ORDINATE BENCH DECISIONS: I. SMT. C. VIJAY KUMARI VS. ITO, IN ITA NO. 1797/HYD/14 , DT. 05-06-2015; II. SMT. R. UMA DEVI VS. DCIT, IN ITA NO. 350/HYD/14, DT. 11-03-2015; III. SMT. N. SAROJINI VS. DCIT IN ITA NO. 226/HYD/14, DT. 11-03-2015; IV. HARNIKS PARK (P) LTD. VS. ITO [41 TAXMANN.COM 109] (HYDERABAD) DT. 27-09-2013; V. M/S. GOUTHAM CONSTRUCTIONS VS. ITO IN ITA NO. 307/HYD/2011, DT. 27-09-2013; VI. SMT. T. URMILA VS. ITO IN ITA NO. 398/HYD/2012 [28 TAXMANN.COM 222] (HYDERABAD) DT. 12-12-2012; 8. LD. DR RELIED ON THE ORDERS OF THE AUTHORITIES. I.T.A. NO. 12/HYD/2014 P. VENKAT REDDY :- 7 -: 9. DURING THE COURSE OF HEARING, THE LD. COUNSEL WAS ASKED TO EXPLAIN THE NATURE OF OWNERSHIP ON LANDS, AS ASSESSEE HAS ONLY SIGNED AS AGPA HOLDER OF A THIRD PARTY BUT NOT A S OWNER. HE EXPRESSED HIS HELPLESSNESS AS THE PURCHASE DEEDS WE RE NOT PLACED ON RECORD. 10. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERU SED THE DOCUMENTS PLACED ON RECORD AND VARIOUS CASE LAW. APPLICATION OF VARIOUS CASE LAW WILL ARISE ONLY WHEN THE FACTS AR E CLEAR. IN THE INSTANT CASE, AO AND CIT(A) HAS GONE ON PRESUMPTION TH AT ASSESSEE IS OWNER OF AGRICULTURAL LANDS WHICH ARE W ITHIN THE HMDA LIMITS. LD. CIT(A) TRIED TO MODIFY THE ABOVE STATING THAT HE WAS ONLY HOLDING RIGHTS IN PROPERTY BUT ULTIMATELY CONFIRMED THE STAND OF AO. AS SEEN FROM THE TWO SALE DEEDS, THE FOLLOWING A RE STATED IN THE RECITALS: 1. THE DEED OF SALE IS MADE AND EXECUTED ON THIS 3 0 TH DAY OF SEPTEMBER 2007 AT MAHESHWARAM, R.R. DISTRICT. SRI BADAVATH KRISHNA, S/O. BALYA AGED ABOUT 33 YRS, OCC: AGRICULTURE, R/O. UPPUGADDA THANDA, MANSANPALLY VIL LAGE, MAHESHWARAM MANDAL, R.R. DIST., A.P. REPRESENTED BY AGPA HOLDER: SRI P. VENKAT REDDY, S/O. P. KANAKAL REDDY, AGED ABOUT 56 YRS, R/O. H.NO. 739/A/1/1, GADDI ANNARAM, DILSUK H NAGAR, HYDERABAD DISTRICT. (HEREIN AFTER CALLED THE VENDOR WHICH EXPRESSION OF THE VENDOR SHALL MEAN AND INCLUDE ALL HIS LEGAL HEIRS SUCCESSORS EXECUTORS, ADMINISTRATORS, LEGAL REPRESENTATIVES, N OMINEES, AND ASSIGNEES ETC., AND M/S SAI CHAITANYA HOUSING (P) LTD (REGISTERED AND INCORPORATED UNDER COMPANYS ACT 1956) FLAT NO: 311 , ANNAPURNA BLOCK, ADITYA ENCLAVE, AMEERPET, HYDERABA D I.T.A. NO. 12/HYD/2014 P. VENKAT REDDY :- 8 -: REPRESENTED BY ITS CHAIRMAN SRI DHULIPALLA SAMBA S IVA RAO, S/O. SATYANARAYANA, AGE: 48 YEARS, R/O. AMEERPET, H YDERABAD. HEREIN AFTER CALLED THE CONSENTING PARTY / AGREEM ENT HOLDERS WHICH EXPRESSION OF THE VENDOR SHALL MEAN A ND INCLUDE ALL THEIR HEIRS, EXECUTORS, ADMINISTRATORS, LEGAL REPRESENTATIVES NOMINEES AND