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TMI Blog2019 (12) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... .1996-97 treating the entire capital gains to be liable for tax in that year, the assessing officer cannot travel beyond the reasons for which assessment was reopened, since it would amount to contradicting views of the assessing officer for two assessment years, viz. 1996-97 and 2000-01, where it was held that entire capital gains was chargeable to tax in both the years ? 2) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that there was no transfer within the meaning of 2(47)(v) during the A.Y.1996-97? 3) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in not holding that capital gains would arise only in the relevant assessment years in which sale deeds were executed in respect of transfer of undivided share of land in favour of nominees of the Developer? 4) Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that the entire capital gains was taxable in A.Y.2000-01, when there was no transfer in respect of the entire land either u/s.2(47)(v) or section 45 of the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -02, the Assessing Officer had completed the assessment protectively on the capital gains offered by the assessees in respect of the undivided share of land sold during that year. 5. The appellants/assessees preferred appeals against both the orders, namely, re-assessment orders dated 23.03.2004 and protective assessment dated 23.03.2004. These appeals were taken on file by the Commissioner of Income Tax (Appeals)-XII [hereinafter referred to as 'the CIT(A)'] in I.T.A.Nos. 35 & 36/04-05 and the appeals were disposed of by a common order dated 27.08.2004 setting aside re-assessment for the year 1996-97 on a technical ground of non-compliance of Section 151 of the Act. In the very same order, the CIT(A) directed the Assessing Officer to treat the protective assessment order dated 23.03.2004 for the assessment year 2001-02 as a substantive one and assess capital gains accordingly. 6. For the assessment year under consideration, namely, 2000-01, the assessees filed their returns of income on 29.12.2000 admitting an income of Rs. 13,83,085/-, which included capital gains in respect of the undivided share of the land that was sold during the previous year relevant to the assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fferent stand and in doing so, it is a clear case of change of opinion. 10. Further, it is contended that the Tribunal was wrong in holding that the re-assessment for the year 1996-97 was cancelled only on a technical ground, that therefore, there was no error in the order passed by the Assessing Officer and the CIT(A) and that the finding of the Tribunal is erroneous because the order of the CIT(A) while setting aside the re-assessment proceedings, though on a technical ground, directed the protective assessment for the year 2001-02 to be a substantive assessment and therefore, the Tribunal committed an error in rejecting the assessee's appeal. 11. In order to substantiate the stand taken by the assessee as accepted by the CIT(A) while treating the assessment for the year 2001-02 as substantive, learned counsel for the assessees referred to various clauses in the General Development Agreement between the assessees and the developer and submitted that the effect of a substantive assessment cannot be changed or altered and that this came to be done based on a mere change of opinion which is unsustainable in law. 12. In this regard, learned counsel for the assessees placed rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the assessment for the year 1996-97 as substantive and the assessment for the year 2001-02 as protective. It is submitted that there was no decision on merits and that the issues, which were considered by the CIT(A), were not at all discussed in the earlier round of appeal proceedings and the stand taken in the present proceedings as confirmed by the Tribunal is perfectly legal and valid and prayed for confirmation of the common order passed by the Tribunal. 16. We have heard learned counsel for the parties and carefully perused the materials placed on record. 17. As held earlier, the sheet anchor of the argument of Mr.M.P.Senthil Kumar is by attaching finality to the protective assessment order dated 23.03.2004 for the assessment year 2001-02. It is submitted that in the said order, the Assessing Officer held that notwithstanding the stand taken on the issue of liability to capital gains, which were brought to tax in the assessment year 1996-97, the capital gains admitted by the assessee in the assessment year 2001-02 were assessed on protective basis. It is submitted that when the assessees challenged the re-assessment order for the year 1996-97 dated 23.03.2004 and the prote ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant's stand has to be upheld. Therefore, the impugned re-assessment order for the assessment year 1996-97 is liable to be quashed.' 'Since the assessment order itself is quashed for the assessment year 1996-97, the other issues raised by the appellant in the grounds of appeal for that year are not dealt with'. "Now coming to the assessment year 2001-2002, it is the main plea of the appellant that the assessment for the year should be made as substantive one and not on protective basis. By virtue of the fact that the reassessment which according to the Assessing Officer was substantive for the assessment year 1996-97 had been annulled, the assessment for the assessment year 2001- 2002 has to be held as substantive one'." 19. After taking note of the common order passed by the CIT(A) dated 27.08.2004, it was held by the CIT(A) in the orders dated 30.11.2005 that the assessment for the year 2001-02, which was directed to be treated as substantive, was not on merits and it was only in the present appeals before the CIT(A), what was sought to be decided was as to the effective date of transfer. We have also gone through the order dated 23.03.2004 for the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they were asked to specifically explain as to when the transaction took place, i.e., whether in the assessment year 1996-97 or in the later years. Further, the Tribunal noticed the inconsistent stand that there is a submission that capital gains should have been assessed for the assessment year 1996-97 because transfer took place on 04.10.1995 itself, i.e. the date of the execution of the Development Agreement. Subsequently, the assessees took a stand that the transfer took place when the assessees actually executed sale deeds in various years in favour of the nominees of the developer. Thus, we fully agree with the finding of the Tribunal that the assessees did not come out clearly as to when the actual transaction took place. 21. Further, the learned counsel for the Revenue pointed out that the assessees, in their letter dated 01.02.2006 to the Assistant Commissioner of Income Tax, Circle -XIV, Chennai, has taken yet another contrary stand by filing an application under Section 154 of the Act for the assessment year 2001- 02 stating that such assessment should be rectified in line with the decision taken for the assessment year 2000-01. 22. As already held by us, the assessees ..... X X X X Extracts X X X X X X X X Extracts X X X X
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