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TMI Blog2015 (10) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006 entered into between the assessee and Wing commander Santosh Kumar Sharma, the developer in respect of certain lands owned by the assessee comprising of 22 guntas situated at Survey Nos.372 & 373, Kalkere village, K.R. Puram Hobli, Bangalore. A GPA dt.18.1.2006 was executed by the assessee, empowering the developer to take possession and do such acts and deeds as required by the JDA. It was observed that in this regard the assessee computed LTCG of Rs. 11,92,150, wherein the assessee claimed to have invested Rs. 1,15,89,600 in the development of the said property and included the same in the cost of acquisition/construction of the transferred property. In addition thereto, the assessee also claimed to have invested Rs. 1,99,14,953 in the purchase of land and construction of a residential house and claimed exemption in this regard under Section 54 of the Act. 2.2 The Assessing Officer observed that in order to verify the claims of the assessee, a survey under Section 133A of the Act was conducted on 20.1.2010, in the course of which it was found that the assessee has not made investments of the sale proceeds of the flats in purchase of land and construction of residential prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Assessment Year 2006-07, in view of the JDA and GPA dt.18.1.2006 as required under Section 2(47)(v) of the Act r.w.s. 53A of T.P. Act. 4. The learned CIT (Appeals) V, Bangalore has erred in holding that the appellant has not received any refundable/non-refundable deposit without appreciating the facts that the appellant had received refundable/non-refundable deposit of Rs. 23,00,000 as a result of which part performance of an agreement comes into play and the transfer of land became absolute in the Assessment Year 2006-07. 5. The learned CIT (Appeals) V, Bangalore has erred in directing the Assessing Officer to disallow the deduction of Rs. 5,00,000 being the cost of improvement of the flat retained which was originally allowed by the Assessing Officer under Section 54F of the Act without providing an opportunity to the appellant as required under Section 251(2) of the Act. 6. The learned CIT (Appeals) V, Bangalore has erred in holding that the cost of construction was allowable in respect of 14338 sq. ft. as against the built up of area 18937 sq. ft. allowed by the Assessing Officer in the assessment order relating to the 11 flats sold. 7. The learned CIT (Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21,552 sq. ft., consisting of 12 residential flats, plus corresponding car parking area, common area, etc. The developer was to get 60% of the undivided portion of the land and the built up area. 7.2.2 The learned Authorised Representative submits that an additional ground of appeal was raised before learned CIT (Appeals) vide letter dt.18.12.2013 on the issue of chargeability of LTCG attributable to the transfer of 60% of the undivided portion of land in favour of the developer by virtue of the JDA and GPA dt.18.1.2006. It was contended before the learned CIT (Appeals) that the LTCG in this regard was not chargeable to tax for Assessment Year 2008-09, but was chargeable for Assessment Year 2006-07, in view of the deemed transfer under the amended provision of section 2(47)(v) of the Act r.w.s. 53A of the Transfer of Property Act and since the JDA was entered into on 18.1.2006, which was relevant to Assessment Year 2006-07. It was further submitted that written submissions in this regard dt.24.1.2012 were also filed before the learned CIT (Appeals) (placed at page 05 of the Paper Book). It was contended by the learned Authorised Representative for the assessee that as per the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.2013 in respect of the year of chargeability of the capital gains on transfer of 60% of the undivided portion of the land in favour of the developer vide the JDA and GPA; both dt.18.1.2006 in the period relevant to Assessment Year 2006-07. Admittedly, this issue was first raised before the learned CIT (Appeals) by the assessee vide written submissions dt.24.1.2012, which, inter alia, was forwarded to the Assessing Officer for remand report thereon. In the submissions made it was contended that the capital gain on the transfer of land vide JDA dt.18.1.2006 was not exigible to tax in Assessment Year 2008-09; but was chargeable for Assessment Year 2006-07 in view of deemed transfer under the amended provisions of Section 2(47)(v) of the Act rws 53 of the Transfer of Property Act. It is in this regard, the assessee raised additional grounds. The learned CIT (Appeals) rejected the same, alleging mala fide intention on part of the assessee in raising the same after the period of limitation for reopening the assessment for Assessment Year 2006-07 expired on 31.3.2013. In our view, the additional ground raised is relevant as it would go to the root of the matter in deciding the year of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us and restored to the file of the learned CIT (Appeals) for examination and adjudication, we are of the view that the finding therein would have a bearing on the issues raised in the grounds raised at S.Nos.3, 4 & 7. We, therefore, deem it fit to refrain from adjudicating these grounds at this juncture. 9. Ground No.5 Exemption u/s.54F Rs. 5,00,000. 9.1 In this ground, the assessee contends that the learned CIT (Appeals) erred in directing the Assessing Officer to disallow the exemption of Rs. 5,00,000 being the cost of improvement of the flat retained by the assessee which was allowed in the order of assessment by the Assessing Officer u/s.54F of the Act, without providing any opportunity to the assessee as required under Section 251(2) of the Act. 9.2 In support of this ground, the learned Authorised Representative of the assessee submitted that in the order of assessment dt.31.12.2010, the Assessing Officer has allowed the assessee exemption of Rs. 37,87,252 under Section 54F of the Act, which included the sum of Rs. 5,00,000 on account of cost of improvement towards the flat retained by the assessee. It is contended by the learned Authorised Representative that, the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. It is ordered accordingly. Consequently, Ground No.5 raised by the assessee is allowed. 10. Ground No.6 Cost of Acquisition of 11 flats sold. 10.1 In this Ground, the assessee had contended that the learned CIT (Appeals) had erred in holding that the cost of construction of 11 flats sold was allowable in respect of only 14,338 sq. ft. as against 18,937 sq. ft. allowed by the Assessing Officer in the order of assessment. 10.2 It is submitted by the learned Authorised Representative that in the order of assessment, the Assessing Officer had computed the cost of construction of the 11 flats sold by the assessee with built up area of 18,937 in the year under consideration at Rs. 1,97,32,354 @ Rs. 1042 per sq. ft. as per the cost incurred by the developer. It is contended by the learned Authorised Representative that while computing the capital gains on sale 11 flats by the assessee, the learned CIT (Appeals) in the impugned order held that the cost of construction is allowable only for 14,338 sq. ft. of built up area and thereby reduced the deductible cost of construction from Rs. 1,97,32,354 for 18,937 sq. ft. to Rs. 1,49,40,196 (viz. 14,338 sq. ft. @ Rs. 1,042 per sq. ft.) Bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cquisition of 11 flats sold with built up area of 18,937 sq. ft. at Rs. 1,97,32,354. The ratio of the decision of the case of Smt. Jeeva Vadivelu (supra) is applicable to the assessee's case to the extent that the assessee was entitled to the cost of acquisition of the flats sold during the year under consideration. In the case on hand, the Assessing Officer has allowed the cost of acquisition of the 11 flats with a built up area of 18,937 sq. ft. @ Rs. 1,042 per sq. ft. at Rs. 1,97,32,354. We find from the impugned order, that the learned CIT (Appeals), in computing the cost of acquisition of the 11 flats, has held that the cost of construction to the builder/developer need not be considered as the cost of acquisition to the assessee and rendered the cost of acquisition to the assessee at Rs. 1,49,40,196. This, in our considered view, is not in accordance with the ratio of the decision of the co-ordinate bench in the case of Smt. Jeeva Vadivelu (supra), wherein the Assessing Officer was directed to ascertain the cost from the developer, who developed the property, to arrive at the cost of acquisition to the assessee. In the case on hand, we find that the Assessing Officer's co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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