9911796707
TMI Blog2020 (9) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... #39; Bench for the assessment year 2007-08. 2. The appeal was admitted by the Hon'ble First Bench by order dated 17.07.2018 on the following substantial question of law: "Whether the learned Tribunal substantially erred in law in holding that Rs. 9 Crores received by the assessee pursuant to a Development Agreement had not accrued as income and was, there fore, not taxable till the Joint Development Agreement took off and sale proceeds were received by the developer?" 3. The assessee filed their return of income for the assessment year under consideration, AY 2007-08 on 24.09.2008 admitting a loss of Rs. 4,11,076/-. The return was processed under Section 143(1) on 26.03.2009. The assessee's case was selected for scrutiny under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attorney were cancelled, it cannot be treated as transfer under Section 2(47) of the Act. However, with regard to the amount of Rs. 9 Crores received by the assessee as advance, the Assessing Officer came to the conclusion that the same has to be treated as a windfall gain and treated as income from other sources and accordingly completed the assessment by order dated 25.03.2015. Aggrieved by such order, the assessee preferred appeal before the Commissioner of Income Tax-I [CIT(A)], Chennai. The appeal was allowed by order dated 01.09.2016. Aggrieved by the same, the revenue preferred appeal before the Tribunal which was dismissed by the impugned order. 4. Mr.T.Ravikumar, learned Senior Standing Counsel appearing for the appellant/revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame. In support of his contentions, Mr. T. Ravikumar, learned senior standing counsel referred to the decisions in the case of Commissioner of Income Tax vs. T.V.Sundaram Iyengar & Sons Ltd. [(1996) 222 ITR 344(SC)], Commissioner of Income Tax vs. Balbir Singh Maini [(2017) 398ITR 0531(SC)], Seshasayee Steels (P) Ltd. vs. Assistant Commissioner of Income Tax [(2020) 115 taxmann.com 5(SC)] and Commissioner of Income Tax -8 vs. Lok Housing Constructions Ltd. [(2016) 70 taxmann.com 2(SC)]. 5. Per contra, Mr.S.Sridhar, learned assisted by M/s.Harshini Jothiraman, learned counsel appearing for the respondent/assessee contended that the CIT(A) reversed the order passed by the Assessing Officer after considering the full facts and the Tribunal re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reopened based on certain information which the Assessing Officer noticed during the assessment proceedings for AY 2010-11. The reasons for reopening were furnished to the assessee, a reading of which shows that the Assessing Officer proposed to apply Section 2(47) of the Act and observed that the assessee has not admitted the income in their return and not offered for capital gain tax. Thus, the issue pertaining to the amount of advance received by the assessee, namely, Rs. 9 Crores was never the subject matter of the reopening proceedings which is sufficient to hold that the assessment order dated 25.03.2015 to be a nullity. Nevertheless, we heard the learned counsels on either side very elaborately. The question would be whether the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue share of the assessee. The modus/manner of adjustment/appropriation was agreed to be done based on mutual agreement. This amount remained with the assessee, the assessee in turn created a mortgage in favour of the developer to the tune of about Rs. 120 Crores and possession of the land was handed over for the purpose of development. The Joint Development Agreement did not take off and the matter remained as such and ultimately, in February 2015, the developer addressed the assessee to return the amount of Rs. 9 Crores before 31.03.2015. Even at that point of time, the agreement was not cancelled and the power of attorney granted to the developer remained in force. Therefore, by no stretch of imagination, the sum of Rs. 9 Crores in the ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer to hold that the amount of Rs. 9 Crores lies in the hands of the assessee was a windfall gain is by referring to an event which took place during the assessment year 2015-16. Obviously, this could not have been done by the Assessing Officer because the assessment which was the subject matter of consideration was of the year 2007-08. The Joint Development Agreement , Power of Attorney, the mortgage were all in force at the relevant time. In fact, even on the date when the Assessing Officer completed the assessment under Section 147 of the Act by order dated 25.03.2015, the Joint Development Agreement was not rescinded and the Power of Attorney was not cancelled. Therefore, on facts, the Assessing Officer could not have held that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