ASSIGNEES ETC., OF SEC OND PART. AND 2. THE DEED OF SALE IS MADE AND EXECUTED ON THIS 30 TH DAY OF SEPTEMBER 2007 AT MAHESHWARAM, R.R. DISTRICT. SRI NENAVATH LAXMAN, S/O. SRI N. DESYA, AGED ABOUT 51 YEARS, OCCUPATION: AGRICULTURE, SRI NENAVATH SEVYA, S/O. SRI N. DESYA, AGED ABOUT 4 6 YEARS, OCCUPATION: AGRICULTURE, SRI NENAVATH CHAKRI, S/O. SRI N. DESYA, AGED ABOUT 72 YEARS, OCCUPATION: AGRICULTURE, SRI NENAVATH RAMESH, S/O. SRI N. DESYA, AGED ABOUT 20 YEARS, OCCUPATION: AGRICULTURE, ALL ARE RESIDENTS O F UPPUGADDA THANDA, MANSUNPALLY VILLAGE, MAHESHWARAM MANDAL, RANGA REDDY DISTRICT, REPRESENT ED BY AGPA HOLDER: SRI P. VENKAT REDDY, S/O. P. KANAKAL R EDDY, AGED ABOUT: 56 YEARS, OCCUPATION: BUSINESS, R/O. H.NO. 7 39/A/1/1, GADDI ANNARAM DILSUKH NAGAR, HYDERABAD DISTRICT. T HROUGH VIDE AGPA DOCUMENT NO. 6729/2005, DATED 11 TH DAY OF NOVEMBER, 2005 OF SRO, MAHESHWARAM. AND M/S SAI CHAITANYA HOUSING (P) LTD (REGISTERED AND INCORPORATED UNDER COMPANYS ACT 1956) FLAT NO: 311 , ANNAPURNA BLOCK, ADITYA ENCLAVE, AMEERPET, HYDERABA D REPRESENTED BY ITS CHAIRMAN SRI DHULIPALLA SAMBA S IVA RAO, S/O. SATYANARAYANA, AGE: 48 YEARS, R/O. AMEERPET, H YDERABAD. (HEREIN AFTER CALLED THE CONSENTING PARTY / AGREE MENT HOLDERS WHICH EXPRESSION OF THE VENDOR SHALL MEAN A ND INCLUDE ALL THEIR HEIRS, EXECUTORS, ADMINISTRATORS, LEGAL REPRESENTATIVES, NOMINEES AND ASSIGNEES ETC., OF SE COMND PART. I.T.A. NO. 12/HYD/2014 P. VENKAT REDDY :- 9 -: THE ABOVE RECITALS CLEARLY INDICATE THAT ASSESSEE HAS ACTED IN REPRESENTATIVE CAPACITY AS A GENERAL POWER OF ATTORNEY HOLDER AND NOT AS OWNER OF THE LAND. THE EXACT RELATIONSHIP AND A PPROPRIATION OF FUNDS REQUIRE VERIFICATION. THE SO CALLED AGPA B Y WHICH ASSESSEE CAME INTO POSSESSION OF LAND/RIGHT, IF ANY, WAS NOT PLACED ON RECORD, SO AS TO EXAMINE THIS ASPECT. 10.1. THE SALE DEEDS CLEARLY INDICATE THAT SAI CHAITAN YA HOUSING (P) LTD., ALSO HAS CERTAIN RIGHTS BY VIRTUE O F AGREEMENTS. WHETHER THE AGREEMENT IS WITH ASSESSEE AS GPA HOLDER O R WITH THE ACTUAL OWNERS SEPARATELY IS NOT CLEAR. THE FACTS AS PER THE DEEDS ARE THAT BOTH THE PARTIES RECEIVED THE CONSIDERATION SEPA RATELY WHICH IS NOT IN DISPUTE. 10.2. EVEN THOUGH ASSESSEE AND SAID COMPANY HAS SOL D 2.02 ACRES OF LAND OUT OF THE EXTENT PURCHASED/AGREED TO PUR CHASE AS PER PAGE 2 OF THE DEED INDICATE SEPARATE EXTENTS OF A C. 1.27 GUNTAS, AC. 1.28 GUNTAS AND AC. 0.27 GUNTAS BEING THE PATTA NOS. 398, 301 & 401 RESPECTIVELY OF DIFFERENT TITLE DEEDS. WHICH PART OF THE ABOVE AC. 4.02 GUNTAS WAS PARTED WITH IS NOT CLEAR. LD. CIT(A) HAS ALREADY DIRECTED AO TO EXAMINE THIS ASPECT AND RE WORK THE COST OF ACQUISITION TO 3.02 ACRES ONLY. BUT THE IMPUGNED LAND IS NOT CLEARLY DEMARCATED AND WHETHER ASSESSEE HOLDS THE BA LANCE OR NOT REQUIRE EXAMINATION. 