Appeal granted for property exemption under Section 54/54F

The Tribunal partly allowed the appeal, granting exemption under Section 54/54F for two flats received under a Joint Development Agreement. Other grounds related to jurisdiction, 'transfer' event, correct cost of acquisition, and interest levy were either dismissed as academic or without merit. The Tribunal upheld the validity of the assessment order and directed the assessing officer to re-compute the interest in accordance with the Tribunal's order.

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Issues Involved:
1. Jurisdiction on re-opening of assessment u/s 148 of the Act.
2. Event of 'transfer' as per Section 2(47)(v) of the Act.
3. Justification of cost of construction as the full value of consideration of land.
4. Non-granting of correct cost of acquisition of the land.
5. Non-granting of Section 54/54F exemption.
6. Levy of interest under Section 234A and 234B.

Issue-wise Detailed Analysis:

1. Jurisdiction on Re-opening of Assessment u/s 148 of the Act:
The assessee contended that the assessment order passed u/s 147 r.w.s. 143(3) was invalid as the reasons for reopening were not communicated despite a request. The Tribunal had previously remanded the matter to the CIT(A) to verify if the reasons were communicated. The CIT(A) upheld the validity of the assessment, stating that the show cause notice dated 20.01.2012, which mentioned the reasons for reopening, was sufficient compliance. The Tribunal dismissed the grounds related to jurisdiction, supporting the CIT(A)'s conclusion.

2. Event of 'Transfer' as per Section 2(47)(v) of the Act:
The assessee argued that there was no 'transfer' as defined in Section 2(47)(v) since no possession was handed over to the developer. However, the Tribunal noted that the Joint Development Agreement (JDA) entered into by the assessee was a registered document, and following the Karnataka High Court's decision in Dr. T. K. Dayalu, it held that entering into a JDA constitutes a 'transfer'. Consequently, this ground was dismissed.

3. Justification of Cost of Construction as the Full Value of Consideration of Land:
This issue was rendered academic due to the Tribunal's decision on the exemption u/s 54/54F and was not adjudicated.

4. Non-granting of Correct Cost of Acquisition of the Land:
Similar to the previous issue, this was rendered academic and was not adjudicated.

5. Non-granting of Section 54/54F Exemption:
The assessee claimed exemption u/s 54/54F for two flats received under the JDA. The CIT(A) had denied this exemption, but the Tribunal found that the case was covered by the Karnataka High Court's decision in CIT vs. Smt. K. G. Rukminiamma, which allowed exemption for multiple units in the same residential building. The Tribunal also referred to similar decisions by the Madras High Court and its own previous rulings, concluding that the assessee was entitled to exemption for both flats. This ground was allowed.

6. Levy of Interest under Section 234A and 234B:
The assessee's challenge to the levy of interest was dismissed. The Tribunal upheld the AO's action, citing the mandatory nature of interest under these sections as established by the Supreme Court in Anjum H. Ghaswala. However, the AO was directed to re-compute the interest while giving effect to the Tribunal's order.

Conclusion:
The appeal was partly allowed, with the Tribunal granting the exemption u/s 54/54F for the two flats and dismissing other grounds either as academic or without merit.

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