TMI Blog2016 (9) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... which the developer has given the possession of the developed area to the assessee. Though the Assessing Officer has recorded that the assessee has filed a letter stating that the built up area has been handed over to the assessee on 8.3.2004, it is not understandable as to how a building could have been completed within a period of three months of entering into the development agreement. It appears that the Assessing Officer has taken the supplemental agreement into consideration for presuming that the built up area has been apportioned to the assessee on 8.3.2004, as the supplemental agreement is entered for apportioning the developed area. Supplemental agreement alone cannot be taken as the proof of handing over of the built up area to the assessee. The Assessing Officer has accepted the assessee’s contention that the capital gains is chargeable to tax in the year of handing over of possession to the assessee. The Assessing Officer has come to the conclusion that capital gains have arisen in this year without proper verification of facts. Since the assessee has disclosed all the relevant facts to the Revenue authorities in is computation of income, we are of the opinion that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return. Subsequently, the Assessing Officer issued notice under S.153A read with S.153C on 15.3.2007. In response to the same, the assessee filed return of income on 28.3.2007 declaring total income of ₹ 1,98,687 alongwith a copy of the original return of income filed on 24.5.2005. 3. During the assessment proceedings under S.143(3) read with S.153C of the Act, the Assessing Officer issued various notices and called for various details. After verification of the details furnished by the assessee, the Assessing Officer noticed that the assessee-HUF had purchased 0.20 guntas OF LAND in Survey Nos.72, 73 and 74 at Miyapur, Seri Lingampally in the name of Smt.R.Sai Rani (Karta s wife), along with three other persons. He also observed that the assessee s share in the land is 10% of the total extent of land, and on the date of purchase itself, i.e. 15.12.2003, assessee through Sm.R.Sai Rani along with other co-owners of land entered into a development agreement with M/s. B.R. Constructions, the builder. As per this agreement, the developer has to construct a building on the land and after construction of the complex, the builder has to hand over 33% of the total built up area to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, and therefore, it is a case of concealment of income and that the penalty is leviable. 6. Aggrieved, the assessee preferred an appeal before the CIT(A), taking a ground that the land did not belong to the HUF, but it belonged to Smt. R.Sai Rani and therefore, CIT(A) could not have brought to tax the capital gains in the hands of the assessee. The CIT(A) held that this is a ground to be taken during the quantum proceedings, and not during the penalty proceedings. As regards the levy of penalty, he confirmed the order of the Assessing Officer and the assessee is in second appeal before us. 7. Learned counsel for the assessee, while reiterating the submissions made by the assessee before the authorities below, submitted that the Assessing Officer, though, has held that the capital gains is chargeable to tax in the year in which the built up area was received by the assessee, he has brought capital to tax in the year when the supplemental agreement was entered into. He submitted that the development agreement itself was entered into on 15.12.2003, while the supplemental agreement was dated 8.3.2004, and it is not possible for any builder to have constructed the building within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee. Though the Assessing Officer has recorded that the assessee has filed a letter stating that the built up area has been handed over to the assessee on 8.3.2004, it is not understandable as to how a building could have been completed within a period of three months of entering into the development agreement. It appears that the Assessing Officer has taken the supplemental agreement into consideration for presuming that the built up area has been apportioned to the assessee on 8.3.2004, as the supplemental agreement is entered for apportioning the developed area. Supplemental agreement alone cannot be taken as the proof of handing over of the built up area to the assessee. The Assessing Officer has accepted the assessee s contention that the capital gains is chargeable to tax in the year of handing over of possession to the assessee. The Assessing Officer has come to the conclusion that capital gains have arisen in this year without proper verification of facts. Since the assessee has disclosed all the relevant facts to the Revenue authorities in is computation of income, we are of the opinion that there is no furnishing of inaccurate particulars of income or concealm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e verified and ascertained. He thereafter proceeded to examine the creditworthiness of Smt.R.Sai Rani and also availability of funds with the assessee over a period of time. He observed that Smt.Sai Rani is not maintaining any books of account nor has the assessee filed any Receipts and Payments Account of her, and therefore, the same cannot be treated as explained. As regards the availability of cash with the HUF, he observed that the savings of the HUF in earlier years is only ₹ 57,000 per year which could be presumed to be the source to accumulate ₹ 15,75,000 only, if the assessee is believed have saved the entire income approximately for four years. He also observed that the household expenses shown by the assessee are very low and therefore, the availability of funds with the assessee is not acceptable. He further observed that the assessee has purchased a Fiat Car worth ₹ 3,25,000 from M/s. Satya Kalyan Constructions Pvt. Ltd., and therefore, the individual also does not have the capacity to advance such fund. He therefore, brought to tax the entire amount of ₹ 15,75,000, treating the same as unexplained. The said addition was confirmed by ITAT in appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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