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Facts
The assessee, an individual, did not file an income tax return for Assessment Year 2015-16 despite selling immovable properties for Rs. 9,25,45,000/- during Financial Year 2014-15. Re-assessment proceedings were initiated under Section 147/148A, and the Assessing Officer assessed the capital gains, which the CIT(A) partly upheld, treating the Joint Development Agreement as a transfer in AY 2015-16. The assessee contested the re-assessment, claiming the capital gains were offered in AY 2019-20 as per Section 45(5A) and that the re-assessment notice under Section 148 was invalid.
Held
The Tribunal noted the property was jointly owned by the assessee and 5 others, and the re-assessment status of co-owners was unclear. As the issue of re-assessment validity was raised for the first time before the Tribunal, and in the interest of justice, the matter was restored to the Ld. CIT(A) / NFAC for re-adjudication. The CIT(A) was directed to consider all facts and law, including the validity of re-assessment proceedings and provide due opportunity of being heard to the assessee.
Key Issues
Whether the re-assessment proceedings initiated under Section 148 were valid and not time-barred. The correct assessment year for taxability of capital gains from a Joint Development Agreement, considering the applicability and retroactivity of Section 45(5A) and the definition of 'transfer'. The determination of the correct sale consideration and the assessee's share, given co-ownership and stamp duty valuation. The claim of double taxation by the assessee who had already offered capital gains in a later assessment year. The consistency of re-assessment treatment for other co-owners of the property.
Sections Cited
147, 148, 148A, 148A(b), 151, 143(2), 142(1), 133(6), 45(5A), 48, 2(47)(v), 50C, 54F, 234A, 234B, 234C, 234D, 271(1)(c)
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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI R. K. PANDA & MS. ASTHA CHANDRA
This appeal filed by the assessee is directed against the order dated 19.06.2024 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2015-16.
Facts of the case, in brief, are that the assessee is an individual and has not filed his return of income for the assessment year 2015-16 despite having sold immovable properties for a total consideration of Rs.9,25,45,000/- during the financial year 2014-15. Information was received from the insight portal that the assessee has sold immovable property for a total consideration of Rs.9,25,45,000/- but has not filed the return of income for the year under consideration. Therefore, the Assessing Officer held that the capital gain derived from the sale of such immovable property remained undeclared. Thereafter, following the due procedure as provided by section 148A of the Act, a show cause notice u/s 148A(b) of the Act was issued on 22.03.2022 after obtaining prior approval of the competent authority u/s 151 of the Act. The assessee was also asked to explain as to why a notice u/s 148 of the Act shall not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year. However, the assessee did not respond to the show cause notice issued u/s 148A(b) of the Act. Therefore, the Assessing Officer, on the basis of material available on record initiated proceedings u/s 147 of the Act as provided by section 148A r.w.s. 148 of the Act. Accordingly, the Assessing Officer issued notice u/s 148 of the Act.
In response to the said notice the assessee filed the return of income on 04.04.2022 declaring total income of Rs.6,97,540/- under the head ‘Income from other sources’. Statutory notices u/s 143(2) and 142(1) of the Act were issued and served on the assessee, in response to which the assessee filed certain details. The Assessing Officer issued notice u/s 133(6) of the Act to the SRO, Panvel-2 as well as the Designated Verification Unit (DVU) of the Income Tax Department for supply of complete details of sale of immovable property by the assessee for a total consideration of Rs.9,25,45,000/-. He, thereafter, asked the assessee to explain the working / computation of total income after duly considering the sale of immovable property of Rs.9,25,45,000/-. However, there was non-compliance from the side of the assessee. Therefore, the Assessing Officer issued a show cause notice asking the assessee to explain as to why the net consideration at Rs.9,25,45,000/- should not be brought to tax as short term capital gain. The assessee thereafter filed his response to the said notice.
