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2015 (12) TMI 1028 - ITAT CHENNAI

2015 (12) TMI 1028 - ITAT CHENNAI - TMI - Reopening of assessment - Long Term Capital Gains computation - Held that:- The Assessing Officer has issued notice u/s 147 after having credible information on record during the course of survey regarding the quantum of Long Term Capital Gains. Recalling the facts, the order of the CIT(A) for the Asst. Year 2008-09 was not regarding the quantum of Long Term Capital Gains, but was regarding the Asst. Year in which the Long Term Capital Gains is to be bro .....

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risdiction u/s 147 of the Income Tax Act, 1961. There is no change of opinion considering the facts of the case. Hence the decision relied on by the Authorized Representative are not relevant to the facts of the case. The submissions of the learned Authorized Representative regarding change of opinion are rejected and the 148 proceedings are upheld - Decided against assessee - ITA No. 1695/Mds/2015 - Dated:- 27-11-2015 - Chandra Poojari, AM And Challa Nagendra Prasad, JM For the Appellant : Mr K .....

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.147 in the facts and circumstances of the case and in law. 2. Commissioner of Income Tax (Appeals) ought to have held on a reading of third proviso under section 147: "Provided also that Assessing Officer may assess or reassess such income other than the income involving matters which are the subject matter of any appeal referred or revision which is chargeable to tax and has escaped assessment. It squarely applied to the case and quashed the assessment in the facts and circumstances of th .....

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w. 4. Without prejudice to the above, the Commissioner of Income Tax (Appeals) ought to have upheld that it is clearly a case based on change of opinion on the part of the Assessing Officer for recomputing the capital gain on the basis of statement at the time of survey u/s.133A and hence the reassessment is unsustainable in the facts and circumstances of the case and in law." 3. The assessee in its grounds challenges the order of the Commissioner of Income Tax (Appeals) in sustaining the r .....

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18,01,000/-. The return of income was processed u/s 143(1) accepting the income returned. Subsequently, the case was selected for scrutiny as per norms and assessment under section 143(3) was completed on 28.11.1010 assessing Long Term Capital Gain (LTCG) of Rs. l0,11,12,800/- on a protective basis. The Long Term Capital Gain arose in this case because of the joint development agreement dated 28/12/2005 between the assessee and M/s VR Nachimuthu (CBE), a firm. The L TCG was assessed on substanti .....

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issue, which was obtained only on 19/10/2007. The Tribunal confirmed the order of the CIT(A). Appeal has been preferred by the Department for the A.Y. 2006-07 against the order of the Tribunal treating the A.Y. 2008-09 as the substantive year for computation of LTCG for. However, no appeal was preferred against the decision of the CIT(A) by the Department for the assessment year 2008-09, it being a protective assessment and appeal was already filed against the Tribunal s decision for AY 2006-07. .....

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erefore, the LTCG was arrived at the time of survey based on the Guideline value of the land deemed to have been transferred to the developer. Subsequently, the assessment was reopened u/s 147 of the IT Act, 1961 and a notice u/s 148 of the IT Act, 1961 was issued on 31.12.2012, Which was served on 5/1/2013. In the letter dt. 12/11/2012, Sri Vikram Damodaran, Director of the assessee company states that it was agreed that at the time of survey the capital gains admitted for AY 2008-09 would be r .....

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of Income Tax (Appeals) held that the capital gains should be taxed in the year 2008-09 and not in the assessment year 2006-07. He submits that meanwhile there was a survey in the premises of the assessee and in the course of survey, the assessee admitted that guideline value of the land deemed to have been transferred to the developer should be adopted at ₹ 1200/- per sq.ft. for the purpose of computing capital gains. Departmental Representative submits that assessee himself has admitted .....

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that guideline value should be adopted at ₹ 1200/- per sq.ft by accepting the same the return was filed. 7. Heard both sides. Perused orders of lower authorities and the submissions made therein. Commissioner of Income Tax (Appeals) has elaborately considered the issue whether the reopening of assessment is valid or not in the order with reference to the contentions of the assessee and the Assessing Officer and held that reopening of assessment is valid. While holding so, Commissioner of I .....

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ine value of the land deemed to have been transferred to the developer. Subsequently the assessment was re-opened u/s 147 of the IT Act 1961 and a notice u/s 148 of the IT Act,1961 was issued on 31.12.2012. Accordingly. after the survey, the assessee filed a return in response to the notice under Section 148 for the A Y 2008-09 on 31.12.2012 adopting the rate of ₹ 1200/- per sq.ft. and returning income of ₹ 12,34,04,230/-. The Authorized Representative submitted that the Assessing Of .....

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int Development Agreement dated 28.12.2005 between the assessee and MIs. V.R. Nachimuthu (CBE) - a firm. The Long Term Capital Gains was assessed on substantive basis in the Asst. Year 2006-07 based on the observation that the effective date of transfer of the land of the assessee is the date of Joint Development Agreement i.e. 28.12.2005 and hence Long Term Capital Gains is assessable for Asst. Year 2006-07, not 2008-09. The assessee preferred appeal before the CIT(A) and the CIT(A) vide his or .....

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g Term Capital Gains. However, no appeal was preferred against the decision of the CIT(A) by the Department for the Asst. Year 2008-09 and appeal was filed against Hon'ble !TAT decision for the Asst. Year 2006-07. Hence for this purpose Long Term Capital Gains on sale of land was made substantively for the Asst. Year 2008-09, without prejudice to the outcome of the appeal filed by the Department before the Hon'ble High Court of Madras in this case for the Asst. Year 2006-07. 6. The Autho .....

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28.12.2005 entered into with M/s. V.R. Nachimuthu (CBE), a firm. The appellant admitted in, the regular return filed, Long Term Capital Gains arising under the JDA for the Asst. Year 2008-09 at ₹ 10,l1,12,800/-. Under the JDA, the appellant was entitled to 35% of the built-up area and the developer was entitled to 65% of the built-up area, together with the proportionate undivided interest in the land. The appellant had received an advance of Rs.l,74,00,000/- but, as per the JDA, instead o .....

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ame amount, as income, for the Asst. Year 2006-07. 7. On appeal against the orders for these two assessment years, the CIT(A)-1, Coimbatore, allowed the appeal for the Asst. Year 2006-07, vide his order dated 16.05.2012 in Appeal No.164/11-12, following his decision that the transfer had taken place during the previous year relevant to the Asst. Year 2008-09 and therefore, it has to be assessed on a substantive basis in the assessment for the Asst. Year 2008- 09. No appeal was filed by the Reven .....

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8377; 12,34,04,230/-. The revision in the Long Term Capital Gains as per the assessment order was based on the guideline value of the land deemed to have been transferred to the Developer which was brought out in the course of Revision Proceedings u/s 133A of the Income Tax Act, 1961. The appellant relied on the decision of the Gujrat High Court in the case of National Dairy Development Board Vs DCIT reported in [2011J CTR (Guj) 302. The argument of the Authorized Representative was that the 3rd .....

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appeal before the Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal show that it sought to revise the first order passed on 22.09.2003, which got merged with the order of the Tribunal in ITA No.842/Mds/200S dated 22.06,2007, which had attained finality. Thus, if the Revenue is questioning the quantum of relief granted to the assessee, the order available for revision would be the order dated 18.05.2005. When this is not subjected to any revision under Section 147 of the Act, .....

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