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| The Tax Publishers2020 TaxPub(DT) 1383 (Hyd-Trib) INCOME TAX ACT, 1961
section 45
Where assessee sold certain piece of land and declared 50% of resulting capital gain as his income on ground that as per agreement he was entitled only to half share and AO taxed entire capital gain in assessee's hands on the ground that agreement could not be relied upon being unregistered document, matter was remanded to AO for verification afresh in line with assessee's contention that unregistered agreements were also on stamp papers which were purchased on the same dates on which stamp papers which used for registering the transactions were purchased.
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Capital gain - Chargeability - Assessee sold land and offered his share of gain - Share in land based upon unregistered documents
The AO observed that the assessee as a GP Holder MSR has sold the plot for a consideration of Rs. 1,65,00,000 and the entire consideration was received by the assessee on various dates as detailed in the sale deed. The assessee had shown only Rs. 82.50 lakhs as his share of capital receipt while computing the long term capital gain. Vide an agreement MSR and 4 others entered into an agreement to pool their funds and invest in land which would be registered in the name of MSR and later sold and the realized profit would be shared in an agreed ratio. MSR and others then approached assessee to purchase 50% of the land on payment of consideration and as per agreement, MSR and others agreed to part with 50%. share of land in favour of assessee. As assessee was entitled to 50% share of land and profit in terms of the agreement, assessee received 80 lacs as consideration and returned Rs. 82,50,000 and claimed deduction under section 54F on investment made in house property. In view of the above, it was submitted that assessee has rightfully offered Rs. 82.50 lacs being his share of consideration for taxation under the head 'long term capital gains' AO sought to tax entire capital gain in assessee's hands. AO held that agreement could not be relied upon being unregistered document. Assessee contended that unregistered agreements were also on stamp papers which were purchased on the same dates on which stamp papers which used for registering the transactions were purchased. Held: Since stamp papers used for recording registered as well as unregistered documents were in seriatim, said documents could not be brushed aside. Even if the agreements were not registered but since stamp papers were found to be genuine, the transactions had to be accepted as correct. AO was accordingly directed to verify the same and readjudicate issue in accordance with law.
REFERRED :
FAVOUR : Matter remanded.
A.Y. : 2009-10
INCOME TAX ACT, 1961
Section 54F
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