MANGESH A.TUPE,,PUNE vs. INCOME-TAX OFFICER,,

The brief facts of the case as emanating from records are : During the period relevant to the assessment year under appeal, the assessee executed a development agreement dated 19-01-2004 for sale of development rights in favour of M/s. City Corporation Limited for a consideration of Rs.31,98,820/-. The assessee did not file return of income disclosing income from transfer of such rights. Notice u/s. 148 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) on 14-03- 2011. The assessee did not respond to notice. Thereafter, several notices were issued to the assessee u/s. 142(1) of the Act, the assessee remained silent and never appeared before the Assessing Officer. The Assessing Officer was constrained to complete the assessment u/s. 144 of the Act. The Assessing Officer observed that as per agreement consideration is Rs.31,98,820/-, whereas, as per Government valuation for stamp duty purpose, the value of land is Rs.54,20,320/- as on the date of execution of development agreement. The Assessing Officer determined the value of land by invoking the provisions of section 50C of the Act at Rs.54,20,320/- and computed Long Term Capital Gain as Rs.25,05,172/-.

Shri Suhas P. Bora appearing on behalf of the assessee submitted at the outset that the assessee has raised 5 grounds in appeal, the ground

The ld. AR of assessee submitted that the assessee vide Development Agreement dated 17-01-2004 with Shri Popat Keshav Tupe and others acquired development rights in respect of land situated at Grampanchayat Sadesatranalli, Hadapsar for a consideration of Rs.23,00,000/-. The copy of the development agreement is at pages 1 to 33 and true English translation of the Development Agreement is at pages 104 to 118 of the paper book. Two days thereafter, the assessee vide Development Agreement with M/s. City Corporation Limited in respect of same land transferred the Development Rights against consideration of Rs.31,98,820/-. The translated copy of the agreement is at pages 34 to 61 of the paper book and the English translation is at pages 119 to 131 of the paper book. The ld. AR submitted that admittedly, before the Assessing Officer, the assessee did not appear. The Assessing Officer treated the land to be ancestral and computed Long Term Capital Gain by invoking the provisions of section 50C of the Act. The Assessing Officer while computing Long Term Capital Gain disturbed both, the sale price of land, as well as cost of acquisition of land. The ld. AR submitted that the land in question is not an ancestral land of the assessee. The assessee had acquired development rights in the land vide development agreement dated

On the other hand Dr. Vivek Agarwal representing the Department vehemently supported the findings of Commissioner of Income Tax (Appeals) and prayed for dismissing the appeal of assessee.

We have heard the submissions made by representatives of rival sides and have perused the orders of authorities below. We have also considered various documents placed on record by assessee in the form of paper book. It is contention of the assessee is that the development rights in respect of land acquired by assessee vide development agreement dated 17-01-2004 were further transferred to M/s. City Corporation Limited vide development agreement dated 19-01-2004. However, on perusal of both the agreements we find that the description of property given in para 1 of the development agreement dated 17-01-2004 is different from the schedule of property annexed with agreement dated 19-01-2004 between M/s. City Developers and Promoters Limited and assessee & others.

The properties which is subject matter of agreement dated 17-01- 2004 between the assessee and Shri Popat Keshav Tupe and others is as under : i. Survey No. 197/5 admeasuring 00 Hector 66 Aar. ii. Survey No. 197/3C admeasuring 00 Hector 20 Aar. iii. Survey No. 187/1B admeasuring 00 Hector 29.33 Aar. iv. Survey No. 187/12 admeasuring 00 Hector 24 Aar. v. Survey No. 188/1A admeasuring 00 Hector 13.66 Aar.

The ld. AR has placed on record a copy of assessment order dated 31-12-2009 passed u/s. 143(3) r.w.s. 153A for assessment year 2004-05. The contention of the assessee is that the transaction which has been subjected to tax in the present proceedings has already been offered to tax in proceedings arising from search operations u/s. 153A of the Act. We find that this plea has been raised by assessee for the first time before the

A perusal of certificate placed on record by the assessee from M/s. City Corporation Limited admitting the payment of Rs.31,98,820/- reveal that the payment has been made to the assessee in respect of land comprising in Survey No. 187/1B at Sadesatra Nali, Hadapsar. It is not clear from the certificate whether the payment of Rs.31,98,820/- is in respect of entire land comprising in Survey No. 187/1B or part of the land in the said survey number. The total area of land has not been specified in the said certificate. Therefore, the said certificate is not of any relevance.

Thus, in view of our above findings we remit this issue back to the file of Assessing Officer for de-novo adjudication in line with our above observations. The Assessing Officer before deciding this issue afresh shall grant reasonable opportunity of hearing to the assessee, in accordance with law. Accordingly, ground Nos. 2 and 3 of the appeal are allowed for statistical purpose.

The ground No. 1 of the appeal has not been pressed, thus, the same is dismissed as not pressed. Ground Nos. 4 and 5 are general in nature, hence, requires no adjudication.

In the result, the appeal of assessee is partly allowed for statistical purpose.