Atchaiah Doddapaneni, Tenali, Tenali V. ACIT,Circle-11(1) Hyderabad, Hyderabad

ITA 1553/HYD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2486 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 18-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: C S SUBRAMANYAM; V SIVA KUMAR A RS
• Keywords: Capital asset; Gift; Additional evidence; Cost of acquisition
• Section: 143(3); 54F; 142(1)

Judgement Text

ITA NO 1553 OF 2016 ATCHAIAH DOD DAPANENI TENALI. PAGE 1 OF 13 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.1553/HYD/2016 (ASSESSMENT YEAR: 2009-10) SHRI DODDAPANENI ATCHAIAH TENALI PAN: ACOPD 7485 N VS ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 11(1) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI C.S. SUBRAMANYAM & SHRI V. SIVA KUMAR, ARS FOR REVENUE : SMT. SUMAN MALIK, DR O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2009-10. IN T HIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE ORDER OF T HE LEARNED CIT (A)-V, HYDERABAD, DATED 31/08/2016 CONFIRMING THE A SSESSMENT ORDER U/S 143(3) R.W.S. 147 OF THE I.T. ACT DATED 4 .3.2015. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX (APPEALS) IS ERRONEOUS IN LAW AND ON THE FACTS OF T HE CASE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) FAILED APPRECIATE THAT THE APPELLANT ACQUIRED TITLE TO THE PROPERTY BY DEEDS OF REGISTRATION DATED 18TH SEPTEMBER, 2003 AS AGAINST THE DEEDS OF REGISTRATION DATED 09TH SEPTEM BER, 2006. 3. THE LEARNED CIT(A) ERRED IN LAW IN TREATING THE UNILATERAL DEED OF CANCELLATION REGISTERED ON 09TH SEPTEMBER, 2006 BY THE SELLERS AS LEGALLY SUSTAINABLE DOCUMENT IGNORIN G THE DATE OF HEARING: 19.12 . 201 7 DATE OF PRONOUNCEMENT: 28.02.2018 ITA NO 1553 OF 2016 ATCHAIAH DOD DAPANENI TENALI. PAGE 2 OF 13 SPECIFIC NOTE GIVEN BY THE SUB-REGISTRAR IN SUCH DE ED ITSELF, THAT THE SAME WAS VOID-AB-INITIO. 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED ON FACTS AND LAW BY TREATING THE ASSET SUBJECTED TO DEVELOPMENT AGREEMENT AS SHORT TERM CAPITAL ASSET I NSTEAD OF TREATING THE SAME AS LONG TERM CAPITAL ASSET DES PITE THE PERIOD OF HOLDING OF THE ASSET WAS MORE THAN 36 MON THS AS FACTUALLY EVIDENCED BY THE DOCUMENTS PRODUCED. 5. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE IGNORED THE DEED DATED 09TH SEPTEMBER, 2006 AS THE SAME WAS EXECUTED ONLY TO PERFECT THE TITLE COM ING TO THE APPELLANT THROUGH THE EARLIER DEED DATED 18TH SEPTE MBER, 2003 AND THUS ERRED IN CONSIDERING THE DATE OF ACQU ISITION AS 09TH SEPTEMBER, 2006. 6. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) TO HAVE CONSIDERED THAT THERE WAS NO FRESH OR ADDITION AL CONSIDERATION PAID IN 2006 AS AGAINST THE ORIGINAL AMOUNT PAID IN 2003, PROVING THAT THE LATER TRANSACTION IS NOT A SEPARATE AND INDEPENDENT ONE. 7. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN LAW DENYING THE BENEFIT OF DEDUCTION UNDER SECTI ON 54F TO THE APPELLANT, WITH RESPECT TO THE GAIN ARISING FRO M THE TRANSFER OF LONG TERM CAPITAL ASSET BY WRONGLY CONS IDERING THE SAME AS SHORT TERM CAPITAL ASSET. 8. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT NOT TO HAVE DENIED THE COST OF ACQUISITION OF RS.20 ,56,480/- CLAIMED BY THE APPELLANT AND THUS ERRED IN CONFIRMI NG THE COST ADOPTED BY THE LEARNED ASSESSING OFFICER AMOUN TING TO RS.18,49,660. 9. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN FACTS IN ADOPTING THE COMPOSITE RATE PER SQUARE FEET AS THE RATE PER CONSTRUCTION. HE OUGHT TO HAVE CONSIDE RED THAT THE COMPOSITE RATE INCLUDES COST OF SITE ALSO. SINC E THE APPELLANT HAS NOT TRANSFERRED HIS SHARE OF SITE, TH E INCLUSION OF COST OF SITE IN THE SQUARE FEET RATE AMOUNTS TO DOUBLE ADDITION. 10. ANY OTHER GROUND OF APPEAL THAT MAY BE PLEADED WITH THE PRIOR APPROVAL BY THE HON'BLE TRIBUNAL DURING T HE COURSE OF APPELLATE PROCEEDINGS. THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND OR MODI FY THE ABOVE GROUNDS OF APPEAL EITHER BEFORE OR AT THE TIM E OF HEARING OF THE APPEAL, IF CONSIDERED NECESSARY. ITA NO 1553 OF 2016 ATCHAIAH DOD DAPANENI TENALI. PAGE 3 OF 13 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, AN INDIVIDUAL AND A PENSIONER DID NOT FILE HIS RETURN OF INCOME. THE AO GOT THE INFORMATION THAT THE ASSESSEE IS ONE OF THE LAND OWNERS WHO HAVE ENTERED INTO A DEVELOPMENT AGREEMENT WITH M/S DIAMOND INFRA FOR THE DEVELOPMENT OF HIS LAND SITUA TED AT SURVEY NO.145 (PART), HYDERNAGAR VILLAGE, BALANAGAR, KUKAT APALLI MUNICIPALITY, RANGA REDDY DISTRICT, ADMEASURING 100 1.00 SQ. YARDS VIDE DEVELOPMENT AGREEMENT DATED 12.05.2008. OBSERVING THAT THE CAPITAL GAINS HAS ARISEN TO THE ASSESSEE B Y VIRTUE OF THE DEVELOPMENT AGREEMENT AND THE SAME HAS ESCAPED ASSE SSMENT AND IS TO BE BROUGHT TO TAX, THE AO ISSUED A NOTICE U/S 147 OF THE ACT DATED 17.12.2003 AND THE SAME WAS SERVED ON THE ASSESSEE. THE ASSESSEE FILED HIS RETURN OF INCOME ALONG WITH A NOTE FOR THE A.Y 2009-10 DATED 16.02.2015 ADMITTING INCOME OF RS .1,69,290 BEING THE INCOME FROM PENSION AND OTHER SOURCES. TH EREAFTER, THE AO ISSUED NOTICES U/S 143(2) AND 142(1) OF THE ACT AND THE ASSESSEE FURNISHED THE REQUIRED EVIDENCE. 