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2021 (7) TMI 492 - AT - Income TaxReopening of assessment u/s 147 - capital gain on JDA transfer in the relevant assessment year - Transfer of capital asset u/s 2(47)((v) - capital gain tax in the year in which JDA is entered into - date of execution of Joint Development Agreement and G.P.A without HELD THAT:- In this case, originally there was no assessment u/s. 143(3) of the Act and reopening was made within four years from the end of relevant assessment year and the AO validly recorded reasons for reopening the assessment as recorded above. At the time of reopening, there need not be conclusive evidence for reopening an assessment. U/s 147 of the Act, reason to believe that income has escaped assessment confers jurisdiction to reopen the assessment where the case is not covered by the provisions of section 143. Intimation u/s. 143(1) cannot be treated as an order of assessment and there being no assessment u/s. 143(3), there is no question of change of opinion on the issue dealt by the AO for reopening the assessment. As AO has reason to believe that income had escaped assessment. It does not mean that there should have been final ascertainment about the fact by legal evidence and conclusion. We are of the opinion that the AO had reason to believe that income has escaped assessment and he duly recorded the reasons on this count. Being so, as held in the case of Rajesh Jhaveri v. ACIT, [2005 (3) TMI 55 - GUJARAT HIGH COURT] we uphold the reassessment. Capital gain on JDA - Transfer u/s 2(47) - AO sought to bring capital gain only on the reason that the assessee entered into JDA with the Developer. But there was no progress in the development in the assessment year under consideration. It was the submission of the ld. AR that there was no development activity until the end of FY 2006-07. Commencment of building construction has not been initiated a the building approval was obtained in the next financial year. Therefore, no income is said to have accrued as laid down in section 48 of the Act. Nothing is brought on record by the AO to show that there was development activity in the impugned land during the assessment year under consideration and cost of construction incurred by the developer was not known. Therefore, it is to be inferred that there was no construction activity by the developer during the assessment year in this land. The assessee only received a meagre amount of refundable deposit during the financial year as enumerated in clause 13 of the JDA. Being so, there was no transfer of property under this JDA. Also without accrual of construction to the assessee, assessee was not expected to pay capital gain on the JDA entered by the assessee with the developer. The condition laid down in section 2(47)(v) of the Act r.w.s. 53A of the Transfer of Property Act is not complied with as there was no willingness of the developer to perform his part of the duty in terms of the JDA. Accordingly it is held that there was no transfer for the assessment year under consideration as held by the Hon’ble Supreme Court in the case of Seshasayee Steels P Ltd.[2019 (12) TMI 702 - SUPREME COURT]. Accordingly, we hold that there was no transfer in AY 2007-08. Grant of exemption u/s. 54/54F - grievance of the assessee is that the AO has granted deduction u/s. 54/54F only on single flat and assessee claimed exemption on two flats built up on two different floors - HELD THAT:- This issue is covered by the Hon’ble jurisdictional High Court in the case of Arun K. Thiagarajan[2020 (6) TMI 513 - KARNATAKA HIGH COURT] the assessee is entitled to deduction u/s. 54/54F on two flats in principle, though they are in different floors, provided it satisfies all the conditions laid down in section 54/54F. Accordingly, this issue is remitted back to the file of AO fresh consideration, after giving opportunity of being heard to the assessee.
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