TaxTMI 
TaxTMI 
2025 (12) TMI 536
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....mon order. 3. First, we take up the ITA No.963/Bang/2025 for the AY 2021-22, wherein the assessee has raised the following grounds of appeal: 1. The impugned order passed by the Learned Commissioner of Income Tax (Appeals) and Assessing Officer, to the extent prejudicial to the Appellant, is not justified in law and on the facts and circumstances of the case. 2. The Ld. CIT(A) has erred in law and on facts in upholding the impugned order of the Ld.AO to the extent he did. 3. The Ld.AO has erred in law and on facts in imputing notational rent in term pf section 23(1)(e) of the Act. 4. The Ld.AO has erred in law and on facts in not appreciating the circumstances due to which the Appellant was unable to let out the subject properties. 5. The Ld. AO has erred in law and on facts in not considering the correct cost of acquisition/improvement in arriving at the capital gains, thereby erred in making an addition contrary to the provisions of section 48 read with section 45 of the Act. 6. The Ld.AO has erred in law and on facts in not allowing the benefit of costs while computing the capital gains. 7. The Ld.AO has erred in ....
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....tial premise of the assessee at 66/1(164), Pranav, South Cross Road, Basavangudi, Bengaluru-560004 was covered. Thereafter, the case was centralized with the Deputy Commissioner of Income Tax, Central Circle-1(4), Bengaluru vide order u/s. 127 of the Act dated 05/03/2022 of the Principal Commissioner of income Tax, Bengaluru-3, Bengaluru. Accordingly, notices u/s. 143(2) as well as 142(1) of the Act was issued on various dates calling for the details as per the said notices. The assessee submitted the details as called for. 3.1 During the course of search operations u/s.132 of the Act at the residence of the assessee, several documents among which the material related to a joint development agreement with the developer, namely M/s. Renaissance Holdings and Developers Pvt. Ltd. were seized. On perusal of the seized material, it was seen that the assessee along with six other parties, in the capacity of land owners enter into a joint development agreement with the developer on 01/03/2007 for a land measuring 13 Acres 24 Guntas situated in Basavanpura Village, Bengaluru. As per the terms of the JDA, the landowners transferred 61.50% of their ownership in the land in lieu of 38.50% ....
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....n up by the landowner) and therefore in the opinion of AO the cost per sq.ft. is Rs. 45.91 sq.ft. (Rs.1,67,28,000/364335.84 sq.ft.) and accordingly held that assessees's calculation of cost per sq.ft was erroneous. During the course of assessment proceedings, the assessee provided his submission on 27/12/2022, the gist of which is reproduced below:- • The total cost at which and was transferred to the partners was Rs. 2,72,00,000 out of which the builder's share was Rs. 1,67,28,000(61.5%) and owner's share being Rs. 1,04,72,000 (38.5%). • There was exemption of Rs. 2,50,000 towards STCG, hence the final value of land is Rs. 2,69,50,000 (2,72,00,000 - 2,50,000) that is Rs. 20 lakhs/ acre • Hence the value of land for landowners is Rs. 1,02,22,000 (Rs.2,72,00,000 * 38.5% - 2,50,000). As per the sharing agreement, the landowners have got UDS (land area) of 1,09,924 sq.ft. So final land cost per sq feet is Rs. 92.99 (Rs.1,02,22,000 divided by 109924 sq.ft.) • The COA was erroneously calculated at from 45.85 to 49.74 as cost per sq ft while filing the ITR. The correct COA rate is Rs. 92.99 per sq.ft. and this rate should be adopted for....
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....67,28,000/- which the assessee is not disputing, is the proportionate cost of the land which was given up as a result of the JDA. Therefore, this cost has to be divided by the proportionate area of the land given up by the assessee and not by the undivided share in the constructed flats which has been adopted by the assessee. • Further, the assessee himself adopted a lower rate of Rs. 45.85 per sq.ft. in the return of income filed for the AY 2021-22. In view of the aforementioned facts, the AO did not accept the claim of the assessee for considering the cost of acquisition @ Rs. 92.99 per sq.ft. and the AO considered the same at Rs. 45.91 sq.ft. for every sq.ft. of undivided share in the flats sold. 3.4 Further, it is seen from the calculations adopted by the assessee, the guidance value of the properties sold have not been considered while determining the sale consideration as per the provisions contained in section 50C of the Act. The guidance value of the property was @ Rs. 5,110/- per sq.ft. as seen from the SRO's registry for stamp duty value. The guidance value prescribed by the SRO from 1/04/2018 till 31/12/2018 WAS Rs. 48,000/- per sq.mt. and thereafter t....
