2023 (2) TMI 800

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....ot engaged in any business activity. The assessee originally filed the return of income on 31.03.2015 declaring total income of Rs. 2,91,21,410/- and paying taxes of Rs. 71,36,593/-. The returned income included income from long term capital gains ('LTCG') of Rs. 2,90,26,991/- consisting of LTCG from sale of residential flats obtained under Joint development agreement ('JDA') of Rs. 2,74,43,009/- and LTCG from sale of agricultural plots of Rs. 15,83,982/-. The assessee also offered a sum of Rs. 23,45,270/- as Income from agricultural activities. The return of income was processed under section 143(1) of the Income-tax Act,1961 ['the Act' for short] and the case was subsequently selected for scrutiny under CASS. Accor....

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.... to taxability of sale of developed flats in the project 'Ramya Residency' was examined by the ld. AO during the course of the proceedings under section 153C of the Act and no addition therein was made. The assessee preferred an appeal before CIT(A)-Bangalore on certain other additions in relation to the order under section 153C r.w.s 143(3) of the Act. The said Appeal was withdrawn under the Vivad Se Vishwas scheme by discharging necessary taxes and Form 5 was received on 23.03.2021. Subsequently, the order dismissing the appeal filed under section 250 was received on 10.08.2021. Accordingly, the assessment in relation to the AY 2013-14 attained finality. An order under section 250 of the Act in relation to the assessment order dat....

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....xtent prejudicial to the Appellant. 2. a) The order of the LAO is bad in law and ought to be quashed, in that, the said order no longer survives on account of its merger into the order passed under section 153C of the Act 3.1 The ld. A.R. submitted that the characterization of the income as business income is contrary to the position adopted by the Revenue in the search proceedings. While in the search proceedings the said transactions have been considered as being exigible to capital gains tax, in the impugned appeal, the very same transactions have been considered as business income. The same approach was adopted for the same property / project for AY 2011-12. This is a contradiction to the Revenue's own position in the ld. AO&#3....

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....or characterization as business income for AY 2011-12 itself therefore rendering the Revenue's approach for the said year as invalid. Hence, he submitted that applying the principles of consistency and estoppel, the characterization as capital gain should be sustained. 4. We have heard the rival submissions and perused the materials available on record. Admittedly, consequent to search action in the case of assessee on 17.8.2016 in the assessment order passed u/s 153C of the Act r.w.s. 143(3) r.w.s. 153D of the Act for the assessment year 2013-14 vide order dated 13.12.2018, the AO determined the income of the assessee as below: 4.1 This assessment has been settled by the assessee under VSVS Scheme, 2020 when it is pending before ld. ....