TaxTMI 
TaxTMI 
2022 (7) TMI 1146
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....and disallowances were beyond the issues selected for limited scrutiny. Order of assessment barred by limitation 3. For that without prejudice to Ground Numbers 1 and 2, the Ld.CIT(A) erred in not holding that the order of assessment dated 31.12.2017 passed u/s.143(3) of the Act is barred by limitation. Without prejudice to the above legal grounds, on merits the following grounds are raised No sufficient opportunity given by the Assessing Officer 4. For that the Ld.CIT(A) ought to have appreciated that the Assessing Officer has not given sufficient opportunity to the appellant to explain the case on merits. Capital gains arising from JDA 5. For that the Ld.CIT(A) is not justified in holding that Rs.3,64,32,706/- is taxable as short term capital gains instead of long term capital gains. 6. For that without prejudice to Ground Number 4, the Ld.CIT(A) erred in not appreciating that the cost of acquisition to be allowed is more than Rs.1,25,02,755/-. 7. For that without prejudice to Ground Numbers 4 and 5, the Ld.CIT(A) ought to have appreciated that actual constructed area sold during the impugned assessment year was only 1835.19 sq ft and not 16670.34 sq ft as taken....
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....ket value of the property as on the date of transfer. 18. For that the Ld.CIT(A) erred in sustaining the addition made by the Assessing Officer without reference to the District Valuation Officer. Disallowance of exemption claimed u/s.54 19. For that the Ld.CIT(A) erred in confirming the action of the Assessing Officer in disallowing the exemption of Rs.4,07,52,117- claimed by the appellant u/s.54 of the Act. Disallowance of exemption claimed u/s.54F 20. For that the Ld.CIT(A) is not justified in upholding the action of the Assessing Officer in restricting the exemption u/s.54F to Rs.59,97,000/- as against an amount of Rs.3,16,75,164/-." 3. Brief facts of the case are that the assessee is an individual filed her return of income for the assessment year 2015-16 on 31.08.2015 declaring total income of Rs.98,67,300/-. The case was selected for limited scrutiny assessment under CASS and accordingly, notice u/s.143(2) of the Income Tax Act, 1961, dated 21.09.2016 was issued. During the course of assessment proceedings, it was noticed that during the year under consideration, the assessee had entered into joint development agreement with M/s. Siddharth Foundations & Housing Lt....
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....sessee has sold flats. Although, the assessee had admitted capital gain in respect of all flats sold during the current year, but in fact, what was required to be taxed for year under consideration is actual consideration received for 1/3rd share of flats sold during the assessment year 2015-16 amounting to Rs.60,17,104/-. 5. The learned DR, on the other hand, supporting order of the learned CIT(A) submitted that there is no merit in the arguments of the assessee that only consideration received towards flats sold during the assessment year 2015-16 needs to be taxed for the impugned assessment year, because the assessee herself has admitted short term capital gain for sale of flats upto assessment year 2015-16 by way of letter dated 06.12.2017, as per which, sale proceeds from construction have been recognized from assessment year 2015-16, and later, because final payments have been received during the course of the year from flat owners and possession was handed by the builder during the financial year relevant to assessment year 2015-16. The learned DR further submitted that the assessee has not raised this issue either before the Assessing Officer or learned CIT(A), however, fo....
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....year. It is well established principles of law by decisions of various courts that unless authority of law, no taxes can be collected from the assessee . Further, income should be taxed in a particular assessment year, when the income is accrued or arises to the assessee. In this case, there is no doubt with regard to fact that for the impugned assessment year only a sum of Rs.60,17,104/- is received by the assessee from sale of flats. Therefore, we are of the considered view that the Assessing Officer ought to have taxed consideration received during the assessment year 2015-16 only instead of taxing entire consideration received by the assessee, including consideration received for earlier financial years. Therefore, we are of the considered view that the Assessing Officer as well as learned CIT(A) were erred in taxing total consideration received by the assessee amounting to Rs.4,89,35,461/- for the assessment year 2015-16 on the basis of admission of the assessee. Hence, we direct the Assessing Officer to consider amount received for the assessment year 2015-16 alone and compute capital gain from transfer and determine whether it is short term or long term depending upon period....
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....anches for different prices. The assessee has received consideration by cheque and the purchasers have confirmed transactions. The Assessing Officer, disregarding all evidences has arrived at hypothetical value at Rs. 3298.50 per share, on the basis of amount received by the assessee from buyers and presumed that the assessee has transferred shares for consideration of Rs. 3298.50 per share and received excess consideration in cash, ignoring fact that these shares have been transferred to different persons. 9. The learned D.R., on the other hand, supporting order of the learned CIT(A) submitted that the assessee has transferred equity shares of unregistered private limited company to related party and undervalued share price and this fact has been brought out in the assessment order in light of asset value of private limited company. The Assessing Officer has arrived at share price on the basis amount retained by the assessee for pending consideration and if you consider said consideration to the percentage of share held by the assessee in the company, then share price works to Rs.3298.50 per equity share. Since, the assessee has transferred shares at lesser price, the Assessing O....
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....ares. However, fact remains that extracted part of MoU implies that dividend of Rs.2.95 crores declared by the company and proceeds of dividend will be used by purchasing shareholders to buy 26,850 shares from the assessee, but nowhere in the MoU, it is stated that 26,850 shares will be purchased @ Rs.1098.70 per share. As a matter of fact, first tranche of sale made on 03.07.2014, the assessee has received only an amount of Rs.1,83,92,250/- and not Rs.2,95,00,000/-. Therefore, working arrived at by the Assessing Officer is completely wrong and without any basis. The Assessing Officer has worked out second tranche of 1800 shares sold by the assessee for Rs.59,37,234/- and arrived at share price of Rs.3298.50 per share. The Assessing Officer, once again, erred in coming to the conclusion without understanding terms of MoU between the parties. First of all, the assessee never sold 1800 shares, which is evident from number of shares sold to different shareholders. Therefore, calculation arrived at by the Assessing Officer is completely wrong. In fact, the assessee has sold 26,850 shares on 03.07.2014, 13,475 shares on 13.11.2014 and finally, 1000 shares was sold on 31.03.2015. Therefo....
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....nt materials and decide correct amount of cost of acquisition of shares sold by the assessee. 13. The next issue that came up for our consideration from grounds no.13 to 15 of the assessee appeal is addition u/s.56(2)(vii)(b)(ii) of the Act. The Assessing Officer has made addition of Rs.40,50,100/- towards difference in sale consideration for transfer of UDS in 11 flats devolved to the share of assessee as per MOU and observed that there is difference between sale price and market value of flats. It was explanation of the assessee that the Assessing Officer has made addition without affording reasonable opportunity of hearing being heard to the assessee Further, before invoking provisions of section 56(2)(vii)(b)(ii) of the Act, the Assessing Officer should have referred valuation to the valuation cell. Therefore, pleaded that the matter may be set aside to the file of the Assessing Officer for further verification. 14. Having heard both the sides and considered relevant materials on record, we are of the considered view that issue of application of section 56(2)(vii)(b)(ii) of the Act, needs to go back to the file of the Assessing Officer to give one more opportunity of hearing ....