AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (12) TMI 1261
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.... was on account of ignorance of the procedure and thus submitted that there was sufficient cause for not filing the appeal in time. 3. Ld DR has not raised any objection for condonation of delay. 4. Having regard to the circumstances of the case, the delay of 32 days is condoned as having been supported by sufficient cause. Thereafter both the appeals are taken up together. 5. For the previous year relevant to the A.Y. 2009-10, both the assessees declared house property income, capital gains and agricultural income (in the case of Smt. Parvathi Devi). They are the part owners of the land on which they entered into development agreement with M/s. Diamond Infra. Though the development agreement is dated 12.05.2008, no capital gains were declared and hence notices u/s 148 dated 17.12.2013 were issued by the Assessing Officer in response to which assessees admitted short term capital gains. Thereafter notices u/s 143(2) and 143(1) were issued and after collecting the information from the assessee, assessments were processed accordingly. In the case of Smt. Parvathi Devi, A.O. observed that a development agreement-cum-GPA was entered into with M/s. Diamond Infra for development of la....
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....he assessees. Therefore, A.O. concluded that capital gains tax is leviable in the year when the development agreement was entered into. 9. The next issue is with regard to the exchange value to be adopted in the hands of the assessees, in lieu of transfer of their land to the builder. The purchase value of the land in question, as per the purchase deed, is Rs. 6,16,000/- and Rs. 5,87,400/- respectively in the hands of Smt. Usha Rani and Smt. Parvathi Devi and they have also incurred registration charges of Rs. 58,520/- and Rs. 60,000/-. As per the registered development agreement the cost of construction is mentioned at Rs. 1,108/- per sft in the case of Smt. Usha Rani and Rs. 1,083/- in the case of Smt. Parvathi Devi whereas the developer, vide letter dated 06.01.2015 submitted that the cost of construction is Rs. 1,450/- per sft, including the costs incurred towards interests on loan till that date. Considering that there was some delay in completion of the project, which is not attributable to the assessees, the A.O. adopted the exchange value at Rs. 1,108/- per sft. The A.O. relied upon the decision of the Hon'ble jurisdictional High Court in the case of Potla Nageswara Rao vs....
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....opted by the A.O. without taking into consideration the cost incurred by the developer and thus there is no mistake in the computation of the A.O. He also observed that the decision of the Hon'ble jurisdictional High Court in the case of Potla Nageswara Rao vs. DCIT (supra) supports the conclusion reached by the Assessing Officer with regard to the year of levy of capital gains tax. In fact the Court observed that even though the payment of consideration is deferred, capital gains tax arises in the year when the transfer of capital asset is completed. He thus confirmed the orders passed by the A.O. 14. Further Aggrieved, assessees preferred appeals before the Tribunal. Though a specific ground was raised with regard to initiation of proceedings u/s 148 of the Act, no material could be placed, either on law or on facts, to contradict the findings / conclusion of tax authorities. Thus Ld AR restricted his arguments on merits of the addition. 15. It may be noticed that though the builder has entered into similar development agreements with more than 20 land owners (out of which 18 land owners have entered into a common development agreement-cum-GPA), only 2 assessees filed the appea....
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....hat there is sale; with regard to the balance portion of land it can be said to be an exchange. It was also contended that the assessees sold semi-furnished flats in the FY 2013-2014 and hence in the year under consideration no transfer took place. 17. On the other hand, Ld DR relied upon the view taken by the A.O. as well as the Ld. CIT(A) to contend that the issue is squarely covered by the decision of Hon'ble jurisdictional High Court in the case of Potla Nageswararao (supra) wherein it was held that upon transfer of capital asset, sale consideration has to be taken into consideration for the purpose of assessment, even though payment of consideration is deferred till the other assessment year. In other words, the actual sale consideration has to be taken into consideration and not the SRO value. It was also submitted that even as per the assessee, the developer has incurred more expenditure towards construction but having regard to the fact that the transfer took place before the date of construction, the market value as on the date of agreement was taken at Rs. 1,084/- per sft and accordingly assessees were allotted specified constructed area in which event the A.O. as well a....