4. However, the Assessing Officer was not satisfied with the arguments advanced by the assessee and made addition of Rs.9,25,45,000/- as short term capital gain by observing as under: “Point-wise rebuttal of reply of the assessee including analysis of any case law relied upon. 1 At the outset, the assessee has responded and uploaded his response only to the show cause notice issued on 29-01-2024. The assessee has not furnished his response to the show cause notice issued on 09-02-2024 even after the time sought has been granted in the notice u/s 142(1) of the I.T.Act issued on 15-02-2024. The ground for non uploading of the response to the show cause notice dt 09-02-2024 is as demanded in notice, need time to prepare and produce necessary records before authority" and "since in earlier notice, translation of document named development agreement drafted in marathi language to English language is demanded which agreement run into more than 45 pages, it needs time for translation which is not possible within 4-5 days, so kindly accept our adjournment sought and extend time for reply" (sic). Even the response of the assessee to the actions proposed in the show cause notice issued to him on 29-01- 2024 is not specific and point-wise and not with complete details, description and supporting evidences. Hence, the same merits no consideration. Further, in his responses to the show cause notice dt. 29-01-2024 which are also appended above, the assessee stated that he had admitted his income from capital gains in the AY 2019-20 and paid taxes thereon. 2 In his reply dt.03-02-2024, the assessee has stated that the assessee along with 5 others was allotted plot No.07 at Sector 19, Ulwe Taluka- Panwel, Dist- Raigad under 12.5% of Goathan Expansion Scheme by CIDCO Ltd., registered on 12-12-2014 and that the plot was actually allotted to the assessee on 09-04-2014 and it was given for development to M/s. Radiant Builders. In this regard, the relevant extract of 'note on working of capital gains furnished by the assessee in his reply is appended below.
Note on working of Capital Gain: A. TAXABILTY U/S 45(5A) UNDER HEAD CAPITAL GAIN Section 45 (5A) provides as follows: In case of an assessee being INDIVIDUAL/HINDU UNDIVIDED FAMILY who enters into a specified agreement for development of a Project, the capital gain arising from such Transfer shall be chargeable Contd..3 to Income Tax as income of the previous year in which the Certificate of completion for the whole or part of the project is issued by the Competent Authority. Considering Above provisions, This being JOINT DEVELOPMENT PROJECT, Tax liability of assessee arises in the year in which Certificate of Completion Of CONSTRUCTED PROJECT has been received. Since Certificate of Completion of above Project has been received on 25-05-2018 i.e. in F.Y.2018-19, A.Y.2019-20, Assessee had paid all Tax liability by filing Income- Tax Return for A.Y.2019-20 (Assessee got Actual Possession of Developed Property ON 31-12-2018 i.e. in FY 2018-19, Α.Υ.2019-20.) Assessee had paid All his Tax liability considering Total On-Money received up to date THAT IS IN TOTAL Rs.1,80,00,000/- (This ON-Money that are TOTAL Rs.1,80,00,000/- received in Various Financial Years) from Radiant Builders, along with Stamp duty/Govt. Value of All Developed Property received i.e. Flats & Shops received as mentioned in Development Agreement on 31-12-2018, Total Stamp Duty Value of ALL Developed Property- Rs.6,95,00,100/-, THUS Total Consideration Received by Assessee was Rs.8,75,00,100. That is (Rs.1,80,00,000 + Rs.6,95,00,100/-). Assessee had paid All his Tax Liability under Head Capital gain on Above Total Consideration of Rs.8,75,00,100/- in F.Y.2018-19, A.Y.2019-20. 3 Here, at the first place, the assessee failed to furnish complete information of the properties in regard to which he derived income from capital gains, their values viz. date & cost of acquisition and indexed cost of acquisition workings with supporting evidences, date, basis and evidences for value of consideration received by him to work out his income from capital gains, complete workings of computation of capital gains on the basis of these details and evidences. The flagged information as well as the regd document (received from Designated Verification Unit of I.T. Department as detailed above) that was forwarded to the assessee are all related to the period under consideration and hence the capital gains on transfer of these properties during the FY 2014-15 are taxable in the hands of the assessee for the AY:2015-16 only AND NOT as stated by the assessee in the AY:2019-20 on the basis of receipt of possession certificate. Provisions of Sec.45(5A) of the I.T. Act have been inserted by Finance Act, 2017 w.e.f.01-04- 2018 which stipulate that the incidence of tax on the capital gains shall be chargeable to Income Tax as income of the previous year in which the certificate of completion for the whole or part of the project is issued by the competent authority. 4 Insofar as the period under consideration i.e. FY:2014-15 is concerned, it is not in dispute that the JDA with builder registered on 04-03-2015 which is in the FY:2014-15 relevant to the Assessment Year 2015-16 under consideration. Hence the incidence of tax on the value of assessee's share in the property to be received from the builder as on the date of execution of the JDA has to be calculated and should have been offered to tax in the AY:2015-16 itself and not in the AY:2019-20 as per the relevant provisions of the statute applicable for the AY:2015-16. 5 In the light of all the foregoing facts, legal obligations as per the prevailing provisions of I.T. Act relevant to the AY:2015-16, it is obvious that the assessee derived income from capital gains on transfer of the properties as detailed in the show cause notice issued. Further, the assessee's response did not contain specific reply with supporting details & evidences to each of the actions proposed in the show cause notice. Hence, the contentions of the assessee are rejected as devoid of merit.
