2022 (12) TMI 1272 - AT - Income Tax

Tribunal directs AO to prevent double taxation, grant indexed cost, apply Section 54F

The Tribunal partially allowed the appeal, directing the Assessing Officer to prevent double taxation, grant indexed cost of acquisition, and correctly ... LTCG - year of assessment - as argued by assessee that once the amount is brought to tax in A.Y 2014-15, therefore, the addition of the same in this year amounts to double addition of the same amount - whether the income on sale of 23 flats has been brought to tax during the A.Y 2015-16 correctly or not? - HELD THAT:- The various other decisions relied on by assessee support the arguments of assessee that the same amount cannot be taxed twice in two different A.Ys. Under these circumstances, we deem it proper to restore the issue to the file of the AO with a direction to verify the record and if the amount of Rs.2,91,07,000/- has been brought to tax in A.Y 2014-15, then the same should be deleted from A.Y 2015-16. We hold and direct accordingly. Needless to say, the AO shall give due opportunity of being heard to the assessee while deciding the issue. The first issue raised by the assessee in the grounds of appeal are accordingly allowed for statistical purposes. Deduction of indexed cost of acquisition wherein the assessee has challenged the order of the Assessing Officer in not granting indexed cost of acquisition - DRP has directed the AO to reduce the indexed cost of acquisition from the sale consideration and arrive at the correct LTCG. A perusal of the assessment order shows that the Assessing Officer has not granted the benefit of indexed cost of acquisition from the sale consideration to arrive at the correct LTCG. We, therefore, direct the Assessing Officer to follow the direction of the DRP and allow indexed cost of acquisition from the sale consideration. Ground raised by the assessee on this issue is accordingly allowed. Reversing 54F deduction granted in A.Y 2012-13 - HELD THAT:- A perusal of the order of the DRP at para 2.4.5 shows that the Assessing Officer in the draft order for A.Y 2014-15 has already brought to tax the amount of Rs.6,77,04,992/- as LTCG which was allowed u/s 54F in A.Y 2012-13. However, the DRP at Para 2.4.6 of the order sustained the addition made by the Assessing Officer on the ground that the same is made on protective basis. Since in the instant case, the flats were allotted to the assessee as per the JDA on 13.01.2012 and the flats were sold on 24.3.2015, therefore, the new asset was sold after a period of 3 years and therefore, the provisions of section 54F(3), in our opinion, shall not apply. Further, when the entire sum of Rs.6,77,04,992/- was reversed in A.Y 2014-15, therefore, again addition of the same, under protective basis, in A.Y 2015-16, in our opinion, is also not justified. We, therefore, direct the AO to verify the record and if the amount of Rs.2,99,46,438/- has already been brought to tax in A.Y 2014-15 or the transactions for the year under consideration is beyond a period of 3 years, then not to make any addition by reversing the deduction already allowed u/s 54F in A.Y 2012-13. Needless to say, that the AO while verifying the record shall give due opportunity of being heard to the assessee and decide the issue as per fact and law. We hold and direct accordingly. Grounds of appeal are accordingly allowed for statistical purposes. Credit of tax paid in A.Y 2016-17 to A.Y 2015-16 - HELD THAT:- Respectfully following the decision of M/S. INTERGLOBE ENTREPRISES PVT. LTD. [2022 (8) TMI 98 - ITAT DELHI] we restore the issue to the file of the Assessing Officer with a direction to verify the record and if any other benefit is not claimed by the assessee in respect of the amount of tax of Rs.1,00,07,393/- paid in A.Y 2016-17, in respect of the income then allow the credit of the same for the A.Y 2015-16. Ground of appeal No.4 raised by the assessee is accordingly allowed for statistical purposes. Issues Involved:1. Double taxation of Rs.2,91,07,000/-2. Deduction of indexed cost of acquisition3. Reversal of Section 54F deduction4. Credit of tax paid in A.Y 2016-17Issue-wise Detailed Analysis:1. Double Taxation of Rs.2,91,07,000/-:The assessee argued that the amount of Rs.2,91,07,000/- was being taxed twice, once in A.Y 2014-15 and again in A.Y 2015-16. The Department had reopened the assessment for A.Y 2014-15, proposing to tax the entire sum of Rs.5,12,07,000/- based on the dates of registration. The Tribunal found merit in the assessee's argument, noting that the same amount cannot be taxed in two different assessment years. The Tribunal directed the Assessing Officer to verify the record and, if the amount of Rs.2,91,07,000/- had been brought to tax in A.Y 2014-15, it should be deleted from A.Y 2015-16. This decision was supported by various legal precedents, including CIT vs. Shelly Products and another (261 ITR 367) (S.C) and CIT vs. Bharat General Reinsurance Co. Ltd (81 ITR 303) (Del.).2. Deduction of Indexed Cost of Acquisition:The assessee contended that the Assessing Officer did not grant the indexed cost of acquisition as directed by the DRP. The DRP had instructed the Assessing Officer to reduce the indexed cost of acquisition from the sale consideration to arrive at the correct LTCG. The Tribunal found that the Assessing Officer had not complied with this direction and ordered the Assessing Officer to follow the DRP's directive and allow the indexed cost of acquisition from the sale consideration.3. Reversal of Section 54F Deduction:The Assessing Officer had proposed to reverse the Section 54F deduction granted in A.Y 2012-13, arguing that the transfer was within three years. The Tribunal noted that the flats were sold after a period of three years from the date of the Joint Development Agreement (JDA) on 13.01.2012, making the provisions of Section 54F(3) inapplicable. Additionally, the Tribunal observed that the entire deduction of Rs.6,77,04,992/- had already been reversed in A.Y 2014-15. Therefore, reversing the deduction again in A.Y 2015-16 would amount to double taxation. The Tribunal directed the Assessing Officer to verify the record and, if the amount had already been brought to tax in A.Y 2014-15, not to make any further addition in A.Y 2015-16.4. Credit of Tax Paid in A.Y 2016-17:The assessee requested credit for tax paid in A.Y 2016-17 towards the tax liability for A.Y 2015-16. The Tribunal cited the decision of the Delhi Bench in the case of Interglobe Enterprises (P) Ltd vs. ACIT, which allowed such claims. The Tribunal directed the Assessing Officer to verify the record and, if no other benefit had been claimed by the assessee for the tax paid in A.Y 2016-17, to allow the credit for A.Y 2015-16. The Assessing Officer was instructed to decide the issue as per fact and law after giving due opportunity of being heard to the assessee.Conclusion:The Tribunal partly allowed the appeal for statistical purposes, directing the Assessing Officer to verify records and make necessary adjustments to avoid double taxation, grant indexed cost of acquisition, and ensure the correct application of Section 54F and tax credits.