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2018 (9) TMI 111 - HC - Income TaxRevision u/s 263 - capital gain addition - Held that:- It was only after the apportionment of the areas upon the construction on the land being completed that the developer could have rightfully retained possession of the developer’s 61% share and resisted dispossession by discharging his obligation under the agreement and seeking refuge in terms of Section 53A of the Act of 1882 despite the formal conveyance pertaining to the developer’s entitlement not having being executed. In any view of the matter, the right of the developer to retain possession and protect such possession under Section 53A of the Act of 1882 could never have arisen prior to the construction being completed and the apportionment effected. There is also a minor matter of the opening words of Section 45 of the Act of 1961 being given some effect while reading such provision. In terms of Section 45(1) of the Act, the expression “chargeable to income tax under the head "Capital gains”, operates on “Any profits or gains arising from the transfer of a capital asset …”. There can be no tax payable unless there is any profit or gain that has arisen. It could never have been the Revenue’s case that there was any monitory profit or gain that accrued to the assessee at the time of the execution of the agreement of February 7, 2007. In the light of the discussion above, the first ground urged by the Revenue does not appeal and the order of the Appellate Tribunal does not call for any interference as it set aside the erroneous view taken by the Commissioner in the order passed under Section 263 of the Act. Claim of depreciation - whether the land had to be regarded as a current asset which could be dealt with by the assessee in its usual course of business or it had to be treated as a fixed asset of the assessee, probably deriving income - Held that:- CIT (Appeals) passed an order on such aspect of the matter on August 20, 2010 and on September 8, 2011 the Tribunal passed its order, holding that the immovable property had to be regarded as a fixed asset of the assessee and depreciation calculated accordingly. Since such issue in respect of the same immovable property had been conclusively dealt with in orders passed by authorities superior to the Commissioner, the Commissioner, in exercise of his powers u/s 263could not have reop ened the same issue. It was a closed chapter and the Assessing Officer’s acceptance of the quantum of depreciation based upon the assessee’s representation that such asset had to be treated as the assessee’s fixed asset could not have been questioned.
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