TaxTMI 
TaxTMI 
2026 (7) TMI 273
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....assed by the Income Tax Officer, Ward 6(1), Patna, ('the AO'), assessing the assessee under section 144 read with section 147 of the Act, vide order dated 10-12-2019 at an income of Rs. 2,46,96,110/-, which is wrong, illegal and unjustified. 3. For that the learned NFAC has erred in the facts and circumstances of the case in confirming the action of the AO in making addition of Rs. 2,45,00,250/-in respect of alleged long term capital gain, which is wrong, illegal and unjustified. 4. For that the learned NFAC has erred in the facts and circumstances of the case in not resorting to the newly inserted section 251(1)(a) of the Act by not remanding back the matter to the assessing officer, which is wrong, illegal and unjustified. 5. For that the learned NFAC has erred in the facts and circumstances of the case in confirming the action of the AO in arbitrarily passing ex-party order without allowing proper opportunity of being heard, which is wrong, illegal and unjustified. 6. That the whole order passed by the NFAC is bad in facts and law. That the assessee craves leave to add, alter, amend or vary the above grounds of appeal at or be....
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....It was further observed that as per the RLDA the total value of land is Rs. 1,27,54,000/-, the assessee share is Rs. 63,75,000/- and capital gain has to be paid on the same value. However, there is no capital gain offered by the assessee instead of having taxable income in the share of long term capital gain. During the course of assessment proceeding from the RLDA, the AO observed that the assessee has transferred complete ownership even the developer can avail loan by mortgage, share of the property and make arrangement for sale the share of property and development was authorised by land owner to carry out the following activities: "1. All legal compliances and paper works relating to the buildings. 2. Appointment of surveyor, engineer, contactor, labourers and others for the building project. 3. Applying for water, electricity and other facilities from respective authorities and applying for permits for cement, iron and other materials. 4. Facing all legal notices and attending all legal matters relating to project at the own cost. 5. The developer can mortgage its share of building and land to raise loan from financial institutions.....
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....develop a land belonging to the assessee, copy placed at page 1-12 of the Paper Book-I, (the PB-I'). Assessment for the year under consideration was completed under section 144 read with section 147 of the Income Tax Act, 1961, (the Act'), by arbitrarily computing Long Term Capital Gains of Rs. 2,45,00,250/- on the execution of the Development Agreement by treating its execution as transfer within the meaning of section 2(47) of the Act, vide assessment order dated 10-12-2019, copy placed at page 20 to 34 of the Appeal Memo. 2. Being aggrieved with the assessment the assessee filed an appeal before the National Faceless Appeal Centre, (the NFAC'), relying upon the decision of the Hon'ble Apex Court delivered in the case of Balbir Singh Mani, submitted that no taxable transfer arises unless possession is given, the rights won't accrue under section 53A of the Act. Kind perusal of the impugned order passed under section 250 of the Act would envisage that the submission of the assessee has summarily been brushed aside on the ground that nothing has been brought on record to substantiate nonreceipt of possession etc. It would further kindly be appreciated t....
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....at the assessing officer has flatly computed Long Term Capital Gains and not allowed benefit of the indexed cost of acquisition of the cost of the land and other deductions such as cost of improvement and deduction under section 54F of the Act. 8. It would, thus, gratuitously be appreciated that even on merits the assessment order needs to be quashed. In view of the foregoing it is humbly prayed that the appeal filed by the assessee may kindly be allowed and the addition of capital gains made may kindly be deleted." 7. The Ld. Counsel also relying on the following judgments: 1. ACIT, Central Circle 4 Vs. Dr. Mahabir Prasad (Pat) in MA No. 391 of 2009 dated 15.05.2012. 2. ACIT, Central Circle 4- v/s Dr. Mahabir Prasad 3. Pancham Singh Vs. ITO, Ward 6(3), Patna 8. Further, the Ld. Counsel relied on the judgement in the case of Pancham Singh Vs. ITO, Ward 6(3), Patna, the relevant portion of the judgment are as under: "6.1 Again, it has also been held by the Hon'ble Apex court in the case of Seshasayee steels (P) Ltd. v Asstt. CIT[2020] 421 ITR 46/312 CTR 375 (SC) that assessee having entered into an agreement to sell wit....