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TMI Blog2021 (1) TMI 352X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer of property during the previous year relevant to assessment year 2006-07. Computation of capital gains being erroneous and excessive - The present proceedings pertains to asst. year 2006-07 and not for the asst. Year 2009-10. It is an admitted position in law that the tax is to be charged in the year it accrued. Therefore the finding of the lower authorities is devoid of merit. We hold that authorities below erred in computing capital gains in the hands of assessee during year under consideration. Interest under section 234 A, B, C - This ground to be consequential in nature. - ITA Nos. 1269 and 1270/Bang/2016 - - - Dated:- 14-8-2020 - A. K. Garodia , Member (A) And Beena Pillai , Member (J) For the Appellant : V. Srinivasan, Advocate For the Respondents : Dilip, Standing Counsel ORDER Beena Pillai, Member (J) Present appeal arises out of order dated 29/04/2016 passed by Ld. CIT(A) Mangaluru, for assessment year 2006-07 on following grounds of appeal: ITA No. 1269/Bang/2016 1. The learned CIT[A] has erred in sustaining the order of the learned A.O. dated 28/12/2012, which was opposed to law, equity, weight of evidence, probabilities, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk nexus for the formation of the belief that income has escaped assessment. Consequently, the assumption of jurisdiction by the A.O. is bad in law and requires to be annulled. 8. The leaned CIT[A] has erred in sustaining the impugned assessment before him, which was made without issuing a notice u/s. 143[2] of the Act, and ought to have annulled the said assessment even if re-opening of the assessment were to be upheld in most unlikely event under the facts and in the circumstances of the appellant's case. 9. The learned CIT[A] is not justified in sustaining an addition by way of capital gains of a sum of ₹ 7,01,91,537/- computed by the learned A.O. on the value as agreed to by the appellant and co-adventurer as the initial investment of the appellant in establishing a joint enterprise to share the revenue of the enterprise holding that such contribution towards investment attracts the provisions of section 2[47][v] of the I.T. Act, under the facts and in the circumstances of the appellant's case. 9.1 The learned CIT[A] is not justified in enhancing the total alleged value of the consideration to a sum of ₹ 46,23,14,942/- under the facts and in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght to seek waiver with the Hon'ble CCIT/DG, the appellant denies itself liable to be charged to interest u/s. 234-B and 234-C of the Act, which under the facts and in the circumstances of the appellant's case and the levy deserves to be cancelled. 16.1 The learned CIT[A] is not justified in sustaining the levy of interest u/s. 234B of the Act, on the ground that it was mandatory without appreciating that in view of the loss suffered by the appellant there was no obligation to file an estimate and pay advance tax and consequently, the very levy of interest is bad in law and requires to be cancelled. 17. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. IT(TP) A No. 1270/Bang/2016 1. The learned CIT[A] has erred in sustaining the order of the learned A.O. dated 28/02/2014, which was opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case instead of annulling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion specified in the said agreement to warrant an inference that income has escaped assessment. 6.1 The learned CIT[A] is not justified in enhancing the total alleged value of consideration to a sum of ₹ 46,23,14,942/- as against the sum of ₹ 17,55,35,000/- made in the original assessment and a sum of ₹ 18,32,31,000/- made in the order impugned in the appeal under the facts and in the circumstances of the appellant's case. 7. The rejection of the grounds taken in appeal by the learned CIT[A] are contrary to law, contrary to records and to the ratio of the catena of decisions cited before him and consequently the assessment made requires to be cancelled and the addition sustained requires to be deleted. 3. Each of the findings of the learned CIT[A] which are not specifically contested in the grounds of appeal inadvertently are deemed to have been contested as erroneous and contrary to law and evidence and are deemed to have challenged and contested in this grounds of appeal. 9. Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, -he appellant denies itself liable to be charged to interest u/s. 234-B and 234-C of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I have given a very careful consideration to the rival contentions. I am of the view that the ratio laid down by the Hon'ble Supreme Court is that assessee is entitled to copy of reasons recorded and the condition for demanding such copy of reasons recorded is that he should file return of income in response to notice u/s. 148. The request for furnishing reasons recorded for initiating Proceedings u/s. 148, whether it should be made prior to furnishing of return of income or hereafter does not emanate torn the decision of the Hon'ble Supreme Court. The fact that the assessee made request for furnishing reasons recorded prior to the file of return of income and thereafter he did not seek copy of reasons recorded is no ground