Zakrullah Choudhary, Pimpri V. DCIT,Cen.Cir 2(3), Pune, Pune

ITA 670/PUN/2012

• Counselvise Citation: 67024514 RSA 2012
• Duration Of Justice: 3 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-01-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 30-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANURADHA V RAVI
• Assessee Lawyers: S N DOSHI; S V CHHELLANI
• Keywords: Sale consideration of property below Jantri Value; Capital asset
• Section: 143(3); 50C; 2(14); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.670/PN/2012 ASSESSMENT YEAR : 2007-08 ZAKRULLAH CHOUDHARY YESHWANT NAGAR, TELCO BHOSARI ROAD, PIMPRI, PUNE 18 PAN: ACPPC3582Q . APPELLANT VS. THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(3), PUNE. . RESPONDENT APPELLANT BY : S/SHRI S.N. DOSHI & S.V. CHHELLANI RESPONDENT BY : SMT. ANURADHA V. RAVI DATE OF HEARING : 20-01-2015 DATE OF PRONOUNCEMENT : 31-03-2015 ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A)-CENTRAL, PUNE, DATED 20.02.2012 RELATING TO ASSESSMENT YEAR 2007-0 8 AGAINST ORDER PASSED UNDER SECTION 143(3) R.W.S. 153A OF THE INCOME TAX ACT, 1 961. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE CIT(A) HAS ERRED IN HOLDING THAT THE APPELLANT HAS SOLD THE LAND IN THE CAPACITY AS OWNER OVERLOOKING THE FACT THAT THE APPELLANT WAS IN FACT NOT THE OWN ER AND HE WAS PARTY TO THE CONVEYANCE DEED AS CONSENTING PARTY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) HAS ALSO ERRED IN HOLDING THAT THE APPELLANT HAS TRANSF ERRED THE LAND UNDER CONSIDERATION WHICH IN FACT WAS NOT IN EXISTENCE AT ALL AT THE TIME WHEN THE APPELLANT HAD ENTERED INTO DEVELOPMENT AGREEMENT ON 7/9/2004 IN RESPECT OF LAND OTHER THAN THE LAND SOLD UNDER CONSIDERATION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND FOR THE REASON EXPLAINED ABOVE THE LEARNED CIT(A) HAS ERRED IN CON FIRMING THE ACTION OF THE ASSESSING OFFICER OF INVOKING THE PROVISION OF SECT ION 50C OF THE I.T. ACT 1961 ERRONEOUSLY HOLDING THAT APPELLANT WAS THE OWNER OF THE SAID LAND TRANSFERRED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND WITHOUT PREJUDICE TO THE ABOVE GROUNDS THE LEANED CIT(A) HAS ERRED IN HOLDING THAT THE ASSESSING OFFICER HAS OFFERED ADEQUATE OPPORTUNITY TO THE APP ELLANT FOR RAISING OBJECTION ON ITA NO.670/PN/2012 2 HIS PROPOSAL OF ADOPTING THE STAMP DUTY VALUE FOR T HE PURPOSE OF CALCULATING THE CAPITAL GAIN. 5. THE ABOVE GROUNDS OF APPEAL MAY KINDLY BE ALLOWE D TO BE AMENDED, ALTERED MODIFIED ETC., IN THE INTEREST OF NATURAL J USTICE. 3. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AC TION U/S 132 OF THE ACT WAS CONDUCTED AT THE RESIDENTIAL PREMISES OF THE ASSESS EE ON 24.10.2007 WHICH, IN TURN, WAS PART OF THE SEARCH ACTION CONDUCTED IN THE CASES OF HABIBULLAH CHAUDHARY, CHETAN MEHTA AND VISHAL MALHOTRA GROUP OF PUNE. THE ASSES SING OFFICER ISSUED NOTICE U/S 153A(A) OF THE ACT REQUISITIONING THE ASSESSEE TO F URNISH THE RETURN OF INCOME WITHIN 30 DAYS FROM THE RECEIPT OF THE SAID NOTICE. IN RESPO NSE, ASSESSEE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.83,55,660/-. D URING THE YEAR UNDER CONSIDERATION, ASSESSEE HAD DECLARED LONG TERM CAPITAL GAIN OF RS. 27,71,375/-. THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS ALONG WITH THE COPIES OF PURCHASE AND SALE AGREEMENT. ON PERUSAL OF THE DETAILS, THE ASSESSING OFFICER NOTED THAT THE SALE RECEIPTS WERE LESS THAN THE GOVERNMENT VALUATION IN RESPECT OF THE FOUR TRA NSACTIONS OF SALE. THE TABULATED DETAILS OF THE TRANSACTIONS ALONG WITH THE NAME OF THE PURCHASER IS INCORPORATED UNDER PARA 6.1 AT PAGE 2 OF THE ASSESSMENT ORDER. THE AS SESSING OFFICER VIDE PARA 6.2 NOTED THAT THE SELLER IN ALL THE FOUR CASES WAS SHRI KOND IBABHAU BALGHARE, HOWEVER, THE PURCHASERS WERE DIFFERENT AND THE ASSESSEE ALONG WI TH SHRI NILESH MADHUKAR NEWALE, SHRI SANJAY SHAMGIR GOSAVI, SHRI SANJAY JNANOBA KOT WAD AND SHRI PITAMBAR VASUDEV PATIL WERE SHOWN AS THE ATTORNEY/CONSENTING PARTY N O.1. THE ASSESSEE ALONG WITH THE FOUR OTHER PARTIES HAD ACQUIRED THE DEVELOPMENT RIG HTS OVER THIS LAND FOR CONSIDERATION OF RS.20,00,000/- WHERE THE ASSESSEE SHARE IS 1/5 TH WITH INVESTMENT OF RS.4,00,000/-. IN VIEW THEREOF, THE ASSESSEE HAD COMPUTED CAPITAL GAI N OF RS.16,00,000/-. THE ASSESSEE WAS SHOW-CAUSED AS TO WHY THE STAMP VALUATION WHICH WAS MORE THAN THE STATED CONSIDERATION SHOULD NOT BE ADOPTED IN VIEW OF THE PROVISIONS OF SECTION 50C OF THE ACT. IN REPLY, IT WAS EXPLAINED BY THE ASSESSEE THAT IT HAD PURCHASED THE DEVELOPMENT RIGHTS OF THE SAID PROPERTY BUT BECAUSE OF CERTAIN DISPUTE S THE ASSESSEE HAD SURRENDERED HIS RIGHTS AND ALSO THE LITIGATION WITH THE SELLER AND THE ORIGINAL LAND OWNERS SOLD THE LAND DIRECTLY TO DIFFERENT PARTIES TO WHICH THE ASSESSEE ONLY GIVEN CONSENT TO THE DEAL. THE CLAIM OF THE ASSESSEE WAS THAT PHYSICAL POSSESSION WAS NEVER GIVEN TO THE ASSESSEE. ITA NO.670/PN/2012 3 THE ASSESSEE CLAIMED TO HAVE RECEIVED AN EXTRA CONS IDERATION WHICH HAD BEEN OFFERED TO TAX AS SHORT TERM CAPITAL GAIN. THE ASSESSING O FFICER WAS OF THE VIEW THAT VIDE THE DEVELOPMENT AGREEMENT DATED 07.09.2004, THE ASSESSE E ALONG WITH THE FOUR OTHERS HAD ACQUIRED FULL INTEREST IN THE