TMI Blog2017 (8) TMI 1126X X X X Extracts X X X X X X X X Extracts X X X X ..... the material before him to compute the capital gain. The decision of the Hon'ble Supreme Court in the case of Kelvinator India Ltd is, in our opinion, applicable to the facts of the case before us. Therefore, in our opinion, the reopening of the assessment is void as rightly held by the CIT (A). Thus, grounds of appeal No.1 (a) & (b) are rejected. The capital gains would not arise in the A.Y 2009-10 as in the present case also the Development Agreement is dated 12.03.2007 and the HUDA building permissions were obtained in the financial year 2007-08 relevant to the A.Y 2008-09. In view of the same, the Revenue’s grounds of appeal 1(c) and (d) are rejected. Additional ground of appeal raised by the Revenue that in the alternative, the capital gain should be brought to tax in the A.Y 2007-08 is concerned, we are of the opinion that this Tribunal cannot give a direction to the AO to bring to tax any income in the A.Y which is not before us. It is left open to the AO to take remedial action, if any, if the law so permits. The additional grounds of appeal are also thus rejected. - ITA No. 1306/Hyd/2015, C.O. No. 11/Hyd/2016 - - - Dated:- 31-7-2017 - Smt. P. Madhavi Devi, Judic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is a delay of 4 days in filing of the appeal before us. The Revenue has filed an affidavit of the ACIT stating the reason for the delay and seeking condonation of the same. Being satisfied with the reason given in the petition, we condone the delay and proceed to dispose of the appeal on merits. 4. Brief facts of the case are that the assessee, an individual, filed his return of income for the A.Y 2009-10 on 30.09.2009 admitting total income of ₹ 48,77,000. The assessment u/s 143(3) of the Act was completed on 30.11.2011 determining the total income at ₹ 48,77,000 and tax payable at ₹ 75,910 respectively. Subsequently, it came to the knowledge of the AO that the assessee has not admitted capital gain arising out of the Development Agreement entered into with M/s. JMR Promoters and Builders on 9.5.2008 in the return of income for the A.Y 2009-10. Believing that the income chargeable to tax has escaped assessment, the AO issued notice u/s 148 of the Act on 28.03.2014. The assessee, vide letter dated 4.4.2014, requested the AO to treat the return filed on 30-09-2009 as the return filed in response to the notice u/s 148 of the Act. 5. Thereafter, during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in support of his claim, the AO rejected the same and brought the sum to tax. Aggrieved, the assessee preferred an appeal before the CIT (A) both on merits of the addition and also against the validity of the reopening of the assessment. The CIT (A) allowed the assessee s appeal in part by holding that as there is a transfer of rights in favour of the Developer by virtue of the agreement dated 12.03.2007 and accordingly taxable capital gain has arisen during the relevant previous year. As regards the validity of the reopening of the assessment also, the CIT (A) held that the AO, during the original scrutiny proceedings, has considered the agreement and concluded the assessment by accepting the income including the capital gains returned by the assessee and therefore, reopening of the assessment without any fresh tangible material would amount to change of opinion. Following the decision of the Hon'ble Supreme Court in the case of M/s. Kelvinator India Ltd, he held the reopening of the assessment to be bad in law and as such void. Aggrieved by the relief granted by the CIT (A), the Revenue is in appeal before us. 7. The learned DR submitted that the AO has accepted the capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice issued u/s 143(2) of the Act, the Authorised Representative of the assessee appeared from time to time and filed the information called for and that after going through the information, the assessment was completed accepting the returned income. The relevant A.Y is 2009-10 and the previous year ended on 31.03.2009. The notice u/s 148 was issued on 28.3.2014 which is within the period of 4 years from the end of the relevant A.Y. The case of the assessee is that the AO has considered all the material available before him before accepting the returned income and therefore, the reopening of the assessment is on a change of opinion. Having gone through the assessment order, we find that the AO, has accepted the assessee s returned income. For reopening of an assessment even within a period of 4 years, there need to be fresh material for the AO to issue a notice u/s 148. It is not sufficient if the AO believes that there is escapement of income as held by the Hon'ble Supreme Court in the case of Kelvinator India Ltd reported in 320 ITR 561 (S.C). In the case before us, the issue of capital gain was very much before the AO and the capital gain has arisen on account of sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Potla Nageshwara Rao vs. CIT in ITTA No.245/2014 dated 9.4.2014 which placed at pages 98 to 101 has held as under: In the context of the above submission, we have to see whether in this case any substantial question of law is involved or not. The learned Tribunal on fact found as follows: In the instant case, on 07.03.2003 an agreement was entered into by the assessee with M/s. Bhavya Constructions Pvt., Ltd., and the plan of the building was approved on 31.03.2003. These dates fall in the previous year 2002-03, relevant to assessment year 2003-04. Thus, in this case, the land being capital asset was transferred by the assessee to the developer during the assessment year under consideration, viz., 2003-04, for construction and it is enough if the assessee has received the right to receive consideration on a later date, so as to attract eligibility to tax on capital gains during the year under appeal. The definition of transfer under Section 2(47) of the Income Tax Act, 1961, reads as follows: transfer, in relation to a capital asset, includes,- (i) the sale, exchange or relinquishment of the asset; or (ii) the extinguishment of any rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the terms of the contract: Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof. Therefore, we are of the view, while upholding the learned Tribunals application of law on this fact, that payment of consideration on the date of agreement of sale is not required, it may be deferred for future date. The element of factual possession and agreement are contemplated as transfer within the meaning of the aforesaid section. When the transfer is complete, automatically, consideration mentioned in the agreement for sale has to be taken into consideration for the purpose of assessment of income for the assessment year when the agreement was entered into and possession was given. Here, factually it was found that both the aforesaid aspects took place in the previous year relevant to the assessment year 2003- 04. Hence, the learned Tribunal has rightly held that the appellant is liable to pay tax on the capital gain for the assessment year. Accordingly, we do not find any element of law to admit this appeal Going by the above rationale, we find that the capita ..... X X X X Extracts X X X X X X X X Extracts X X X X
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