TaxTMI 
TaxTMI 
2022 (12) TMI 1312
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....yderabad (herein after referred as "Developer") vide Doc No. 2742/2016, dated 14/03/2016 registered at SRO, Mangalagiri for construction of Multistoried Residential Complex by name 'Lakshmi's Sreelikhitha Pride' in Survey No.66, Mangalagiri. The assessee being the land owner is in possession of vacant land admeasuring 4,776 sq. yds acquired through a Registered Gift Deed bearing No. 3175/2013 dated 30/03/2013. The assessee granted absolute power to the Developer to construct residential complex at their own cost. The assessee and the Developer agreed to share the built up are in the ratio of 46:54 respectively. Since the possession of the property was handed over to the Developer during the previous year relevant to the AY 2016-17 the Ld. AO as per the provisions of section 2(47) of the Act read with section 53A of the Transfer of Property Act considered the property as transferred during the assessment year 2016-17. The Ld. AO noticing that the assessee has not filed return of income for the AY 2016-17 believed that the income chargeable to tax escaped assessment and notice u/s. 148 of the Act was issued and served on the assessee on 24/11/2017 requiring him to file the return of ....
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....oinder. The Ld. AR submitted a rejoinder and pleaded that the additional evidence may be considered while deciding the appeal. The Ld. CIT(A) considering the provisions of Rule 46A of the IT Rules, 1962 observed that the conditions prescribed under the Rule 46A were not satisfied and did not accept the additional evidence filed by the assessee. The Ld. CIT (A) hence dismissed the appeal of the assessee. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us. 4. The assessee has raised the following grounds of appeal: "1. The order of the Ld. CIT(A) is contrary to the facts and also the law applicable to the facts of the case. 2. The Ld. CIT(A) ought to have quashed the notice issued U/s. 148 of the Act and further he ought to have held that the reassessment proceedings are liable to be quashed as void ab initio. Without prejudice to the above: 3. The Ld. CIT(A) is not justified in confirming the addition of Rs. 6,20,13,020 made by the AO towards long term capital gains in respect of a land property alleged to have been transferred by development agreement dated 14/3/2016. 4. The Ld. CIT(A) ought to have held tha....
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....on 18/5/2016. Further, the Ld. AR submitted that 209 sq yds of land was gifted to the mother of the assessee on 5/3/2016 before entering into the development with the Developer. However, the gift deed was revoked on 18/5/2016 thereby requiring the assessee to enter into a supplementary development agreement with the Developer on 18/5/2016 including this 209 sq yds arising out of the revocation of the gift deed. The Ld. AR therefore pleaded that the capital gains shall be taxable only in the AY 2017-18 as the agreement became final on 18/5/2016 only. Per contra, the Ld. DR relied on the orders of the Ld. Revenue Authorities. We have heard both the sides and perused the material available on record. Admitted facts are that the development agreement was originally entered into by the assessee on 14/3/2016 in the ratio of 46:54 with the Developer. Consequently, additional 209 sq yds acquired subsequent to execution of the development agreement by way of revocation deed dated 18/5/2016 and added in the supplementary deed dt 18/5/2016 during the AY 2017-18. We find that the supplementary deed is an extension of the original development agreement with the same terms and conditions only....
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....ction of super built up area including parking area (Rs. 4,59,62,970 + Rs. 61,28,396 = Rs. 5,20,91,366/-) shall be the deemed sale consideration for the purpose of computation of capital gains. We therefore direct the Ld. AO to compute the capital gains adopting the above deemed sale consideration. Accordingly, this ground no. 5 raised by the assessee is allowed for statistical purposes. 10. With respect to Ground No.6 the assessee has claimed certain expenses like NALA Charges, Property taxes and Deviation Charges. The Ld. AR submitted that as per the Development Agreement the assessee is supposed to incur these charges for the purpose of conversion of the agricultural land to residential purposes. The Ld. AR further submitted that the assessee is in agreement to the deviation in the construction of the Multistoried Residential Building and hence the payment made towards the deviation charges shall be allowed as cost of construction for the purpose of computing the capital gains. Per contra, the Ld. DR submitted that the conversion of the land arises out of the development agreement entered into by the assessee and hence it has to be borne by the Developer. Further the Ld. DR s....
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....n may be allowed U/s. 54F of the Act. Per contra, the Ld. DR submitted that the assessee is having two houses and hence exemption U/s. 54F cannot be allowed in this scenario. The Ld. DR relied on the order of the Ld. Revenue Authorities. We have heard both the sides and perused the material available on record and the orders of the Ld. Revenue Authorities. The provisions of section 54F of the Act is extracted herein below for reference: '54F. Capital gain on transfer of certain. capital assets not to be charged in case of investment in residential house.-(1) Where, in the case of an assessee being an individual, the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before or after the date on which the transfer took place purchased, or has within a period of three years after that date constructed, a residential house (hereafter in this section referred to as the new asset), the capital gain shall be dealt with in accordance with the following provisions of this section, that is to say,- (a) if th....