TaxTMI 
TaxTMI 
2025 (5) TMI 1072
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....edure as provided by section 148A of the Act, a show cause notice u/s 148A(b) of the Act was issued on 22.03.2022 after obtaining prior approval of the competent authority u/s 151 of the Act. The assessee was also asked to explain as to why a notice u/s 148 of the Act shall not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year. However, the assessee did not respond to the show cause notice issued u/s 148A(b) of the Act. Therefore, the Assessing Officer, on the basis of material available on record initiated proceedings u/s 147 of the Act as provided by section 148A r.w.s. 148 of the Act. Accordingly, the Assessing Officer issued notice u/s 148 of the Act. 3. In response to the said notice the assessee filed the return of income on 04.04.2022 declaring total income of Rs. 6,97,540/- under the head 'Income from other sources'. Statutory notices u/s 143(2) and 142(1) of the Act were issued and served on the assessee, in response to which the assessee filed certain details. The Assessing Officer issued notice u/s 133(6) of the Act to the SRO, Panvel-2 as well as the Designated Verifica....
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.... under 12.5% of Goathan Expansion Scheme by CIDCO Ltd., registered on 12-12-2014 and that the plot was actually allotted to the assessee on 09-04-2014 and it was given for development to M/s. Radiant Builders. In this regard, the relevant extract of 'note on working of capital gains furnished by the assessee in his reply is appended below. Note on working of Capital Gain: A. TAXABILTY U/S 45(5A) UNDER HEAD CAPITAL GAIN Section 45 (5A) provides as follows: In case of an assessee being INDIVIDUAL/HINDU UNDIVIDED FAMILY who enters into a specified agreement for development of a Project, the capital gain arising from such Transfer shall be chargeable Contd..3 to Income Tax as income of the previous year in which the Certificate of completion for the whole or part of the project is issued by the Competent Authority. Considering Above provisions, This being JOINT DEVELOPMENT PROJECT, Tax liability of assessee arises in the year in which Certificate of Completion Of CONSTRUCTED PROJECT has been received. Since Certificate of Completion of above Project has been received on 25-05-2018 i.e. in F.Y.2018-19, A.Y.2019-20, Assessee had paid all Tax liability by filing Income-Tax Ret....
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....lue of assessee's share in the property to be received from the builder as on the date of execution of the JDA has to be calculated and should have been offered to tax in the AY:2015-16 itself and not in the AY:2019-20 as per the relevant provisions of the statute applicable for the AY:2015-16. 5 In the light of all the foregoing facts, legal obligations as per the prevailing provisions of I.T. Act relevant to the AY:2015-16, it is obvious that the assessee derived income from capital gains on transfer of the properties as detailed in the show cause notice issued. Further, the assessee's response did not contain specific reply with supporting details & evidences to each of the actions proposed in the show cause notice. Hence, the contentions of the assessee are rejected as devoid of merit. 4. Conclusion drawn: The assessee failed to substantiate his contention as to why the flagged value of information should not be taxed in his hands for the year under consideration by furnishing details & supporting evidences for sources of acquisition, date of acquisition, cost of acquisition, date of transfer of the properties in regard to which the assessee derived capital gains,....
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.... added the consideration mentioned on both agreements i.e. Rs. 9,25,45,000/- and 50% of on Money (since it was joint development agreement) i.e. Rs. 1,00,00,000/- to the total income. 6.6. During the appellate proceedings the appellant re-iterated his contention and explained the underlined registered agreements as under: Appellant along with 5 others were allotted Plot no.07 at Sector-19, Ulwe, Taluka-Panvel, Dist-Raigad under 12.5% Gaothan Expansion Scheme by CIDCO Ltd., Vide Lease Agreement entered Between Appellant along with 5 others & CIDCO Ltd., Registered on 12-12-2014. The Plot was actually allotted to Appellant & Others on 09-04-2014. Said Plot was Given for Development to Firm Radiant Builders (PAN-AARFR9087M) vide Development Agreement Registered between Appellant and 5 Others and Firm- Radiant Builders on 04-03-2015, wherein it was agreed by Plot Developing Party i.e. Radiant Builders to pay Total On money of Rs. 2 Crores along with to give 50% Developed Property to Appellant & 5 Others. 6.7. In Pursuit of above DEVELOPEMENT Agreement, Tripartite Agreement was entered & Registered between Appellant & 5 others, Radiant Builders and Cidco Ltd., ON 04-03-2015 (F.Y.2....
