Decided on November 14,2014

Dilip Anand Vazirani Appellant


B.R.Baskaran, Member (A) - (1.) THE appeal filed by the assessee is directed against the order dated 29 -03 -2012 passed by Ld. CIT (A) -29, Mumbai and it relates to the assessment year 2001 -02.
(2.) THE issues urged before us is whether the Ld. CIT (A) was justified in law in confirming that the capital gain is assessable in the assessment year 2001 -02 and if the answer to the above question is Yes, then, whether the computation of capital gain approved by Ld. CIT(A) is correct in law. The facts relating to the case are stated in brief. We shall first narrate the events as to how the assessee acquired the property. The father of the assessee named Shri Anand Vazirani was originally habitant of Pakistan and he owned certain land there. Pursuant to Indo -Pakistan partition, Shri Anand Vazirani migrated to India along with his family members during 1947 and left his property in Pakistan. In 1954, he applied for compensation and allotment of any evacuee's property under the "The Displaced Persons (Claim and Rehabilitation) Act, 1954. The said application was not processed till 1989 and hence he wrote two letters to Settlement Commission. Thereafter, he filed a writ petition before Hon'ble High Court of Bombay and the High Court, vide its order dated 22.11.1989, directed the Settlement Commission to allot property at 21 Bund Garden Road, Pune to set off the value payable to Mr. Anand Vzirani. On 30 -5 -1990, the Central Government also directed the Maharashtra Government to allot property. Pending allotment, Shri Anand Vazirani passed away on 30 -03 -1992. There after, the assessee herein pursued the matter by making several applications, petition etc to the Settlement Commission and the Government of Maharashtra. On 08 -9 -994 & 01.7.1995, the Settlement Commission passed orders against the assessee on the reasoning that the land value was higher than the compensation amount. Upon the writ petition filed by the assessee, Hon'ble High Court quashed the order of the Settlement Commission on 24.4.1996. Again, the Settlement Commission dismissed the case. Again the assessee filed Writ petition before Hon'ble High Court in 1997 and the High Court, vide its order dated 13.8.1998, directed the Settlement Commission to allot property to the legal heirs of Shri Anand Vazirani on payment of differential amount as compensation. The Settlement Commission filed SLP before Hon'ble Supreme Court and on 19.4.1999, the said SLP was dismissed by the Apex Court. The review petition filed by the Settlement Commission was dismissed by the Hon'ble Supreme Court on 18.8.1999. The assessee paid the differential amount on 1.4.2000 & 4.4.2000. Finally, the Settlement Commission passed final order in favour of the legal heirs on 24.4.2000 and the possession letter was given on 15.5.2000.
(3.) IN the mean time, the assessee also took steps to sell the property and the events relating thereto are narrated here under. The assessee entered into a Memorandum of Understanding (MOU) on 05 -08 -1994 with M/s. Radiant Builder for development of property. According to the assessee a right was created in the favour of him and other legal heirs in respect of the impugned property, by the order passed by Hon'ble High Court in 1989 and hence he entered into a MOU to develop the property. Subsequently, the assessee entered into another MOU with M/s. Murali Realtors on 26.12.1995 & 17.5.1996 and a Deed of Confirmation was also executed on 13.11.1997. Thereafter the assessee also applied to the Income tax department seeking clearance u/s. 269UL and the Income tax department also issued a certificate on 15.9.1998. There after, the assessee executed supplementary MOU on 29.3.2000 and the development agreement was executed on 25.9.2000 with M/s. Murali Realtors. Thereafter, on 10.2.2001 the assessee cancelled the MOU entered with M/s. Radiant Builder earlier in 1994. Between 2000 to 2005, the assessee purchased the tenancy rights of various tenants. In 2005, the assessee received substantial payments from M/s. Murli Realtors and the possession was handed over. Finally the assessee executed sale deed on 19.5.2007 in favour of M/s. Murali Realtors. According to the assessee, since the substantial amount was received and the possession was also handed over by March 2005, the Capital gain was offered in the assessment year 2005 -06. The legal heirs of Mr. Anand Vazirani were the assessee herein, his mother and his sister. The assessee's mother died in between and his sister executed release deed in favour of the assessee. Accordingly the assessee herein became the full owner of the property.;

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