TaxTMI 
TaxTMI 
2014 (6) TMI 587
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....d/2013 in respect of Sri Ch. Malla Reddy for A.Ys. 2003-04, 2004-05, 2005-06, 2008-09 and 2009-10, respectively. 3. The first common ground in these appeals is that the CIT(A) erred in holding that while completing assessment u/s. 153A addition can be made without reference to seized documents. 4. Facts of the case in brief, as narrated in ITA No. 769/Hyd/2013, are that a search and seizure operation was conducted in the residential premises of the assessee on 7.8.2008. Subsequently, a notice u/s. 153A was issued for the A.Ys. 2003-04 to 2008-09. In response, the assessee filed his return of income for the A.Y. 2007-08 on 5.8.2010. The particulars of the return of income filed by the assessee originally for these years, as also those filed in response to the notice u/s. 153A are as under: A.Y. Date of filing original return Income as per original return Agri. Income Income as per return after 153A notice Agri. Income in return after 153A notice 2003_04 31.03.2004 78,620 4,01,369 78,620 4,01,369 2004_05 31.03.2005 4,60,900 4,70,000 4,60,900 4,70,000 2005_06 31.03.2007 3,60,010 2,62,645 3,60,010 2,62,645 2008_09 __ __ __ 3,08,27,386 3,74,100 5. ....
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.... in 137 ITD 287. Accordingly, this ground is dismissed. 8. The next ground in ITA No. 769/Hyd/2013 is with regard to disallowance of expenditure of Rs. 54,059. The assessee claimed expenditure of Rs. 54,059 out of commission income of Rs. 2,67,700 which was disallowed by the AO. The contention of the assessee's counsel is that the amount had been shown in the original return of income whereas there was no contradicting evidence in the seized material suggesting non-incurring of such expenditure by the assessee so as to disallow the same. 9. The DR submitted that no details of expenditure in respect of expenses of Rs. 54,059 were furnished. Being so, it was disallowed. 10. We have heard both the parties and perused the material on record. The AO disallowed the expenditure of Rs. 54,059 without an iota of discussion in his order. There is no finding by the AO regarding how he doubted this expenditure and he in a mechanical manner disallowed the same which is not proper. Had he doubted the expenditure, he ought to have called for evidence and confronted the assessee to prove the genuineness of the expenditure. In absence of this, in our opinion, the said expenditure canno....
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....ssessment u/s. 158BC r.w.s. 158BB of the Act. Being so, the assessee is required to explain the source of Rs. 3,25,000 while framing the assessment u/s. 153A of the Act. Before the learned AR submitted that the assessee has material to suggest that the assessee has received this amount of Rs. 3,25,000 from sale of agricultural land. Considering the plea of the assessee, we are inclined to remit this issue to the file of the AO to explain the source of receipt of Rs. 3,25,000. Accordingly, this ground is remitted back to the file of the AO for fresh consideration. ITA No. 769/Hyd/2013 is partly allowed for statistical purposes. 14. The second ground in ITA No. 770/Hyd/2013 is with regard to sustaining addition of Rs. 1,25,000 u/s. 68 of the Act. This issue is relating to receipt of Rs. 1,25,000 out of the sale proceeds from agricultural land. As this issue is similar to the ground in A.Y. 2003-04 relating to receipt of Rs. 3,25,000, as discussed in earlier paras, this ground is remitted back to the file of the AO for fresh consideration. ITA No. 770/Hyd/2013 is also allowed partly for statistical purposes. 15. ITA No. 771/Hyd/2013: The second ground in this appeal is with rega....
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....in the A.Y. 2005-06. Without prejudice to the above contentions, it was submitted that the Assessing Officer adopted consideration in respect of 70000 square feet of constructed area at Rs. 3,42,00,000, being the market value for the entire constructed area, whereas he should have adopted only 36%, being the assessee's share. It was also claimed that the market rate fixed by the Sub- Registrar could not have been adopted as it included the cost of land also, which is owned by the assessee. Accordingly, it was claimed that the sale consideration was adopted without considering the exact cost of construction of the constructed area to be allotted to the assessee, whereas the value of land was also to be excluded. 18. Further he submitted that there cannot be any income recognition in the hands of the assessee for the A.Y. under consideration even if it is presumed that the land belongs to the assessee rather than HUF since the assessee has not received any substantial consideration and only given possession of the property to the vendor for the limited purpose of construction and by any stretch of imagination just a symbolic handing over of possession of the property cannot be....
