TaxTMI 
TaxTMI 
2024 (4) TMI 941
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....,410/-. The case was selected for scrutiny under CASS to examine "Capital Gains Deduction Claimed". Therefore, Show Cause Notice dated 23rd August 2022 was issued calling upon petitioner to show cause as to why certain variations prejudicial to petitioner's interest should not be made. 4. In reply assessee explained that on 11th August 2014 development agreement was executed by and between the owner of the building known as Vallabha Niwas and M/s. Arkade Paradigm (the Developer). The owners of the building agreed to grant development rights in respect of the building and agreed to permit the developer to develop the property on terms and conditions mentioned therein. Under the development agreement, the developer was required to provide pe....
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....ome of petitioner under Section 56(2)(x) of the Act and deduction under Section 54F of the Act be denied. Petitioner replied vide his Chartered Accountant's letter dated 1st September 2022 explaining that the tenancy in the hands of petitioner was at Nil cost and on surrender of this tenancy rights was allotted a flat in the new building which was valued by the Stamp Duty Authority at Rs. 11,68,99,000/-. Petitioner fetched the consideration of Rs. 11,68,99,000/- on surrender of its tenancy rights which has been invested in the flat on 15th Floor of the new building and hence entitle to deduction under Section 54F of the Act. Petitioner also filed copies of rent receipt, application to Brihanmumbai Electric Supply and Undertaking (BEST) for ....
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....e to the show cause notice, in the operative part there is no reference to Section 56(2)(x) of the Act. 9. The courts have time and again held that issuance of show cause notice is not an empty formality. Its purpose is to give reasonable opportunity to the affected persons to effectively deal with the allegations in the show cause notice. In our view, even the show cause notice dated 23rd August 2022 is defective in as much as even though it had reference to Section 56(2)(x) of the Act, it did not mention whether the Assessing Officer proposed to treat the stamp duty value as deemed income of assessee under clause (a) or clause (b) of Section 56(2)(x) of the Act. This is because both are separate provisions and under either of these two c....