×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
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25-10-2019, Sri M. Nagaraju, Section 2(47), 148, 2(47)(v), Tribunal Bangalore
This appeal is filed by the revenue and the C.O. is filed by the assessee and these are directed against the order of ld. CIT(A)-5, Bangalore dated 30.11.2015 for
Assessment Year 2006-07. In course of hearing, it was submitted by ld. AR of assessee that the C.O. filed by the assessee is not pressed and hence, the C.O. filed by the assessee is dismissed as not pressed.
2. In the appeal filed by the revenue, following grounds are filed by the revenue.
“1. The order of the Commissioner of Income Tax (Appeals)-5, Bangalore, is opposed to the law and not on the facts and circumstances of the case.
2. On the facts and circumstances of the case, the CIT(A) erred in law in allowing the appeal of the assessee even after agreeing to the fact that there was no transfer of land. It is practically impossible for the builder to enter land, get all the approvals and start construction unless and until the possession is handed over to it.
3. On the facts and circumstances of the case, the CIT(A) erred in law in ignoring to consider the ratio of judgements in CIT Vs High Court of Karnataka and Chiturbhuj Dwarkadas Kapadia Vs CIT of Bombay High Court and erred in holding that these cases are not applicable to the facts to this case.
4. For these and other grounds that may be urged upon, the order of the CIT(A) may be reversed and that assessment order be restored.
5. The appellant craves leave to add, alter, ament of delete any other grounds on or before hearing of the appeal.”
3. The revenue has also filed additional grounds which are as under.
“a. The order of the Ld CIT(A)-5, BANGALORE 5, Bangalore in so far as it is prejudicial to the interest of revenue, is opposed to the law and the facts and circumstances of the case
b. Whether in the facts and circumstances of the case the learned CIT(A) was right in not considering the fact that nothing prevented the assessee to get the property registered in the firm' s name after conversion if it was the asset of the firm?
c. Whether in the facts and circumstance of the case the learned CIT(A) was right in not considering the fact that the Joint development agreement dated 04-04-2005, categorically states that the owner of the land at question is the assessee and not the firm? Here again the other persons included in the JDA are only the confirming parties and there are no reason mentioned in the document as to why they are the confirming parties.
d. Whether in the facts and circumstance of the case the learned CIT(A) was right in not considering the para no.5 of the sale deed dated 19-01- 2006, wherein the assessee confirms that he is the vendor and assures the purchaser that he is the absolute owner of the schedule site and that except him there are no others, who have got any kind of right, title, share or interest, whatsoever over the schedule site?”
4. The relevant brief facts are that it is noted by the AO in the assessment order that Investigation Wing, Bangalore forwarded information that the present assessee had executed a Joint Development Agreement with a builder / developer M/s. Ajmera Housing Corporation, Bangalore jointly with his wife Smt. N. Lakshmi and Son Sri N. Abhilash as ‘owners’ and 9 others as ‘confirming parties’ in respect of land measuring 7 Acres 05 guntas. It is noted by the AO on page no. 2 of the assessment order that this JDA was registered on 04.04.2005 and as per the agreement, the assessee received refundable deposit of Rs. 795 Lakhs. He has further noted that as per the terms of agreement, in consideration of the assessee agreeing to transfer undivided share of 69.5% in the said land, the builder agreed to construct and deliver 30.50% of super-builtup area in the form of apartments along with similar percentage of car parking and other benefits in the constructed area. TheAO computed the capital in the hands of the present assessee in Assessment Year 2006-07. The AO further noted that in the return of income filed by the assessee for this year on 26.03.2007, no capital gain was offered by the assessee in the said return and therefore, the AO issued the notice u/s. 148 and it was replied that the return earlier filed may be treated as the return filed in response to notice u/s. 148. It is noted by the AO in para 13 of the assessment order that in course of assessment proceedings, it was claimed before him that the land which is covered in JDA is relating to the firm M/s Neeladri Developers in which all the persons covered in the JDA are partners. He has further noted that in this connection, the assessee has filed written submissions which is reproduced by the AO. Thereafter in para 14 of the assessment order it is noted by the AO that the land in question was originally purchased in the individual name of Sri M Nagaraju. He has further noted that the said land was introduced as a business asset in the books of the firm M/s Neeladri Developers. But it is further noted by the AO that there is no mention about the fact that the land belongs to the firm at the time of entering into JDA. The AO has also observed that if the flats are received consequent to JDA by firm, the firm ought to have declared such income in the return of income. M/s Neeladri Developers has not filed any return of income from Assessment Year 2007-08 onwards. The AO has further noted that in Financial Year 2011-12, the assessee has admitted capital gain for few of the flats received consequent on JDA and based on this discussion, the AO computed the capital gain of Rs. 20,11,94,074/- and taxed the same in the hands of the present assessee in the present year. Being aggrieved theassessee carried the matter in appeal before ld. CIT(A). The ld. CIT(A) held