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....was not developed nor any construction activity was completed nor was the share of the assessee delivered to him. 22. Further, he submitted that it was not the plea of the assessee before the lower authorities that the property is owned by the HUF. The fact of entering into a Development Agreement with regard to the land admeasuring Ac. 2.00 Gts. in survey No. 212 (part) at Madinaguda, Serilingampally, as evidenced by the seized material also, has not been disputed by the assessee and others. It is also a fact that as per the said Development Agreement, the possession of land had also been given to the developer for construction of residential units thereon on 16-9-2004 itself. The consideration to be received by the land owners for foregoing their share in the said land had also been specified in the said agreement, which was 36% of the total constructed space of 70,000 sq. feet. It is however claimed by the Representative of the assessee in his submissions that the impugned land belonged to the HUF and not the assessee in his individual capacity. However, it is clear that such contention has not been evidenced by way of any documentary evidence. On the other hand, from the Dev....
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....contention, that consideration for the transfer was neither received nor did it accrue on the date of entering into the Development Agreement, it is an established position of law that consideration for transfer can be even futuristic. Reliance in this regard is placed on the decision of the Hon'ble Chennai Bench of the ITAT in the case of R. Kalanidhi vs. ITO (122 TTJ 405), In the assessee's case, the consideration to be received in lieu of such transfer had been clearly ascertained by specifying that the assessee and others were to get 36% of the total constructed area of 70,000 sq. feet. Accordingly, tile cost of construction of such area was to be the consideration received and the same was categorically specified on the date of entering into the Development Agreement itself. 26. The DR submitted that the assessee contented that the capital gains in respect of the above transaction had been offered by the HUF in the return filed by it after the completion of construction and that the same was accepted by the Department. However, it is clear that in the light of the decisions cited above; the correct year in which such capital gains was to be brought to tax is assessm....
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....r u/s. 2(47)(v) does not belong to the assessee and it belongs to the HUF. The assessee pleaded that the capital gain arising out of such transfer is offered to tax by the assessee in the hands of the HUF for A.Y. 2008-09. He drew our attention to the copy of assessment order passed by the ACIT, Central Circle-1, Hyderabad in the case of Sri Ch. Malla Reddy HUF for A.Y. 2007-08 and copy of acknowledgement of return of income and assessment order in the case of Ch. Malla Reddy HUF for A.Y. 2008-09 placed on record in Paper Book No. 121 and 122 for A.Y. 2007-08, for A.Y. 2008-09 123- 126. 29. Further, the AR also brought on record the order u/s. 171 of the Act in the case of Ch. Malla Reddy, Ch. Narasimha Reddy and Sri C. Gopal Reddy dated 28.2.2003 vide partition deed dated 31.8.1988 which is kept on record at Paper Book No. 296. He also brought on record another order u/s. 171 dated 28.3.2000 in the case of Ch. Malla Reddy, K. Mahender Reddy, K. Bhadra Reddy vide partition deed dated 31.8.1988. It is also brought on record by the assessee that the return of income filed by the assessee as a HUF in the following assessment year: (a) Ch. Malla Reddy HUF AY 1999-00 and 2001-02; ....
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.... considerable force in the submission of the revenue and it must be upheld. We have earlier noticed the scheme of the Act. Section 4 of the Act creates the charge and provides inter alia for payment of tax in advance or deduction of tax at source. The Act provides for the manner in which advance tax is to be paid and penalises any assessee who makes a default or delays payment thereof. Similarly the deduction of tax at source is also provided for in the Act and failure to comply with the provisions attracts the penal provisions against the person responsible for making the payment. It is, therefore, quite apparent that the Act itself provides for payment of tax in this manner by the assessee. The Act also enjoins upon the assessee the duty to file a return of income disclosing his true income. On the basis of the income so disclosed, the assessee is required to make a self-assessment and to compute the tax payable on such income and to pay the same in the manner provided by the Act. Thus the filing of return and the payment of tax thereon computed at the prescribed rates amounts to an admission of tax liability which the assessee admits to have incurred in accordance with the provi....
