M.Lakshma Reddy, Secunderabad V. ITO, Secunderabad

ITA 1151/HYD/2004

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5941 (ITAT-HYDERABAD)
• Duration Of Justice: 5 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 21-01-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 06-12-2004
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Capital asset; Cost of acquisition; Corroborative evidences
• Section: 234B; 2

Judgement Text

10 SUBMITTED BY THE LEARNED DR THAT THE ASSESSEE AND HIS SO N HAD TAKEN POSSESSION OF THEIR SHARE OF FLATS IN THE FINANCIAL YEAR 2000-01 ONLY. 9. WE HAVE CONSIDERED THE SUBMISSIONS OF RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND ALSO CASE LAW RELI ED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE. WE FIND THAT THE AUTHOR ITIES WERE JUSTIFIED IN HOLDING THAT THE ENTIRE CAPITAL GAIN ARI SES ONLY IN THE ASSESSMENT YEAR 2001-02 THOUGH THE ASSESSEE THE ASSESSEE HAD SOL D SEMI-FINISHED FLATS DURING THE DIFFERENT PREVIOUS YEA RS AS PER THE DEVELOPMENT AGREEMENT. WE FIND THAT THE ASSESSEE HAS HAN DED OVER THE EXISTING BUILDING TO THE DEVELOPER FOR DEMOLISHIN G AND CONSTRUCTION OF THE COMPLEX IN THE YEAR UNDER CONSIDERATION. THE A SSESSEE ALSO RECEIVED TWO FLATS FROM THE BUILDER WHICH WERE ULTIMAT ELY SOLD BY THE ASSESSEE IN THE RELEVANT FINANCIAL YEAR. THE TRANSACTION OF HANDING OVER THE POSSESSION OF THE ASSESSEE'S PROPERTY AND RECEIVING CONSIDE RATION IN THE FORM OF TWO FLATS WERE OCCURRED IN THE YEAR UNDER CONSIDERATION ONLY. IN THIS REGARD, THERE IS NO DISPUTE. THUS, THERE IS A PART PERFORMANCE OF THE CONTRACT ON THE PART OF THE DEVELOPER AND THE ASSESSE E. IN TERMS OF SECTION 2(47)(V) OF THE INCOME-TAX ACT, ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATU RE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT 1882, THE T RANSFER OF PROPERTY IS OCCURRED IN THE PREVIOUS YEAR UNDER DISPUTE. MOREOVER, IN TERMS OF SECTION 45 OF THE INCOME-TAX ACT, THE PROFITS AN D GAINS ARISING FROM THIS TRANSFER SHALL BE DEEMED TO BE INCOME OF TH E PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE. CONSIDERING THE PROVISI ONS OF THE ABOVE, IN OUR VIEW THE ASSESSEE IS LIABLE FOR CAPITAL GAIN TAX ONLY FOR THE YEAR UNDER DISPUTE. HENCE, IN VIEW OF THE ABOVE, WE DO N OT SEE ANY INFIRMITY 11 IN THE ORDERS OF THE LOWER AUTHORITIES AND THEIR ORDE RS ARE CONFIRMED ON THIS ISSUE. 10. WITH REGARD TO ADOPTION OF THE COST OF THE CONSTRU CTION AT RS.441/- PER SFT., WE FIND THAT THE ASSESSEE WAS NOT PROP ERLY INFORMED ABOUT OF METHOD OF COMPUTING THE COST OF CONSTRUCTION AND THE LEARNED COUNSEL ALSO CONTENDED THAT THE ASSESSEE WAS NOT GIVEN ANY O PPORTUNITY TO EXPLAIN HIS STAND ON THIS ISSUE. WE SEE SOME FORCE IN THE ARGUMENT OF THE LEARNED COUNSEL THAT THE ASSESSEE WAS NEVER SHOWN A NY SUPPORTING EVIDENCE BY THE ASSESSING OFFICER FOR TAKING CO ST OF CONSTRUCTION AT RS.441 PER SFT. UNDER THESE CIRCUMSTANCES, W E RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERA TION OF THIS ISSUE AFRESH AFTER AFFORDING AN OPPORTUNITY OF BEING H EARD TO THE ASSESSEE. HENCE THIS GROUND OF THE ASSESSEE IS ALLOWED FOR STAT ISTICAL PURPOSES. 11. WITH REGARD TO THE NEXT ISSUE RELATING TO NON CONSIDERATION OF COST OF ADDITIONS MADE TO THE PROPERTY WHILE ARRIVING AT THE INDEXED COST OF ACQUISITION, WE FIND THAT NO PROPER EVIDENCE WAS FURNI SHED BEFORE THE LOWER AUTHORITIES IN SUPPORT OF INCURRING SUCH EXPENDITU RE ON THE IMPROVEMENT OF THE PROPERTY. HENCE, WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITIES AND THE SAME IS CONFIRM ED. IN THE GROUND OF APPEAL, THE ASSESSEE ALSO TOOK A GROUND WHICH WAS REPRO DUCED IN GROUND NO.4 ABOVE. BUT, AT THE TIME OF HEARING, IT WAS NOT PRESSED. THEREFORE, THIS GROUND IS REJECTED AS NOT PRESSED. 12. WITH REGARD TO CHARGING OF INTEREST UNDER SECTIONS 2 34A & 234B OF THE ACT, THIS IS MERELY CONSEQUENTIAL AND NO ADJUDICATI ON IS REQUIRED ON THIS ISSUE.