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TMI Blog2015 (10) TMI 479X X X X Extracts X X X X X X X X Extracts X X X X ..... in a particular year, then the Assessing Officer can tax that amount in that year only. The scheme of the Act does not envisage that if a particular item of income has escaped taxation in one year, it can be brought to tax in another year solely for the reason that the time limit to reopen the assessment in that year has expired. On an appreciation of the facts additional ground raised by the assessee in respect of the year of chargeability of capital gains on transfer of 60% of land to the developer pursuant to JDA dt.18.1.2006 requires to be admitted as it goes to the very root of the matter. - remand the same to his file for consideration and adjudication thereon after affording the assessee adequate opportunity of being heard and to file details/submissions required. It is ordered accordingly - Decided in favour of assessee for statistical purposes. Chargeability of capital gains arising out of the said land by virtue of JDA and GPA dt.18.1.2006 within the ambit of the provision of Section 2(47)(v) of the Act rws 53A of the Transfer of Property Act - Held that:- Since the issue of the year of chargeability of capital gains on transfer of land to the developer vide JDA dt.18. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 1,97,32,354 to Rs.;1,49,40,196 by unilaterally reducing the built up area from 18,939 sq. ft. to 14,338 sq. ft. is not sustainable on facts and therefore set aside the same and restore the finding of the Assessing Officer in the order of assessment. It is ordered accordingly - Decided in favour of assessee. The action of the learned CIT (Appeals) in reducing the cost of construction of the 11 flats sold by the assessee in the period under consideration, to be in gross violation of the provisions of section 251(2) of the Act, rendering the same illegal and unsustainable in law. We, therefore, reverse the order of the learned CIT (Appeals) and restore the order of the Assessing Officer on this issue. Consequently, Ground No.6 of the assessee's appeal is allowed on this alternate argument also. - I.T. A. No.928/Bang/2014 - - - Dated:- 4-9-2015 - SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER For The Appellant By : Shri H. Guruswamy, ITP. For The Respondent By : Shri P. Dhivahar, JCIT. ORDER Per Shri Jason P. Boaz, A.M. This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm Capital Gains ( STCG ). The Assessing Officer rejected the assessee's claim of HUF Status and assessed the income from LTCG and STCG in the assessee's individual lands. The assessment was completed under Section 143(3) rws 147 of the Act vide order dt.31.12.2010, wherein the total income of the assessee was determined at ₹ 3,23,49,372. In this order, the Assessing Officer determined the LTCG on transfer of 60% of the undivided portion of land at ₹ 1,85,10,384; STCG on sale of 11 flats was computed at ₹ 1,34,13,797 and LTCG attributable to the sale of undivided interest of land in respect of the 11 flats at ₹ 2,73,751. 3. Aggrieved by the order of assessment for Assessment Year 2008-09 dt.31.12.2010, the assessee preferred an appeal before the CIT (Appeals) V, Bangalore. The learned CIT (Appeals), disposed off the appeal vide order dt.24.12.2013 allowing the assessee partial relief. 4. Aggrieved by the order of the CIT (Appeals) V, Bangalore dt.24.12.2013 for Assessment Year 2008-09, the assessee is in appeal before the Tribunal raising the following grounds 1. The appellate order dt.24.12.2013 is opposed to law, facts and weight of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral in nature and not urged before us are dismissed as infructuous. 6. The effective grounds of appeal for adjudication are as under Ground No.2 in respect of the non-admission by the learned CIT (Appeals) of additional grounds urged by the assessee as regards the year of chargeability of LTCG attributable to transfer of 60% of the undivided interest in land (UDI) by virtue of the JDA dt.18.1.2006 and the GPA dt.18.1.2006. Ground No.3, 4 and 7 in respect of the relevant assessment year of chargeability of LTCG arising out of the transfer of 60% of UDI in the said land by virtue of the JDA and GPA both dt.18.1.2006 within the ambit of Section 2(47)(v) of the Act rws 53A of the Transfer of Property Act. Ground No.5 in respect of disallowance of exemption of ₹ 5 lakhs by the CIT (Appeals), which was already allowed by the Assessing Officer under Section 54F of the Act, in respect of the cost of improvement of the flat retained for self occupation. Ground No.6 in respect of the issue of cost of construction allowable for the 11 flats sold by the assessee. 