SUBJECT PROPERTY OR A NY OTHER PROPERTY TO BE RECEIVED IN EXCHANGE THEREOF AND AS THE PROPERTY IN QUESTION WA S NOT TRANSFERRED TO THE NAME OF THE ASSESSEE, PCNTDA GAVE THE LAND IN EXCHANGE TO THE O RIGINAL LAND OWNER. AS PER THE ASSESSING OFFICER, THE BENEFICIAL OWNER OF THE LAND RECEIVED IN EXCHANGE WAS, HOWEVER, THE ASSESSEE AND FOUR OTHERS, WHO WERE ENTITLED TO THE GAINS ARISING ON THE TRANSFER OF THE LAND. HENCE, THE PROVISIONS OF SECTION 50C OF THE ACT WERE APPLIED AS THE ASSESSEE WAS THE BENEFICIAL OWNER OF THE LAND TRANSFERRED AN D THE VALUE ADOPTED BY THE STAMP DUTY AUTHORITY WAS APPLIED AND THE SHORT TERM CAPIT AL GAIN WAS COMPUTED IN THE HANDS OF THE ASSESSEE AT RS.85,40,820/- AND SINCE THE ASSESS EE HAD ALREADY DECLARED SHORT TERM CAPITAL GAIN OF RS.16,00,000/-, AN ADDITION OF RS.6 9,40,820/- WAS MADE IN THE HANDS OF THE ASSESSEE. 4. THE CIT(A) UPHELD THE ORDER OF THE ASSESSING OFF ICER OBSERVING THAT THE ORIGINAL LAND OWNER HAD GIVEN FULL RIGHTS TO THE ASSESSEE AN D FOUR OTHER PARTIES IN RESPECT OF THE LAND WHICH, THEY WERE TO RECEIVE FROM PCNTDA IN LIE U OF THEIR ORIGINAL LAND. THUS, FULL RIGHTS OF ENJOYMENT OF THE LAND WHICH THE ORIGINAL LAND OWNERS WERE TO RECEIVE WAS GIVEN TO THE ASSESSEE AND TO THE OTHER PARTIES, UNDER WHI CH THE ASSESSEE ACQUIRED RIGHTS IN THE PROPERTY AND THIS RIGHT WAS A CAPITAL ASSET IN LIEU OF THE PROVISIONS OF SECTION 2(14) OF THE ACT. THE SURRENDERING OF THE RIGHTS WAS TRANSFER W ITHIN THE MEANING OF SECTION 2(47) OF THE ACT WAS HELD BY THE CIT(A). THE OTHER OBJECTIO N OF THE ASSESSEE AGAINST APPLICATION OF PROVISIONS OF SECTION 50C OF THE ACT WAS ALSO RE JECTED IN VIEW OF THE PROPOSITION THAT THE PROVISIONS OF SECTION 50C OF THE ACT WERE APPLI CABLE TO THE CASES OF DEVELOPMENT AGREEMENT. RELIANCE IN THIS REGARD WAS PLACED UPON THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF ARIF AKHATAR HUSSAIN VS. ITO, (2011) 140 TTJ 413 (MUM.). ASSESSEE IS IN APPEAL AGAINST THE ORDER OF THE CIT( A). ITA NO.670/PN/2012 4 5. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE REFERRED TO VARIOUS CLAUSES OF THE DEVELOPMENT AGREEMENT AND POINTED OUT THAT T HE ASSESSEE WAS TO RECEIVE DEVELOPMENT RIGHTS OF A PROPERTY WHICH, IN TURN, WA S TO BE ALLOTTED TO THE ORIGINAL LAND OWNER BY PCNTDA. HOWEVER, THERE WAS CERTAIN DISPUT ES IN THE SAID ALLOTMENT AND EVENTUALLY THERE WAS SETTLEMENT BETWEEN THE PARTIES AND THE ASSESSEE ALONG WITH FOUR OTHER PERSONS GAVE UP ITS RIGHT IN THE PROPERTY TO BE ALLOTTED BY PCNTDA. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER POINTED OUT THAT THE ORIGINAL LAND OWNER DIRECTLY SOLD THE PROPERTY TO THE PURCHASERS AND THE ASSESSEE WAS ONLY A CONSENTING PARTY TO THE SAID AGREEMENT, AS INITIALL Y, THERE WAS A DEVELOPMENT AGREEMENT BETWEEN THE ORIGINAL LAND OWNER AND THE ASSESSEE AL ONG WITH FOUR OTHER PERSONS. OUR ATTENTION WAS DRAWN TO THE VARIOUS AGREEMENTS EXECU TED BETWEEN THE PARTIES. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER POINTED OUT THAT IN THE ABSENCE OF ANY ASSET HAVING BEEN ACQUIRED BY THE ASSESSEE AND THE ASSESSEE HAVING ANY OWNERSHIP RIGHTS OR ANY OTHER RIGHTS IN THE PROPERT Y SOLD BY THE ORIGINAL LAND OWNER DIRECTLY TO THE PURCHASERS, THERE WAS NO MERIT IN I NVOKING THE PROVISIONS OF SECTION 50C OF THE ACT IN THE PRESENT CASE, VIS--VIS THE ASSESSEE . 6. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE, ON THE OTHER HAND, PLACING RELIANCE ON THE ORDER OF THE CIT(A) POINTED OUT THAT THE POWER OF ATTORNEY WAS EXECUTED BY THE VENDOR IN FAVOUR OF THE ASSESSEE AN D CONSEQUENTLY THE ASSESSEE HAD FULL RIGHTS IN THE SAID PROPERTY. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO THE APPLICATION OF SECTION 50C OF THE ACT. THE PROVISIONS OF THE SAID SECTION 50C OF THE ACT ARE APPLICABLE WHERE THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF T HE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS L ESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE S O ADOPTED OR ASSESSED SHALL, FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE ITA NO.670/PN/2012 5 CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF S UCH TRANSFER. THE CONDITIONS WHICH HAVE TO BE FULFILLED FOR THE APPLICATION OF S ECTION 50C OF THE ACT ARE THAT THERE IS A TRANSFER OF A CAPITAL ASSET BEING LAND O R BUILDING OR BOTH, IN LIEU OF WHICH TRANSFER, THE ASSESSEE HAD RECEIVED CERTAIN CONSIDE RATION OR IT HAD ACCRUED TO THE ASSESSEE AND WHERE SUCH CONSIDERATION WAS LESS THAN THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY FOR THE P URPOSES OF PAYMENT OF STAMP DUTY VIS--VIS THE SAID TRANSFER, THEN THE SECTION PROVIDES THAT THE VALUE ADOPTED OR SO ASSESSED BY THE STAMP VALUATION OFFICER, BE D EEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. IN ORDER TO APPLY THE PROVISIONS OF SECTION 50C OF THE ACT, THE FIRST STEP IS THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, WHICH IS TO BE FULFILLED, FOR INVOKING PROVISIONS O F SECTION 50C OF THE ACT. THE SECOND STEP IS THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY AND WHERE THE SAID VALUE ADOPTED OR ASSESSED IS IN EXCESS OF THE CONSIDERATION RECEIVED OR ACCRUING, THEN FOR THE PURPOSES OF DETE RMINING THE CAPITAL GAIN IN THE HANDS OF THE ASSESSEE, THE SAID VALUE SHALL BE DEEM ED TO BE FULL VALUE OF CONSIDERATION RECEIVED OR ACCRUING, CONSEQUENT TO T HE TRANSFER. 