TaxTMI 
TaxTMI 
TaxTMI 
2018 (11) TMI 433
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....rm capital gain" as against appellant's claim that the capital gain is a "long term capital gain". The appellant submits that the appellant has held the rights in the said flat for more than 36 months and therefore the capital gain falls in the category of long term capital gain. 3. Your appellant craves leave to add to, amend, alter, delete and/or modify the above grounds of appeal on or before the final date of hearing of this appeal petition. 3. Rival contentions have been heard and record perused. The facts of the case, as discussed in the order are that on the basis of information received from the Addl. CIT-19(2), Mumbai, the AO reopened the case on the ground that the assessee had shown Long Term Capital Gain of Rs. 19,71,149/- as exempt on sale of property during the asst. year under consideration. The date of acquisition of the property had been taken by the assessee as 01.06.05 and the date of sale as 22.04.2009 and sale consideration amount of Rs. 71,25,000 was assessee's share @ 25% from the total sale consideration of Rs. 2,85,00,000, However, there was no registered document for purchase of the property nor, was there any development agreement between the o....
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....ed document and there is no registered document for purchase of the property. Further, the intimation of disapproval was obtained by the developer on 19.10.05 only and the builder had not commenced the project at the time when the advances were made by the party and even after getting the plan approved, no agreement was entered into between M/s. P.R. Investments and the assessee. The A.O., therefore, concluded that date of acquisition of the rights would depend upon facts of each case and the documents executed/provided by the developer to the intended buyers and in case of initial advance if there is no commitment or allotment by the deveoper, the same would not amount to acquisition of rights in the property, which is acquired only when an allotment letter specifying the project, etc. has been issued by the developer to the buyer. The A.O. also rejected the argument of the assessee that rights were created when advances were given on the ground that the above amount which passed hands towards property that was to be conveyed in the near future and the same cannot be treated ownership of the property. The A.O. therefore, took the date of acquisition of the flat, as to the date of ....
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....03. 12 preferred proceedings under Article 226 for quashing of the re-assessment proceedings. In the case of the appellant, there has been no order passed u/s, 143(3) or 264 of the Act and, the appellant has himself admitted that his return was processed u/s. 143(1) of the Act only. Hence, I do not find any merit in the above submissions of the appellant and reject the same. Further, as there as been no order u/s. 143(3) of the Act, there cannot be any change of opinion, as argued by the appellant, and though Gujarat High Court vide order dtd. 23.8.2012 in Special Civil Application No.858 of 2006 in Inductotherm (India) Pvt. Ltd. has held that intimation u/s, 143(3) of the Act, cannot be re-opened u/s. 147 of the Act in absence of "tangible material" and the said decision is being followed by the ITAT, Mumbai, I have in para 3.2 of the order discussed at length the tangible material for re-opening of the assessment. The appellant had also requested for a copy of reasons recorded for re-opening of the assessment, which was duly provided by the A.O. vide letter dtd. 21,08.2012. Thus, in the case of the appellant not only tangible material was there, but reasons for re-opening were al....
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....reement (MOAT) under which M/s. P.R. Investments will obtain development rights to develop the leasehold land (utilizing not only the primary FSI of the above mentioned plot, but also the TDRs as may be available under the Development Control Regulations). The appellant also stated that if P.R. Investments enters into the above agreement, they will have to construct on the above leasehold plot a residential building of stilt and six upper floors and part of the 7th upper floor utilizing FSI 1 along with TDR 1 (i.e. FSI 2) and also avail of open space concessions available as on date and in such proposed building retain to themselves the ownership of the residential flats on the 4th, 5th and 6th upper floors, as well as ownership of the leasehold land and the shareholding/membership of the said society and, P.R. Investments would have the right to sell/dispose of the residential flats on the first, second and third floors of the proposed building, but with no right in or to the leasehold land or in or to the shares of the said society. The appellant and D.M. Ramesh also stated that they are interested in booking with P.R. Investments, for purchase of a residential flat on the 3rd fl....