Conclusion drawn: The assessee failed to substantiate his contention as to why the flagged value of information should not be taxed in his hands for the year under consideration by furnishing details & supporting evidences for sources of acquisition, date of acquisition, cost of acquisition, date of transfer of the properties in regard to which the assessee derived capital gains, amount of consideration and the detailed workings thereof, etc. The assessee has not furnished details with evidences to show that the uploaded data viz. regd documents and the flagged information are one and the same. Therefore, the net sale consideration at Rs.9,25,40,000/- by way of Short Term Capital Gains and net consideration of Rs.99,95,000/- by way of Long Term Capital Gains as detailed in the show cause notices remained unexplained and hence the same, as proposed in the Show Cause Notices issued, are brought to tax as the income of the assessee for the year under consideration and the assessment is completed accordingly.”
In appeal the Ld. CIT(A) / NFAC upheld the action of the Assessing Officer by observing as under: “6. FINDINGS & DECISION 6.1. I have gone through the assessment order and grounds of appeal. The impugned appeal pertains to capital gain related additions carried out by the Ld.AO. Aggrieved by the assessment order, the appellant had filed appeal with multiple grounds which are disposed off collectively as under.
6.2. Based on information available with Ld. AO, it was observed that the appellant had sold properties worth Rs.9,25,45,000/- and the appellant had not filed his return of income. Thus, in order to compute taxable capital gain, the Ld. AO re-opened the assessment after undertaking proceedings U/s 148A. It is pertinent to note that the Ld. AO has mentioned at para serial numbered 1 on page 3 of assessment order that the appellant has sold two properties worth Rs.4,01,32,000/- and Rs.5,24,13,000/-. 6.3. In response to notice under section 148A, the appellant had filed return of income declaring income of Rs.6,97,540/-. The basis to arrive said amount was not filed with the Ld.AO. 6.4. The Ld.AO obtained copy of agreements registered by the appellant with sub registrar Panvel. As per the assessment order, the appellant had registered two agreements totalling to worth Rs.9,25,45,000/-. On face of agreement, it was observed that the appellant had also received sum of Rs.2,00,00,000/- as on money pursuant to joint development agreement. 6.5. The appellant filed copy of submission dated 03-02-2024 filed with Ld.AO explaining the underlined transactions. The Ld. AO has also re-produced extracts of submissions in his order. However, the Ld. AO has not been satisfied with the details filed by the appellant and added the consideration mentioned on both agreements i.e. Rs.9,25,45,000/- and 50% of on Money (since it was joint development agreement) i.e. Rs.1,00,00,000/- to the total income. 6.6. During the appellate proceedings the appellant re-iterated his contention and explained the underlined registered agreements as under: Appellant along with 5 others were allotted Plot no.07 at Sector-19, Ulwe, Taluka- Panvel, Dist-Raigad under 12.5% Gaothan Expansion Scheme by CIDCO Ltd., Vide Lease Agreement entered Between Appellant along with 5 others & CIDCO Ltd., Registered on 12-12-2014. The Plot was actually allotted to Appellant & Others on 09-04-2014. Said Plot was Given for Development to Firm Radiant Builders (PAN-AARFR9087M) vide Development Agreement Registered between Appellant and 5 Others and Firm- Radiant Builders on 04-03-2015, wherein it was agreed by Plot Developing Party i.e. Radiant Builders to pay Total On money of Rs.2 Crores along with to give 50% Developed Property to Appellant & 5 Others. 6.7. In Pursuit of above DEVELOPEMENT Agreement, Tripartite Agreement was entered & Registered between Appellant & 5 others, Radiant Builders and Cidco Ltd., ON 04-03-2015 (F.Y.2014-15, Α.Υ.2015-16). 6.8. In a nutshell, the appellant had entered into agreement with CIDCO for allotment of Land and subsequently entered into Joint development agreement dated 04-03-2015. 