7. Ground No.2 Additional Ground urged before the CIT (Appeals) 7.1 In this ground, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer failed to submit the remand report. The learned Authorised Representative contends that the issue regarding the year of chargeability of LTCG, relating to the said land in Assessment Year 2006-07; in view of the JDA and GPA dt.18.1.2006 was raised vide letter dt.24.1.2012 before the learned CIT (Appeals) about 13 months prior to the expiry of the period of limitation on 31.3.2013 for initiation of proceedings under Section 148 of the Act and the Assessing Officer being in possession of the relevant information in remand proceedings had enough time to initiate assessment proceedings for Assessment Year 2006-07 in the assessee's case. It is argued that in the above factual circumstances, the learned CIT (Appeals) s observation, that the assessee had raised this additional ground with malafide and willful intention to escape the liability to pay tax on LTCG arising on transfer of 60% of share in land to the developer, is not correct as both the learned CIT (Appeals) and the Assessing Officer were aware and had knowledge of the facts of the issue of the year of chargeability of LTCG on transfer of 60% of land in view of the assessee's raising the issue in submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the information in this regard was with the authorities below from 24.1.2012. The intention of law is that the income of an assessee is to be brought to tax correctly in the correct year. If an item of income is taxable in a particular year, then the Assessing Officer can tax that amount in that year only. The scheme of the Act does not envisage that if a particular item of income has escaped taxation in one year, it can be brought to tax in another year solely for the reason that the time limit to reopen the assessment in that year has expired. 7.4.2 On an appreciation of the facts of the matter on record, we are of the considered view that the additional ground raised by the assessee in respect of the year of chargeability of capital gains on transfer of 60% of land to the developer pursuant to JDA dt.18.1.2006 requires to be admitted as it goes to the very root of the matter. We, therefore, in the interest of justice and equity, admit this additional ground raised by the assessee. Since the same has not been examined by the learned CIT (Appeals), we remand the same to his file for consideration and adjudication thereon after affording the assessee adequate opportunity of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is contended that this action of the learned CIT (Appeals) resulted in the enhancement of the assessee's income by ₹ 5 lakhs due to reduction in exemption granted under Section 54F of the Act and therefore in accordance with the provisions of section 251(2) of the Act, the learned CIT (Appeals) ought to have put the assessee on notice about his views on this issue and allowed the assessee adequate opportunity of being heard in the matter; which he failed to do. The learned Authorised Representative submitted that in view of this action of the learned CIT (Appeals) is illegal and unsustainable and requires to be reversed. 9.3. We have heard the rival contentions and perused and carefully considered the material on record. As contended by the learned Authorised Representative, we find that the learned CIT (Appeals) at para 11.3 of the impugned order, has directed the Assessing Officer to disallow the cost of improvement amounting to ₹ 5 lakhs, which claim of the assessee, the Assessing Officer had allowed. On a perusal of the impugned order, it is evidently clear that the learned CIT (Appeals) s action led to an enhancement of the assessee's income to the ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e opportunity of being heard in violation of the principles of natural justice. 10.3 The learned Authorised Representative contends that, without prejudice to the above contention, the learned CIT (Appeals) was not justified in reducing the cost of construction of the 11 flats, which the Assessing Officer computed and allowed at ₹ 1,97,32,354 after obtaining the details from the developer. In support of this proposition, the learned Authorised Representative placed reliance on the decision of the co-ordinate bench of this Tribunal in the case of Smt. Jeeva Vadivelu V ACIT in ITA Nos.225 306/Bang/2011 dt.7.9.2012. It is submitted that the facts of the assessee's case are similar to the facts of the cited case and therefore the assessee is entitled to the cost of construction amounting to ₹ 1,97,32,354 as allowed by the Assessing Officer. 10.4.1 We have heard both parties and perused and carefully considered the material on record. As regards the allowability of the cost of acquisition of property to the assessee, we find that the co-ordinate bench of the Tribunal in the case of Smt. Jeeva Vadivelu (supra) at para 31 thereof has held as under 31 .We ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment, appears to be in order. We are of the view that the finding of the learned CIT (Appeals), in reducing the cost of acquisition of the 11 flats sold by the assessee in this year from ₹ 1,97,32,354 to Rs.;1,49,40,196 by unilaterally reducing the built up area from 18,939 sq. ft. to 14,338 sq. ft. is not sustainable on facts and therefore set aside the same and restore the finding of the Assessing Officer in the order of assessment. It is ordered accordingly. Ground No.6 of the assessee's appeal is allowed. 10.4.3 Even otherwise, the action and finding of the learned CIT (Appeals) in reduction of the cost of construction of the 11 flats sold by the assessee in the year under consideration from ₹ 1,97,32,354 to ₹ 1,49,40,196 is not sustainable since it has led to an enhancement of the assessee's income to the extent of ₹ 47,92,158. In such circumstances, as per the provisions of section 251(2) of the Act, the learned CIT (Appeals) was required to put the assessee on notice and afford the assessee adequate opportunity of showing cause against such enhancement; which we find the learned CIT (Appeals) has failed to do. In this factual matrix, we f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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