to deny the assessee the benefit or looking into the reasons for initiating reassessment proceedings u/s. 147. In fact, in the decision rendered by the Hon'ble Bombay High Court in the case of Trend Electronics (supra) on identical facts, the Hon'ble Court took the view that failure to furnish reasons recorded to the assessee when sought for rendered the order of reassessment invalid. With regard to the contention of the Id. Standing Counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the MoU dated 7.3.2008 and by virtue of the provisions of Sec. 47 of the Registration Act, 1908, the JDA dated 7.6.2005 has to be regarded as a registered JDA and therefore the decision of the Hon'ble Supreme Court in the case of Balbir Singh (supra) is not applicable to the facts of the Assessee's case. 31 Section 47 of the Registration Act, 1908 reads as follows:- Time from which registered document operates: A registered document shall operate from the time from which it would have commenced to operate if no registration thereof had been required or made and not from the time of its registration. 32. As we have already seen, the joint development agreement dated 762005 no longer exists as subsequently a MoU was entered into on 5.4.2006 in which the parties to the agreement were all different and the tens of agreement of joint development were also different and that MoU was substituted by another MoU dated 7.3.2008 which was ultimately registered. Though there is a reference to the agreement dated 7.6.2005 in the MoU dated 7.3.2008, it is only for the sake of completeness. The MoU dated 7.3.2008 does not state that it was in continuation of the MoU dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the finding of the Id. AM on finding regarding delivery of possession to the Developer is correct, it is not possible for the revenue to say that delivery of possession under a unregistered agreement for sale entered into after Amendment to the Registration Act, 1908 and the Transfer of Property Act, 1872 by the Amendment Act, 2001, would also give rise to a transfer within the meaning of section 2(47v) of the Act. I, therefore, agree with the view of Id. JM and hold that there was no transfer of the property during the previous year relevant to AY 2006-07. 4.2. We note that, Hon'ble Third Member concurred with the view taken by Hon'ble Judicial Member, who held that there was no transfer of property during the previous year relevant to assessment year 2006-07. Respectfully following the same, we allow Grounds 4, 5, 10, 10.1, 14 15 of assessee. 5. Ground 9, 9.1 13 are against computation of capital gains being erroneous and excessive. 5.1. We have perused the order passed by Hon'ble Judicial Member as well as the descent order by Hon'ble Accountant Member. We note that these issues are not subject matter of the descent order. Therefore, view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for the asst. Year 2009-10. It is an admitted position in law that the tax is to be charged in the year it accrued. Therefore the finding of the lower authorities is devoid of merit. In the result these grounds No. 9, 9.1 and 11 of ITA No. 1269/Bang/16 Ground No. 6.6.1 of ITA No. 1270/Bang/2016 of the assessee are allowed. ---this space is left vacant intentionally--- 5.3. Respectfully following the above observation, we hold that authorities below erred in computing capital gains in the hands of assessee during year under consideration. Accordingly these grounds raised by assessee stands allowed. 6. Ground No. 12 is in respect whether the transaction results in AOP. 6.1. We have perused the order passed by Hon'ble Judicial Member as well as the descent order by Hon'ble Accountant Member. We note that these issues are not subject matter of the descent order. Therefore, view of Hon'ble Judicial Member has to be adopted as it is as under. Hon'ble Judicial Member held it to be academic. Accordingly, this ground is not adjudicated upon. 7. Ground No. 16 16.1 are in respect of interest under section 234 A, B, C. 7.1. We have perused the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l gains the total cost of lard was taken as ₹ 18,32,31,000/-. Thus there is escapement of long-term capital gains. Therefore, we find no merit in the submission of the assessee that the second reopening done by the AO was bad in law. Accordingly this issue is decided against the assessee and in favour of the Revenue. Respectfully following the same, we dismiss this ground is raised by assessee. 10. Ground No. 7-8 is in respect of whether transfer of property occurred during the year under consideration under section 2(47) (v) of the Act. 10.1. This issue was subject matter of dissent in order passed by Hon'ble Accountant Member dated 13/02/2018 and was referred to Hon'ble Third Member. 10.2. This issue has been addressed by Hon'ble Third Member in paragraph 30-32 of his order dated 14/02/2020. We have considered this issue while deciding Grounds 4, 5, 10, 10.1, 14 and 15 in ITA No. 1269/B/2016, in paragraph 4.1. hereinabove. Hon'ble Third Member consented with view taken by Hon'ble Judicial Member. Respectfully following the majority view, we allow these grounds raised by assessee. 11. Ground 6.1, 7 8 are against computation of capita ..... X X X X Extracts X X X X X X X X Extracts X X X X
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