Zarir Rustom Joshi Vs ITO (ITAT Mumbai)
The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals) under Section 250 of the Income Tax Act, 1961, for Assessment Year (AY) 2009-10.
The assessee, an individual, had not filed his return for the relevant year. The assessment was reopened based on information that agricultural land bearing Survey No. 5/1, CTS No. 4083, was sold for Rs.2,08,00,000/-, of which Rs.22,00,000/- was payable to ten vendors including the assessee. Since the property fell within municipal limits, capital gains were considered chargeable to tax. Notice under Section 148 was issued, and the assessee filed a return declaring income of Rs.1,98,110/-. The Assessing Officer (AO) completed assessment under Sections 143(3) read with 147, determining total income at Rs.21,17,110/- after making an addition of Rs.19,19,000/- towards long-term capital gain (LTCG). The total sale value was taken at Rs.3,23,40,000/-, and the assessee’s 1/12th share was computed at Rs.26,95,000/-.
The CIT(A) upheld the addition, holding that the assessee failed to substantiate his claim with sufficient documentary evidence.
Before the Tribunal, the assessee contended that he and other co-owners had entered into a registered development agreement dated 08.03.2000 with a developer for a lump sum consideration of Rs.66,00,000/-, fully paid by cheque. The agreement was registered, and a general Power of Attorney (POA) was executed in favour of the developer. It was argued that this amounted to “transfer” under Section 2(47)(v) and (vi) of the Act, and the assessee had relinquished his 1/12th share in 2000. The capital gain was offered in AY 2000-01, and exemption under Section 54EA was claimed.
