J. Sudhakar Reddy, A.M. - (1.) ALL these appeals filed by the assessees are directed against the orders of the CIT(A), dt. 4th May, 1999 (ITA Nos. 573 to 576/Hyd/1999) and 5th Nov., 2002 (ITA Nos. 948 to 951/Hyd/2002) and relate to asst. yr. 1995-96. Though these appeals relate to different assessees, the issues are common. For the sake of convenience, these appeals are heard together and disposed of by this common order.
(2.) ITA Nos. 573 to 576/Hyd/1999 are filed against the original assessment orders passed by the AO under Section 143(3) and ITA Nos. 948 to 951/Hyd/2002 are filed against reassessment orders passed for the same assessment year. The brief facts of the case are as follows. Late Shri B. Paparaju was one of the co-owners of an immovable property admeasuring 36 grounds and 1,703 sq.ft., along with a building known as "Dinrose Estate" situated at Nos. 73 to 76, Anna Salai, Chennai. This property had been acquired on 24th Feb., 1979, by late Shri B.V. Gopalakrishna, father of Shri B. Papa Raju, for a consideration of Rs. 11,50,000. Shri B.V. Gopalakrishna died on 28th April, 1980. The property got devolved on late Shri B. Paparaju, his brother, Shri B.V. Raju, Smt. Radhamma and Smt. Y. Rajyalakshmi. The share of Shri B.V. Raju was further divided between himself and his two sons, Shri B.V. Krishna Jayant and Shri B.V. Naveen Krishna. The assessees before us were four of the co-owners of the property. The property was held jointly. It was stated that they were trying to dispose of the property and that the Department of Telecommunications published an advertisement for purchase of land in or around Anna Salai on 7th Feb., 1993, and also on 20th Feb., 1994. The co-owners of the property were residents of Hyderabad. They entered into a memorandum of understanding with M/s Sri Ram Vilas Services Ltd. and M/s Amalgamations Ltd., on 22nd May, 1994, for relinquishing the tenancy rights and handing over vacant possession of the property. Accordingly, an amount of Rs. 1,30,000 was paid to M/s Sri Ram Vilas Services Ltd. and Rs. 2,60,000 was paid to M/s Amalgamations Ltd. for relinquishment of tenancy rights. Shri B.V. Gopalakrishna, while purchasing the property from one Shri J.D. Italia, had not paid the entire sale consideration and the balance part of the sale consideration had to be paid by the legal heirs. Shri B.V. Gopalakrishna had also taken a loan from M/s Indian Bank and the loan was outstanding. One of the tenants, M/s Sri Ram Vilas Services Ltd., had advanced an amount of Rs. 50,00,000 to the assessees to enable them to repay the loan and obtain the title deed from the bank. The loan was given at an interest rate of 18 per cent per annum.
(3.) ONE company by name Tele Data Informatics Ltd. of Chennai, was approached by the assessees for arranging transaction for purchase of the property by the Department of Telecommunications as M/s Tele Data Informatics Ltd. had been regularly undertaking some work with the Department of Telecommunications and as they enjoyed a reputation and acquaintance with the Department. As a result of the services rendered, the co-owners had entered into an agreement of sale on 26th Oct., 1994, with the Department of Telecommunications. As per the agreement of sale, the vendee had to pay the vendors consideration at the rate of Rs. 22,75,000 per ground of 2,400 sq.ft. In the said agreement, payments that had to be made to the tenants, M/s Sri Ram Vilas Services Ltd. and M/s Amalgamations Ltd., for surrendering their tenancy rights were mentioned. The gross sale consideration amounted to Rs. 8,19,00,000. It was claimed that the co-owners had incurred expenditure on payment of compensation to the tenants (direct payments by the Department of Telecommunications to the tenants as per the agreement), expenditure on demolition, payment of brokerage to the agent and interest to the tenants for the late payment of compensation as well as interest payment to Indian Bank on the loan, and interest payment to Shri J.D. Italia.;