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....rect amount of consideration and (b) the relevant assessment year from taxability purpose. Each issue is dealt separately as under: 6.14. First dealing with correct amount of consideration: The Ld. AO has considered Rs. 9,25,45,000/- towards property and Rs. 1,00,00,000/- towards on-money. However, in actual the appellant has not received Rs. 9.25 crores as consideration to enter JDA. Further, on perusal joint development agreement reflected 2 values, one being Stamp Duty Assessed or the Govt Value of Rs. 4,01,32,000/- and the other being the Value of consideration of Rs. 5,24,13,000/-. The Ld. AO has considered both the values and calculated it as Rs. 9.25,45,000/- (Rs.4,01,32,000/- Plus Rs. 5,24,13,000/- which is not correct. However, as per submission of the appellant, he received total build up area in the constructed project of worth Rs. 6,95,00,100/- (being stamp duty valuation) and On-Money of Rs. 1,80,00,000/- Said consideration is equivalent to his share i.e. 1/6th. Therefore, the total consideration that should be considered for computation of capital gain amounts to Rs. 8,75,00,100/- 6.15. Now the next question pertains to timing of taxability. In this regard, ....
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.... Agreement giving licensee to permit builder to construct flats as transfer by way of sale, which is contrary to judgments of SC. 3) In the facts and the circumstances of the case and in law, the learned A.O. erred in adding stamp duty value and agreement value of Rs 92545000/- u/s 50C by wrongly treating the same as sale of 2 properties and the learned CIT[A] erred in calculating sale consideration at Rs 87500100/- 4) In the facts and the circumstances of the case and in law, the learned A.O. erred in treating the Appellant as full owner instead of 1/6th owner which is the correct share. 5) In the facts and the circumstances of the case and in law, the learned A.O. erred in treating the Development Agreement as transfer in AY15-16 instead of AY 19-20 in which all taxes were paid and exemption u/s 54F was claimed thereby preponing date of transfer. 6) In the facts and the circumstances of the case and in law, the learned CIT[A] NFAC erred in confirming rest of all the grounds 7) The Assessing Officer wrongly charged interest u/s 234 A, B, C and D and initiated penalty u/s 271(1)(c). 7. The Ld. Counsel for the assessee at the outset did not press ground of appeal No.1(b) ....
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.... to the decision of Hon'ble Supreme Court in the case of Union of India & Ors. Vs. Rajeev Bansal vide Civil Appeal No.8629 of 2024 order dated 03.10.2024, the Ld. Counsel for the assessee drew the attention of the Bench to page 51 of the said order. Referring to page 52 para 19(f) of the said order, he submitted that the Revenue in the said case has conceded that for assessment year 2015-16 all notices issued on or after 1st April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA. He submitted that since in the instant case also, the assessment year involved is assessment year 2015-16 and the notice u/s 148 of the Act has been issued after 01.04.2021, therefore, such reopening of the assessment has to be quashed. 11. Referring to the following decisions, the Ld. Counsel for the assessee submitted that the reopening of assessment being not in accordance with law has to be quashed: i) Pratishtha Garg vs. ACIT vide W.P. (C) 16878/2024 CM Appl. 71476/2024, order dated 19.12.2024 ii) M/s. Orbit Financial vs. ACIT vide ITA No.5812/M/2024 & CO No.287/M/2024, order dated 31.12.2024 iii) Prashant Jayantilal Patel vs. ITO vid....
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....ll not apply where the assessee transfers his share in the project on or before the date of issue of the said certificate of completion, and the capital gains shall be deemed to be the income of the previous year in which such transfer takes place and the provisions of this Act, other than the provisions of this sub-section, shall apply for the purpose of determination of full value of consideration received or accruing as a result of such transfer. Explanation.-For the purposes of this sub-section, the expression- (i) "competent authority" means the authority empowered to approve the building plan by or under any law for the time being in force; (ii) "specified agreement" means a registered agreement in which a person owning land or building or both, agrees to allow another person to develop a real estate project on such land or building or both, in consideration of a share, being land or building or both in such project, whether with or without payment of part of the consideration in cash; (iii) "stamp duty value" means the value adopted or assessed or assessable by any authority of the Government for the purpose of payment of stamp duty in respect of an immovable propert....
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....pital gains. 18. We find in appeal the Ld. CIT(A) / NFAC partly allowed the appeal filed by the assessee, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the Ld. Counsel for the assessee that the property is jointly held by 5 others apart from the assessee. Further, it is also his submission that in the case of the brother of the assessee, no such reopening of assessment has taken place. It is also his submission that the assessee has filed the return of income and paid the taxes in assessment year 2019-20 when the assessee received his share of shops and flats, the details of which are placed at pages 160 and 161 of the paper book. 19. We find in the instant case the assessee along with 5 others was allotted plot No.07 at Sector 19, Ulwe Taluka-Panwel, Dist-Raigad under 12.5% of Goathan Expansion Scheme by CIDCO Ltd. vide Lease agreement entered into between the assessee along with 5 others and CIDCO Ltd. on 12.12.2014. The plot was actually allotted to the assessee and others on 09.04.2014 which was given for development to the firm M/s. Radiant Builders vide Development Agreement registered between the assessee & 5 others ....