8. NOW, COMING TO THE FACTS OF THE PRESENT CASE. T HE ASSESSEE HAD ENTERED INTO A DEVELOPMENT AGREEMENT DATED 07.09.2004 WITH THE OWNER OF THE LAND SITUATED AT GAT NO.732 ADMEASURING 3H 22R. THE SAI D LAND WAS ACQUIRED BY PCNTDA IN 1972 AND IT HAD AGREED TO ALLOT A PLOT IN EXCHANGE OF THE ABOVE LAND OR COMPENSATION AS MAY BE ORDERED BY THE COURT. TH E ASSESSEE ALONG WITH FOUR OTHER PERSONS VIDE DEVELOPMENT AGREEMENT DATED 07.0 9.2004 JOINTLY ACQUIRED THE DEVELOPMENT RIGHTS OF THE AREA OF THE LAND TO B E RECEIVED OR TO RECEIVE COMPENSATION, IN EXCHANGE BY THE OWNERS FROM PCNTDA FOR A TOTAL CONSIDERATION OF RS.20,00,000/- WHEREIN THE SHARE O F THE ASSESSEE WAS ITA NO.670/PN/2012 6 RS.4,00,000/-. UNDER CLAUSE 1 OF THE DEVELOPMENT A GREEMENT DATED 07.09.2004, THE DESCRIPTION OF THE PROPERTY WAS GIV EN AS UNDER :- DESCRIPTION OF PROPERTY : TUKADI PUNE, PLOT TUKADI TALUKA HAVELI FALLING UNDE R THE THERE JURISDICTION OF SUB REGISTRAR OF HAVELI NO.4, SITUATED AT GAT NO.732 (O LD GAT NO.752) AREA 1.HECTRE 37R OUT OF 3H.72R, PCNTDA, VILLAGE CHIKHAL I OR 12.5% OF THE LAND AROUND 1750 SQ.MT IN EXCHANGE OF LAND ACQUIRED AS P ER THE SCHEME OF PCNTDA OR AND AREA AS WOULD BE DIRECTED BY THE COURT OR TH E COMPENSATION FOR DAMAGES TO BE AWARDED. 9. UNDER CLAUSE 3 IT WAS ADMITTED THAT THE PROPERTY OF THE ORIGINAL LAND OWNER WAS RECORDED IN THE NAME OF PCNTDA IN THE 7/12 EXTR ACT, THE RELEVANT CLAUSE 3 READS AS UNDER :- THE PROPERTY DESCRIBED ABOVE IS RECORDED IN THE RE CORD OF RIGHT 7/12 EXTRACT IN THE NAME OF PCNTDA. HOWEVER, THIS AGREEMENT IS IN RESPECT OF LAND AS WOULD BE ORDERED BY THE COURT OR AN AREA UNDER 12.5% SCHE ME. SIMILARLY THE COMPENSATION AS WOULD BE DECIDED BY PCNTDA OR COURT OR BY GOVERNMENT OF MAHARASHTRA TO BE RECEIVED BY THE DEVELOPER. 10. THE PARTIES UNDER CLAUSE 3 AGREED THAT THE AGRE EMENT WAS IN RESPECT OF A LAND AS WOULD BE ORDERED BY THE COURT OR IN RESPECT OF COMPENSATION AS WOULD BE DECIDED BY PCNTDA OR BY COURT OR BY GOVERNMENT OF M AHARASHTRA AND THE SAME WAS TO BE RECEIVED BY THE DEVELOPER. THE PERU SAL OF THE SAID CLAUSES OF THE DEVELOPMENT AGREEMENT REFLECTS THAT ON THE DATE OF THE EXECUTION OF THE SAID AGREEMENT, THERE WAS NO LAND OR ANY PROPERTY IN EXI STENCE. IN THE ABSENCE OF ANY LAND OR ANY PROPERTY WHETHER ANY TRANSFER OR AN Y PROPERTY COULD TAKE PLACE VIDE SAID DEVELOPMENT AGREEMENT. ON A LATER DATE I .E. 31.10.2006 PCNTDA ALLOTTED PIECE OF LAND