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....ional rent. The AO did not accept the contention of the assessee since, the assessee being the owner of the House property during the year, the annual value of the property must be determined and brought to tax during the year. Further, the AO observed that the purchaser only agreed to purchase the property and ownership had not been transferred yet as the sale deed was not executed during the year. In view of the same, the notional rent of two properties, that is D-104 and D-04 (D-78 considered as self-occupied) are brought to tax as follows: - Particulars Gross Annual Value Less: Municipal Tax Annual Value 30% Standard deduction Income from HP D-104 62,958 10,493 52,465 15,740 36,726 D-4 59,322 9,887 49,435 14,831 34,605 TOTAL 71,331 Thus, the AO completed the assessment proceedings on a total assessed income of Rs. 5,26,62,915/- against the return income ofRs.5,07,94,880/- under section 143(3) of the Act vide order dated 30/12/2022. 4. Aggrieved by the assessment order passed u/s. 143(3) of the Act, dated 30/12/2022, the assessee preferred an appeal before the ld.CIT(A)-11, Bengaluru. 5. The ld.CIT(A) dismissed....
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....gard to determination of notional rent by the AO in respect of two villas,the ld.CIT(A) observed that the assessee had although entered into certain agreement for sale but no sale deeds were materialized during the year. The ld.CIT(A) by relying on the decision of the coordinate bench of ITAT held that taxing statues are to be strictly construed and the notion of "intent to let out" or "proposed to be let" etc. cannot be imported into the provision which seeks to tax a notional sum. The ld.CIT(A) was also of the view that where the property was not let out at all during the entire previous year, no deduction for vacancy allowance is permissible. 6. Again aggrieved by the order of the ld.CIT(A)-11, Bebgaluru dated 25/02/2025, the assessee has filed the present appeal before this Tribunal. The assessee has filed written synopsis and case law compilation in support of his case. 7. Before us, the ld.A.R. of the assessee vehemently submitted that the ld.AO had taken the value of cost of acquisition @ 45.91 per sq.ft. instead @ 92.99per sq.ft. has claimed by the assessee by ignoring the cost of acquisition of the area which cover roads, amenities amongst other miscellaneous lands w....
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....ng with the other five parties in the capacity of landowners had entered into a Joint Development Agreement on 01/03/2007 with the developer namely M/s. Renaissance Holdings and Developers Pvt Ltd. As per the terms of the JDA, the landowners transferred 61.5% of their ownership in the land in lieu of 38.5% of the super built up area in the form of villas and row house. The assessees's share in the flats to be received as part of the JDA is 15% of the SBA. During the year under consideration, the assessee sold villa no.B-77, D-103, B-13 and villa no.15 and declared capital gains amounting to Rs. 4,74,72,475/-. It is an undisputed fact that the total cost at which the land was transferred to all the partners was Rs. 2,72,00,000/- out of which the owners share being Rs. 1,04,72,000/- ( 38.5%). It is also an undisputed fact that the assessee share in the cost of acquisition in the owner's share is Rs. 15,70,800/- (1,04,72,000 X 15/100). The only dispute is with regard to cost per sq.ft. towards the land to be adopted while arriving at the capital gain on the sale of the properties. The assessee himself adopted a rate of Rs. 45.85 per sq.ft. in the return of income filed for the AY 2021....
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....garded the actual sale consideration of property amounting to Rs. 2,18,29,631/- while calculating the capital gains. We are of the considered opinion that as per the third proviso of section 50C of the Act, where the value adopted or assessed or assessable by the stamp valuation authority does not exceed 110% of the consideration received or accruing as a result of the transfer, the consideration so received or accruing as a result of the transfer shall, for the purposes of section 48 of the Act, be deemed to be the full value of consideration. In the present case, the sale consideration of villa no.13 was Rs. 2,18,29,631/-. The 110% of the consideration received is Rs. 2,40,12,594/- whereas the stamp duty value was only Rs. 2,32,54,118/-and therefore we of the considered opinion that the actual sale consideration so received amounting to Rs. 2,18,29,631/- shall be deemed to be the full value of the consideration for the purpose of section 48 of the Act. Accordingly we direct the AO to consider sale consideration of Rs. 2,18,29,631/- instead of Rs. 2,32,54,118/- as determined in respect of Villa No.13. 9.2 Now with regard to restriction of the claim of exemption under section 54....
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....ale and for this reason he kept the property vacant. We are of the considered opinion that for the application of section 23(1)(c) of the Act, it is not at all relevant as to whether the property was let out in past or not. If the property is held by the owner for let it out and efforts were also made to let it out, then the properties were covered by provision of section 23(1)(c) of the Act. We are also of the considered opinion that in case the property is vacant because of inability of the assessee to let out or sale due to the pandemic, then the notional rent should not be added as income of the assessee. In our opinion as the assessee clearly demonstrated that the same was kept for the sale and no one came forward to take on rent during the covid period due to the covid pandemic, the notional rent determined amounting to Rs. 71,331/- is unwarranted and accordingly the same is deleted. 10. In the result appeal filed by the assessee is allowed. 11. Now, we take up the three appeals related to the Asst. year 2007-08 in which all three assessee being the partners of the erstwhile firm raised the sole issue that whether the capital gain accruing to the assessee on transfer of....
