TaxTMI 
TaxTMI 
2024 (11) TMI 383
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a perverse Order in setting aside on grounds that the assessment order passed u/s 143(3) is erroneous and prejudicial to the interest of revenue. 3. That the Ld. Pr. CIT erred in law in interpreting the provisions of section 263 which says 'commissioner may call for and examined the records of the proceeding if he consider any order passed there in, by the AO is erroneous in so far as prejudicial to the interest if revenue' whereas in present case the AO had already conducted the inquiry, allowed the deductions as permissible. 4. That the Ld. Pr. CIT erred in law in setting aside the assessment order on ground of capital gain arising from transfer of a long term asset of year 1998 as short term capital gain. 5. That the Ld. Pr. CIT erred in law to deny the deduction u/s 54E and 54F in impugned year on the ground that transfer took plakhe in earlier year 2012-13 (AY:2013-14) but at same time directed to tax the consideration received on such transfer in impugned assessment year 2015-16, itself. 6, That Ld. Pr. CIT erred on facts about taxability of capital gain on transfer of long term capital Assets in earlier Assessment Year 2013-14 and 2014-15....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ature. 10. That, for this delay caused by Pandemic enforced disruptions, the appellant may suffer, if the appeal is not admitted for the delay in filing. 11. That on such facts and circumstances, the appellant prays to admit the appeal by condoning the delay. The appellant further pray that the denial of appeal on this technical ground would cause irreparable damage and losses to the appellant. 12. That the above information and explanation are true and correct and the deponent adheres to them." 3.1. The impugned order passed u/s. 263 of the Act is dated 29.05.2020 which is passed during the period of Covid-19 pandemic. The assessee had filed the present appeal on 05.05.2022 and the delay is attributable to the COVID pandemic. Thus, the period from May 2020 upto the date of filing of appeal is covered by the decision of the Hon'ble Supreme Court. This period has been excluded by the Hon'ble Supreme Court in the case of suo moto Writ Petition (C) No. 3 of 2020 dated 10.01.2022 by which the period from 15.03.2020 to 28.02.2022 has been directed to be excluded for the purpose of limitation. Vide this order a further period of 90 days has been granted for ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y, the return of income was selected for scrutiny on the following issues: a. Sale of property mismatch b. Mismatch in income/capital Gain on sale of land or building c. Deduction claimed under head Capital Gain. 7. The assessee was issued notice u/s 142(1) of the Act dated 15.02.2017 to furnish the following details: a. Copies of sale deed and purchase deed in relation to transaction made in the year b. Computation sheet c. Capital gains calculation d. Supporting & working for Deduction under the head Capital gains e. All Bank statements 8. The assessee attended the hearings before the Jurisdictional Assessing Officer (JAO) from time to time. On requisition, the assessee filed current registered development agreement and Power of attorney registered under the agreement, both dated 26.09.2014, Income Tax Returns of the past three assessment years, AY 2013-14, AY 2014-15 & AY 2015-16 wherein inter alia he had offered capital gains on considerations received under earlier JDA in each assessment years as also under the fresh JDA respectively, copies of MOU dated 03.11.2011 and old unregistered development ag....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Lakh in AY 2013-14 and Rs. 24 Lakh in AY 2014-15, both in the year of receipts. The value of consideration of Rs. 90 Lakh under the fresh agreement dated 26.09.2014 was rightly and lawfully offered for tax in the AY 2015-16. The JAO, after due consideration and application of mind computed the capital gains. d. The order of the Pr. CIT is silent on the veracity of claim of deduction from capital gains u/s 54EC and 54F, based on documentary evidence submitted with the JAO and available in assessment records. It is not his point that the claim is not based on evidence. e. There is no error in such computation of income. The order of the JAO is not erroneous on the facts of the case. f. More so there is no loss of revenue as the entire sum of Rs. 162 Lakh was offered for tax. g. Alternatively, if we go by the observation of the Ld. PCIT then Rs. 90 Lakh will not be subject to tax as his order is silent on year of taxability of the said receipt of money. The Ld. PCIT merely harped upon the claim of deduction u/s 54F and 54EC, on wrong ground that such capital gains has wrongly been claimed in AY 2015-16. The Ld. Pr. CIT failed to order the year of ta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d by the city and which was paid by the new developer to the erstwhile developer M/s. R.K. Constructions. The assessee offered Rs. 90,00,000/- for tax during the AY 2015-16 as it had offered Rs. 38,00,000/- in AY 2013-14 and Rs. 24,00,000/- in AY 2014-15 being long term capital gains and short term capital gains respectively. The residual receipt of Rs. 90,00,000/- was shown during the AY 2015-16 on which deductions u/s 54EC for Rs. 40,00,000/- and another deduction u/s 54F for Rs. 43,00,000/- was claimed for the residential property constructed during AY 2016-17. The assessee had also borrowed money and paid interest which was claimed u/s 24(b) of the Act. The PCIT was of the view that the transfer of property had taken place in the AY 2013-14 thus the capital gains accrued in that year and not in the impugned assessment year 2015-16. Since the transfer had taken place in earlier AY 2013-14 and not in the impugned assessment year 2015-16, therefore, the deductions u/s 54EC and 54F were incorrectly claimed in AY 2015-16. The assessee had offered for tax Rs. 38,00,000/- in AY 2013-14 and Rs. 24,00,000/- in AY 2014-15 and hence on the same asset he cannot claim capital gains on asset....
X X X X Extracts X X X X
X X X X Extracts X X X X
....view taken by AO on examination of documents and records on taxability of capital Gain. The AO sought details and supporting on claim of deductions on 15.02.2017 u/s 54EC and 54F., which were furnished on 22.02.2017. The AO also issued Show cause notice on 26.05.2017. The assessee replied. xvii. After considering all facts, claims and supporting, the AO passed the order, hence it cannot be said that order is erroneous on want of enquiry. xviii. The AO has rightly treated such capital gain on long term capital asset only. The asset was acquired in 1998 and gifted to the assessee in 2011. As per 49(1) the cost of acquisition and period of holding of the donor are considered in the hands of donee. Thus the Ld. PCIT erred on fact that the property is not a long term asset when same was acquired in 1998. xix. The Ld. PCIT erred on law that the capital gain arising on such long term capital asset is not eligible for deduction u/s 54F and 54EC, which says deduction are available on capital Gain on transfer of Long term Capital asset, not on Long term capital Gain. xx. The order of Ld. PCIT is vague and ambiguous as it failed to assert the decision on ta....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on 2.-For the removal of doubts, it is hereby clarified that "transfer" includes and shall be deemed to have always included disposing of or parting with an asset or any interest therein, or creating any interest in any asset in any manner whatsoever, directly or indirectly, absolutely or conditionally, voluntarily or involuntarily, by way of an agreement (whether entered into in India or outside India) or otherwise, notwithstanding that such transfer of rights has been characterised as being effected or dependent upon or flowing from the transfer of a share or shares of a company registered or incorporated outside India; 17. The assessee had entered into joint development agreement with M/s R.K. Construction on 10.02.2012 for a total consideration of Rs. 1,95,00,000/- along with 8 flats and 8 car parks upon construction. The total consideration therefore, was not only Rs. 1,95,00,000/- but the fair market value of the 8 flats and car park which the assessee was to receive from the developer. However, instead of showing capital gain in the year of transfer i.e. AY 2012-13, the assessee showed capital gains of Rs. 38,00,000/- in AY 2013-14 and Rs. 24,00,000/- in AY 2014-15 which ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uction u/s 54EC and 54F, he has made the following observations in para 3 of his order. "3. On perusal of return of A.Y 2013-14 and 2014-15 it is noticed that the assessee claimed STCG on both the years on the basis of date of transfer as per section 53A of the Transfer of Property Act. Subsequently the assessee claimed exemption u/s 54EC and 54F on the basis of the fact that date of transfer of the same property as the date of registration, thus claiming and allowing the date of transfer as the date of registration was not in order for availing exemptions u/s. 54EC and 54F in the FY. 2014-15 relevant to A.Y. 2015-16 when the assessee himself claimed in two consecutive assessment years Le., AY 2013-14 and AY 2014-15, the date of development agreement as the date of transfer for claiming STCG." 19. As mentioned above, since the second registered agreement and the balance payment was received from M/s Tanvee Green City (P) Ltd., therefore, the Ld. PCIT was not correct in holding that claiming and allowing the date of transfer as the date of registration was not in order for availing exemption u/s 54EC and 54F in FY 2014-15. The AO allowed the claim of deduction u/s 54EC b....