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2015 (7) TMI 72 - ITAT HYDERABAD

2015 (7) TMI 72 - ITAT HYDERABAD - TMI - Revision u/s 263 - order has been passed by the Ld. CIT under section 263 without considering the explanation offered by the assessee - Registration of Development Agreement - Explanation w.r.t Exemption u/s 54F - Held that:- On the basis of this explanation offered in respect of each and every issue, it was contended on behalf of the assessee before the Ld. CIT that it was not the case of assessments having been completed by the A.O. without making prope .....

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inted out specifically even a single enquiry which A.O. ought to have made in the facts and circumstances of the case but has failed to do. We, therefore, fully agree with the stand of the assessee that the impugned order has been passed by the Ld. CIT under section 263 without considering the explanation offered by the assessee and without applying his mind. In our opinion, this failure of the Ld. CIT, however, does not constitute any legal infirmity to make the order passed by him under sectio .....

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e Ld. CIT(A) shall pass well discussed and well reasoned order after giving proper and sufficient opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes. - ITA Nos.1075 to 1077/Hyd/2014 - Dated:- 17-6-2015 - Shri B. Ramakotaiah & Smt.Asha Vijayaraghavan, JJ. For the Petitioner : Shri Sanjay Kumar For the Respondent: Shri B.V. Gopinath ORDER Per Smt. Asha Vijayaraghavan, J.M. This appeal is preferred by the assessee against the order of the CIT (C .....

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course of search, certain documents were found and seized relating to the assessee. Accordingly notice u/s 153C was issued to the assessee. 4. The facts are as follows: A.Y 2005-06 5. Assessee along with fiver others executed a Development Agreement cum GPA on 01-06-2004 for development of 2915 Sq Yds. (3085 Sq Yds. Minus 175 Sq Yds. Surrendered to Municipality) of land at Begumpet, Hyderabad. Out of this land, the assessee's share works out to 659 Sq Yds. As per the agreement cum GPA for f .....

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s the date of Development Agreement cum GPA was on 1.6.2004 (FY 2004-05) relevant of A.Y 2005-06), there was transfer during A.Y 2005-06 and capital gains needs to be taxed in A.Y 2005-06. This fact has not been verified during assessment proceedings. AY 2006-07 6. From the computation of the assessee for the AY 2006-07, an amount of ₹ 34,77,500/- (Calculated @650 per Sq Foot cost of construction x 5350 Sq feet area received) was shown as received for surrendering 362.55 Sq. Yds of land to .....

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assessee. However, the assessment was completed by adopting the amount offered by the assessee. This fact has not been verified during the assessment proceedings. A. Y.2007-08 7. The assessee was allowed exemption u/s 54F for an amount of ₹ 13,91,000/- in respect of Flat No. 205 in the FY 2004-05. This Flat No. 205 was subsequently gifted by the assessee to Srnt. Kiran Gupta on 20-02-2007 which indicate that the assessee did not hold the property for the period prescribed u/s 54F. Conseque .....

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sessment orders passed for the aforementioned assessment years shall not be revised u/s.263 of the LT.Act. In response to the notices the Authorised Representative of the assessee filed written submissions as under: A.Y 2005-06 9. Assessees's submission dated 24.03.2014 - Registration of Development Agreement: You may note that the endorsement of registration behind the development agreement (as per the seized material on page 352 of Annexure A/EBPL/OFF/01) is very much there. This informati .....

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53C dated 826.12.2011 is correct. (ii) A.Y.2006-07 10. Assessees's submission dated 24.03.2014 Registration of Development Agreement: You may note that the endorsement of registration behind the development agreement (as per the seized material on page 352 of Annexure A/EBPL/OFF/01) is very much there. This information was very much available and constdered by A.O already. Explanation with respect to rate adopted for transfer of Land: With regard to your calculation in the notice, on the bas .....

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g 104.18 (Balancing figure) Rs.15,09,000 You may note thet; after construction the land is only an undivided portion and the sale is always made not on what land comes as undivided shsre, but on the basis of oudt-up area. Hence, just for giving the break-up as requested by the department; the cost of building was taken on the basis of Construction cost No one would sell a building at cost of construction. The flat was sold for ₹ 1355.14/- per sft (Rs. 1355.14/per sq.ft (Rs.1355.14 *2140 SF .....

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actually computed is on the basis of cost of construction (5350 sq. ft* ₹ 650/- per sqft) of buht-up area developed and received by the assessee in exchange of land given for development. All these facts have been considered by the A. 0 and have been clarified already and all the above workings were given in detail. (iii) A. Y.2007-08 11. Assessee s submission dated 24.03.2014 Registration of Development Agreement: You may note that the endorsement of registration behind the development ag .....

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et Hence/ the flat being gifted to assessee's wife is not "trenster" and the exemption claimed for the same holds good. This is only a family srrsnqement and does not constitute sale of capital asset Explanation w.r.t revision u/s 263 of I. TAct; 1961: In this regard we would like to affirm that all the above facts were considered by the A.O in past for which explanations were sought by him. We had provided valid explenettons for all the queries raised and they were considered by t .....

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g Officer fails to make the necessary enquiries which he is legally required to make and decide the issues without making such enquiries then the order of the Assessing Officer would be erroneous in Law. This was so held in the case of Desai Brothers Ltd. Vs. DCIT, Pune Tribunal. Similar view was also taken by many other Tribunals and High Courts wherein it was held that on failure of Assessing Officer to make enquiry as expected, Commissioner was justified in invoking provision of Section 263 b .....

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d that in the circumstances of the case, the A.O. should have made further enquiries before accepting the statements made by the assessee in his return. It is incumbent on the A.O. to investigate the facts stated in the return when circumstances would make such an enquiry prudent. The word erroneous in 5ec.263 of Income-tax Act, 1961 includes cases where there has been failure to make necessary enquiries. Considering the above, the order passed by Assessing Officer without examining the issues n .....

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he assessments as per the directions above . 13. Aggrieved, assessee has filed appeal before us for A.Ys 2005-06 to 2007-08. 14. We heard both the parties and perused the material on record. We find that the Coordinate Bench of the Hyderabad Bench has decided similar issue in the case of Mr. Pramod Kumar Gupta, Hyderabad in ITA No.1102 & 1103/Hyd/2014 vide order dated 20th February, 2015. The relevant portion at Para 7 is reproduced below: 7. As is clearly evident from the common ground rais .....

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of assessment proceedings. In reply to the said notices, a detailed submission was filed by the assessee explaining as to how the issues raised by the Ld. CIT in the notices issued under section 263 were not relevant for the purpose of completing the assessments in the case of the assessee for all the four years under consideration. On the basis of this explanation offered in respect of each and every issue, it was contended on behalf of the assessee before the Ld. CIT that it was not the case .....

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s were required in the facts and circumstances of the case. He has not pointed out specifically even a single enquiry which A.O. ought to have made in the facts and circumstances of the case but has failed to do. We, therefore, fully agree with the stand of the assessee that the impugned order has been passed by the Ld. CIT under section 263 without considering the explanation offered by the assessee and without applying his mind. In our opinion, this failure of the Ld. CIT, however, does not co .....

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by the assessee and after applying his mind. Needless to observe that the Ld. CIT(A) shall pass well discussed and well reasoned order after giving proper and sufficient opportunity of being heard to the assessee. 15. Respectfully following the Coordinate Bench Decision, the appeals of assessee are treated as allowed for statistical purposes. Sd/- (Asha Vijayaraghavan) Judicial Member ITA Nos.1075 to 1077/Hyd/2014 (Assessment years: 2005-06 to 2007-08) I do not agree with my sister s draft orde .....

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