CALLED BULK LAND NO.13 ADMEA SURING 1.37H TO THE ORIGINAL LAND OWNER AND EXECUTED THE EXCHANGE DEED. UNDER T HE SAID EXCHANGE DEED DATED 31.10.2006, THE ORIGINAL LAND OWNERS BECAME T HE OWNERS OF THE SAID PLOT AND NO EFFECT TO THE DEVELOPMENT AGREEMENT APPARENT LY WAS GIVEN BY THE PARTIES. THEREAFTER, THE SAID PLOT OF LAND WAS SOL D BY THE ORIGINAL LAND OWNER TO ITA NO.670/PN/2012 7 FOUR DIFFERENT PURCHASERS FOR DIFFERENT CONSIDERATI ONS AS TABULATED AT PAGE 2 OF THE ASSESSMENT ORDER. THE TOTAL SALE CONSIDERATION AS PER THE SAID DOCUMENTS EXECUTED BETWEEN THE ORIGINAL LAND OWNERS AND THE R ESPECTIVE PURCHASERS WAS RS.1.94 CRORES AS AGAINST WHICH THE GOVERNMENT VALU ER HAD ADOPTED THE VALUE AT RS.4.47 CRORES. THE ASSESSEE ALONG WITH FOUR OT HER PARTIES WERE THE CONSENTING PARTIES TO THE SAID TRANSACTION OF TRANS FER AND IT WAS CLAIMED BY THE ASSESSEE AND FOUR OTHER PERSONS THAT THEY SHALL NOT CLAIM ANY RIGHT OF WHATSOEVER NATURE IN RESPECT OF THE SAID PROPERTY. CONSEQUENT TO GIVING THEIR CONSENT TO THE SAID DOCUMENT, THE ASSESSEE RECEIVED A SUM OF RS.20 ,00,000/- AS HIS SHARE AND AFTER DEDUCTING SUM OF RS.4,00,000/- PAID TO THE OR IGINAL LAND OWNER FOR ACQUIRING THE DEVELOPMENT RIGHTS IN A PROPERTY, WHICH WAS NOT IN EXISTENCE, THE ASSESSEE OFFERED A SUM OF RS.16,00,000/- AS INCOME FROM SHOR T TERM CAPITAL GAIN. HOWEVER, THE AUTHORITIES BELOW HELD THAT SINCE THE ASSESSEE HAD ACQUIRED THE RIGHTS IN THE PROPERTY, WHICH HAS NOW BEEN SOLD, WH ERE THE STAMP VALUATION AUTHORITY HAVE ADOPTED THE VALUE HIGHER THAN THE VA LUE AGREED UPON, THEN THE PROVISIONS OF SECTION 50C OF THE ACT ARE TO BE APPL IED IN ORDER TO COMPUTE THE INCOME FROM CAPITAL GAIN IN THE HANDS OF THE ASSESS EE. 11. WE FIND NO MERIT IN THE STAND OF THE AUTHORITIE S BELOW IN THE FACTS OF THE PRESENT CASE, WHERE THE ASSESSEE HAD ACQUIRED DEVEL OPMENT RIGHTS IN A PROPERTY, WHICH MAY BE ALLOTTED IN EXCHANGE, TO THE ORIGINAL LAND OWNER. THOUGH THE ASSESSEE WAS HOLDING THE POWER OF ATTORNEY FROM ORIGINAL LAND OWNER BUT AS THE DOCUMENTS REVEAL, THE PROPERTY IN EXCHANGE WAS ALLOTTED TO THE ORIGINAL LAND OWNER ONLY BY PCNTDA AND NO COGNISANCE WAS GIVEN TO THE DOCUMENTS EXECUTED BETWEEN THE PARTIES. THE SO-CALLED DEVELO PMENT AGREEMENT DATED 07.09.2004 WAS IN RESPECT OF A PLOT OF LAND WHICH M AY BE ALLOTTED BY PCNTDA OR IN RESPECT OF A COMPENSATION FOR DAMAGES WHICH MAY BE AWARDED. HOWEVER, THE PCNTDA ALLOTTED THE PLOT OF LAND TO THE ORIGINAL LA ND OWNER ITSELF WHO, IN TURN, ITA NO.670/PN/2012 8 SOLD THE SAID ASSET TO FOUR DIFFERENT PURCHASERS VI DE SEPARATE SALE DEEDS ON TOTAL