3. AFTER CONSIDERING THE INFORMATION FURNISHED BY T HE ASSESSEE, THE AO OBSERVED THAT THE ASSESSEE HAS ENT ERED INTO A DEVELOPMENT AGREEMENT-CUM-GPA WITH M/S DIAMOND INFR A FOR DEVELOPMENT OF HIS LAND OF 1001.00 SQ. YARDS BEARIN G PLOT NO.25, SURVEY NO.145/2, HYDERNAGAR VILLAGE, BALANAGAR MAND AL, R.R. DISTRICT REGISTERED ON 12.05.2008. HE OBSERVED THAT AS PER THIS DEVELOPMENT AGREEMENT, THE ASSESSEE WAS TO GET 1040 6.54 SFT. DEVELOPED AREA (IN THE FORM OF SEVEN FLATS) IN LIEU OF THE LAND HANDED OVER BY HIM TO THE DEVELOPER. THE AO OBSERVE D THAT THE ASSESSEE HAS PURCHASED THE PLOT NO.25 ON 9.9.2006 V IDE REGISTERED SALE DEED NO.18410/2006. WHEN QUESTIONED ABOUT THE INCIDENCE OF CAPITAL GAIN ARISING OUT OF THE DEVELO PMENT ITA NO 1553 OF 2016 ATCHAIAH DOD DAPANENI TENALI. PAGE 4 OF 13 AGREEMENT, THE ASSESSEE SUBMITTED THAT HE HAS NOT R ECEIVED ANY DEVELOPED AREA FROM THE BUILDER INSPITE OF THE EXPI RY OF THE TIME LIMIT OF 36 MONTHS AND THE GRACE PERIOD OF 06 MONTH S THEREAFTER AND SINCE NO DEVELOPED AREA AS AGREED UPON IN THE D EVELOPMENT AGREEMENT WAS RECEIVED BY THE ASSESSEE, THE ASSESSE E CLAIMED THAT THERE IS NO TRANSFER OF PROPERTY UNDER THE PRO VISIONS OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT. FURTHE R, WITHOUT PREJUDICE TO THE ABOVE CONTENTION, THE ASSESSEE ALS O MADE AN ALTERNATE PLEA THAT HE HAS PURCHASED THE LAND, IN Q UESTION, IN THE YEAR 2003 VIDE REGISTERED SALE DEED NO.6621/2003 AN D 6622/2003 DATED 18.09.2003 AND THEREFORE, THE GAINS ARISING OUT OF THE DEVELOPMENT AGREEMENT IS LONG TERM CAPITAL G AIN AND SINCE THE ASSESSEE IS RECEIVING RESIDENTIAL FLATS A S CONSIDERATION, THE LTCG IS EXEMPT U/S 54F OF THE ACT. ACCORDINGLY, HE PRODUCED COPIES OF THE PURCHASE DEEDS OF THE PLOT OF LAND. T HE AO CONSIDERED THAT THE ASSESSEE HAS PURCHASED PLOT NO. 25 WHICH HAS BEEN GIVEN FOR DEVELOPMENT, VIDE REGISTERED SALE DE ED NO.18410/2006 DATED 9.9.2006, WHEREAS IN THE EARLIE R REGISTERED SALE DEEDS DATED 18.09.2003, THE PLOT NO. MENTIONED WAS 109B IN SURVEY NO.145(P) AND PLOT NO.109/C IN SURVEY NO.145 . HE ALSO OBSERVED FROM THE RECITALS FROM THE SALE DEED THAT THE EARLIER SALE DEEDS WERE CANCELLED AND THAT NO POSSESSION WAS GIV EN TO THE ASSESSEE BY VIRTUE OF THOSE SALE DEEDS REGISTERED I N 2003 AND THAT THE POSSESSION WAS HANDED OVER TO THE ASSESSEE ONLY IN 2006. THEREFORE, HE HELD THAT THE ASSET HAS BEEN HELD FOR A SHORT TERM ONLY AND THE RESULTANT CLAIM IS STCG. HE ALSO OBSER VED THAT IN VIEW OF THE FACT THAT DEVELOPMENT AGREEMENT IS ENTE RED ON 12.05.2008 AND THE DEVELOPER HAS BEEN GIVEN THE POS SESSION OF THE PROPERTY, THE CAPITAL GAIN HAS ARISEN IN THE RE LEVANT A.Y FOR THE LAND TRANSFERRED BY THE ASSESSEE TO THE DEVELOPER. ITA NO 1553 OF 2016 ATCHAIAH DOD DAPANENI TENALI. PAGE 5 OF 13 