KUNHAYSU Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) These appeals filed by the assessees are directed against the order of the Income Tax Appellate Tribunal, Cochin Bench in ITA No.184/Coch/2012 and connected cases, which in turn were directed against the orders of the Commissioner of Income Tax (Appeals) - I, Kochi arising out of the assessment orders passed for the assessment years 2008-2009 and 2009-10.

(2.) The appellants were joint owners of a plot of land having an extent of 222.93 cents in R.S.No.45/3 of Kottakkal Amsom Desom and they sold it to Sri.Abdu Haji, who constructed on it a commercial complex by name "Smart Trade City". Subsequently, on 9/7/2008, the Department carried out search and seizure operations in the case of M/s.Smart Trade City, during the course of which, sale agreement dated 13/1/2006 entered into between the appellants and Sri.Abdu Haji for the sale of the property mentioned above was seized. The agreement revealed that the property was agreed to be sold at a sale consideration of Rs. 3,27,500/- per cent and the aggregate sale consideration worked out Rs. 7,30,09,575/- which was to be paid within 1-1= years after measurement of the property. However, in the sale deeds that were executed in respect of the property, the sale consideration declared was only Rs. 99,95,000/-.

(3.) In view of the above, the assessing officer initiated proceedings against the assessees under Section 153C of the Act and accordingly notices were issued and the assessees filed returns of income, claiming exemption of capital gains arising on sale of the land on the ground that the land is an agricultural land. This contention was rejected and adopting Rs. 3,27,500/- per cent as the sale consideration, the assessing officer computed the long term capital gain. For this purpose, the assessing officer adopted the market value as on 01/04/1981 as the cost of land which was determined at Rs. 100/- per cent.Accordingly, long term capital gain was computed at Rs. 7,28,86,741/- and this was allocated among the assessees in proportion to the rights held by them and was assessed in the assessment year 2008-09.