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.... profit from development agreement in the assessment year 2008-09, facts are that during the course of search operation, a Development Agreement cum GPA had been found and seized from the premises of M/s. Malla Reddy Educational Society as page Nos. 16 to 51 of Annexure A/MRG/PO/01, which was a Development Agreement executed by the assessee, his family member's and other relatives in favour of M/s. Aditya Construction Co. India Pvt. Ltd. on 2-5-2007. Possession of the land had been handed over to the Developer for construction of residential units. The total impugned land of Ac. 20.17 Gts. at survey No. 98, 99 and 100, Gundla Pochampally village, Medchal Mandal was owned by 14 individuals, wherein the assessee had share to the extent of 2 acres. The entire piece of land had been given on development and the developers and land owners were entitled to 50% each of the constructed residential bungalows. As per the Development Agreement (DA), 150 units with plinth area of 3,500 square feet each were to be built. 36. On a consideration of facts, the Assessing Officer opined that since the land owners had handed over vacant and peaceful possession of the impugned land to the devel....
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....ract Section 53A, the following conditions need to be fulfilled. (a) There should be contract for consideration; (b) It should be in writing; (c) It should be signed by the transferor; (d) It should pertain to the transfer of immovable property; (e) The transferee should have taken possession of property; (f) Lastly, transferee should be ready and willing to perform the contract". 47. Elaborating upon the scope of expression "has performed or is willing to perform", the oft quoted commentary "Mulla-The Transfer of Property Act" (9th Edn. : Published by Butterworths India), at p. 448, observes that: "The doctrine of readiness and willingness is an emphatic way of expression to establish that the transferee always abides by the terms of the agreement and is willing to perform his part of the contract. Part performance, as a statutory right, is conditioned upon the transferee's willingness to perform his part of the contract in terms covenanted there under." Willingness to perform the roles ascribed to a party, in a contract is primarily a mental disposition. However, such willingness in the context of Section 53A of the Act has to be absolute and unconditi....
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.... part of sale consideration. Admittedly, there is no progress in the development agreement in the assessment year under consideration. The Municipal sanction for development was obtained not in this assessment year and it was obtained only on 17.09.2006 from the Hyderabad Urban Development Authority. The sanction of the building plan is utmost important for the implementation of the agreement entered between the parties. Without sanction of the building plan, the very genesis of the agreement fails. To enable the execution of the agreement, firstly, plan is to be approved by the competent authority. In fact, the building plan was not got approved by the builder in the assessment year under consideration. Until permission is granted, a developer cannot undertake construction. As a result of this lapse by the transferee, the construction was not taken place in the assessment year under consideration. There is a breach and break down of development agreement in the assessment year under consideration. Nothing is brought on record by authorities to show that there was development activity in the project during the assessment year under consideration and cost of construction was incurre....
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....he property is only one of the condition u/s 53A of the Transfer of Property Act but it is not the sole and isolated condition. It is necessary to go into whether or not the transferee was 'willing to perform' its obligation under these consent terms. When transferee, by its conduct and by its deeds, demonstrates that it is unwilling to perform its obligations under the agreement in this assessment year, the date of agreement ceases to be relevant. In such a situation, it is only the actual performance of transferee's obligations which can give rise to the situation envisaged in Section 53A of the Transfer of Property Act. On these facts, it is not possible to hold that the transferee was willing to perform its obligations in the financial year in which the capital gains are sought to be taxed by the Revenue. We hold that this condition laid down under Section 53A of the Transfer of Property Act was not satisfied in this assessment year. Once we come to the conclusion that the transferee was not 'willing to perform', as stipulated by and within meanings assigned to this expression under Section 53A of the Transfer of Property Act, its contractual obligations in ....
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....stances of the present case as discussed above, we are of the considered view that the assessee deserves to succeed on reason that the capital gains could not have been taxed in the in this assessment year in appeal before us. The other grounds raised by the assessees in their appeals have become irrelevant at this point of time as we have held that provisions of section 2(47)(v) will not apply to the assessees in the assessment year under consideration. Consequently, the appeal filed by the revenue in ITA No. 328 to 331/Hyd/2011 have become infructuous and dismissed accordingly. 38. Accordingly, taking a consistent view, since the facts are similar, as there is no development activity undertaken by the developer in the assessment year under consideration, we are inclined to allow this ground of the assessee in ITA No. 772/Hyd/2013. 39. The next ground in ITA No. 772/Hyd/2013 is with regard to treating Rs. 5,15,400 as undisclosed income of the assessee. 40. Before the CIT(A), this ground was not pressed. Even before us also this ground is not pressed. Being so, we are not inclined to entertain this ground at this stage. Accordingly, this ground is dismissed as not pressed.....