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....ng to be constructed by the Developer on the said plot will have (6) six upper floors plus a part of 7th upper floor and the residential accommodation and residential accommodation to be made available to the owners and which are to be on the top upper floors; hence residential accommodation for the owners is stated to entire 4th, 5th, 6th upper floors and part of the 7th upper floor with an open terrace at the 7th upper floor and the owners would be eligible to use part of such residential accommodation for commercial purposes. It was also agreed that after all the said conditions specified in clause 3 of the MOAT are fulfilled, a Development Agreement will be entered and executed by and between the owners on the one hand and the Developer on the other hand, containing not only the basic terms and conditions in the MOAT, but the other usual terms and conditions which are contained in a Development Agreement and as would be agreed by and between the parties thereto. The monetary consideration to be paid by the developer to the owners for the grant of full and exclusive development rights in favour of the developer in respect of the said immovable property was agreedat a lumsum of R....
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....formed the developers that they have negotiated with the "Purchasers" to sell the said premises for a lumsum consideration of Rs. 2.85 crs, to be paid by the purchasers to the "Investors", out of which 25%, i.e. Rs. 71,25,000 is to be received by the appellant and the balance 75%, i.e. Rs. 2,13,75,000 to be received by Shri D.M. Ramesh in the name of Grey Investments Pvt. Ltd. 7.8. A careful analysis of the above documents filed by the appellant, therefore, clearly point out that there is no evidence on record to show M/s. P. R. Investments ever confirmed booking of a flat on the third floor of the building to be constructed by them in the name of the appellant and Shri D.M. Ramesh. There is only signature of one Ajay C. Wadhwani, partner signing for M/s. P. R. Investments which has not been authenticated, and there is no letter from M/s. P.R. Investments issued to the appellant to this effect. It is only in Sale Agreement dtd. 21.04.2009, that it is mentioned that appellant had paid to M/s. P. R. Investments Rs. 10 lac only on 2.4.2005 [Para (h)(vi) on page 4 of the Sale Agreement dtd. 21.4.2009], whereas, from the copy of receipt of Rs. 10 lac issued by the M/s P.R. Investments....
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....Option" to purchase the fiat had been exercised by the appellant, which is 21.4.2009. In the light of the above stated facts, the case laws cited by the appellant are neither relevant nor applicable. 1, therefore, hold that the A.O. has rightly taken the appellant's share of Rs,71,25,000 in the total sale consideration amount of Rs. 2.85 cr. as short term Capital gain and brought it to tax under the said head of income. The Order of the A.O. is upheld on this issue and ground of appeal no.2 dismissed. 7. Rival contentions have been heard and record perused. So far as reopening of assessment is concerned we are inclined to agree with the findings of CIT(A) and uphold the same. So far as merit of addition is concerned, we found that during the year under consideration assessee has sold his flat and earned capital gain of Rs. 20,50,000/- which was invested in specified securities u/s.54EA. Assessee had booked a flat in a new building being Flat on 3rd floor in a building of Nutan Laxmi Cooperative Housing Society situated at N.S. Road No.9, JVPD Scheme, Vile Parle (W), Mumbai-400 049 for a total consideration of Rs. 1,49,20,000/-. The assessee's share in this property is 25% ....
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....ew building as per the terms and conditions mentioned in the Letter of Purchase Option dated 1st April 2005. Letter of Confirmation of purchase of flat dated 15.07.2005 together with Letter of Purchase Option dated 01.05.2005 is an Allotment Letter for sale of residential flat on 3rd Floor in the proposed new building at Juhu. Therefore, the date of purchase/ acquisition of flat is 15.07.2005. The Sale Agreement is dated 21.04.2009. Hence, the resulted gain on sale of flat is a long term capital gain as the period of holding the flat is more than 36 months in the hands of the assessee. 10. We further observe that in para 6 of the letter it is stated that assessee would be entitled to exercise his option in writing for purchase of flat latest by 31st December 2006. The builder/developer confirmed the terms and conditions of the intended purchase of new flat. The builder/developer M/s. P.R. Investments have entered into Memorandum of Agreed Terms with the Owner of bungalow and land for the purpose of development of new building on 24th June 2005. When the Memorandum of Agreed Terms was signed between the land owner and Developer, assessee immediately exercised his option and gave a....