9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (9) TMI 822 - HC - Income TaxPenalty u.s 271(1)(c) - exigibility to capital gain - Transfer - exigible to tax by reference to Section 2(47)(v) read with Section 53-A of the Transfer of Property Act, 1882 - JDA entered by assessee - Held that - The facts of the case of assessee are admittedly identical as have been decided in the case of Shri C.S. Atwal Vs CIT, Ludhiana 2015 (7) TMI 878 - PUNJAB & HARYANA HIGH COURT issue of exigibility to capital gain in favour of the assessee and against the revenue wherein held as no possession had been given by the transferor to the transferee of the entire land in part performance of JDA so as to fall within the domain of Section 53A of 1882 Act. The possession delivered, if at all, was as a licencee for the development of the property and not in the capacity of a transferee. Further Section 53A of 1882 Act, by incorporation, stood embodied in section 2(47)(v) of the Act and all the essential ingredients of Section 53A of 1882 Act were required to be fulfilled. In the absence of registration of JDA the agreement does not fall under Section 53A of 1882 Act and consequently Section 2(47)(v) of the Act does not apply. In view of cancellation of JDA no further amount has been received and no action thereon has been taken. The issue of exigibility to capital gains tax having been decided in favour of the assessee, the question of penalty under Section 271(1) (c) of the Act would not be exigible - Decided in favour of assessee.
Issues:
1. Applicability of penalty under Section 271(1)(c) of the Income Tax Act, 1961 for non-disclosure of accrued capital gain. 2. Interpretation of the provisions related to long term capital gain tax under Section 45 of the Act. 3. Validity of penalty deletion by the CIT(A) and the subsequent dismissal by the Tribunal. Issue 1: Applicability of Penalty under Section 271(1)(c) The appellant-revenue filed an appeal against the Tribunal's order deleting the penalty imposed under Section 271(1)(c) of the Act. The dispute arose from the assessee's failure to fully disclose accrued capital gain, leading to an addition by the Assessing Officer. The CIT(A) deleted the penalty, which was upheld by the Tribunal. The appellant argued that penalty should not have been deleted as the capital gain was not fully disclosed. However, the High Court cited a previous judgment regarding taxability of capital gains on unrealized amounts, concluding that no penalty would be applicable in this case. Issue 2: Interpretation of Long Term Capital Gain Tax Provisions The case involved a Joint Development Agreement (JDA) where the assessee transferred land to a developer. The Assessing Officer added the entire consideration to the assessee's income as long term capital gain. The dispute centered around the applicability of Section 2(47) of the Act and the interpretation of possession under Section 53A of the 1882 Act. The High Court referred to a previous case to determine that no taxable capital gains arose from the transaction, as the possession was not transferred in part performance of the JDA. The Court emphasized that the assessee would only be liable for capital gains tax on amounts actually received. Issue 3: Validity of Penalty Deletion The CIT(A) had deleted the penalty imposed under Section 271(1)(c), a decision upheld by the Tribunal. The appellant-revenue challenged this deletion, arguing that the penalty should not have been removed due to non-disclosure of capital gains. However, the High Court relied on a previous judgment to establish that no penalty would be applicable since no capital gains arose on unrealized amounts. Consequently, the appeal was dismissed, affirming the deletion of the penalty. This detailed analysis of the judgment covers the issues related to the applicability of penalty under Section 271(1)(c), interpretation of long term capital gain tax provisions, and the validity of the penalty deletion by the CIT(A) and subsequent dismissal by the Tribunal.
|
