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Facts
A search and seizure operation was conducted, leading to the discovery of an agreement for the sale of land. The assessee, A.A. Balachandran, sold 151 cents of land for Rs. 3,38,24,000/- as per the agreement, while the registered sale consideration was only Rs. 1,70,27,000/-. A notice under section 153C was issued, and the assessee filed a return of income disclosing Rs. 28,48,690/-.
Held
The Assessing Officer completed the assessment at a total income of Rs. 3,37,75,946/-, assessing the income from the land sale on a protective basis in the hands of the assessee and on a substantive basis in the hands of Shri T.G. Chandrakumar. The CIT(A) directed the AO to adopt the cost of acquisition at Rs. 1,00,000/- per cent.
Key Issues
The core issue revolves around the correct valuation of the land sale for tax purposes, specifically the consideration received versus the registered value and the cost of acquisition.
Sections Cited
132, 153C, 143(3)
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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM & SHRI MANU KUMAR GIRI, JM
A.A. Balachandran O R D E R Per: Inturi Rama Rao, AM These appeals filed by the assessees are directed against the orders of the Commissioner of Income Tax (Appeals)-3, Kochi dated 03.02.2021 for Assessment Year (AY) 2008-09.
Since identical issues and facts are involved in these appeals, they are heard together and disposed of by this common order.
For the sake of convenience and clarity the facts relevant to the appeal bearing for AY 2008-09 are stated herein.
Brief facts of the case are that the appellant is an individual deriving income under the head ‘Salaries’. No regular return of income for AY 2008-09 was filed by the appellant. The search and Seizure operations u/s. 132 of the Income Tax Act, 1961 (the Act) were conducted in the case of one Dr. P.H. Abdul Majeed and M/s. Sevana Group of medical stores on 18.12.2013 and 14.2.2014 respectively. During the course of search and seizure operations, an agreement was found and seized which was entered into between Shri P.M. Pujayan, Shri T.G. Chandrakumar, Shri A.A. Balachandran (the assessee), Shri P. Manoj and Shri K.J. Thomas on first part and Dr. Abdul Majeed and Smt. Lakshmidevi Gopinathan on the second part with respect to sale of 384.5 cents of land at Ayyanthole. The land was sold by the assessee and 4 others to Shri Arun Majeed, S/o Dr. A.A. Balachandran P.H. Abdul Majeed and Smt. Lakshmidevi Gopinathan during the year 2007-08 through an agreement dated 03.01.2007 as per which the consideration to be received was Rs. 2,24,000/- per cent at a total value of Rs. 8,61,28,000/-. However, the registered value of sale consideration for 384.5 cents of land was Rs. 1,70,27,000/- only. As per the registered documents the assessee had sold 52.600 cents to Smt. Lakshmidevi Gopinathan for Rs. 10,52,000/- and 98.4 cents to Shri Arun Majeed for Rs. 19,68,000/-, totaling to Rs. 30,20,000/-, on 25.08.2007. But as per the agreement, Shri A.A. Balachandran, the assessee had received an amount of Rs. 3,38,24,000/- as sale consideration for the said land (151 cents). Based on the above information, a notice u/s. 153C was issued on 23.07.2014 to the appellant. In response to the notice u/s. 153C, the appellant filed return of income for AY 2008-09 on 25.08.2014 disclosing income of Rs. 28,48,690/-. Against the said return of income, the assessment was completed by the ACIT, Central Circle, Thrissur (hereinafter called "the AO") vide order dated 28.03.2016 passed u/s. 143(3) r.w.s. 153C of the Act at a total income of Rs. 3,37,75,946/-. While doing so, the AO assessed the income arising on sale of land property on protective basis in the hands of the assessee and substantive basis in the hands of one Shri. T.G. Chandrakumar.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order directed the AO to adopt the cost of acquisition @ Rs. 1,00,000/- per cent.
Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.
When the appeal was called on, nobody appeared on behalf of the assessee despite due service of notice of hearing. Therefore, we proceeded to dispose of the appeal after hearing the learned CIT- DR.
The learned CIT-DR submits that the appeal in the case of Shri T.G. Chandrakumar was disposed of by this Tribunal confirming the substantive addition made in his hands. Therefore, he submits that the matter may be remanded back to the file of the AO to pass denovo assessment based on the outcome of the appeal in the case of Shri T.G. Chandrakumar.
We find merit in the submissions made by the learned CIT- DR, accordingly, we remand the matter back to the file of the AO to pass fresh de novo assessment taking into consideration the outcome of the appeal in the case of said T.G Chandrakumar. Appeal stands partly allowed for statistical purposes.
Order pronounced in the open court on 6th November, 2025.