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TMI Blog2022 (12) TMI 1272X X X X Extracts X X X X X X X X Extracts X X X X ..... roornagar Mandal, R.R. Distt. As per the above agreement, the assessee had received 52 constructed flats as his share admeasuring 65,190 sq.ft built-up area. The total cost of the project was Rs.19,35,96,000/- out of which assessee's share was Rs.6,77,58,600/- (35%). However, the assessee had not filed return of income for the A.Y 2012-13 declaring the same as taxable income for which the assessment for the A.Y 2012-13 was reopened. After considering all material on record, the assessment for A.Y 2012-13 was completed by the Assessing Officer by bringing the income from LTCG of Rs.6,77,58,600/- to tax in respect of the 52 Flats. 4. Further, it was seen that during the A.Y 2015-16, the assessee had entered into further agreements of sale cum irrevocable general power of attorney with possession with the developer M/s. SNR Nirmal India (P) Ltd whereby the assessee sold and conveyed 23 flats out of the 52 flats (he had already sold 29 flats in A.Y 2014-15) allocated to him by virtue of development cum GPA agreement dated 13.01.2012, to the developer-purchaser for a total consideration of Rs.4,38,57,500/- as below: S.No Document No. & Date No. of flats sold Consideration 1 1705/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 2(47) of the I.T. Act, 1961 and considering the fact that substantive compliance of the contract had taken place during the financial year 2014-15, the Assessing Officer held that the capital gain is assessable in A.Y 2015-16 and not in A.Y 2016-17. 7. So far as the issue relating to deemed income being reversal of deduction u/s 54F granted in A.Y 2012-13 is concerned, the Assessing Officer noted that the assessee had entered into JDA with the developer on 13th of January 2012 wherein the assessee was to receive 52 flats. However, there is no material on record to show that the assessee had actually received the said 52 ready built flats on the date of entering into JDA. Also, the assessee has not furnished occupancy certificate in respect of all 52 flats so as to reckon the actual date of acquisition of flats in the hands of assessee. He, therefore, was of the opinion that under the circumstances, the end of the financial year, i.e., 31st March 2012 could be considered as date of acquisition of the flats in the hands of the assessee. Since the assessee has sold 23 flats which were forming part of the said 52 flats on 24th March 2015, the Assessing Officer held that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Term Capital Gains ignoring the directions of DRP to reduce the indexed cost. 3(b) The Ld. Assessing Officer failed to appreciate the fact that the period of holding of 23flats in question is more than 3 years from the date of acquisition and hence, resulting capital gain is long-term entitling the appellant for deduction of indexed cost of acquisition. 4. The Ld. DRP in the facts and circumstances of the case is not justified in not allowing the credit of taxes of Rs.1,00,07,393/- paid in assessment year 2016-17 in respect of transaction of sale of 23 flats for Rs.4,38,57,500/- now brought to tax in assessment year 2015-16. 5(a). The Ld. DRP having observed (para 2.4.5) that the exemption granted u/s.54F during A.Y2012-13 needs to be brought back to tax in the year in which the property is sold i.e., in A.Y 2014-15 is not justified in not deleting the same in the year under consideration. 5(b) The Ld. DRP in facts and circumstances of the case failed to appreciate the claim that the transfer of property took place after 3 years from the date of acquisition i.e., 13-01-2012 being the date of JDA, and hence provisions of sec.54F(3) are not applicable to the facts of the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a particular A.Y, by the assessee himself, however, he is entitled to claim deduction of the same before the appellate authority since the same cannot be taxed in the year. For the above proposition, the learned Counsel for the assessee relied on the following decisions: 1) CIT vs. Shelly Products and another (261 ITR 367) (S.C) 2) CIT vs. Bharat General Reinsurance Co. Ltd (81 ITR 303) (Del.). 3) Prithvi Share Brokers (349 ITR 336) (Mum) 4) Parikh & Co. (122 ITR 610) Guj. High Court) 5) S.R. Kosthi vs. CIT (276 ITR 165 (Guj.H.C) 6) Sanghi Industries vs. ACIT (ITA Nos.979 to 1001/Hyd/2017) 13. He accordingly submitted that the Assessing Officer should be directed to delete the sum of Rs.2,91,07,000/- since the same has already been considered for taxation in the A.Y 2014-15. 14. The learned DR, on the other hand, while relying on the order of the Assessing Officer submitted that the issue may be restored to the file of the Assessing Officer with a direction to verify the record and adjudicate the issue afresh. 15. We have heard the rival arguments made by both the sides, perused the orders of the AO and the DRP and the paper book filed on behalf of the assessee. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.7.6 Thus, there is no scope for telescoping of the sum of Rs. 2,91,07,000/- in this year as this amount pertains to sale 29 flats and considered for taxation in the A.Y. 2014-15. 