9911796707
TMI Blog2016 (7) TMI 1632X X X X Extracts X X X X X X X X Extracts X X X X ..... ble jurisdictional High Court as well as facts came to the knowledge of the Assessing Officer that the assessee had entered into JDA is valid and justified. Addition on account of capital gains - HELD THAT:- We find that as per the JDA dt.12.5.2004 the assessee has handed over possession to the developer for construction of the residential project though the said JDA and handing over of the possession does not constitute an outright and absolute sale however it would certainly constitute the transfer of the immovable property as per the provisions of section 2(47)(v) of the Act as held by the Hon ble jurisdictional High Court in the case of Dr. T.K. Dayalu [ 2012 (6) TMI 405 - KARNATAKA HIGH COURT] . We do not find any error or illegality so far as the JDA along with handing over of possession constitute transfer of land in question in terms of section 2(47)(v) . The issue of computation of capital gains is set aside to the record of the Assessing Officer with a direction to compute the capital gains by taking consideration for transfer of the land as on the date of JDA as market value of the asset to be received by the assessee. - I.T.A. No. 390/Bang/2015 - - - Dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. The assessee-HUF filed its return of income on 5.2.2006 declaring total income of ₹ 1,79,727 and agricultural income of ₹ 1,78,000. Subsequently, during the course of enquiry the Assessing Officer found that the assessee has entered into Joint Development Agreement (in short JDA ) dt.12.5.2004 with M/s. SJR Builders along with assessee s brother s wife in respect of the property measuring 2 acres of land bearing Survey No.136/1 situated at Munnekollalu Village, Varthur Hobli, Bangalore East Taluk, Bangalore. The Assessing Officer accordingly reopened the assessment by issuing a notice under Section 148 on 19.3.2012 by recording the reasons that there is a transfer of land as per the provisions of section 2(47)(v) of the Income Tax Act, 1961 (in short the Act ) as the possession of the said property has been taken by the developer in part performance of contract referred in section 53A of the Transfer of Property Act. The Assessing Officer has placed reliance on the judgment of Hon ble jurisdictional High Court in the case of CIT Vs. Dr.T.K. Dayalu 202 taxman 531. Accordingly, the Assessing Officer held that the assessee has not offered the capital gains in the yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 004 and subsequently the Assessing Officer found that the assessee had entered into a JDA and accordingly it is a tangible material to indicate that the income assessable in the form of capital gains has escaped assessment. He has relied upon the orders of the authorities below. 7. We have considered the rival submissions as well as the relevant material on record. The return was filed on 15.2.2006 and there is no assessment on the original return filed by the assessee. Subsequently, the Assessing Officer issued a notice dt.29.2.2012 under Section 148 for reopening of assessment as under : F.No. AC-7(1)/12-13 Dated : 25.04.2012. To Mr. N.G. Chandra Reddy, 22/222, Doddankundi Village, Marthahalli, Bangalore-560 037 Madam, Sub : Furnishing of reasons recorded for reopening u/s.147 as requested by you for the A.Y. 2005-06. -- -- -- -- -- Kind reference is invited to the above. The reasons recorded for reopening is as under : You have entered into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... validity of reopening of assessment based on decision of the Hon ble High Court was held to be valid in para 3 as under : 3. The Tribunal has held that such reopening was not justified, as in its view the reopening was only as a consequence of a change of opinion which was not warranted having regard to the fact that the assessee had furnished all the information required to the time of the original assessment. learned counsel for the assessee sought to support the view so taken by the Tribunal by relying on certain observations of the Supreme Court in the case of ITO vs. Lakhmani Mewal Das 1976 CTR (SC) 220 : (1976) 103 ITR 437 (SC) : TC 51R.598. At p. 448 of that judgment, the Court observed as under : As stated earlier, the reasons for the formation of the belief must have a rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the ITO and the formation of his belief that there has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the JDA dt.12.5.2004 the assessee has handed over possession to the developer for construction of the residential project though the said JDA and handing over of the possession does not constitute an outright and absolute sale however it would certainly constitute the transfer of the immovable property as per the provisions of section 2(47)(v) of the Act as held by the Hon ble jurisdictional High Court in the case of Dr. T.K. Dayalu (supra) in para 8 as under : 8. The Hon ble Supreme Court (sic-Bombay High Court) in Chaturbhuj Dwarkadas Kapadia vs. CIT (2003) 180 CTR (Bom) 107 : (2003) 260 ITR 491 (Bom) held that the date relevant for attracting capital gain having regard to the definition under s. 2(47) of the Act is the date on which possession is handed over by the developer and has observed as follows : Under s. 2(47)(v), any transaction involving allowing of possession to be taken over or retained in part performance of a contract of the nature referred to in s. 53A of the Transfer of Property Act would come within the ambit of s. 2(47)(v). That, in order to attract s. 53A. the following conditions need to be fulfilled. There should be a contract for consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital gains, we find that the co-ordinate bench of this Tribunal in the case of Shankar Vittal Motor Co. Ltd. (supra) has held as under : We have given our thoughtful consideration and rival submissions and facts and circumstances of the case and also gone through the order of the authorities below. As the case referred as Smt Prathima Reddy Vs ITO, Ward- 6(4) (2012) 25 Taxmann.com 264(Hyd.) by the learned DR actually dissimilar to the facts of the present case because in the said case, the controversy was with regard to the assessment year, but the determination of value was not in dispute. However, in the instant case, the main controversy is not with regard to the assessment year, but it is of the valuation of property whether market value as on the date of JDA has to be considered or Construction cost has to be considered. The judgment passed by the jurisdictional High Court in the case of CIT Vs Dr. T.K. Dayalu 292 Taxman.com 531 is relevant for deciding the present controversy. We are of the view, because at the time of signing JDA the capital gain has to be computed only on the guidance value of the land. Even otherwise, if any capital gains to be accrued in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
