TMI Blog2020 (10) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... Factory Ltd. [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT]. No reason to interfere with the orders passed by ld. CIT(A) in quashing the penalty order. - ITA No.1195/Bang/2016, ITA No.2706/Bang/2017, C.O. No.33/Bang/2018 (Arising out of ITA No.2706/Bang/2017) - - - Dated:- 28-9-2020 - Shri N.V. Vasudevan, Vice President And Shri B.R. Baskaran, Accoutant Member For the Appellant : Shri Priyadarshi Mishra, D.R. For the Respondent : Shri Padam Chand Khincha, A.R. ORDER PER B.R. BASKARAN, ACCOUNTANT MEMBER: The revenue has filed two appeals challenging the orders passed by the Ld. CIT(A)-2 Panaji in the quantum assessment proceedings as well as in penalty proceedings. The assessee has filed cross objection in respect of order passed by Ld. CIT(A) in the penalty proceedings. All the appeals relate to assessment year 2008-09. 2. We shall first take up the appeal filed by the revenue in the quantum assessment proceedings. Grounds of appeal raised by the revenue read as under: 1. The order of the CIT(A) is erroneous both on facts and in law. 2. The CIT(A) erred in adopting the area of the land transferred at 1,05,850 sft while the evidence on rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Area of land as 1,09,253 sq.ft., (b) Fair market value of land at ₹ 600/- per sq.ft. and (c) Adopting indexed cost of acquisition as ₹ 1,18,09,734/-. 5. The assessee did not agree with the AO on all the above said three points. Hence, before Ld. CIT(A), the assessee disputed all the three points. The Ld. CIT(A), after examining the contentions of the assessee as well as the materials furnished before him, determined the long term capital gain at ₹ 2,76,37,846/-. Accordingly, he gave relief of ₹ 2,83,48,069/- to the assessee. The revenue is aggrieved by the relief so granted to the assessee by Ld. CIT(A). The revenue is also contending that the Ld. CIT(A) has violated provisions of rule 46A of I.T. Rules, while adopting the sale value at ₹ 350/- per sq.ft. 6. We heard the parties and perused the record. For the sake of convenience, we extract below the decision rendered by Ld. CIT(A). 4.4 I have gone through the submissions of the AR of the appellant and the order of the AO. It is a fact that the appellant entered into Joint Development Agreement (JDA) with BEL on 27.08.2007 and handed over the possession of the land on the same day. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L i; 81% of 1,30,680 sq.ft. ie. equal to 1,05,850.80 sq.ft. Thus, the area of the land actually transferred by the appellant for computation of capital gains is 1,05,850 .80 sq.ft. 4.6. The next aspect of dispute is the rate per sq. foot for determination of sale consideration of land transferred by the appellant. In the JDA the sale consideration in terms of value has not been mentioned. JDA provides for giving 19% of the built up area in the project to the appellant by BEL. In the assessment order, AO has taken the sale consideration per sq. foot of land at ₹ 600/- , which is as per the prevailing rate for the stamp duty valuation applicable to assessment year 2010-11. The appellant as stated earlier had offered the capital gains for taxation in the return filed for A.Y 2010-11. In the said return, the appellant had taken the rate per sq. foot at ₹ 600/- being the rate for stamp duty valuation relevant to A.Y 2010-11. During appellate proceedings, it was submitted by the AR that if the capital gains are to be brought to tax in AY 2008-09, the stamp duty valuation rate applicable to A.Y 2008-09 be taken. The AR also produced the copy of stamp duty valuation rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital gain as worked in para 4.10 amounting to ₹ 2,76,37,846/- is hereby confirmed. The appellant gets relief of ₹ 2,83,48,069/- . Ground no 11 to 13 taken by the appellant are partly allowed. 7. We notice that the CIT(A) has arrived at the area of land transferred by the assessee as 1,05,850.80 sq.ft. by considering the Deed of rectification entered between the parties and also on noting the fact that the area of the land mentioned in Schedule-2 was rectified and the land mentioned in Schedule 3 was not available with the assessee. The Ld. CIT(A) also noticed that the fair market value of the land taken by the A.O. as ₹ 600/- per sq.ft. was applicable to the assessment year 2010-11, while the fair market value fixed by the stamp authorities for assessment year 2008-09 was ₹ 350/- per sq.ft. The Ld. CIT(A) has also arrived at the indexed cost of acquisition by considering the actual purchase value of the land either purchased by the assessee or by the donor of the land to the assessee. He has adopted the proportionate value pertaining to 1,05850.80 Sq.ft. Accordingly, the Ld. CIT(A) has arrived at the long term capital gain at ₹ 2,76,37,846/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.R. submitted that the assessee had challenged the re-assessment order by filing appeal before Ld CIT(A) and the Ld CIT(A) has again determined the long term capital gain at ₹ 2,76,37,846/-. He submitted that the order so passed by Ld. CIT(A) has since been accepted by the revenue by not filing appeal before ITAT. This fact also supports our view that the order passed by Ld. CIT(A) does not call for any interference. 11. The Ld A.R also raised a legal issue, i.e., the Ld A.R submitted that the AO has passed the reassessment order by assessing very same long term capital gains, which was earlier assessed in the original assessment order. By placing reliance on the decision rendered by Hon ble Supreme Court in the case of ITO vs. K.L. Srihari (HUF)(250 ITR 193), the Ld A.R submitted that the reassessment order shall efface the original assessment order. In that view of the matter, the original assessment order shall not survive in the eyes of law, in which case, the present appeal filed by the revenue shall also not survive. 12. We do not find it necessary to address this legal issue, since we have already confirmed the order passed by Ld CIT(A) by dismissing the appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. CIT(A) has quashed the penalty order in view of the fact that the A.O. did not specify the limb under which penalty proceedings are initiated and also did not strike off the inapplicable portion in the penalty notice. The Ld. CIT(A) followed the decision rendered by the jurisdictional High Court in the case of Manjunatha Cotton Ginning Factory Ltd. On perusal of the order passed by the Hon ble Karnataka High Court in the case of Ryatara Sahakari Karkhane Niyamitha(supra) we notice that the decision rendered by the Madras High Court in the case of Sundaram Finance Ltd. (supra) was brought to the notice of the Karnataka High Court in the question framed before it, yet the jurisdictional High Court followed the decision rendered in the case of Manjunatha Cotton Ginning Factory Ltd. by observing as under: 4. It is apparent that the show-cause notice issued under section 274 of the Act does not specifically disclose the charge against the Assessee as to whether it is for concealment of particulars of income or furnishing of inaccurate particulars of income, which is sine-quo-non for issuance of show-cause notice and for want of such particulars, the Tribunal set-aside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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