6.9. The appellant also clarified that on Index 2 document pertaining to joint development agreement, there are two valued being mentioned viz. market value of underlined land i.e. Rs.5,24,13,000/- and agreement value Rs 4,01,32,000/-. The Ld. AO has treated these individual values as two properties and arrived at figure of Rs.9,25,45,000/- whereas both the values pertain to same property only. 6.10. The appellant clarified that his share in Property or Plot was ONLY 1/6th of total consideration and accordingly the same shall be taxed to the tune of 1/6th 6.11. The appellant also submitted that the development of the underlined project completed in FY 2018-19 and it received Certificate of completion of constructed project. Therefore, as per section 45(5A) of the IT Act, the event of taxation shall be AY 2019-20. Appellant had paid All his Tax liability considering His share of Total On-Money received up to date i.e. IN TOTAL Rs.1,80,00,000/- (This ON- Money that are TOTAL Rs.1,80,00,000/- received in Various Financial Years) from Radiant Builders, along with Stamp duty/Govt. Value of All Developed Property received to His Share i.e. Flats & Shops received as mentioned in Development Agreement on 31-12-2018, Total Stamp Duty Value of ALL Developed Property Rs.6,95,00,100/-. Thus, Total Consideration Received by Assessee was Rs.8,75,00,100. That is (Rs. 1,80,00,000+ Rs.6,95,00,100/-). Appellant had paid All his Tax Liability under Head Capital gain on Above Total Consideration of Rs.8,75,00,100/- in F.Y.2018-19, A.Y.2019-20 and had filed Income Tax Return accordingly. Thus, there is no tax liability pending as on today against appellant against above transaction. The appellant also filed copy of ITR for AY 2019-20 in support to its claim that it had offered capital gain to tax. The appellant has also claimed exemption U/s 54F to the tune of Rs.96,13,514/-, 6.12. The appellant filed copy of lease deed entered into with CIDCO, joint development agreement entered with Radiant Builders, copy of ITR along with computation of total income. 6.13. On perusal of the assessment order, it is observed that the moot point of litigation is (a) the correct amount of consideration and (b) the relevant assessment year from taxability purpose. Each issue is dealt separately as under: 6.14. First dealing with correct amount of consideration: The Ld. AO has considered Rs.9,25,45,000/- towards property and Rs.1,00,00,000/- towards on-money. However, in actual the appellant has not received Rs.9.25 crores as consideration to enter JDA. Further, on perusal joint development agreement reflected 2 values, one being Stamp Duty Assessed or the Govt Value of Rs.4,01,32,000/- and the other being the Value of consideration of Rs.5,24,13,000/-. The Ld. AO has considered both the values and calculated it as Rs.9.25,45,000/- (Rs.4,01,32,000/- Plus Rs.5,24,13,000/- which is not correct. However, as per submission of the appellant, he received total build up area in the constructed project of worth Rs.6,95,00,100/- (being stamp duty valuation) and On-Money of Rs.1,80,00,000/- Said consideration is equivalent to his share i.e. 1/6th. Therefore, the total consideration that should be considered for computation of capital gain amounts to Rs.8,75,00,100/-
6.15. Now the next question pertains to timing of taxability. In this regard, the appellant contested that as per Section 45(5a) of the IT Act, the time of taxability would be the year in which certificate of Certificate of completion of constructed project is received. However, it is pertinent to mention that the appellant entered JDA in FY 2015-16 and at that point in time said provision of Section 45(5A) was not applicable. Section 45(5A) was inserted w.e.f. 01.04.2018. Therefore, receipt of Certificate of completion of constructed project has no bearing on time of taxability. 6.16. In this context, it is worth noting that section 45(5A) is not inserted retroactively. As per section 2(47)(v) entering into JDA result into transfer of rights from the appellant to Radiant Builders and the appellant also received nonrefundable money of Rs.2 crores. 6.17. The Hon'ble Karnataka High Court in the case of Dr. T. K. Dayalu (202- Taxman 531) (Kar) had held that on entering into a JDA, there was a „transfer‟ as per the provisions of section 2(47) and consequently capital gains was attracted. 6.18. In view of the above, I am of the considerate opinion that the year in which transfer took place shall be the relevant year for purpose of taxing the capital gain. 6.19. Having regard to the above, the Ld.AO is directed to compute the tax liability on account of said capital gain for AY 2015-16 (i.e. the year in which JDA is entered into) and not A.Y.2019-20, considering the total sale consideration of Rs.8,75,00,100/- (as discussed above and submitted by the appellant) and as per provisions of Income Tax Act. 6.20. The Ld. AO is also directed to give due credit of taxes paid by the appellant on account of underlined capital gain in AY 2019-20 against the taxes payable for AY 2015-16 on account of underlined capital gain. 6.21. Accordingly, the appeal of the appellant is partly allowed.”
Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal by raising the following grounds: 1) In the facts and the circumstances of the case and in law, the re-opening proceedings initiated u/s. 148 is bad in law: a. The re-opening the proceedings is time barred and is bad in law. b. The notice u/s. 148A was wrongly issued by the Jurisdictional AO instead of the Faceless AO.
2) In the facts and the circumstances of the case and in law, the learned A.O. erred in treating the Development Agreement giving licensee to permit builder to construct flats as transfer by way of sale, which is contrary to judgments of SC. 3) In the facts and the circumstances of the case and in law, the learned A.O. erred in adding stamp duty value and agreement value of Rs 92545000/- u/s 50C by wrongly treating the same as sale of 2 properties and the learned CIT[A] erred in calculating sale consideration at Rs 87500100/- 4) In the facts and the circumstances of the case and in law, the learned A.O. erred in treating the Appellant as full owner instead of 1/6th owner which is the correct share. 5) In the facts and the circumstances of the case and in law, the learned A.O. erred in treating the Development Agreement as transfer in AY15-16 instead of AY 19-20 in which all taxes were paid and exemption u/s 54F was claimed thereby preponing date of transfer. 6) In the facts and the circumstances of the case and in law, the learned CIT[A] NFAC erred in confirming rest of all the grounds 7) The Assessing Officer wrongly charged interest u/s 234 A, B, C and D and initiated penalty u/s 271(1)(c).
The Ld. Counsel for the assessee at the outset did not press ground of appeal No.1(b) and 5, hence these grounds are dismissed as ‘not pressed’. Ground of appeal No.6 being general in nature, is dismissed. Ground of appeal 7 being consequential in nature is also dismissed.
The Ld. Counsel for the assessee at the outset submitted that the assessee along with 5 others was allotted Plot No.07 at Sector-19, Ulwe, Taluka-Panvel, Dist-Raigad under 12.5% Gaothan Expansion Scheme by CIDCO Ltd., Vide Lease Agreement entered between the assessee along with 5 others & CIDCO Ltd., registered on 12th December, 2014. The plot was actually allotted to the assessee & others on 09th April, 2014. The said plot was given for development by the assessee & 5 Other allottees of this property or plot to the firm Radiant Builders (PAN-AARFR9087M) for construction of residential cum commercial building on this plot vide Joint Development Agreement registered between the assessee & 5 others and firm Radiant Builders on 04th March, 2015, wherein it was agreed by Plot Developing Party i.e. Radiant Builders to pay total on money of Rs.2 Crores along with to give 50% Developed Property to the assessee & 5 Others after completion of project or construction of building thereon. In pursuit of above Development Agreement, tripartite agreement was entered & registered between the assessee & 5 others, Radiant Builders and Cidco Ltd., on 04th March, 2015 (F.Y. 2014-15, Α.Υ.2015-16). He submitted that the assessee is not the single beneficiary of the transaction but the property is jointly owned by 5 others apart from the assessee. He submitted that in the case of the brother of the assessee no reopening of assessment has taken place.