4. THEREAFTER, HE PROCEEDED TO CONSIDER THE ASSESSE ES CLAIM OF DEDUCTION U/S 54F OF THE ACT AND HOLDING T HAT THE GAIN IS SHORT TERM CAPITAL GAIN, HE HELD THAT THE ASSESSEE IS NOT ELIGIBLE TO CLAIM EXEMPTION U/S 54F OF THE ACT. HE ALSO CONSIDE RED THE COST OF ACQUISITION OF THE LAND AS PER THE PURCHASE DEED EN TERED ON 9.9.2006 TO BE AT RS.14,89,200 AND AFTER INCLUDING THE REGISTRATION CHARGES OF RS.3,60,460, HE ADOPTED THE COST OF ACQUISITION AT RS.18,49,660. AS REGARDS THE ESTIMAT ION OF SALE CONSIDERATION IN THE HANDS OF THE ASSESSEE, THE AO CONSIDERED THE VALUE OF THE CONSTRUCTION AS MENTIONED IN THE REGIS TERED DEVELOPMENT AGREEMENT DATED 12.05.2008 I.E. AT RS.1 096 PER SFT. AND ADOPTED THE SAME FOR COMPUTATION OF THE SHORT T ERM CAPITAL GAINS. ACCORDINGLY, HE COMPUTED THE TAXABLE INCOME OF THE ASSESSEE AGAINST WHICH, THE ASSESSEE PREFERRED AN A PPEAL BEFORE THE CIT (A), WHO CONFIRMED THE ORDER OF THE AO AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE HAS PURCHASED PLOT NO.109/B VIDE REGIS TERED SALE DEED NO.6621/2003 DATED 18.09.2003 AND ALSO PLOT NO .109/C VIDE REGISTERED SALE DEED NO.6622/2003 DATED 18.09. 2003 FROM ONE MR. G. BALA SWAMY. HE DREW OUR ATTENTION TO THE RECITALS IN THE SALE DEED ACCORDING TO WHICH THE VENDOR HAS SUB MITTED A PROPOSED LAYOUT FOR DEVELOPMENT OF RESIDENTIAL PLOT S IN THE SAID LAND OF ACRES 03-20 GUNTAS TO HUDA VIDE NO.17641/MP 2/HUDA/ 01 DATED 9.8.2001 AND THE SANCTION OF THE LAYOUT AT HUDA IS UNDER PROCESS. HE SUBMITTED THAT THE UNAPPROVED PLO TS WERE SOLD TO THE ASSESSEE AND THE ASSESSEE WAS PUT IN POSSESS ION OF THE LAND AS IS MENTIONED IN THE REGISTERED SALE DEED. H E SUBMITTED THAT THE HUDA LAYOUT AS PROPOSED BY SHRI BALA SWAMY WAS NOT ITA NO 1553 OF 2016 ATCHAIAH DOD DAPANENI TENALI. PAGE 6 OF 13 APPROVED AND HE HAD GIFTED THE ENTIRE LAND TO HIS S ON, SHRI G. SRIKANT, WHO ULTIMATELY GOT THE HUDA LAYOUT APPROVE D AND THE SALE DEEDS EXECUTED IN FAVOUR OF THE ASSESSEE IN TH E YEAR 2003 WERE UNILATERALLY CANCELLED AND FRESH SALE DEEDS WE RE EXECUTED ON 9.9.2006. HE SUBMITTED THAT THE ASSESSEE HAD PAID T HE ENTIRE SALE CONSIDERATION FOR THE PLOT TO THE VENDOR IN THE YEA R 2003 ITSELF, AND HAS NOT PAID ANY FURTHER SALE CONSIDERATION IN THE YEAR 2006. HE ALSO DREW OUR ATTENTION TO THE RECITALS IN THE S ALE DEED DATED 9.9.2006, WHEREIN THE EARLIER REGISTERED SALE DEED AND THE CANCELLATION THEREOF AND THE CIRCUMSTANCES UNDER WH ICH THE TWO SALE DEEDS ARE EXECUTED ARE MENTIONED. THEREFORE, A CCORDING TO HIM, THE ASSESSEE HAS PURCHASED THE ASSET IN THE YE AR 2003 ITSELF AND DUE TO THE DIFFICULTIES FACED BY THE VENDOR IN GETTING