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2021 (11) TMI 739 - AT - Income TaxCapital gain computation - year of assessment - Year of transfer of asset u/s 2(47) - HELD THAT - The joint development agreement was executed on 6.11.2013 and from the assessment order the AO has himself accepted that the transfer took place as per sec.2(47) rws 53A of the Transfer of Property Act which was taken place for the previous year ending only on 31.3.2014 relevant to AY 2014-15, therefore, the capital gain should be arising in the AY 2014-15 - Decided against revenue.
Issues Involved:
1. Legality of CIT(A)'s action in allowing the appeal without hearing the AO. 2. Justification of CIT(A) in allowing the appeal. 3. Deletion of addition made by the AO on account of wrong claim of deduction under Section 54F. Issue-wise Detailed Analysis: 1. Legality of CIT(A)'s Action in Allowing the Appeal Without Hearing the AO: The Revenue contended that the CIT(A)'s action of allowing the appeal without providing an opportunity for the AO to be heard was "illegal, arbitrary and not in consonance with the principles of natural justice." However, the tribunal did not find this argument sufficient to overturn the CIT(A)'s decision, especially given the substantial issues at hand related to the assessment year and the application of Section 54F. 2. Justification of CIT(A) in Allowing the Appeal: The tribunal examined the facts, including the development agreement executed on 6.11.2013, and noted that the AO himself had accepted that the capital gain tax liability arose in the assessment year 2014-15. The CIT(A) had granted relief based on this acknowledgment and referenced several judicial precedents to support the decision. The tribunal upheld the CIT(A)'s conclusion that the capital gains should be assessed in the AY 2014-15, not AY 2016-17, thus justifying the CIT(A)'s allowance of the appeal. 3. Deletion of Addition Made by the AO on Account of Wrong Claim of Deduction Under Section 54F: The tribunal reviewed the CIT(A)'s decision to delete the addition made by the AO regarding the wrong claim of deduction under Section 54F. The CIT(A) had relied on various judicial decisions, including those of the Karnataka High Court and the Andhra Pradesh High Court, which interpreted the term "a residential house" to mean that multiple units in a single complex could be considered as one residential house for the purpose of Section 54F. The tribunal found that the CIT(A) had correctly applied these precedents and that the AO's addition was unwarranted. Consequently, the tribunal upheld the CIT(A)'s deletion of the addition. Conclusion: The tribunal concluded that the CIT(A)'s order was correct in determining that the capital gains should be assessed in the AY 2014-15 and that the deletion of the addition made by the AO was justified. The tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision and emphasizing the adherence to judicial precedents and the principles of natural justice. Order Pronounced: The appeal by the Revenue was dismissed, and the order was pronounced on 30/08/2021.
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