TaxTMI 
TaxTMI 
2022 (2) TMI 1025
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....s hold that this appeal is covered by the CBDT Circular No. 03 of 2018 dated 11-07-2018 and Circular No. 17 of 2019 prescribing tax effect limit for filing of appeal by the Revenue before the tribunal as Rs. 50 lac with retrospective effect. The Revenue's instant appeal ITA No. 853/Hyd/2018 stands declined in the foregoing terms therefore. 3. We are now left with Revenue's former appeal ITA No. 852/Hyd/2018 raising the following substantive grounds: "2. The Learned CITCA) ought to have appreciated the fact that the charge ability of capital gains would arise in the Asst. Year 2009-10 and not in Asst. Year 2015-16 as the development agreement dated 05-03-2009 was never cancelled. 3. The Learned CITCA) ought to have appreciated the facts and circumstances of the case and erred in not considering the fact that as per the agreement dated 05-03-2009, the possession of the property was given to the developer and as per Sec. 53A of the Transfer of Property Act, 1882 the transfer was complete in the Asst. Year 2009-10 only. 4. The Ld. CIT(A) ought to have appreciated the facts of the case as the newly introduced provisions of Sec. 45(5A) were not applicable to the case on ha....
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....r is incorrect in not recognizing the series of events and agreements without any commencement of construction. 5. The Assessing Officer is incorrect to charge interest u/s. 234A and 234B. 6. Any other ground that may be urged at the time of hearing with the permission of the learned Commissioner of Income tax (A)-11." 4. During the appellate proceedings Sri. P. Samba Murthy, CA appeared and filed written submissions. Though the appellant has raised as many as 6 grounds, there is only one issue i.e. addition of Rs. 11,94,23,521/- as Long term capital gains. 5. The AO during the assessment proceedings has asked the appellant as to why the capital gains should not be assessed to tax on signing of the joint development agreement dt. 05.03.2009. The appellant filed a detailed reply inter-alia stating that the developer could not commence the development work as per the development agreement entered into. There was a long delay even in obtaining plan approval from the municipality. The director of the company was also examined by the AO after examining the factual as well as legal position the AO concluded as under: "After considering ell facts and circumstances, it is observe....
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....ed with some additions. In these circumstances we bring to your kind notice that the assessment for the above assessment year was completed on protective basis and the same subject was finally subjected to tax in the assessment year 2015-16, we humbly pray before your good self to kindly delete the above addition on account of long term capital gains for the above assessment year. " 7. I have considered the assessment order, submissions of the appellant and the material placed before me. It is seen that the developer could not start developmental activity as per the agreement entered on dt. 05.03.2009. Thereafter the agreement was modified by way of supplementary development agreement dt. 04.02.2013. Still there was no development as planned and finally the appellant has entered into a fresh supplementary development agreement dt. 26.09.2014 which included a new builder also as third party after the plan was approved by GHMC. The appellant has offered the resultant capital gains for the A.Y 2015-16 and the same has been assessed by the AO. In view of the factual position as above and also the fact that the AO himself has assessed the capital gains on protective basis only for t....
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....ital gain which duly stood offered to tax in A.Y. 2015-16. It therefore sought to buttress the point that there has not been any escapement of income at all as projected at the Revenue's behest once the very capital gains had been declared in the latter assessment year in above terms. Mr. Bhanu Narayan has also quoted M/s. Seshasayee Steel (P) Ltd. Vs ACIT (2020) 421 ITR 46 (SC) that the assessee's latter agreement only amounts to transfer u/s. 2(47)(v) of the Act. 8. We have given our thoughtful consideration to rival contentions and find no reason to express our concurrence with the CIT(A)'s detailed discussion supported at the assessee's behest. Suffice to say, the assessee had entered into a development agreement cum GPA dt. 04.03.2009 (duly registered document) wherein the possession was irrevocably handedover to the developer party M/s. AMSRI Builders. There is further no dispute that this followed the latter supplementary agreement dt. 25.09.2014 between assessee, M/s. AMSRI Builders and M/s. Rajaram Constructions which is in continuity with the first main development agreement only. That being the case, we express our due agreement with the Revenue's ar....