10.3. UNLESS ASSESSEE OWNS THE LAND, THE ISSUE WHETH ER THE SALE OF AGRICULTURAL LAND WILL GIVE RISE TO CAPITAL G AIN OR NOT CANNOT BE EXAMINED. MOREOVER, THE APPLICABILITY OF HMDA AC T ALSO I.T.A. NO. 12/HYD/2014 P. VENKAT REDDY :- 10 -: DEPENDS ON OWNING THE LAND. IF ASSESSEE HAS ONLY CE RTAIN RIGHTS ON LAND, THEN THE NATURE OF OWNERSHIP IS DIFFERENT. UNLE SS THE AGPA IS EXAMINED, THIS ASPECT CANNOT BE ADJUDICATED. 10.4. WITH REFERENCE TO THE CONSIDERATION RECEIVED A LSO ASSESSEE HAS CLEARLY STATED IN RETURN OF INCOME AS UND ER: NOTE: DURING THE YEAR 2007-08 THE ASSESSEE HAS SO LD AGRICULTURAL PROPERTY FOR RS. 61,00,000/- OF WHICH RS. 9,15,000 (MY SHARE) UTILISED FOR THE PURPOSE OF RENOVATION AND EXPANSION OF EXISTING PROPERTY AT H.NO. 16- 11-739, GADDIANNARAM, DILSUKHNAGAR, HYDERABAD. AGRICULTURAL PROPERTY SOLD DURING THE YEAR 1. SY. NO. 100/U/5, AND SY. NO. 96, AT MANASANIPALLY V ILLAGE, RANGA REDDY DIST. TO THE EXTENT OF 3.02 ACRES. THEREFORE, THE CONTENTION OF AO THAT HE HAS RECEIVED FULL AMOUNT CANNOT BE ACCEPTED. EVEN THE SALE DEED INDICATE SEPAR ATE PAYMENTS. THEREFORE, CONSIDERING THE ENTIRE AMOUNT MA Y NOT BE CORRECT. HOWEVER, THESE ASPECTS CAN AGAIN BE EXAMINED SINCE THE NATURE OF OWNERSHIP ITSELF REQUIRES EXAMINATION. IN C ASE ASSESSEE HAS NOT PURCHASED LANDS BUT ACQUIRED CERTAIN RIGHTS BY WAY OF AGPA, THEN WHETHER THE TRANSACTION RESULT IN ADVENTURE I N NATURE OF TRADE ALSO REQUIRE FURTHER EXAMINATIONS. THE ISSU E WHETHER THE GAIN IF ANY IS TO BE ASSESSED AS SHORT TERM CAPITAL G AINS OR BUSINESS CAN BE CONSIDERED ON EXAMINATION OF FACTS. 10.5. IN ORDER TO EXAMINE THE ABOVE ASPECTS, WE HEREB Y SET ASIDE THE ORDERS OF AO AND CIT(A) AND RESTORE THE ENTIR E ISSUE TO THE FILE OF AO, WHO SHOULD EXAMINE ALL ASPECTS AND RE -DO THE I.T.A. NO. 12/HYD/2014 P. VENKAT REDDY :- 11 -: ASSESSMENT BASED ON FACTS AND LAW. NEEDLESS TO STATE TH AT ASSESSEE SHOULD BE GIVEN DUE OPPORTUNITY IN THE PRO CEEDINGS. 11. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 19 TH AUGUST, 2016 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMB ER HYDERABAD, DATED 19 TH AUGUST, 2016 TNMM COPY TO : 1. P. VENKAT REDDY, 16-11-739, GADDIANNARAM, DILSUKHNAGAR, HYDERABAD. 2. ADDL. COMMISSIONER OF INCOME TAX, RANGE-9, HYDERABAD. 3. CIT (APPEALS)-VI, HYDERABAD. 4. CIT-VI, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.