Referring to pages 160 and 161 of the paper book, the Ld. Counsel for the assessee submitted that the assessee has paid the taxes during the assessment year 2019-20 when he received the consideration and therefore bringing the same to tax in this year will amount to taxation of the same twice. He accordingly submitted that since the assessee has paid the taxes on long term capital gains in assessment year 2019-20 and the case of the brother of the assessee has not been reopened, therefore the order of the Ld. CIT(A) / NFAC being not in accordance with law has to be set aside.
The Ld. Counsel for the assessee in his next plank of argument submitted that the re-assessment notice is also not in accordance with law. Referring to the decision of Hon'ble Supreme Court in the case of Union of India & Ors. Vs. Rajeev Bansal vide Civil Appeal No.8629 of 2024 order dated 03.10.2024, the Ld. Counsel for the assessee drew the attention of the Bench to page 51 of the said order. Referring to page 52 para 19(f) of the said order, he submitted that the Revenue in the said case has conceded that for assessment year 2015-16 all notices issued on or after 1st April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA. He submitted that since in the instant case also, the assessment year involved is assessment year 2015-16 and the notice u/s 148 of the Act has been issued after 01.04.2021, therefore, such reopening of the assessment has to be quashed.
Referring to the following decisions, the Ld. Counsel for the assessee submitted that the reopening of assessment being not in accordance with law has to be quashed: i) Pratishtha Garg vs. ACIT vide W.P. (C) 16878/2024 CM Appl. 71476/2024, order dated 19.12.2024 ii) M/s. Orbit Financial vs. ACIT vide & CO No.287/M/2024, order dated 31.12.2024 iii) Prashant Jayantilal Patel vs. ITO vide order dated 09.12.2024 iv) Ashok Amratlal Shah vs. ITO vide ITA Nos.4286 to 4288/Mum/2024, order dated 31.12.2024 v) Chiara Nath vs. DCIT vide ITA No.1924/Del/2024, order dated 27.12.2024
vi) Adhir Sachdeva vs. ACIT vide W.P. (C) 17647/2024 and CM Appls 75054- 55/2024, order dated 20.12.2024 vii) Neera Gupta vs. ITO vide W.P. (C) 17352/2024, CM Appl.73891/2024, order dated 17.12.2024 viii) IBIBO Group Pvt. Ltd. vs. ACIT vide W.P (C) 17639/2022, order dated 13.12.2024 ix) ITO vs. Pushpak Realities Pvt. Ltd. vide & 2 Ors. Order dated 07.11.2024 x) ACIT vs. Manish Financial vide & 5050/Mum/2024 & CO Nos.231 & 230/Mum/2024, order dated 02.12.2024
He accordingly submitted that legally the re-assessment proceedings are not in accordance with law and factually the assessee has already paid the taxes in assessment year 2019-20 and therefore bringing to tax the same amount will amount to double taxation of the same amount. So far as the present year is concerned, he submitted that it was only a Development Agreement and nothing has been received by the assessee during the year. He accordingly submitted that the appeal of the assessee be allowed.
The Ld. DR on the other hand strongly relied on the orders of the Assessing Officer and the Ld. CIT(A) / NFAC. Referring to the provisions of section 45(5A) of the Act as stood at the relevant time, the Ld. DR drew the attention of the Bench to the same which read as under: “45(1) …. (5A) Notwithstanding anything contained in sub-section (1), where the capital gain arises to an assessee, being an individual or a Hindu undivided family, from the transfer of a capital asset, being land or building or both, under a specified agreement, the capital gains shall be chargeable to income-tax as income of the previous year in which the certificate of completion for the whole or part of the project is issued by the competent authority; and for the purposes of section 48, the stamp duty value, on the date of issue of the said certificate, of his share, being land or building or both in the project, as increased by 83[the consideration received in cash, if any,] shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset : Provided that the provisions of this sub-section shall not apply where the assessee transfers his share in the project on or before the date of issue of the said certificate of completion, and the capital gains shall be deemed to be the income of the previous year in which such transfer takes place and the provisions of this Act, other than the provisions of this sub-section, shall apply for the purpose of determination of full value of consideration received or accruing as a result of such transfer. Explanation.—For the purposes of this sub-section, the expression— (i) "competent authority" means the authority empowered to approve the building plan by or under any law for the time being in force; (ii) "specified agreement" means a registered agreement in which a person owning land or building or both, agrees to allow another person to develop a real estate project on such land or building or both, in consideration of a share, being land or building or both in such project, whether with or without payment of part of the consideration in cash; (iii) "stamp duty value" means the value adopted or assessed or assessable by any authority of the Government for the purpose of payment of stamp duty in respect of an immovable property being land or building or both.”