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....idence for passing the consideration between the parties at Rs. 78,60,000, except loose sheets. Being so, the apparent consideration disclosed in the sale deed which was duly registered with the SRO is to be considered as the consideration passed between the parties. Accordingly, we are inclined to hold that the AO shall consider the consideration only at Rs. 58,72,050 and if there is no failure on the part of assessee to explain the source of Rs. 58,72,050 for purchase of this property, the same should be treated as explained investment. This view of ours is also supported by the Supreme Court in the case of K.P. Verghese vs. ITO, 131 ITR 597. This ground is partly allowed. In the result, ITA No. 772/ Hyd/2013 is partly allowed. 45. Coming to ITA No. 773/Hyd/2013. The first issue for our consideration is that the CIT(A) erred in holding that while completing the assessment u/s. 153A of the Act additions can be made without reference to the seized documents. 46. We have heard both the parties and perused the material on record. We have considered similar issue in ITA No. 769/Hyd/2013 and decided the issue in para 7 of this order. Following the same ratio, this ground of th....
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.... It is the contention of the assessee that as per the Board Circular No. 1916 dated 11-5-1994, it is common to possess 500 grams of gold jewellery among Indian women. However, since the assessee hails from an affluent agricultural family, women in his family would have received more than 1000 grams of gold at the time of their marriage, which should be considered explained, However, as regards the Instruction No. 1916 stated above, it is clear that the said Instruction itself is in fact in the nature of a guideline for dealing with the jewellery found in the course of search and effect seizure out of such jewellery, if the same is in excess of the limits prescribed therein. Though the Hon'ble Karnataka High Court in the case of Smt. Pati Devi vs ITO (240 ITR 727) have approved the retrospective applicability of the said Instruction only, but they have not held that these guidelines would apply even to the consideration of investment in unaccounted jewellery in the course of assessment proceedings also. However, tile Hon'ble High Court have indeed mentioned in the said judgement that the limits regarding weight in the said Instruction have been prescribed "view of the social cir....
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....ng addition of Rs. 10 lakhs out of Rs. 11,21,200. 54. Facts of the issue are that the assessee could not explain cash to this extent found at the residence in the course of search. Accordingly, Rs. 10 lakhs out of the cash so found was seized. In his statement recorded u/s. 131 on 20.11.2006, the assessee admitted Rs. 10 lakhs of cash as his undisclosed income and the same was admitted as unaccounted money in the return filed for the assessment year 2009-10 also. The remaining was stated to be petty cash belonging to himself and his family members. Though the assessee filed his return offering a sum of Rs. 3,03,00,991, which included the amount so admitted, the Assessing Officer opined that the assessee had accounted for Rs. 10 lakhs only as his undisclosed income. In the absence of any clarification and reconciliation regarding petty cash, the entire cash of Rs. 11,21,200/- was treated as unexplained money u/s. 69A. However, the CIT(A) reduced the addition to 10 lakhs on this count. Hence, the assessee is in appeal before us. 55. The AR submitted that the Assessing Officer did not reject the Receipts and Payments A/c submitted by the assessee but treated Rs. 1,21,200 also, o....
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....lank cheques in lieu of loans borrowed as a form of security. He, therefore, concluded that the cheques found from the premises of the assessee showed that loans had been advanced by the assessee to the said two parties and those were lying with him as security only. Accordingly, the sum of Rs. 27 lakhs was treated as undisclosed investment out of undisclosed sources. 60. During the course of appellate proceedings, the AR of the assessee reiterated that the above said parties had stated that they had not taken any loan from the assessee and that the signed cheques had been given by them only with a view to get loan, which they did not receive. Accordingly, he claimed that the evidence clearly indicated that the assessee had not given any loan to the said persons, as long as there is no evidence to show that the amounts were so advanced. 61. The CIT(A) observed that the above mentioned signed cheques had been given by Sri M. Krishna Rao and Sri Jakkula Narasimha Reddy to the assessee as security for getting loans. It is, however, the contention of the assessee that the said two parties were not given loans and the cheques had only remained with the assessee. However, it is clear ....
