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TMI Blog2023 (5) TMI 1109X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 271(1)(C) of the I.T.Act, 1961 4. The learned Commissioner of Income tax (Appeals) is not justified in not considering the fact that the year of taxability of capital gain in the case of Joint Development Agreement is controversial issue and this was a reasonable cause for non-disclosure of such capital gain by appellant in the assessment year under appeal. 5. The appellant craves leave to add, amend, delete or substitute any ground or grounds during the course of hearing. 3. In the present case the assessing officer had completed the scrutiny assessment after determining the total income the assessee for Rupees 45, 81, 730/-for the assessment year 2014- 15. Feeling aggrieved by the assessment order, the assessee preferred the appeal before the Ld. CIT(A) for the assessment year 2013 - 14 and also for 2014-15. The Ld. CIT(A) while deciding the appeal for the assessment year 2013-14, in paragraph 4.4 of order dated 14 August 2018 it was mentioned as under:- 4.4 On plain reading of the documents No. 2819/2013 registered on 17 April 2013 and applying the ratio of the decision of the Hon'ble Supreme Court of India in the case cited supra and Punjab and Haryana High Court d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration of the total land given for development at the time of entering of JDA. Further, it is pertinent to mention here that the AO has assessed the Capital gains at the time of entering of JDA and no building structure was existing at that time and the AO's presumption is not proper and unjustifiable. In the circumstances, the appellant beg to submit that the entire land and its value has to be taken for deriving capital gains at the time of entering of JDA and this may kindly be considered and direct the AO." 5.3. On consideration of the submissions made by the appellant, I find that the contention of the Assessing Officer to increase capital gains by Rs.8,35,535/- has no basis. Since the total land of 6933 sq. ft. was given for development under Joint Development Agreement, the hypothetical calculation made by the Assessing Officer is Incorrect. Hence, the recomputation or capital gains of Rs.32,39,000/- excluding an amount of Rs.8,35,535/- as worked out by the AR of the appellant below in the course of appellate proceedings is legally correct. Sale consideration on JDA 53,28,785 (Total cost of the project) 2,66,42,720 Including car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the developer for AY 2014-15, but not offered capital gains on the transfer of land. As discussed above, while disposing appeals, notice has been given for enhancing the income for AY 2014- 15 and the same was consented accordingly appellate order was passed. The assessee all through in the assessment proceedings and before the appellate authority during the proceedings for AY 2013-14, contended that capital gains will not arise in that AY, which means the assessee is aware that capital gain is chargeable to tax in the AY 2014-15, as the JDA is registered in the FY 2013- 14. The assessee in the submissions, contended that the AO considered the JDA in the assessment proceedings and stated that as the super built up area was received during the FY 2013-14, in the year in which the JDA was entered and hence, capital gains separately does not arise on account of JDA. It was also contended that possession was not given to the builder as per clauses and the project was carried out jointly with the builder, the assessee being also a contractor. The assessee relied on the decision of Hon'ble ITAT, Hyderabad, in the case of ABVS Prakash for proposition that a symbolic possession giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not disclosed capita: gains on the transfer of land by virtue of JDA, either in the AY 2013-14 or 2014-15. For the AY 2014-15, the assessee offered short term capital gains on sale of two flats and not disclosed the transaction of transfer of land and consequential capital gains on the same. The assessee stated that the capital gains was not eligible in the AY 2014-15, as no possession was given to the builder relying on certain decisions. This contention is also not tenable for the reason that the project which was envisaged as per JDA was accomplished and the share of flats were received by the assessee. Unless the land was given possession to the builder/developer, constructing the apartment or receipt of super built up area to his share by the appellant, does not arise. The assessee has not substantiated the claim that no possession was given to the builder in the above facts. When the assessee received super built up area in the form of flats, the claim made that no possession was given to the builder and no capital arises for the AY 201..1-15, appears to be not a bona fide explanation. Knowing fully well, the clauses of the agreement and also on receipt of flats, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gave relief to the appellant for that AY., then the income i.e. capital gains required to be taxed in the year of taxability. This is not a completely new source of income. This income was considered by the AO for AY 2013-14. CIT(A) considering the Apex court decision, held that the income is chargeable for the AY 2014'-15 and brought to tax by enhancement. In view of this, there is no merit in the argument of the assessee that the enhancement was made altogether on a new source of income. The capital gains issue on account of transfer of land was not examined by the AO in the AY 2014-'15, hence, enhancement of income by CIT(A), cannot be treated as re-examination of the same issue, Moreover, the CIT(A) has not redone the assessment which has' been completed by the AO for the AY 2014-15. In view of these reasons, all the contentions put forth by the assessee are rejected and the CIT (A) has exercised the power vested under law to bring the income which has to be taxed in the year under consideration. The assessee concealed the particulars of income specifically the capital gains on transfer of land and the same is attracted penal provision, as discussed above, as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een filed by the assessee with the Assessing Officer. The assessee must act with candour and the disclosure must be full and true. A full disclosure is a disclosure of all material facts which does not contain any hidden material or fact. A true disclosure is a disclosure which is truthful in all respects. The capital gains could not have been brought to tax but for initiation of Department to bring to tax the same and only after enhancement notice is given the capital gains was accepted by the assessee. It is not a voluntary consent but due to the effort made by Department in establishing the concealment of income. Reliance is placed on the decision of the Hon'ble High Court of Karnataka in the case of Manjunatha Cotton & Ginning Factory (35 taxman.com 250) and also on the decision of the Hon'ble High Court of Punjab & Haryana in the case of Banta Singh Kartha Singh (125 ITR 239 P H) for the preposition that concealment penalty can be leviable even on agreed addition when the concealment was found & established by Department. Reliance is also placed on the decision given by the Hon'ble Supreme Court of India in the MAK Data Pvt Ltd (358 ITR 593), wherein it was held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities. It was the contention of the Ld.DR that the assessee has not disclosed the capital gain earned on account of the JDA either in the assessment year 2013-14 or 2014-15. The DR submitted that assessee in fact has declared the short-term capital gain on sale of two flats in the assessment year 2014-15 however the assessee has not disclosed the capital gain earned on the JDA. It was submitted by the Ld.DR that the capital gain have been brought to tax only on account of issuance of enhancement notice issued to the assessee at the appellate stage. It was submitted that there was no voluntary and or willingness on the part of the assessee to disclose the capital gain. In the light of the above it was submitted that the order passed by the Ld. CIT(A) is in accordance with law. 8. We have heard the rival contentions of the parties and perused the material available on record. In the present case the important fact to be noticed is that the assessee in the quantuam appellate proceedings, after receipt of the enhancement notice had admitted an amount of Rs. 32,39,000/-subject to the condition that an amount of Rs. 8 35535/-shall not be enhanced by the Ld. CIT(A). However, the Ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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