HUDA LAYOUT APPROVED, IT HAS NECESSITATED THE CANCELLATI ON OF THE EARLIER DEED AND REGISTRATION OF THE FRESH SALE DEED, BUT I T DOES NOT MEAN THAT THE ASSESSEE HAS PURCHASED THE PLOT ONLY IN TH E YEAR 2006. HE HAS ALSO DRAWN OUR ATTENTION TO THE SCHEDULE OF THE PROPERTY MENTIONED IN THE SALE DEEDS OF BOTH 2003 AND 2006, TO DEMONSTRATE THAT THE PIECE OF LAND, THOUGH THE PLOT NOS HAVE CHANGED, IS THE SAME. THEREFORE, ACCORDING TO HIM, THE ASSET IS A LONG TERM ASSET AND THEREFORE, THE GAINS FROM THE D EVELOPMENT AGREEMENT BEING, LONG TERM CAPITAL GAIN, IS ALSO EL IGIBLE FOR EXEMPTION U/S 54F OF THE ACT IN RESPECT OF THE FLAT S RECEIVED BY HIM BY VIRTUE OF THE DEVELOPMENT AGREEMENT. IN SUPP ORT OF HIS CONTENTION THAT THE SALE DEED HAS BEEN EXECUTED BY MR. BALA SWAMY AND THE CIRCUMSTANCES UNDER WHICH THEY WERE C ANCELLED AND RE-REGISTERED BY SHRI G. SRIKANT TO THE ASSESSE E, HE FILED AFFIDAVIT OF SHRI G. BALA SWAMY AND PRAYED THAT, IT BE ADMITTED AS AN ADDITIONAL EVIDENCE AND CONSIDERED FOR ADJUDICAT ION OF THE MATTER. ITA NO 1553 OF 2016 ATCHAIAH DOD DAPANENI TENALI. PAGE 7 OF 13 6. THE LEARNED DR, HOWEVER, OPPOSED THE ADMISSION O F THE ADDITIONAL EVIDENCE AND ALSO RELIED UPON THE OR DERS OF THE AUTHORITIES BELOW. SHE ALSO DREW OUR ATTENTION TO T HE RECITALS IN THE CANCELLATION DEED WHEREIN IT IS MENTIONED THAT THE VENDOR WAS IN POSSESSION OF THE PROPERTY TILL THE REGISTERED S ALE DEEDS WERE CANCELLED. THEREFORE, ACCORDING TO HIM, THE GAIN AR ISING TO THE ASSESSEE IS SHORT TERM CAPITAL GAIN AND THE ASSESSE E IS NOT ELIGIBLE FOR THE CLAIM U/S 54F OF THE ACT FOR THE REASONS ME NTIONED BY THE AO AND CONFIRMED BY THE CIT (A). 7. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE PROPERTY PURCHASED BY T HE ASSESSEE IN THE YEAR 2003 VIDE REGISTERED SALE DEED NO.6621/200 3 IS PLOT NO.109/B AND ADMEASURING 1001 SQ. YARDS. THE PLAN S HOWING THE PLOT NO.109/B AND THE SCHEDULE THERETO IS AS UNDER: SCHEDULE QF THE PRQPERTY ALL THAT THE PLOT BEARING NOLL~9/B, IN SURVEY NOT 145 (PART) ADMEASURING 1001.0 SQUARE YARDS OR 836.84 SQ.MTRS, IN THE PROPOSED LAYOUT TO HUDA FOR DEVELOPMENT OF RESIDENTIAL PLOTS IN 'DIAMOND HILLS EXTENSION' SITUATED AT HYDERNAGAR VILLAGE, BALANAGAR MANDAL, KUKATPALLY MUNICIPALITY, RANGA REDDY DISTRICT, S.R.O. KUKATPALLY, AND BOUNDED AS FOLLOW:- NORTH : NEIGHBOURS LAND IN : SURVEY NOL145 (P). SOUTH : PLOT NOS:109/A & 109/C. EAST : 40'-0' WIDE ROAD, HILLS PARK, SURVEY I NO: 145. WEST : CBCID COLONY, SY.NO.I145 (P). ITA NO 1553 OF 2016 ATCHAIAH DOD DAPANENI TENALI. PAGE 8 OF 13 ITA NO 1553 OF 2016 ATCHAIAH DOD DAPANENI TENALI. PAGE 9 OF 13 8. FURTHER, VIDE