TaxTMI 
TaxTMI 
2014 (5) TMI 273
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....of both the parties and carefully perused the record placed before us including paper book filed by the assessee spread over 124 pages. Ld. DR submitted that during the quantum proceedings, the Assessing Officer held that the transaction of land falls under the meaning of section 2(47)(v) of the Act which specifies that transfer means "any transaction involving the allowing of the possession of any immoveable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the transfer of Property Act, 1872." 4. The DR further submitted that an amount of Rs.6.48 crore was considered as the sale consideration of the land and capital gain arising thereon was worked out at Rs.6,29,37,264/- and the same was assessed in the hands of the assessee in the year under consideration. The DR further pointed out that the matter traveled upto ITAT and ITAT vide its order dated 20.1.2012 in ITA No. 2085/Del/2007 decided the issue in favour of the department and against the assessee. The DR has drawn our attention towards penalty order and submitted that in view of clause (a) to Explanation 4 of section 271(1)(c), the plea of the assessee that no pe....
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....of was not effective for the year under consideration i.e. 1998-99. The counsel placed reliance on the decision of Hon'ble Supreme Court in the case of Commissioner of Income Tax vs Gold Health Coin 301 ITR 308(SC). 6. On careful consideration of above submissions and perusal of material placed on record, at the outset, we observe that the Commissioner of Income Tax(A) cancelled the penalty order with following observations and findings:- "6.7 In order to decide whether the appellant had concealed the particulars of income, on perusal of the notes to accounts, I find that the auditors at S.No.14 of the notes to accounts had commented that "the company had sold its Compressor Division as a going concern to Tecumseh India (P) Ltd.. The sale price of fixed assets or current assets and current liabilities to exclude part of the land under dispute as described in Schedule F Note 3 and part of the building at Faridabad." Secondly, I find that the appellant had disclosed the capital gains on the impugned sale of land in its return for A. Y. 2000-01 which was filed on 30.11.2000. The ld. AO, in respect of the assessment proceedings for A.Y. 1998-99 i. e. Current year, had issued n....
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.... Mtr. and building thereon, the consideration of which was fixed at Rs. 6.48 crores, was contingent on issue of notification by the Haryana Govt. for allowing release of such land, and therefore in its view no transfer had taken place during the current year. Further, only 50% of sale proceeds was transferred into an ESCROW account on which the appellant was earning interest, which was treated as licence fee for allowing M/s Tecumseh to use this property. It is evident that the property was handed over with the right of easement to M/s Tecumseh. The Hon'ble ITAT, Delhi while deciding the quantum assessment proceedings vide their order dated 20.01.2012 had held that 'transfer' within the meaning of Section 2(47)(b) of the Act had taken place during the current year itself as both parties have done their part - performance within the meaning of Section 53A of the Transfer of Property, 1853 Act. The appellant's submission that the land could not be transferred unless de-notified under the Land Acquisition Act of the Haryana Government, was not considered by the Hon'ble ITAT on the basis of the provisions of the agreement which provide that the appellant shall recei....
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.... impugned land was brought to tax, the same was eligible for set off against brought forward Long-Term Capital Loss of over Rs. 9 crores, and hence no tax was payable in the current year. In addition, appellant was also having current year's Business loss of Rs.61,95,91,753 and brought forward Business loss of Rs. 168.47 crores, which could have been set off against the above referred impugned capital gains. For the A.Y. 2000-01, in which the appellant had offered capital gains, the appellant had current year's Business loss of RS.72,43,97,142, while it had brought forward business loss of over Rs. 228 crores. Either, way no tax was payable by the appellant, but the only implication was that by offering capital gain in A.Y. 2000-01, the cost of acquisition was inflation indexed for 24 more months that had the effect of reducing capital gains by Rs. 3,26,450. In my view even though the appellant had, in its interpretation disclosed capital gain in A.Y. 2000-01 and not in A.Y. 1998-99, the same did not have any significant tax implication other than the fact that lesser amount of capital gain to the extent of Rs. 3,26,450 on account of difference in inflation indexing, was cl....
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....the current year and hence the capital gain would have been set off against the same. 7.2 However, the appellant's alternative plea that in view of the fact that the effect of addition was reduction of loss only and penalty under Section 271(1)(c) could not be levied as the amendment in Explanation 4 thereof was not effective for the current year, by relying on the decision in the case of CIT Vs Prithpal Singh (supra) is not acceptable, in view of the decision of the Hon'ble Supreme Court in the case of CIT Vs Gold Health Coin 301 ITR 308, in which the following was held: "Explanation 4 to Section 271(1)(c)(iii) of the Income Tax A ct, 1961, regarding the imposition of penalty even if the returned income is a loss, is c1arificatory and not substantive. It applies even to assessment years prior to April 1, 2003, the date on which it was brought into force. What the Finance Act,2002, intended was to make the position explicit which otherwise was implied." 7.3 However, keeping in view the above facts, in my view the claim of the appellant that the capital gain in respect of the impugned transfer of land should be taxed in A.Y.2000- 01 and not in the current year, (whi....