TaxTMI 
TaxTMI 
2023 (11) TMI 934
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....o add, urge, alter, modify, and withdraw any ground/grounds before or at the time of hearing of the appeal. 4. The brief facts of the case culled out from the records are that the assessee has filed his return of income on 27.09.2011 declaring total income of Rs. 3,96,34,074/- from real estate and LTCG. During the previous year, the assessee and M/s Biltech Engineering Pvt. Ltd. have sold a joint ownership property on a net value of Rs. 68,05,400/-, wherein the share of assessee's was 50% i.e. Rs. 34,02,700/-. This property was a part of the residential project "Banyan Tree Enclave" at Shankar Nagar, Raipur. The assessee had entered into joint venture on 28.12.2006 with M/s Biltech Engineering Pvt. Ltd. (AACCB2418A) for development of 1.977 Hectares of land situated at Shankar Nagar, Raipur. As per Clause-25 of the Joint development agreement, the assessee and the developer, M/s Biltech Engineering Pvt. Ltd. were entitled to sell 29% and 71 % of flat and constructed areas including the undivided proportionate share in the common areas respectively. It is observed by the Ld. AO that, however, no specific details of flats/villas/lands were earmarked in the agreement which could as....
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.... the order of Hon'ble Delhi High Court in the case of CIT vs. Jagat Novel Exhibitors (P) Ltd. (2012)67DTR/248 CTR217/207 Taxman 243/356 ITR 559 (Delhi), wherein the Court held that section 292B has a salutary purpose and ensures that technical objections, without substance and when there is effective compliance or compliances with intent and purpose, do not come in a way or affect the validity of the assessment proceedings. In the case of Sky light hospitality LLP v/s ACIT the Hon'ble Supreme Court (in 2018) held that wrong name mentioned in said notice was merely clerical error, which could be corrected u/s 292B". The fact is that notice u/s 148 of the Act was generated on 30.03.2018 and simultaneously sent to the assessee. The proof of date of dispatch of the notice is the date of generation of notice itself which is 30.03.218 at 7:15 P.M. There is no dispute. Alternatively, the system generated notice 148 of the Act dated 30.03.2018 was dispatched through registered post on 31.03.2018 which was returned back undelivered is available on the record. The proof of dispatch of the notice may also be tracked from consignment No. "RC22538585IN". The assessee has grievance that the ....
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.... reasons recorded for the escaped income of Rs. 1,92,42,016/- was merely based on presumption and surmises without any tangible material, therefore, in violation of section 45(2) r.w.s. 2 (47)(v). Ultimate addition confirmed was for Rs. 42,34,074/- only, therefore, the addition made was not in conformity with the reasons recorded and, thus, in absence of reason to believe as mandated by law u/s 147, which is sine qua non for assuming valid jurisdiction to reopen the case, the reopening u/s 147(148) is liable to be quashed. Reliance was place on: 1. TANMAC India vs DCIT(2017) 78 taxmann.com 155 (Mad HC),wherein, Hon'ble Madras High Court has held that: "Where assessee firm paid certain amount to partner who retired from firm and claimed deduction of same and AO allowed the same while processing the return, but latter on, reopen assessment on the basis of return and enclosure thereto, which were already part of record, reopening was not justified." 2. Tupperware India Pvt. Ltd. vs CIT(2016) 60 taxmann.com 350 (Del HC). In this case Hon'ble Delhi HC has delt with the aspect pertaining to contract manufacturing agreements entered into by the assessee with two....
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....The finding of the Ld. CIT(A) are not in proper consideration of the facts of the case, since the assessee itself has converted its investment into stock in trade, therefore, the income generated from transfer of such investment should be considered as business receipt and not the income chargeable under the head capital gains. 6. We have considered the rival contention, perused the material available on record and have considerately gone through the case laws pressed for our consideration. On perusal of the Joint Development Agreement, as also observed by Ld. CIT(A) that according to the said agreement wherein the assessee company has entered into with M/s Biltech engineering Pvt. Ltd., as per covenants of the said agreement the assessee was only concerned with securing and obtaining the consideration of land from the developer in lieu of granting the developer, rights to develop the land. The owner and the developer shall be entitled to 29% and 71% of flats and constructed areas including the Undivided proportionate share in the common areas/ facilities. The Developer shall be responsible for keeping and holding possession of the said land and to construct the building or buil....
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....erefore, it cannot be construed that the possession of the immoveable property of the assessee is vested with the joint developer as per the provisions of the Act. Considering these facts and circumstance of the case of the assessee it is apparent that the assessee shall not be liable to be taxed for entering into a joint development agreement when neither the assessee have received any consideration nor handed over possession of the immovable property during the relevant assessment year. It is ordered accordingly. Hence the appeal of Revenue is devoid of merits. 6.1 According to the aforesaid findings of the ITAT, it is explicitly clear that the provisions of section 45(2) r.w.s. 48 for Capital Gain and "Income from Business and Profession" shall apply in the present case also. AO's belief that the entire amount received/credited to P&L by the assessee shall be taxable in the hands of assessee under the head 'Business and Profession", since the same are treated into stock-in-trade by the assessee and therefore benefit of indexation claimed by the assessee is not available. Though, Ld AR has submitted before us that factually the consideration received by the assessee as per its....
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....sons recorded by the Ld AO u/s 148(2) treating the income to chargeable under the head Business and Profession are found to be under wrong appreciation of facts and erroneous application of law, which is not permissible. This aspect is covered by the judgment relied upon by the assessee, in the case of Prakriya Pharmacem Vs. ITO (supra), wherein Hon'ble Gujarat High Court has categorically held that, under the circumstances, the reasons recorded by the Assessing Officer to form belief that the income chargeable to tax had escaped assessment lack validity for the simple reason that an attempt was as made by the AO to apply certain provisions of the Act, which were not apply in the case on hand. Thus, the notice u/s 147 for reopening is set aside. Relevant extract of the decision in Prakriya Pharmacem (supra) is as follows: 9. With this narrow scrutiny permissible at this stage we would examine the reasons recorded by the Assessing Officer for issuing the impugned notice. We may recall that in the reasons provided it is stated that the assessee has transferred 5,30,410 shares during year under consideration whose market value on the date of transfer was Rs. 7.63 crores (roun....
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....rned by section 45 of the Act. For apparent reasons, the proviso to sub-section (iii) of section 47 of the Act would not apply to the present case, since it applies to any transfer under gift or irrevocable trust under capital asset in the nature of shares, debentures or warrants allotted by a company to its employees under Employees' Stock Option Plan or Scheme. Admittedly, this is not such a case. This proviso is in the nature of exclusion to main provisions of sub-clause (iii) of section 47 of the Act. Under the circumstances, the case on hand would be governed by the main body of sub-clause (iii) of section 47 of the Act and consequently, the provision of section 45 of the Act pertaining to capital gain would not apply. 12. An attempt was made by the Assessing Officer to apply further to proviso to section 48 of the Act. Section 48 of the Act pertains to mode of computation. It essentially provides that the income chargeable under the head "Capital gains" shall be computed, by deducting from the full value of the consideration received or accruing as a result of the transfer of the capital asset the following amounts, namely, expenditure incurred wholly and exclusi....
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....ordingly, notice issued u/s 148 is set aside and the order passed u/s 147 r.w.s. 144 is quashed. 6.5 Since, the legal ground No. 1 raised by the assessee under its CO No. 26/RPR/2019, pertaining to validity of jurisdiction is decided by us, in favor of the assessee by quashing the order passed u/s 147 in terms of our aforesaid observations, the additional ground raised by the assessee, grounds of CO in support of the order of Ld. CIT(A), and the grounds raised by the revenue in ITA No. 173/RPR/2019 are rendered academic, therefore, the same are not adjudicated and left open. 7 In the result CO filed by the assessee is allowed and the appeal filed by the revenue stands dismissed. Order pronounced in the open court on 27/10/2023. ============= Document 1 1. 2. 3. 4. 5. 9 6. 7. 8. 9. Grounds of appeal "Whether on points of law and on facts & circumstances of the case, the Ld. CIT(A) was justified in deleting the addition of Rs. 42,34,074/- on account of disallowing indexation on cost of acquisition and treating the LTCG as business income?" "Whether on points of law and on facts & circumstances of the case, the Ld. CIT(A) w....
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....)-492001, PAN-AACCT4516F CO No.26/RPR/2019, AY11-12 (A) Application for raising 'additional grounds' of appeal. dt.11-1-23 The assessee-Co wants to raise 'additional grounds' of appeal, which is given below, may kindly be permitted for your Honor's judicious consideration on the matter: Additional Gr.No.1 "1. On the facts and circumstances of the case and in law, reasons recorded for alleged escaped income of Rs.1,92,42,016 merely based on presumption & surmises without having any tangible material; in violation of sec45(2) rws.2(47)(v); while ultimate addition of Rs.42,34,074 (i.e., Rs.1,58,39,316 minus Rs.1,15,62,032) has been madeby the ld AO; in absence of 'reasons to believe' as mandated by law u/s147 which is sine qua non for assuming valid jurisdiction to reopen the case; reopening u/s147/148 is liable to be quashed as held in TANMAC India (2017) (Mad), Tupperware India PL (2016) (Del HC), Prakriya Pharmacem (2016) (Guj), Orient Craft Ltd (2013) (Del HC)." Additional Gr.No.2 "2. On the facts and circumstances of the case and in law, approval granted by ld PCIT u/s151(1) on the wrong reasons recorded by ld AO for AY11-12 w....