SALE DEED NO.18410 OF 2006, THE AS SESSEE HAS PURCHASED PLOT NO.25 ADMEASURING 1001 SQ. YARDS OF LAND FOR A TOTAL CONSIDERATION OF RS.14,89,200 AND THE SCHED ULE OF THIS PLOT AND PLAN ARE AS UNDER: ITA NO 1553 OF 2016 ATCHAIAH DOD DAPANENI TENALI. PAGE 10 OF 13 ITA NO 1553 OF 2016 ATCHAIAH DOD DAPANENI TENALI. PAGE 11 OF 13 9. ON A COMPARISON OF THESE TWO DOCUMENTS, IT CLEAR LY EMERGES THAT EXCEPT FOR THE CHANGE IN PLOT NO. THER E IS NO CHANGE IN THE MEASUREMENTS OR AREA OR THE BOUNDARIES OF TH E PLOT. THUS, WE FIND FORCE IN THE ARGUMENT OF THE LEARNED COUNSE L FOR THE ASSESSEE, THAT THE SAME PLOT HAS BEEN RE-REGISTERED TO THE ASSESSEE AFTER UNILATERALLY CANCELLING THE EARLIER DOCUMENT AND THE CIRCUMSTANCES HAVE CLEARLY BEEN MENTIONED IN THE CA NCELLATION DEED AS WELL AS THE SUBSEQUENT SALE DEED AND THIS I S THE PROPERTY WHICH HAS BEEN GIVEN FOR DEVELOPMENT BY THE ASSESSE E. SINCE THE CANCELLATION AND THE RE-REGISTRATION OF THE PROPERT Y IS NOT FOR ANY REASON ATTRIBUTABLE TO THE ASSESSEE AND THE FACTS A ND CIRCUMSTANCES ARE BEYOND THE CONTROL OF THE ASSESSE E, IT CANNOT BE IMPUTED THAT THE ASSESSEE HAS NOT PURCHASED THE PRO PERTY IN THE YEAR 2003. 10. THE RELIANCE OF THE LEARNED DR IS ON THE RECITA LS IN THE CANCELLATION DEED THAT THE POSSESSION OF THE PROPER TY WAS IN THE HANDS OF THE VENDOR. HOWEVER, WE FIND THAT THE CANC ELLATION DEED IS A UNILATERAL DOCUMENT WITHOUT THE ASSESSEE BEING MADE A PARTY TO IT AND IS ALSO IN CONTRADICTION TO THE REGISTERE D SALE DEED DATED 18.09.2003 WHEREIN IT HAS BEEN MENTIONED THAT THE P OSSESSION HAS ALREADY BEEN HANDED OVER TO THE ASSESSEE. THERE FORE, THE RECITALS IN THE UNILATERAL CANCELLATION DEED ALONE, CANNOT BE TAKEN AS EVIDENCE FOR HOLDING THAT THE POSSESSION OF PROP ERTY HAS BEEN DELIVERED TO THE ASSESSEE ONLY IN THE YEAR 2006. TH EREFORE, WITHOUT GOING INTO THE AFFIDAVIT OF SHRI BALA SWAMY, WHICH HAS BEEN FILED AS AN ADDITIONAL EVIDENCE, WE ARE INCLINED TO ACCEP T THE CONTENTION OF THE ASSESSEE THAT HE HAS PURCHASED THE PROPERTY IN THE YEAR 2003 AND THEREFORE, THE PROPERTY IS A LONG TERM CAP ITAL ASSET AND THE GAIN ARISING FROM TRANSFER THEREOF IS LTCG. SIN CE THE GAIN ON ITA NO 1553 OF 2016 ATCHAIAH DOD DAPANENI TENALI. PAGE 12 OF 13 ENTERING INTO THE DEVELOPMENT AGREEMENT IS LTCG, TH E ASSESSEE IS ALSO ELIGIBLE FOR THE CLAIM OF EXEMPTION U/S 54F OF THE ACT. HOWEVER, SINCE NEITHER THE AO NOR THE CIT (A) HAVE GONE INTO THE CLAIM OF SECTION 54F, WE DEEM IT FIT AND PROPER TO REMAND THE ISSUE TO THE FILE OF THE AO FOR CONSIDERING THE CLA IM OF THE ASSESSEE U/S 54F OF THE ACT. 11. AS REGARDS THE COMPUTATION OF CAPITAL GAINS ARI