TMI Blog2018 (10) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... or bringing to tax in the year 2010-11 was the letter of the developer to announce that the building is ready for occupation without complying to the ‘JDA’ and approval norms. Even though the same was brought to the notice of the AO, according to us, the reason for reopening the assessment is on faulty ground. - Reassessment quashed - Decided in favor of assessee. - ITA No. 981/H/18, 1284/H/18, 1099/H/18 And ITA No. 1283/H/18 - - - Dated:- 10-10-2018 - SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER For The Assessee : Shri Kiran For The Revenue : Smt. K.J. Divya ORDER PER BENCH: These appeals are filed by the Assessees, who are family members, against orders of CIT(A) - 6, Hyderabad, all dated, 19/03/2018. As issue is identical in all these appeals, they were clubbed and heard together, therefore, a common order is passed for the sake of convenience. 2. Briefly the facts as taken from T. Srinivasa Rao (HUF) in ITA No. 981/Hyd/2018 are, the assessee along with other family members had entered into an agreement with M/s Saptagiri Construction for development of the property bearing No. 9-1-219/232, St. Mary s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly in the AY 2010-11. 2.2 In view of the above observations, the AO issued a notice u/s. 148 to the assessee and later a letter was issued, asking the assessee to show cause as to why the Capital Gains arising on account of transfer of property in question, should not be taxed in view of the provision of Section 5OC of the I.T. Act, 1961. In response to the said notice, the assessee submitted its objections, which are as under: ( a) The transfer of 55% of the land was effected on 10/01/2000 subject to the construction and handing over of 45% of the constructed area and such construction is not complete even now. ( b) The transfer, if any, as per the Development Agreement was already effected on 10/01/2000 as held by the High Court of Andhra Pradesh in the case of Sri Potla Nageswara Rao and is assessable for the assessment year 2000-2001. ( c) No further transfer is required to be made after the Development Agreement was entered into by the owners in favour of the Developer. ( d) The sale document was neither executed by the appellant nor is required to be executed by the appellant and is invalid. ( e) The Developer did not execute the Developme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r recalculated the cost of constructed area at ₹ 5,10,30,000/- (Rs.24,300 x 2100). Alternatively, he also took the consideration value of the land foregone i.e. 55% of 4534 sq. yards i.e. 2493.7 sq. yards at ₹ 11,96,97,600/-by taking the SRO value of the land as on 2009 at ₹ 48,000 per sq. yard. Telukunta's family share being 50%, the consideration to be considered in their hands was taken at ₹ 5,98,48,800/-. As the amount of ₹ 5.98 crores was higher than cost of construction of ₹ 5.10 crore, the Assessing Officer calculated the Long Term Capital Gains by adopting ₹ 5.98 crore as full value of consideration. After deducting indexed cost of acquisition of ₹ 47,28,055/- and cost of the structure in the year 2000 of ₹ 12,00,000/- as given by the assessee (Telukunta's share 50% of 12 lakhs : ₹ 6,00,000/-) which after indexation came to ₹ 9,74,808/-, long term capital gains were taken at ₹ 5,41,45,937/-. As the assessee's share was 20%, long term capital gains falling to its share were computed at ₹ 1,08,29,187/-. The assessee had filed return of income of ₹ 1,62,648/-. After allowing the bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r: 8. Considered the rival submissions and perused the material on record. We notice that the assessment was reopened by issue of notice u/s 148 on 29/03/2016 and the reason for reopening was submitted by AO vide letter dated 20/06/2016 (we notice that the assessee letter reference was mentioned as 18/04/2014, whereas the actual letter reference was 18/04/2016), there is a typographical mistake committed by AO). The reasons recorded by AO to reopen the assessment was as under: On verification of the letter of the developer M/s Saptagiri Constructions letter dt: 22.12.2009 it is noticed that the builder was ready to handover the possession of construction space to the land lords in the FY 2009-10 relevant to the AY 2010-11. Therefore there was simultaneous transfer of possession of 55% of land by the assessee to the builder and possession of 45% of built-up are by the builder to the assessee in FY 2009-10 in terms of section 2(47) of the Income Tax Act, 1961 read with section 53A of the Transfer of property Act. On verification, it is noticed that the assessee has not filed his ROI for the A. Y 2009-10. In the view of the above, the income under the head Capital Gain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital gains are attracted in the year 2003. Hence, the stand of the AO to charge the capital gains in the year 2010-11 is not proper. Secondly, the reason for bringing to tax in the year 2010-11 was the letter of the developer to announce that the building is ready for occupation without complying to the JDA and approval norms. Even though the same was brought to the notice of the AO, according to us, the reason for reopening the assessment is on faulty ground. 8.2 In our considered view, the income chargeable to tax falls only in the AY 2003-04 and not in AY 2010-11. Therefore, the assessment completed u/s 144 r.w.s. 147 is held to be not in accordance with law, hence, the same is quashed. 8.3 Since, the assessment itself is quashed, the other grounds raised by the assessee are not required to be adjudicated at this stage. Therefore, the ground raised by the assessee in this regard is allowed. As the issue in dispute is materially identical to that of the said cases, following the decision drawn therein, we set aside the order of CIT(A) and allow the grounds raised by the assessee. 8.1 As the facts and grounds raised in all other appeals are identical to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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