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TMI Blog2016 (9) TMI 1631X X X X Extracts X X X X X X X X Extracts X X X X ..... TAT, Visakhapatnam. The ITAT, Visakhapatnam Bench has set aside the order of the Commissioner u/s 263 of the Act and directed the A.O. to complete the assessment u/s 143(3) r.w.s. 254 of the Act. The order already passed on 24.2.2015 and the order is under appeal before Ld. CIT(A). In so far as, assessment year 2006-07 is concerned, the Ld. CIT(A) without considering the agreement various clauses incorporated, without considering the facts and circumstances of the case, without considering the capital gains offered by the assessee herself simply held that the assessment year 2001-02 is not before me and it has to be taxed only in assessment year 2001-02. We find that the order passed by the Ld. CIT(A) is not correct and the Ld. CIT(A) ought to have considered all the details. We also find that in the assessment years 2005-06 and 2006-07 facts are similar - we find that the request made by the Ld. D.R. is justified and accordingly we set aside the order passed by the Ld. CIT(A) and direct the Ld. CIT(A) to examine all the details and decide de-novo, in accordance with law. Appeal filed by the revenue is allowed for statistical purposes. - I.T.A. No. 716/Vizag/2013 - - - Dated: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the departments concerned would be obtained by the developer only. It means that so long as the approval is not obtained the shares of both the parties are not determined and there is no question of part performance of handing over the property to the developer as claimed by the assessee. The plan approval of the property was obtained from the municipal authorities vide approval no.140.I2QQ. Subsequent to the approval only the construction was started and partly completed during the financial years 2004-05 and 2005-06 only. As such the assessee's claim that the capital gains are assessable in the year 2001-02 is not correct. 3. As verified from the Regd. Sale deeds executed by the assessee and the second party jointly vide document No.536/05 dt.05.02,2005 and 3755/04 dated 15- 10-2004, it was recorded therein at page.2 thereof, among other things as follows (para 5 thereof) The schedule property is devolved upon the 1 party (viz Smt. lvaturi Mahalakshmamma) by virtue of the will no.244/1977 executed by her husband and since then the scheduled property is under the enjoyment of the 1st party with absolute title together with possessionary rights . It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded over to the builder and the right in the rest of the property i.e half share was with the assessee only and hence the question of inclusion of the cost of land in the capital gains in the hands of the assessee does not arise. This contention is not acceptable. While taking the value of the share of the assessee in the constructed portion, the cost of the undivided land and common area are includible, as the assessee had got right in these areas besides the carpet area of 7294 Sq.ft received. While arriving at the cost of construction the Regd. valuer adopted the composite rate of 918 per sft. As against this, the composite rate adopting the market rate as per S.R.O, patamata for the site and the cost of construction, u/s.500 of the Income Tax Act, 1961. comes to ₹ 933 per sft. Doing so, the long term capital gains are worked out as under: Total Constructed area received By the assessee in fifth floor : 7294 sft. Share of assessee in common Area 900 sft/5 (floors) : 780 sft. Total area received Rs. : 8074 sft. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Balance payable : ₹ 21,07,900 4. Accordingly, A.O. has calculated the capital gains including undivided land and common area also. 5. Assessee carried matter in appeal before the Ld. CIT(A). The Ld. CIT(A) deleted the addition made by the A.O. by observing as under: 4. I have carefully gone through the assessment order and submissions of the appellant. The appellant has given her property for development and received 5th floor of the building with carpet area of 7294 sq.ft. as per development agreement dated 29.01.2001, which was not disputed by the Assessing Officer in his assessment order. Instead the appellant disclosed the capital gains during the Asst. Years 2005-06 and 2006-07 and filed return of income based on the registration of flats (constructed area) and disclosed her share. For this Asst. Year, the Assessing Officer completed the assessment and taxed capital gains on the appellant's share in common area i.e. on 780 sq.ft. On careful observation of the submissions of the appellant and the assessment order, I am of the opinion that once the development agreement is over, 50% share of constructed value comes to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approval no.1440/2003. Subsequent to the approval only, the construction was started and partly completed during the financial years 2004-05 and 2005-06. As per clause 8 of the agreement, it says that after getting the plan approval, we will fix our shares in the construction. We find that the assessee has also offered capital gains for the assessment year 2005-06 as well as 2006-07. It appears from the record that though the assessment for the A.Y. 2005-06 is not before us, the A.O. has completed assessment u/s 143(3) of the Act, thereafter the Commissioner has issued a notice u/s 263 of the Act. Assessee carried matter in appeal before the ITAT, Visakhapatnam. The ITAT, Visakhapatnam Bench has set aside the order of the Commissioner u/s 263 of the Act and directed the A.O. to complete the assessment u/s 143(3) r.w.s. 254 of the Act. The order already passed on 24.2.2015 and the order is under appeal before Ld. CIT(A). In so far as, assessment year 2006-07 is concerned, the Ld. CIT(A) without considering the agreement various clauses incorporated, without considering the facts and circumstances of the case, without considering the capital gains offered by the assessee herself sim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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