TMI Blog2013 (1) TMI 546X X X X Extracts X X X X X X X X Extracts X X X X ..... in favour of new vendee in 1995, no substantial question of law arises for our consideration. This Court is in agreement with the above reasoning as in the present case, the Petitioner had acquired right to a specific plot, furthermore, the interest was in the nature of an actionable claim, which could be asserted in a legal proceeding. The tax authorities had issued a no objection certificate in respect of the transaction. In these circumstances, the reporting of the amount received as capital gains was correct. Moreover, Calcutta Discount Ltd. vs. ITO, (1960 (11) TMI 8 - SUPREME COURT) is an authority for the proposition that as long as the assessee makes a full and true disclosure of the income, the fact that it might claim that as falling under one head which is ultimately not accepted, would not make it a wrong disclosure, or suppression. The question as to the proper assessability of any amount, to income tax falls within the domain of the tax adjudicator - writ petition is entitled to succeed & the reassessment proceedings are hereby quashed - in favour of assessee. - W.P.(C) 4350/2012, C.M. APPL. 9016/2012 - - - Dated:- 17-1-2013 - MR. S. RAVINDRA BHAT AND MR. R.V. E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. on 02.09.2010. The petitioner wrote a letter to Respondent No.1 on 21.09.2010 bringing to its notice that it had received the notice u/s 148 only on 02.09.2010 and sought reasons for the delay in sending notice and reasons for reopening the case. In its letter dated 08.10.2010, the first respondent did not furnish any reasons for the delay in serving of notice and reopening of the case but merely stated that the petitioner should comply with its notice and file its return for the assessment year 2006-2007. The petitioner, therefore, furnished the return filed for the assessment year 2006-07 and also asked for the reasons for re-opening assessment. The first respondent reproduced some clauses of the MoU as reasons for reopening the case. On 02.12.2010 the petitioner, on receipt of the reasons for re-opening, filed its objection and stated that the proceedings under section 148 were initiated merely on a change of opinion and were, therefore, bad in law. 5. On 14.12.2010 the first respondent passed an order stating that the income of Rs.5,05,00,000/- earned by the petitioner on account of transfer of capital asset was income from other sources and not capital gains . The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n into any wearing apparel;] (iii) agricultural land in India, not being land situate - (a) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the last preceding census of which the relevant figures have been published before the first day of the previous year; or (b) in any area within such distance, not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a), as the Central Government may, having regard to the extent of, and scope for, urbanisation of that area and other relevant considerations, specify in this behalf by notification in the Official Gazette; (iv) 6 per cent Gold Bonds, 1977, or 7 per cent Gold Bonds, 1980 or National Defence Gold Bonds, 1980, issued by the Central Government; (v) Special Bearer Bonds, 1991, issued by the Central Government; [(vi) Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 notified by the Central Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ying for treatment of the amount received as capital gain. In the absence of any definite right to own property, the petitioner could not claim ownership of any immovable property, or for that matter, any property. Counsel relied on the terms of the MoU, to say that the vendor had never promised to part nor indeed parted with the title to any particular property. The amount which passed hands was only towards property that was to be conveyed in the future. That surely could not be treated as ownership of property. In these circumstances, it was necessary for the petitioner to properly disclose the total amount received, and report it as income from other sources, where it was properly assessable. The respondents contended that the amount was invested for the purpose of earning interest. The omission to so show it in the returns, entitled the Assessing Officer to treat the disclosure as wrongly made, and issue notice under Section 148 of the Act. 9. The Assessing Officer in this case held that the sum of Rs. 5,05,00,000/- reported by the petitioner was income from other sources and not long term capital gains . The AO proceeded on the premise that since there was no sale deed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 03.02.1997 was rightly assessed under Income from other Sources and not Capital Gains . To support its argument that no ownership right was vested with the petitioner, the Revenue Department relied on some of the clauses in the MoU. 12. In the present case, the undeniable facts are that the petitioner paid Rs. 68 lakhs, at the time of entering into the MoU, i.e the Agreement for Sale. That transaction was reported to the revenue; a no objection certificate was issued. No doubt, the MOU did not assign a particular defined plot of land. A supplementary deed was later entered into, and the petitioner was consequently allotted plot no. A-1. The revenue relies on the following clauses: 2. The allotment shall be done by Keventers/DPD and allotment letter issued only if the Intending Allottee has already paid a sum of Rs. 1.80 crores to Keventers/DPD in terms of Clause 4(1)(a) below. 3. Para 3 It is clarified that this MOU shall not be, or deemed to be, an allotment, sale or transfer (including under the Transfer of Property Act or any of the Acts in force) and the eventual allotment/sale shall be subject to, inter alia, receipt by Keventers/DPD of full payments. xxxxxx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmity in the impugned order passed by the Tribunal and since it is a finding of fact given by the Tribunal that the assessee acquired right in the property at the time of execution of first agreement in the year 1990 and had relinquished his rights in favour of new vendee in 1995, no substantial question of law arises for our consideration. 14. This Court is in agreement with the above reasoning. That apart, in the present case, the Petitioner had acquired right to a specific plot; furthermore, the interest was in the nature of an actionable claim, which could be asserted in a legal proceeding. The tax authorities had issued a no objection certificate in respect of the transaction. In these circumstances, the reporting of the amount received as capital gains was correct. Moreover, Calcutta Discount Ltd. vs. ITO, 1961 (41) ITR 191 (SC) is an authority for the proposition that as long as the assessee makes a full and true disclosure of the income, the fact that it might claim that as falling under one head which is ultimately not accepted, would not make it a wrong disclosure, or suppression. The question as to the proper assessability of any amount, to income tax falls within the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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