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2015 (5) TMI 536 - AT - Income TaxRevision u/s 263 - levy of tax on capital gains pursuant to the development agreement - Held that:- In the present case, AO has not at all examined the issue, though, materials relating to entering into the development agreement are available on record. Therefore, there being failure on the part of AO to conduct enquiry and examine the issue or otherwise apply his mind to facts and materials on record, assessment order is erroneous and prejudicial to the interests of the revenue, thereby amenable to the jurisdiction u/s 263 of the Act. However CIT was not justified in straightaway directing AO to compute capital gain on transfer of land to the developer as per the development agreement. As before coming to conclusion that there is a transfer in terms of section 2(47)(v) various factors as indicated hereinbefore, need to be examined. Assessee’s claim that there was dispute between the parties and developer was not willing to carry out development work requires examination on the basis of evidence produced by assessee. Further, AO is required to examine assessee’s claim that he is no more owner of the property as it was sold to his wife by registered agreement of sale on 04/04/06. AO also is required to determine the year of taxability considering the claim of assessee that capital gain on transfer of land to the builder was offered by the land owners in A.Y. 2011-12 upon cancellation of development agreement and execution of sale deed. Thus we uphold the exercise of jurisdiction u/s 263 by ld. CIT, but, we modify his order by directing AO to examine the issue of accrual of capital gain in the impugned AY, independently, without being influenced by any of the observations of ld. CIT. AO must decide the issue considering all facts and materials on record as well as the submissions of assessee - Decided partly in favour of assessee for statistical purposes
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