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....peals) ought to have appreciated that in the absence of the order, the AO should have charged from the date of assessment order i.e., 31.03.2009. 10. For these and other grounds which could be taken up at the time of the hearing, the Appellant prays to allow the appeal by directing to charge at 20% on capital gains, deleting interest charged under Section 234A and to charge the interest under Section 2348 from 01.04.2009, as per sub-section (3) of Section 234B of the Act. (Total tax effect: Rs. 61,96,740/-) 13. In ITA No.964/Bang/2025 for the AY 2007-08, wherein the assessee has raised the following grounds of appeal: 1. The impugned order passed by the Learned Commissioner of Income Tax (Appeals) and Assessing Officer, to the extent prejudicial to the Appellant, is not justified in law and on the circumstances of the case. 2. The Ld. CIT(A) has erred in law and on facts in upholding the impugned order of the Ld.AO to the extent he did. 3. The Ld. CIT (Appeals) and AO ought to have appreciated that the asset which was owned by the firm in which the Appellant is a partner, was a long-term capital asset and by virtue othe f transfer in ....
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....nt prejudicial to the Appellant, is not justified in law and on the facts and circumstances of the case. 2. The Ld. CIT(A) has erred in law and on facts in upholding the impugned order of the Ld AO to the extent he did. 3. The Ld. CIT (Appeals) and AO ought to have appreciated that the asset, which was owned by the firm in which the Appellant is a partner, was a long-term capital asset and by virtue of the transfer in the name of the partner, it does not lose the status of asset. 4. The Ld. CIT (Appeals) ought to have appreciated that if capital gain is computable and in chided, the cost of the asset should have been taken at the value at which it was determined while allocating to the Appellant on acquisition since the value.at which the asset allocated to the Appellant had already suffered tax by way of deemed consideration in the hands of the firm while computing capital gain under Section 45(4) of the Act. Accordingly, the asset in the hands of the Appellant was a long-term capital asset and has to be taxed at 20%. 5. Without prejudice, the asset being a long-term capital asset, the value as on 01.04.1981, as inflated by the Cost Inflation In....
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....termining the quantum of capital gains computed in the hands of the assessee. The limited purpose for which the appeal was set aside by this ITAT to the ld. CIT(A)-5, Bengaluru was that the ld. CIT(A) had not adjudicated Ground No.9 and also the ground no.10 related to the interest. 15.1 Thus, the sole ground to be adjudicated on merits in the set aside proceedings was whether and gain accruing to the assessee on transfer of land under the joint development agreement is a long-term capital gain or a short-term capital gain. A capital asset is long term capital asset if it is held by the assessee for more than 36 months. The assessee submitted that the land i.e. the matter of joint development, was originally acquired a decade ago by the partnership firm M/s. Komarla Hatcheries, in which the assessee is one of the partners. It was contended that under the partnership law, the firm by itself has no formal existence. Further, the assessee had submitted that, in case of gift or acquisition by will, the holding of the previous owner is considered and even in this case, the holding of the firm should be considered and taxed as LTCG. The period of holding is reckoned from the date of p....
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.... No.10 related to chargeability of interest u/s. 234B of the Act, the ld.CIT(A) was of opinion that it is mandatory and consequential in nature and there is no need for any specific adjudication and accordingly dismissed the appeal of the assessee. 15.4 Aggrieved by the order of the ld.CIT(A), the assessee has filed present appeal before this Tribunal. The assessee has filed a paper book comprising 91 pages containing therein the copy of the court order along with the compromise petition as well as various case laws relied upon by the assessee. 16. Before us, the ld.A.R. of the assessee vehemently submitted that the partnership firm were consisting of family members of the assessee only and it is akin to the partition due to the family settlement and accordingly the cost as well as period of holding of the previous owner must be considered for calculating the capital gains. 17. The ld.D.R. on the other hand vehemently submitted that the property was originally held in the name of firm M/s. Komarla Hatcheries in which the assessee is one of the partners. Due to dispute between the partners, the land which was owned by the partnership firm was distributed among the partners ....
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....r the JDA is also required to be considered at the same guideline value that does not mean the capital gain accruing as a result of JDA will not be taxed. We are of the considered opinion that the same person entered a two separate transactions. Once he received the land of the firm as the partner & thereafter he again transfer the same land as co-owner. The assessee after receiving the land from the firm had transferred the same under JDA within a very short span of time. Therefore the AO had correctly calculated the capital gain as short term capital gain. We also do not agree with the contention of the AR of the assessee that the asset which was owned by the firm in which the assessee was partner was long-term capital asset and by virtue of transfer in the name of partners, it does not lose the status of the asset. As stated above the assessee had entered two separate transactions i.e. one as a receiver of the land on distribution of asset by the firm & another as a seller by entering into JDA with the developer. Lastly, the contention of the AR of the assessee that, even in case of succession, inheritance, gift or acquisition by will, the holding of the previous owner is consid....