SING ON ACCOUNT OF THE JOINT DEVELOPMENT AGREEMENT, WE FIND THAT THE ASSESSEE HAS INCLUDED THE STAMP DUTY PAID BY HIM IN BOTH THE YEARS 2003 AND 2006, IN THE COST OF ACQUISITION, WH EREAS THE AO AND THE CIT (A) HAVE ADOPTED ONLY THE STAMP DUTY AN D OTHER EXPENSES PAID BY THE ASSESSEE IN THE YEAR 2006 AS P ART OF COST OF ACQUISITION. SINCE WE HAVE ALREADY HELD THAT THE CA NCELLATION AND RE-REGISTRATION OF THE PROPERTY IS NOT DUE TO ANY F AULT OF THE ASSESSEE BUT DUE TO THE FACTS AND CIRCUMSTANCES PRE VAILING AT THE RELEVANT POINT OF TIME, WE AGREE WITH THE LEARNED C OUNSEL FOR THE ASSESSEES ARGUMENT THAT BOTH THE EXPENSES ARE PART OF THE COST OF ACQUISITION AND SHOULD BE ALLOWED WHILE COMPUTING T HE LTCG. THE AO IS DIRECTED ACCORDINGLY. 12. AS REGARDS THE ESTIMATION OF SALE CONSIDERATION , WE FIND THAT ON ACCOUNT OF LAND TRANSFERRED UNDER THE DEVELOPMENT AGREEMENT, IT IS THE CASE OF THE ASSESSEE THAT THE AO HAS ADOPTED THE COST OF CONSTRUCTION MENTIONED IN THE DEVELOPME NT AGREEMENT AND NOT THE ACTUAL COST INCURRED BY THE BUILDER FOR THE CONSTRUCTION OF THE FLATS. HE SUBMITTED THAT THE SA LE CONSIDERATION TO THE ASSESSEE IS THE COST INCURRED BY THE BUILDER AND NOT ONLY THE VALUE MENTIONED IN THE DEVELOPMENT AGREEMENT, P ARTICULARLY ITA NO 1553 OF 2016 ATCHAIAH DOD DAPANENI TENALI. PAGE 13 OF 13 SINCE IN THIS CASE, THE DEVELOPMENT COULD NOT BE CO MPLETED WITHIN THE STIPULATED PERIOD OF THE DEVELOPMENT AGREEMENT. WE FIND THAT THE AO HAD CALLED FOR INFORMATION FROM THE DEVELOPE R WHO HAD REPORTED THAT DUE TO DELAY IN COMPLETION OF THE PRO JECT, THE COST OF CONSTRUCTION WAS 1450 SFT. THE AO HAS CONSIDERED TH AT THE DELAY IN COMPLETION OF THE PROJECT WAS NOT ATTRIBUTABLE T O THE ASSESSEE AND THEREFORE, THE COST ARRIVED AT AND MENTIONED IN THE REGISTERED DEVELOPMENT DATED 12.05.2008 WAS THE EXCHANGE VALUE AND IS TO BE ADOPTED AS SUCH. WE AGREE WITH THIS FINDING OF T HE AO. ADMITTEDLY, THE ASSESSEE HAS RECEIVED THE BUILT-UP AREA IN THE SUBSEQUENT A.Y AND THE DELAY IN COMPLETION OF THE P ROJECT WAS NOT DUE TO ANY REASON ATTRIBUTABLE TO THE ASSESSEE. THE REFORE, THE AO HAS CORRECTLY ADOPTED RS.1096 AS MENTIONED IN THE D EVELOPMENT AGREEMENT AS SALE CONSIDERATION RECEIVED BY THE ASS ESSEE. 13. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY, 2018. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 28 TH FEBRUARY 2018. VINODAN/SPS COPY TO: 1 SHRI DODDAPANENI ATCHAIAH, 20-23-2 STATION ROAD, CHINNARAAVURU, TENALI 522201 2 ASSTT. COMMISSIONER OF INCOME TAX, C IRCLE 11(1) HYDERABAD 3 CIT (A) - 5 HYDERABAD 4 PR. CIT 5 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER