TaxTMI 
TaxTMI 
2026 (6) TMI 829
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....d return of income (RoI) for AY 2016-17 on 01.10.2016 admitting total income of Rs. 3,22,910/-. A search and seizure operation u/s. 132 of the Income Tax Act, 1961 (in short "the Act") was conducted in the case of M/s. Giridhari Constructions Group on 26.04.2018. During the course of search operation, certain loose-sheets were found and seized in the residential premises of Sri Allam Raja Reddy, which includes a General Power of Attorney (GPA) executed on 27.06.2015 among the assessee's along with four others and developers for a total consideration of Rs. 6,48,08,000/-. Consequent to search, the assessment has been completed u/s. 143(3) r.w.s.153C of the Act on 30.04.2021 and made addition of Rs. 32,14,976/- towards 'Shrot Term Capital Gai....
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....not offered capital gains for AY 2016-17. Further, merely for the reasons of addition to capital gains, it can't be said that the assessee concealed particulars of income. The AO after considering the relevant submissions of the assessee observed that the additions made towards capital gains of Rs. 32,14,976/- has been finally confirmed by the Tribunal and from the above, it is clear that the assessee concealed particulars of income which attracts penalty u/s. 271(1)(c) of the Act. Therefore, levied penalty of Rs. 9,05,448/- u/s. 271(1)(c) of the Act which is equivalent to 100% of tax said to be evaded. 4. Aggrieved by the penalty order, the assessee preferred an appeal before the Ld.CIT(A). Before the Ld.CIT(A), the assessee reiterated ....
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....wards capital gains forRs.32,14,976/- has been finally confirmed by the Tribunal, but fact remains that mere confirmation of addition in quantum proceedings is not sufficient to hold that the assessee has concealed income. The Ld. Counsel for the assessee further submitted that, no doubt assessee has not declared capital gains in respect of transfer of property in pursuant to development agreement-cum-GPA. However, fact remains that due to divergent views expressed by various Courts including jurisdictional High Court of Andhra Pradesh & Telangana in the case of Potla Nageswara Rao [in ITTA No.245 of 2014 dated 09.04.2014] and also the decision of the Hon'ble Telangana High Court in the case of Smt. Shantha Vidyasagar Annam reported in 2025....
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....ties below. We have also carefully gone through the relevant orders passed by the Tribunal in quantum proceedings while upholding the addition made towards capital gains in respect of transfer of property in pursuant to development agreement. There is no dispute with regard to the fact that the ITAT Hyderabad Benches confirmed the addition made towards STCGs by following the decision of the Hon'ble Supreme Court in the case of CIT v. Balbir Singh Maini reported in [2018] 12 SCC 354 and also the decision of jurisdictional High Court in the case of Potla Nageswara Rao (supra) and held that once development agreement has been registered and possession has been handed over to the developer, the ingredients of transfer defined u/s. 2(47) r.w.s.5....
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....the Transfer of Property Act, there should be a real transfer of property coupled with consideration and physical possession and the same should be ascertainable from facts of each case depending upon terms and conditions and other parameters required for verifying whether transfer has been taken place or not. From the above, it is clear that at the relevant point of time, when the assessee has furnished RoI for the year under consideration there was no clarity with regard to assessment of capital gains in pursuant to development agreement i.e. whether it is on the date of development agreement or on the date when the developer has performed his part of duties or at the time of completion of construction and handed over possession of comple....