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....is dismissed. 64. The next ground in ITA No. 804/Hyd/2013 is with regard to sustaining addition by the CIT(A) of Rs. 5,25,000 made by the AO u/s. 68 of the Act. 65. Brief facts of the issue are that during the course of first appellate proceedings the assessee claimed that no such addition could have been made in the proceedings u/s. 153A, as no material was found or seized in the course of search and seizure operation pertaining to the A.Y. 2003-04. The AR contended that the amount had been shown in the return of income filed originally and the AO had no controverting evidence in the seized material. The AR submitted that the said amounts were advances for sale of land, which were refunded later as the agreement of sale was cancelled. 66. The CIT(A) observed that once the provisions of s. 153A are invoked, the AO acquires jurisdiction to assess/reass the total income in respect of six preceding years. While making such assessment/re-assessment, the AO is required to look into various claimed of the assessee, irrespective of the fact whether the seized material specifically pertains to all of those six years individually. As regards the credits considered as unexplained, i....
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....eveloper for construction of residential units, The total impugned land of Ac. 20.17 Gts. at survey No. 98, 99 and l00, Gundla Pochampally village, Medchal Mandal was owned by 14 individuals, wherein the assessee had share to the extent of 2 acres. The entire piece of land had been given on development and the developers and land owners were entitled to 50% each of the constructed residential bungalows. As per the Development Agreement (DA), 150 units with plinth area of 3,500 square feet each were to be built. 72. On a consideration of facts, the Assessing Officer opined that since the land owners had handed over vacant and peaceful possession of the impugned land to the developer to execute the project in terms of the DA, as per the provisions of s. 2(47)(v) of the Act, the said agreement constituted transfer. He noted that in several judicial pronouncements, it has been held that any transaction which allows the possession to be taken would constitute "transfer" within the meaning of s. 2(47) and that any transaction which involves a transfer of title in future or exchange of a property to be put up in future, would necessarily constitute a "transfer", within the meaning of s....
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.... for the construction of residential units. Under the circumstances, it is clear that in the light of the decision of the Hon'ble Jurisdictional Income-tax Appellate Tribunal in the case of Dr. Maya Shenoy Vs. ACIT (supra), which has been consistently followed by them in their subsequent decisions, there was indeed a "transfer" as contemplated u/s. 2( 47)(v) of the Act read with the provisions of s. 53A of Transfer of Property Act, 1882 .It is clear that the view taken by the Hon'ble Jurisdictional Income- tax Appellate Tribunal finds support from the view of the Hon'ble Bombay High Court in the case of Chaturbhuj Dwarakadas Kapadia Vs. CIT (supra) and also of Hon'ble Authority for Advance Ruling in the case of Jasbir Singh Sarkaria, (supra). Besides, it is seen that the Hon'ble IT AT , Cochin Bench, in their relatively recent decision dated 28-9-2012 in the case of G. Sreenivasan Vs. DCIT (ITA No. 188/Coch/2009) have also expressed a similar view after referring to the above mentioned decision of the Hon'ble Bombay High Court. Accordingly, following the above mentioned judicial pronouncements, it is clear that since the t:ppellant and others had entered into the ab....
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....sence of any evidence to the contrary, the willingness of the developer to perform in this case is required to be judged only from the available Development Agreement, which indeed shows absolute and unconditional willingness, which is not studded with any condition. In my considered opinion therefore, the mere fact of not taking up construction alone cannot establish the developer's intent in not performing its part. Until and unless the impugned Development Agreement is itself modified or cancelled and it is established with evidence. that the project itself has been abandoned, it cannot be said that the parties thereto do not intend to adhere to the terms there of in future also or that the Development Agreement has broken down. Further, even lf the developer under the Development Agreement was required to develop the property and hand over the possession of land owner's share within a period of two years and six months, it is clear that the said agreement did not stipulate that in the case of delay exceeding such time limits, the Development Agreement would be deemed as cancelled or abandoned. 77. The CIT(A) observed that so far as the reliance of the Id. Representat....
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....sed the material on record. In our opinion, there is no commencement of activities of development by the developer. Being so, this issue is squarely covered by the order of this Tribunal in the case Mrs. K. Radhika & Ors. (cited supra). Accordingly, we are inclined to delete the addition. In the result, ITA No. 806/Hyd/2013 is partly allowed. 80. The next ground for our consideration in ITA No. 807/Hyd/2013 is with regard to addition of Rs. 6,49,000 made u/s. 68 of the Act. 81. Brief facts of the issue are that the addition of Rs. 6,49,000 on account of unexplained credit in the assessment year 2009-10, as per the assessment order, a credit of such amount had been shown in the Fund Flow Statement furnished by the assessee towards sale of land. However, no profit from such sale was admitted in the return of income. The assessee could not furnish any documentary evidence in the course of assessment proceedings to substantiate the reasons for not offering any income on account of said credit. Therefore, the sum of Rs. 6,49,000 was considered as unexplained cash credit. During the course of appellate proceedings, the Representative of the assessee submitted that the assessee prop....
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....rtunity was given to submit proof regarding expenditure claimed. However, despite such contention no evidence was submitted by the assessee even before him. Since the assessee failed to discharge the onus of establishing the claim for deduction on account of development expenses and brokerage, the addition made by the AO of Rs. 3,48,900 was sustained by the CIT(A). Against this, the assessee is in appeal before us. 88. We have heard both the parties and perused the material on record. The contention of the assessee's counsel is that the AO not pointed out this addition at the stage of assessment and no opportunity was given to the assessee to submit evidence regarding this addition. In our opinion, it is appropriate to give an opportunity to the assessee. Accordingly, this issue is remitted back to the AO with a direction to the assessee to furnish necessary evidence before the AO. This ground is partly allowed for statistical purposes. In the result, ITA No. 803/Hyd/2013 is partly allowed for statistical purposes. 89. Now coming to ITA No. 764/Hyd/2013. The first ground for consideration is with regard to framing assessment u/s. 153C of the Act. 90. As discussed in th....
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....eement has the effect of transferring the land from the owner to the developer. The AO also relied on the decisions in the cases of Chaturbhuj Dwarakadas Kapadia vs. CIT (2003 INDLAW MUM 47, 501) and Jasbir Singh Sarkaria (2007 INDLAW AIR 14). Accordingly, he opined that in the instant case also, the assessee was liable for capital gains in the FY 2007-08, the year in which the Development Agreement was entered into and the "transfer" took place. 95. During the course of assessment proceedings, the assessee was required to explain as to why capital gains should not be charged on the above transaction. The assessee objected to the proposal of the Assessing Officer, contending that the case laws so cited were not applicable to his case. It was also claimed that possession of the property had not been given. On a consideration of the facts and contentions, however, the Assessing Officer opined that even though construction had not been completed till then, possession of the land had indeed been taken over by the developer for construction of buildings. He felt that Clause-7 in the Agreement to the affect that the said agreement did not mean transfer of property as per s. 2(47) of t....
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....0 units with plinth area of 3,500 square feet each were to be built. 98. Before the CIT(A), the AR of the assessee submitted that since the real estate market dwindled owing to recession worldwide. the developers could not even obtain approvals from the local authorities and no construction of bungalows was undertaken. It was stated that the land stands as it is even after the lapse of five years and is in complete possession of the land owners. He stated that in the absence of any activity by the developer, no capital gain could be said as arising only on entering into the development agreement. He claimed that the transfer was not complete on the said date, but could be said as completed only when the construction got completed and the constructed are handed over to the assessee. It was argued that as per the development agreement, the same was to be implemented within a period of two years and six months and as mentioned therein, time was to be the essence of the contract. However, since the developer did not commence any activity, the agreement could not be considered as valid and is rather void, as the same has not been implemented even till date. The AR averred that the AO....
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....with the provisions of s. 53A of Transfer of Property Act, 1882. 101. The CIT(A) observed that that the Jurisdictional Tribunal finds support from the view of the Hon'ble Bombay High Court in the case of Chaturbhuj Dwarkadas Kapadia vs. CIT (supra) and also of the Hon'ble Authority for Advance Ruling in the case of Jasbir Singh Sarkaria (supra). Besides, the Cochin Bench of the Tribunal , i their relatively recent decision dated 23.9.2012 in the case of G. Sreenivasan vs. DCIT (ITA No. 188/Coch/2009) have also expressed a similar view after referring to tile above mentioned judgement of the Hon'ble Bombay High Court. Accordingly, following the above mentioned judicial pronouncements. it is clear that since the assessee and others had entered into the above referred Development Agreement on 28-3-2007 and had also qiven possession of land for construction of residential units thereon on the said date itself, the capital gains arising from such transfer was indeed chargeable to tax in the assessment year 2007-08. 102. The CIT(A) observed that the assessee has further contended that the developers had not even obtained permissions from Municipal Authorities for construction o....
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....lf modified or cancelled and it is established with evidence that the project itself has been abandoned, it cannot be said that the parties thereto do not intend to adhere to the terms thereof in future also or that the Development Agreement has broken down. 104. The CIT(A) observed that even if the developer under the Development Agreement was required to develop the property and hand over the possession of land owner's share within a period of two years and six months, it is clear that the said agreement did not stipulate that in the case of delay exceeding such time limits, the Development Agreement would be deemed as cancelled or abandoned. 105. The CIT(A) observed that so far as the reliance of the AR of the assessee in the case of Mrs. K. Radhika vs. DCIT (supra) is concerned. it is seen that even in the said decision the ITAT have opined that handing over of possession is only one of the conditions u/s. 53A of the Transfer of Property Act, it is necessary to go into whether the transferee is "willing to perform" its obligation. They have felt that if the transferee, by its conduct and its deeds, demonstrates that it is willing to perform its obligations under the a....
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.... of the case are that the only ground taken in assessment year 2009-10 relates to the contention that the AO erred in not giving credit for Rs. 8 lakhs out of the cash seized in the course of search, and charged interest without deducting the said amount from taxes due. It is claimed that the assessee had requested the AO to adjust the cash of Rs. 8 lakhs seized from the premises of Shri Ch. Gopal Reddy towards his tax dues for the A.Y. 2009-10 by way of a letter from him. 109. The CIT(A) observed that the Hon'ble Punjab and Haryana High Court in the case of CIT vs. Arun Kapoor reported in 334 ITR 351 have observed that while the assessee is liable to pay interest u/s. 234B and 234C, they are also entitled to the benefit of payment out of seized cash from the date of making application for adjustment of seized cash towards tax liability. Similarly, in the case of CIT vs. Ashok Kumar (334 ITR 355) also they have observed that the assessee is entitled to adjustment of cash seized, if request has been made prior to the date of payment of advance tax. Similar view has been expressed by the ITA Chandigarh Bench in the case of Nikka Mal Babu Ram vs. ACIT, Central Circle (41 SOT 407) a....
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....ed by accepting the amounts so offered, Accordingly, he claimed that the income returned should have been taken at Rs. 20.81,040 as against the income of Rs. 2,61,040 for the A.Y. 2007-08. Likewise, it is claimed that since the assessee had admitted the unaccounted cash of Rs. 40,41,000, unaccounted jewellery of Rs. 42,80,000, and had filed the return u/s. 153A admitting an income of Rs. 1,45,44,220, after admitting the undisclosed loans also, the computation should have been started with the figure of Rs. 1,45,44,220. 113. The CIT(A) observed that the assessee in the return filed in response to the notice u/s. 153A on 30.12.2009, had admitted an income of Rs. 20,81,040 for the assessment year 2007-08. However, it is clear that "Such income was shown only after considering the undisclosed investment of Rs. 18,20,000 admitted by the assessee in his statement recorded on 12-11-2008 after the search and seizure action. Therefore, no infirmity can be said to exist in the computation of income made by the Assessing Officer by adopting the income of Rs. 2,61,040 only at the beginning of the computation. It is clear that the present claim of the admitted income being Rs. 20,81,040 has ....
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....levy of interest u/s. 234A and 234B of the Act. 121. We have heard both the parties and perused the material on record. The assessee has not furnished any evidence to substantiate his claim that the assessee has made a request before the AO to adjust the cash seized. However, considering the plea of the assessee, if the balance left over after adjustment of existing tax liability, it should be adjusted over tax payable by the assessee. This ground is partly allowed. In the result, ITA No. 768/ Hyd/2013 is partly allowed. ITA Nos. 766, 821, 822, 823, 824, 825 and 902/Hyd/ 2013 - Sri Ch. Bhoopal Reddy & Ors 122. Now coming to ITA Nos. 766, 821, 822, 823, 824, 825 and 902/Hyd/2013 in case of Shri Ch. Bhoopal Reddy, Smt. Ch. Swaroopa, Smt. Ch. Vasanthalatha, Smt. C. Lakshmi, Sri Ch. Srisailam Reddy, Smt. P. Satyawati and Smt. D. Bharati, respectively, for A.Y. 2008-09. 123. The first common ground in all these appeals is framing of assessment u/s. 153C of the Act. 124. As discussed earlier in the case of Sri Ch. Malla Reddy in ITA No. 769/Hyd/2013, we are inclined to reject this ground. This ground is decided against the assessee in all these appeals. 125. The next co....
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.... shown in the receipts and payment account filed along with the regular return of income and there was no controverting evidence in this respect in the seized material. The CIT(A) observed that no additions could have been made by the AO. 133. We have heard both the parties. These additions were made as the assessee failed to establish the nature and source of credit appearing in the books of account of the assessee for the assessment years under consideration. Further, the assessee was not able to controvert the findings of the lower authorities. Accordingly, this ground is rejected and the additions are sustained. In the result, ITA No. 799 and 800/Hyd/2013 are dismissed. 134. Coming to the other common ground in ITA Nos. 800 and 801/Hyd/2013 with regard to treating transfer of property in the year under consideration as a transfer u/s. 2(47)(v) of the Act. 135. Similar issue came for consideration in the case of Sri Ch. Malla Reddy in ITA No. 772/Hyd/2013. Taking a consistent view this ground is allowed. Thus, ITA No. 801/ Hyd/2013 is partly allowed. 136. The next ground for consideration in ITA No. 802/ Hyd/2013 is with regard to the addition of Rs. 22 lakhs made u/....
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....s from a community basically engaged in agriculture and his family, including himself, was engaged in agriculture. The assessee's AR submitted that the assessee had been showing agricultural income from year to year, including the assessment year 2005-06. It was added that the impugned lands were situated beyond notified areas and hence excluded from the definition of capital asset. Accordingly, any profit from sale of such lands was exempt from tax, It was also argued that the AO did not give any opportunity for submitting documentary evidence to support the claim. Vide submissions dated 20-5-2011, it was submitted that apart from the lands already owned by him, the assessee , along with others had purchased certain agricultural lands as under:- Sy. No. Extent Joint ownership with Date of purchase Doc. No. Date of sale Sold to Share of consideration 440, 443, 444 Ac. 5.0 Gts M. Raja Sekhar Reddy 1823/ 2004 19.4.06 S.S. Educational Society Rs. 10,00,000 145. It was submitted that the lands so purchased at Gowdavali and Dungidal villages were beyond the limits of any town, municipality with a population exceeding 10....
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....were traded like any other commodity. It is also clear that even in the course of appellate proceedings, the assessee has not been able to substantiate, its claim that the same were agricultural lands. It is an established position that mere mentioning of lands as agricultural in the revenue records is not sufficient to establish that those are indeed agricultural and that those were acquired for the purpose of agriculture only. Finding no infirmity in the action of the Assessing Officer, the addition of profit of Rs. 75,125 as a taxable item of income in the hands of the assessee is upheld by the CIT(A). Against this, the assessee is in appeal before us. 147. We have heard both the parties and perused the material on record. In this case, the assessee pleaded that an opportunity may be given to explain source of this credit in A.Ys. 2005-06 and 2006-07 towards receipt of Rs. 75,125 and Rs. 10 lakhs in A.Y. 2005-06 and 2006-07, respectively. Considering the plea of the assessee, we remit the entire issue to the file of the AO with direction to the assessee to substantiate his claim that the land sold is agricultural land. In the result, ITA Nos. 814 and 815/Hyd/2013 are partly a....
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....s of gold jewellery among Indian women. 152. The CIT(A) observed that as regards the Instruction No. 1916, it is clear that the said Instruction itself is in fact in the nature of a guideline for dealing with the jewellery found in the course of search and effect seizure out of such jewellery, if the same is in excess of the limits prescribed therein. Though the Hon'ble Karnataka High Court in the case of Smt. Pati Devi vs ITO (240 ITR 727) have approved the retrospective applicability of the said Instruction only, but they have not held that these guidelines would apply even to the consideration of investment in unaccounted jewellery in the course of assessment proceedings also. However, the Hon'ble High Court have indeed mentioned in the said judgement that the limits regarding weight in the said Instruction have been prescribed "in view of the social circumstances prevailing in the country". Considering such observation, in conjunction with the facts of the case, various Benches of the Tribunal have opined that the benefit of the said Instruction, after considering both aspects, can be given in the post-search assessments also while deciding the issue of unaccounted i....