Appeals Remitted for Fresh Consideration due to Interlinked Issues.

The Tribunal remitted the Revenue's appeal for A.Y. 2006-07 and the assessee's appeal for A.Y. 2005-06 back to the AO for fresh consideration, as they were interlinked. The AO was instructed to re-examine the taxability of capital gains, provide a fair opportunity to the assessee, and make a decision in compliance with the law. Both appeals were considered allowed for statistical purposes.

---

---

Issues involved: Appeal by Revenue for A.Y. 2006-07 against CIT(A) order u/s. 143(3) and Appeal by assessee for A.Y. 2005-06 against CIT(A) order u/s. 144.

A.Y. 2006-07:
The Revenue appealed against the CIT(A)'s direction to assess income on long term capital gains for A.Y. 2005-06 instead of 2006-07 and the consideration of fresh evidence without giving opportunity to AO u/s. 46A of I.T. Rules.

The assessee, subject to a joint development agreement, claimed exemption u/s. 54F for capital gains. AO computed long term capital gain and added unexplained cash credit. CIT(A) held profit from land sale as long term capital gains and profit from built-up area sale as short term. Exemption u/s. 54F was denied, but cash credit addition was deleted.

A.Y. 2005-06:
AO determined capital gains without allowing deduction u/s. 54F. CIT(A) confirmed AO's order except on long term capital gains quantum. Assessee appealed against this order.

Judgment:
The Tribunal remitted both appeals back to the AO for fresh consideration, as the Revenue's appeal for A.Y. 2006-07 and the assessee's appeal for A.Y. 2005-06 were interlinked. The AO was directed to re-examine the taxability of capital gains after affording a reasonable opportunity to the assessee and decide in accordance with the law. Both appeals were treated as allowed for statistical purposes.

---