He submitted that since the assessee in the instant case has transferred his right in the property through a Joint Development Agreement on 04.03.2015, therefore, such transfer has taken place on the date of agreement i.e. 04.03.2015 relevant to assessment year 2015-16 and accordingly the assessee is liable for capital gain during the impugned assessment year. He also relied on the following decisions: i) Chaturbhuj Dwarkadas Kapadia of Bombay vs. CIT (2003) 260 ITR 491 (Bom) ii) CIT vs. Dt. T.K. Dayalu (2011) 14 taxmann.com 120 (Kar)
The Ld. DR accordingly submitted that the order of the Ld. CIT(A) / NFAC being in accordance with law has to be upheld.
So far as the validity of re-assessment proceedings are concerned, the Ld. DR submitted that the notice has been issued within due time after following the due process of law and therefore the same is in order. The decision of Hon'ble Supreme Court in the case of Union of India & Ors. Vs. Rajeev Bansal (supra) is not applicable to the facts of the present case. Further, the assessee has taken this ground before the Tribunal for the first time and no such ground was taken before Ld. CIT(A) / NFAC.
We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer in the instant case reopened the assessment on the ground that the assessee has sold immovable property for a total consideration of Rs.9,25,45,000/- during the financial year 2014-15 relevant to assessment year 2015-16 and has not filed his return of income. Since, according to the Assessing Officer, the assessee failed to substantiate as to why the flagged value of information should not be taxed in his hands for the year under consideration by furnishing details and supporting evidences for sources of acquisition, date of acquisition, cost of acquisition, date of transfer of the properties in regard to which the assessee derived capital gains, amount of consideration and the detailed workings thereof, etc. the Assessing Officer brought to tax the net sale consideration of Rs.9,25,45,000/- by way of short term capital gains and the on-money amount of Rs.99,95,000/- by way of long term capital gains.
We find in appeal the Ld. CIT(A) / NFAC partly allowed the appeal filed by the assessee, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the Ld. Counsel for the assessee that the property is jointly held by 5 others apart from the assessee. Further, it is also his submission that in the case of the brother of the assessee, no such reopening of assessment has taken place. It is also his submission that the assessee has filed the return of income and paid the taxes in assessment year 2019-20 when the assessee received his share of shops and flats, the details of which are placed at pages 160 and 161 of the paper book.
We find in the instant case the assessee along with 5 others was allotted plot No.07 at Sector 19, Ulwe Taluka-Panwel, Dist-Raigad under 12.5% of Goathan Expansion Scheme by CIDCO Ltd. vide Lease agreement entered into between the assessee along with 5 others and CIDCO Ltd. on 12.12.2014. The plot was actually allotted to the assessee and others on 09.04.2014 which was given for development to the firm M/s. Radiant Builders vide Development Agreement registered between the assessee & 5 others and the firm M/s. Radiant Builders on 04.03.2015. However, it is not known as to what has happened to the cases of other 5 co-owners. The order of the Assessing Officer as well as the Ld. CIT(A) is silent on this issue. Further, the issue of validity of re-assessment has been taken for the first time before the Tribunal.
Since it is not known as to what has happened in the case of the other 5 co- owners and since it is the submission of the Ld. Counsel for the assessee that no notice u/s 148 of the Act has been issued in the name of the brother of the assessee for his share of consideration in the property in question, therefore, considering the totality of the facts of the case and in the interest of justice, we deem to proper to restore the issue to the file of the Ld. CIT(A) / NFAC with a direction to re- adjudicate the issue as per fact and law including the issue of validity of re- assessment proceedings after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are accordingly partly allowed for statistical purposes.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes.
Order pronounced in the open Court on 22nd April, 2025.