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TMI Blog2024 (9) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... er deemed rental annual value is assessable in respect of the flats which were not acquired for self-occupation rather kept as investment for sale, we find tha in the case of Sachin R Tendulkar [ 2018 (8) TMI 847 - ITAT MUMBAI] has decided the issue in favour of assessee. Whether the gain arose to the assessee on sale of flats would be long term capital gain or short term capital gain - Undisputed facts are that assessee has acquired the land somewhere in 1960 and the rights in flats, allotted to assessee has been accrued on 15-12- 2010 and other was entered on 19.06.2013, when the Joint Development agreements were entered into by the assessee. No material has been brought on record by the AO or by DR before us to refute these factual observations made by the NAFC. Further in AYs 2014-15 and 2015-16. The gain attributable to this land was earlier assessed by the department as long term capital gain. D.R. failed to point out any change in the facts and circumstances even this impugned year. Therefore, applying the principle of consistency as formulated in the case of Radhasoami Satsang [ 1991 (11) TMI 2 - SUPREME COURT] we are of the view that the CIT(A) is correct in allowing the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) since he is a co- owner having 1/3 share in property. In above manner, the assessee has disputed only taxable share of deemed rental income in assessee's hand however, the NFAC has deleted the addition in entirety. The Led. NFAC has erred in allowing assessee's ground related to treatment of LTCG offered by the assessee at Rs.25,75,90,104/- as STCG at Rs. 29,76,76,017/- on the ground that there was no addition made in the case of other two co-owners of the same property for the same assessment year. The NFAC has not considered that the assessments of three different co-owners were completed in faceless manner. There is no algorithm for allocation of cases of three different assessees having common interest in a single property to a single assessing officer for assessment. This cannot be a reason for deletion of addition made. The Ld. NFAC has erred in holding that though the same nature of income of assessee was considered as LTCG in previous AYs, the same should be considered as LTCG only for the current year also. The NFAC erred in not discussing the correct legal position on the issue and in not considering the fact that any inadvertent error occurred during previous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e on 30.11.2020 declaring an income of Rs.2,75,83,189/-. Thereafter the assessee revised its return of income on 25.03.2021 by declaring an income of Rs.27,51,54,480/-. The assessee has entered into a Joint Development Agreement (JDA) with one Brigade Enterprises Ltd. for development of his lands which were earlier used by the assessee for agricultural purposes. During the course of assessment proceedings. The AO observed that the assessee has received rental income in respect of plant machinery from one entity. The AO observed that the assessee has not reflected this income in its return of income despite the fact that the tenant has deducted TDS u/s 194I(a). Accordingly, the AO has made an addition of Rs.4,75,590/-. The assessee clarified that the assessee has not rented out any plant machinery, rather it was an amount for the rent of the flat which amount was already included by the assessee in its rental income. However, the AO could not find any force in the submission of the assessee and added the income under the head income from other sources (IOS). Thereafter the AO scrutinised the JDA dated 14.03.2022 and show caused why the deemed rental income from the properties, devel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee from the other two co-owners who were also part of the JDA and in their hands no addition qua deemed rental has been made by department. Similarly, the ld. CIT(A) allowed the appeal of the assessee on the issue of short term capital gain of long term capital gain. The relevant findings of the ld. CIT(A) are as under: - 7.8.4 I have perused the documents on record and it is seen that the facts and circumstances of the case under consideration as well as the facts and circumstances of the case of other two co-owners are similar. In respect of the remaining two co-owners, the AO has accepted the long term capital gain, cost of acquisition/improvement as well as income declared under the head income from house property and moreover no such deemed rental income was charged. However, out of the assessment of three co-owners, only in the case of the appellant of the AO has not accepted the contention of the appellant on similar facts, which is not justifiable. 7.9 Decision on the taxability of capital gains (i) During the assessment proceedings, the AO observed that, the flat, which have been claimed to be sold and on the same flats, the assessee has offered long term capital gai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fered by the appellant of Rs. 25,75,90,404/-, the AO computed the short term capital gain of Rs. 29,76,76,017/-. 7. The ld. CIT(A) also observed that for AYs 2014-15 and 2015-16 the cases of the assessee were assessed u/s. 143(3) of the Act and the department treated the gain under similar facts as long term capital gain. Therefore, in view of the principle of consistency also the ld. CIT(A) allowed the appeal of the assessee. So far as the last issue as to the taxation of income from flat instead of plant and machinery the CIT(A) held that the same is to taxed under the head income from house property, and the assessee has already declared such income and no separate addition is required. 8. The learned D.R., Shri Subramanian, appearing for the Revenue vehemently argued that the ld. CIT(A) has erred in deleting the addition of deemed rental income from the flats owned by the assessee. The learned D.R. also contended that the ld. CIT(A) has erred in treating the short term capital gain as long term capital gain and relied upon the previous year s assessment orders. The learned D.R. also filed certain judgements in order to support his case. The first judgement relied upon by the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is also embodied. Undisputed facts are that assessee has acquired the land somewhere in 1960 and the rights in flats, allotted to assessee has been accrued on 15-12- 2010 and other was entered on 19.06.2013, when the Joint Development agreements were entered into by the assessee. No material has been brought on record by the AO or by DR before us to refute these factual observations made by the NAFC. Further in AYs 2014-15 and 2015-16. The gain attributable to this land was earlier assessed by the department as long term capital gain. The learned D.R. failed to point out any change in the facts and circumstances even this impugned year. Therefore, applying the principle of consistency as formulated by the Hon'ble Supreme Court in the case of Radhasoami Satsang v. CIT (1992] 193 ITR 321 we are of the view that the ld. CIT(A) is correct in allowing the appeal of the assessee. 12. In respect of last issue that is the taxability of income from alleged plant and machinery. We observe that before the AO assessee has submitted that he has given one flat on rent to M/s Musigma Business Solutions @ 1,58,530 p.m. (herein after referred to as Payee) and the payee has wrongly applied the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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