TMI Blog2011 (10) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... th Atul K. Jasani for the appellant. Mr. D.A. Athawale for the respondent. JUGMENT (PER J.P. DEVADHAR, J.) 1. Heard. The appeal is admitted on the following (re-framed) question of law :- Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in upholding the penalty of Rs. 3,44,40,616/- levied on the appellant under Section 271(1)(c) of the Income Tax Ac t, 1961 ? 2. By consent of the parties, the appeal is taken up for final hearing. 3. The assessment year involved herein is AY 2002-03. 4. The relevant facts are that on 24/8/2001 the assessee had entered into a Memorandum of Understanding (MoU) with M/s. Maitri Associates for development of its property. Thereafter, a formal land development agreement was entered into by and between the parties on 21/3/2002. As per the MOU and the land development agreement, the assessee was to receive Rs.6 crores upfront and balance in the form of 40% of sale proceeds to be received on construction and sale of the flats. 5. In the audited profit and loss account, the balance sheet and the audit report dated 28/10/2002, relating to AY 2002-03, the receipt of Rs.6 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioners, who opined that the capital gains would be taxable not in AY 2002-03 but in AY 2006-07, 2007-08 and 2008-09 depending upon the actual date of sale of individual flats. 11. Thereafter, the assessing officer contrary to his earlier show cause notice, issued a fresh show cause notice on 24/12/2008 seeking to tax the amounts received by the assessee as 'business income' in the respective years of receipt. 12. The assessing officer issued yet another show cause notice on 26/12/2008 seeking to tax Rs.6 crores under the head 'capital gain' in AY 2002-03 and the balance as 'income from other sources' in the respective years of receipt. 13. In these circumstances, the assessee as per the second legal opinion obtained from the leading tax practitioners once again filed revised return on 26/12/2008, wherein the income was offered to tax in AY 2006-07, 2007-08 and 2008-09 and the capital gain offered in AY 2002-03 was withdrawn. 14. Contrary to the show cause notice dated 26/12/2008, the assessing officer passed the assessment order for AY 2002-03 on 31/12/2008, wherein the total consideration of Rs.43,88,87,617/- received by the assessee during the period 2002 to 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich heading the income were to be taxed. Moreover, on the date of filing of the original return on 31/10/2002 there was a Mumbai Bench decision in the case of DCIT V/s. Asian Distributors Ltd. reported in [2001] 70 TTJ (Mumbai) 88, wherein it was held that if the property development agreement contains a clause that possession of the property would be given to the developer only upon payment of the last instalment, then, even if licence to enter upon the land is given to the developer, there would be no transfer of the property under Section 2(47)(v) of the Act and capital gains would be taxable only on receipt of the last instalment under the agreement. In the present case, the assessee has disclosed all material facts and the capital gain was offered to tax in the subsequent years on receipt of the sale proceeds and, therefore, no fault could be found with the assessee. The decision of this Court in the case of Chaturbhuj Dwarkadas Kapadia V/s. CIT reported in [2003] 260 ITR 491 (Bom) was delivered on 13/2/2003 which is after the filing of the original return of income for AY 2002-03 on 31/10/2002. As per the said decision the capital gain was taxable in 2002-03. However, the rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crores was disclosed in the original return of income as advance receipt under the development agreement entered into with the developer, the assessee cannot be said to have concealed income or furnished inaccurate particulars of income. 22. The argument of the revenue that even after the decision of this Court in the case of Chaturbhuj Kapadia (supra) the assessee could have revised the return of income for AY 2002-03 is without any merit, because, firstly, even after laying down the law, this Court in the case of Chaturbhuj Kapadia (supra) allowed the claim of the assessee therein in view of the decisions prevailing prior to the said decision. Thus, the said decision was not to affect the transaction concluded prior to the decision. Secondly, the revenue itself was aggrieved by the said decision of this Court and had filed S.L.P. challenging the said decision which was ultimately dismissed on 6/2/2004. Thus, the argument of the revenue that in the light of the judgment of this Court in the case of Chaturbhuj Kapadia (supra) the assessee ought to have revised the return of income for AY 2002-03 cannot be accepted. 23. Moreover, in the present case, the assessing officer h ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