2.7.7 Further, the DRP's role is restricted to the adjudicate as to whether the income on sale of 23 flats has been brought to tax during A.Y. 2015- 16 correctly or not. In view of the facts and reasons recorded by the AO, the Panel has already upheld that the amount of Rs. 4.38,57,500/- should be brought to tax for A.Y. 2015-16 only." 15.2 It is the submission of the learned Counsel for the assessee that once the amount of Rs. 2,91,07,000/- is brought to tax in A.Y 2014-15, therefore, the addition of the same in this year amounts to double addition of the same amount which is not justified. We find merit in the above argument of the learned Counsel for the assessee. We find the Hon'ble Supreme Court in the case of CIT vs. Shelly Products & Anr (Supra) has observed as under: "If he has by mistake or inadvertence or on account of ignorance, included in his income any amount which is exempted from payment of income-tax, or is not income within the contemplation of law, he may likewise bring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting indexed cost of acquisition. 18.1 The learned Counsel for the assessee submitted that the sum of Rs.4,38,57,500/- was admitted to tax in A.Y 2016-17 and the DRP has directed the same to be brought to tax in A.Y 2015-16. He submitted that the assessee is not objecting to this observation of the DRP. However, he drew the attention of the Bench to Para 2.6.2 of the order of the DRP where the DRP has observed as under: "2.6.2 It is seen from the records, that the cost of acquisition of 52 flats admeasuring 65,190 sq.ft is Rs.6,77,58,600/- (as brought to tax in A.Y 2012-13). Thus, the cost of acquisition for 23 flats admeasuring 28625 sq.ft (65,190 sq.ft being total built area (-)36565 sq.ft being built up area of 29 flats) will be 2,97,52,875/-. Accordingly, we direct the Assessing Officer to reduce the indexed cost of acquisition from the sale consideration and arrive at the correct LTCG". 19. He submitted that as per the direction of the DRP, the Assessing Officer was supposed to reduce the indexed cost of acquisition. However, the Assessing Officer in the order passed u/s 144C(13) simply reduced the cost of Rs.2,97,52,875/- without giving any indexation benefit. He submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 and 2.4.6 the learned Counsel for the assessee drew the attention of the Bench to the same which reads as under: "2.4.5 However, we note that the assessee has sold these properties during the A.Y 2014-15 and hence the exemption granted u/s.54F during A.Y 2012-13 needs to be brought back to tax in the year in which the property is sold i.e., in the A.Y 2014-15. It is also noted that the AO in the draft assessment order for A.Y. 2014- 15, has rightly brought back this exemption of Rs. 6,77,04,992/- to tax as LTCG, which was allowed u/s.54F in AY 2012-13. 2.4.6 As regards, the proposed addition in of proportionate 54F deduction in the said A.Y 2015-16, we note that AO in the DAO has proposed to add back 54F of Rs. 2,99,46,438/- to tax on protective' basis. Hence, it does not require any deletion". 24. He submitted that once the assessee has accepted the same in the A.Y 2014-15, no addition of the same can be made in the A.Y 2015-16. 25. The learned DR, on the other hand, heavily relied on the order of the DRP. 26. We have heard the rival arguments made by both the sides, perused the orders of the AO and the DRP and the paper book filed on behalf of the assessee. We have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o say, that the Assessing Officer while verifying the record shall give due opportunity of being heard to the assessee and decide the issue as per fact and law. We hold and direct accordingly. Grounds of appeal 3b, 5a and 5b are accordingly allowed for statistical purposes. 27. In Ground of appeal No.4, the assessee has requested to give credit of tax paid in A.Y 2016-17 to A.Y 2015-16. 27.1 The learned Counsel for the assessee submitted that the assessee admitted a sum of Rs.4,38,57,500/- to tax in A.Y 2016-17 and paid tax of Rs.1,00, 07,393/- consisting of TDS and 140A tax. He submitted that the DRP directed the said sum of Rs.4,38,57,500/- to be treated as income in A.Y 2015-16 and the assessee has not objected to the same. However, before the DRP, the assessee has claimed that since the income is proposed to be preponed for the A.Y 2015-16, therefore, the tax paid on that income in A.Y 2016-17 should also be given credit in A.Y 2015- 16. However, the DRP at para 2.7.8 refused to accept the claim by observing as under: "2.7.8. Regarding the claim of credit of taxes paid on the amount of sale consideration of Rs.4,38,57,500/- in A.Y 2016-17 to be allowed this year, the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit in the appropriate assessment year is examined in the light of Section 199(3) r.w. Rule 37BA(3) of the Income Tax Rules, it would be clear that credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable. The assessee contends that the TDS credit is available in the financial year where the corresponding income has been referred by the assessee. A reference was made to the decision of the Co-ordinate Bench in the case of Greatship India Ltd. vs. DCIT in ITA Printed from itatorders.in I.T.A. No.6580/Del/2019 3 No.5562/Mum/2018 order dated 8th June, 2020 to contend that the TDS credit cannot be postponed to a different assessment year on the basis of deduction carried out by the deductor when the accrued income from such transaction has been reported in the earlier assessment year. 6. A combined reading of Section 199(3) r.w. Rule 37BA(3) makes the position of law clear that credit for TDS is available in the year in which the income is reported and as a corollary, should not be deferred to some other assessment year. In the instant case, the Revenue has allowed the credit in the subsequent ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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