AGREEMENT VALUE OF RS.1.94 CRORES. THE TRANSFER OF PROPERTY WAS BETWEEN THE ORIGINAL LAND OWNER AND FOUR NEW PURCHASERS WHO WER E PARTIES TO THE SAID SALE DEED WHICH WERE VALUED BY THE STAMP VALUATION OFFIC ER AT HIGHER VALUE. HOWEVER, THE ASSESSEE WAS NOT THE BENEFICIARY OF TH E SAID TRANSACTION EXCEPT TO THE EXTENT OF RS.20,00,000/-, WHICH WAS RECEIVED ON ACCOUNT OF THEM GIVING UP THE RIGHTS IN THE SAID TRANSACTION IN VIEW OF THE D EVELOPMENT AGREEMENT DATED 07.09.2004 EXECUTED WITH THE ORIGINAL LAND OWNER. AS POINTED BY US IN THE EARLIER PARA HEREINABOVE THE PROVISIONS OF SECTION 50C ARE APPLICATION WHERE THERE IS A TRANSFER OF CAPITAL ASSET BEING LAND OR BUILDING OR BOTH AND SUCH TRANSFER IS BETWEEN A SELLER AND PURCHASER OR AS THE REFERRED B Y THE CIT(A) BY A PERSON WHO HAD ACQUIRED DEVELOPMENT RIGHTS IN THE PROPERTY. T HE ASSESSEE THOUGH HAD ENTERED INTO AN AGREEMENT WITH THE ORIGINAL LAND OW NER BUT THE SAID DEVELOPMENT AGREEMENT COULD NOT BE FINALIZED AS FIRSTLY THERE W AS NO PROPERTY IN EXISTENCE ON THE DATE WHEN THE DEVELOPMENT AGREEMENT WAS EXECUTE D AND SUBSEQUENTLY ALSO THERE WAS NO TRANSACTION OF ANY CAPITAL ASSET BEING LAND OR BUILDING WITH THE ASSESSEE. SINCE PCNTDA ALLOTTED THE ASSET IN EXCHA NGE TO THE ORIGINAL LAND OWNER ITSELF AND DID NOT CONSIDER THE TERMS OF THE DEVELOPMENT AGREEMENT AS SACROSANCT, IN THE TOTALITY OF THE ABOVE FACTS AND CIRCUMSTANCES, IT COULD NOT BE SAID THAT THE PROVISIONS OF SECTION 50C OF THE ACT WERE APPLICABLE TO THE TRANSFER TRANSACTION VIS--VIS ASSESSEE WHO WAS ONLY A CONFI RMING PARTY TO THE EXCHANGE DEED. IN THE ENTIRETY OF THE ABOVE FACTS AND CIRCU MSTANCES, WE HOLD THAT THE INCOME FROM SHORT TERM CAPITAL GAIN IS TO BE ASSESS ED IN THE HANDS OF THE ASSESSEE BY TAKING THE CONSIDERATION AT RS.20,00,00 0/- AND AFTER ADJUSTING THE COST PAID BY THE ASSESSEE AT RS.4,00,000/- THE INCO ME FROM SHORT TERM CAPITAL GAIN TO BE ASSESSED IN THE HANDS OF THE ASSESSEE IS RS.16,00,000/-. ITA NO.670/PN/2012 9 12. WE FIND NO MERIT IN THE ORDERS OF THE AUTHORITI ES BELOW HOLDING THAT THE ASSESSEE HAD SOLD THE LAND IN THE CAPACITY AS OWNER AND CONSEQUENTLY WE HOLD THAT THE PROVISIONS OF SECTION 50C OF THE ACT ARE N OT ATTRACTED. THUS, GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED ON THIS 31 ST DAY OF MARCH, 2015. SD/- SD/- (R.K. PANDA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 31 ST MARCH, 2015 SUJEET COPY OF THE ORDER IS FORWARDED TO: - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-CENTRAL, PUNE; 4) THE CIT-CENTRAL, PUNE; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE