TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1310
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.... impugned order including the legal issue challenging the jurisdiction of the AO to have reopened the original assessment u/s.143(3) of the Income Tax Act, 1961 (hereinafter in short "the Act") after four years from the end of the assessment year and consequently has challenged the issue of notice u/s. 148 of the Act on 23.03.2020. Since assessee has raised the legal issue, we will deal with it first. 4. The brief facts regarding the legal issue are that the assessee had filed his return of income (RoI) on 29.09.2013 for AY 2013-14 declaring total income at Rs. 2,28,64,820/- which was selected for scrutiny under CASS and the first round was completed u/s. 143(3) of the Act on 24.02.2016 at total income of Rs. 2,32,05,740/- after making addition of Rs. 3,40,920/- u/s.14A of the Act. The AO in his reasons recorded for reopening the assessment for AY 2013-14, takes notes of certain events of subsequent assessment year i.e. AY 2014-15, wherein the assessee had admitted Long Term Capital Gain (LTCG) of Rs. 1,72,99,576/- in respect of sale of land at Puzhal, Red Hills, Chennai, [herein after the scheduled land] which was accepted by the AO while framing assessment u/s.143(3) of the Act ....
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....rs Pvt. Ltd. for this property on 06.04.2012). The salient features of this agreement is reproduced- Paragraph 2. Sharing Ratio 2.1 In consideration of the Developer having agreed to build, erect and complete the Buildings at its own costs in the Schedule property, the Developer shall be entitled to 66.66% of the saleable area along with proportionate common areas (Developer Allocation). The undivided share of land being part of the Developer Allocation shall be transferred by the owner in favour of Developer or its nominee(s) as may be instructed by the developer. 2.2 The owner shall be entitled to 33.33% of the saleable area along with the proportionate common areas (owner Allocation). 2.5 Subject to the terms of this agreement, the Developer has guaranteed a minimum return of Rs. 9,00,00,000/- as the share in lieu of selling the Owners Allocation to the Purchasers As per transfer of property, the LTCG on sale of land should have been admitted during A.Y. 2013-14. Basis of forming reason to believe and details of escapement of income: In this case return of income was filed for the year under consideration and regular assessment u/s. 143(3) was made on 24.02.2016. ....
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....ng the Owners Allocation to the purchases. Thereafter, the AO concludes that LTCG on sale of land should have been admitted during AY 2013-14. Then he states about the basis for forming reason to belief and details of escapement of income, and notes that the assessee didn't furnish during the course of assessment proceedings for AY 2013-14, the evidence regarding JDA dated 06.04.2012; and that fact [JDA] came to light during the scrutiny proceedings for AY 2014-15. Therefore, according to the AO, there was fresh material in the form of JDA before him which attracts Explanation-1 of sec.147 of the Act and for the said reasons, he has re-opened the assessment u/s.147 of the Act. 8. Before proceeding further, we note that relevant assessment year under consideration is AY 2013-14 and the scrutiny assessment u/s.143(3) was completed on 24.02.2016 and thereafter the AO has issued the impugned notice u/s.148 of the Act on 23.03.2020 i.e. after four years from the end of the relevant assessment year and therefore, the condition precedent to reopen as mandated u/s. 147 of the Act as well as the proviso to section 147 of the Act need to be satisfied by the AO before he reopens the scrutini....
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...., after amendment in the year 2001 in section 17(1A) and section 49 of the Registration Act, if an agreement, (like the JDA in the present case) is not registered, then it shall have no effect in law for the purposes of Section 53A of the Transfer of Property Act. In short, there is no agreement in the eyes of law which can be enforced under Section 53A of the Transfer of Property Act. This being the case, we are of the view that the Ld.AR of assessee rightly stated that in order to qualify as a "transfer" of a capital asset under Section 2(47)(v) of the Act, there must be a "contract" which can be enforced in law under Section 53A of the Transfer of Property Act. A reading of Section 17(1A) and Section 49 of the Registration Act shows that in the eyes of law, there is no contract which can be taken cognizance of for the purpose specified in Section 53A of Transfer of Property Act. For such a proposition, we rely on the decision of the Hon'ble Supreme Court in the case of CIT v. Balbir Singh Maini reported in [2017] 86 taxmann.com 94 (SC), wherein the Hon'ble Supreme Court held as under: 20. The effect of the aforesaid amendment is that, on and after the commencement of the Amend....