G Sreenivasan, Trivandrum V. Deputy Commissioner of Income Tax, Trivandrum

ITA 188/COCH/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64829 (ITAT-COCHIN)
• Duration Of Justice: 3 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 08-08-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 09-04-2009
• Court: TRIBUNAL
• Keywords: Capital asset; Business income; Opportunity of being heard; Principle of natural justice; Validity of assessment
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A NO. 188/COCH/2009 ASSESSMENT YEAR : 2003-04 SHRI G. SREENIVASAN, REP. BY L/H DR. JYOTHI KAMALAM, JYOTHY NIVAS, MOONNAMANACKAL, PETTAH, TRIVANDRUM. [PAN:BPEPS 4387G] VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE, TRIVANDRUM. (ASSESSEE-APPELLANT) (REVENUE- RESPONDENT) ASSESSEE BY SHRI D.S. SREEKUMARAN, ADV. REVENUE BY MS. VANI RAJ, JR. DR DATE OF HEARING 08/08/2012 DATE OF PRONOUNCEMENT 28/09/2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 11-02-2009 PASSED BY LD CIT(A)-III, KOCHI AND IT RELATES TO TH E ASSESSMENT YEAR 2003-04. 2. THE GROUNDS RAISED BY THE ASSESSEE GIVE RISE TO THE FOLLOWING ISSUES:- (A) VALIDITY OF NOTICE ISSUED U/S 148 OF THE ACT FOR REASSESSMENT. (B) VALIDITY OF ASSESSMENT OF CAPITAL GAIN IN THE YEAR UNDER CONSIDERATION. (C) ELIGIBILITY OF DEDUCTION U/S 54/54F OF THE ACT . 3. THE FACTS RELATING TO THE CASE ARE STATED IN BRIEF. THE ASSESSEE WAS NOT ASSESSED TO TAX EARLIER. DURING THE COURSE OF SEARCH PROCEE DINGS CARRIED OUT IN THE CASE OF M/S NIKUNJAM CONSTRUCTIONS P LTD ON 21.2.2006, IT WAS N OTICED THAT THE ASSESSEE HAD I.T.A. NO. 188/COCH/2009 2 ENTERED INTO AN AGREEMENT WITH THAT COMPANY ON 14.4 .2002 FOR CONSTRUCTION OF A MULTI STORIED BUILDING CONSISTING OF RESIDENTIAL APARTMEN TS ON 40 CENTS OF LAND OWNED BY HIM, WHICH WAS LOCATED IN KADAKAMPALLY VILLAGE UNDER SUR VEY NO.227,228,250 & 251B/4. AS PER THE SAID AGREEMENT, THE ASSESSEE WOULD RECEIVE 7800 SQ. FT. OF THE CONSTRUCTED AREA AND FIVE CAR PARKING AREA IN ADDITION TO A SUM OF RS.18.00 LAKHS. THE SAID AMOUNT OF RS.18.00 LAKHS WAS RECEIVED BY THE ASSESSEE FROM THE SAID COMPANY AS UNDER:- RS.10,00,000/- DURING THE FINANCIAL YEAR 2002-03 RS. 5,00,000/- DURING THE FINANCIAL YEAR 2003-04 RS. 3,00,000/- DURING THE FINANCIAL YEAR 2004-05 4. AS THE ASSESSEE HAD NOT FILED HIS RETURN OF INCOME, THE AO ISSUED NOTICE U/S 148 OF THE ACT ON 14.2.2007 FOR THE YEAR UNDER CONSIDERATI ON. THEREAFTER, THE AO COMPLETED THE ASSESSMENT BY DETERMINING THE LONG TERM CAPITAL GAIN AT RS.65,17,513/-. THE ASSESSEE CHALLENGED THE SAID ORDER PASSED BY THE AO BEFORE LD CIT(A), BUT COULD NOT SUCCEED. HENCE, THE ASSESSEE IS IN APPEAL BEFORE U S. 5. THE FIRST ISSUE RELATES TO THE VALIDITY OF R EOPENING OF ASSESSMENT. ACCORDING TO THE ASSESSEE, THE AO ISSUED NOTICES U/S 148 OF THE ACT SIMULTANEOUSLY FOR THE ASSESSMENT YEARS 2003-04 (THE YEAR UNDER CONSIDERATION), 2004- 05 AND 2005-06 ON IDENTICAL REASONS. IN HIS WRITTEN SUBMISSION, THE ASSESSEE H AS EXTRACTED THE REPLY DATED 18.5.2007 GIVEN BY THE AO ON THE REASONS FOR REOPEN ING OF THE ASSESSMENT FOR THE ASSESSMENT YEAR 2005-06. FURTHER, AS PER AGREEMENT DATED 14.4.2002 EXECUTED BY YOU IN FAVOUR OF M/S NIKUNJAM CONSTRUCTIONS (P) LTD, YOU HAVE SOLD 40 CE NTS OF LAND IN SY NOS. 227, 228, 250 & 252B/4 OF KADAKAMPALLY VILLAGE FOR A CON SIDERATION OF FLATS AREA EXTENDING 7800 SQ.FT. PLUS CAR PARK AREA RS.1000/- PER SQ. FT AND CASH OF RS.18,00,000/-. THUS TOTAL SALES CONSIDERATION COM ES TO RS.1,01,00,000/-. THOUGH THE AGREEMENT WAS EXECUTED ON 14.4.2002, THE POSSESSION WAS HANDED OVER TO THE DEVELOPERS ON 21.4.2004. SINCE THE HAN DING OVER OF POSSESSION OF LAND TOOK PLACE ON 21.4.2004 THE CAPITAL GAIN HAS T O BE ASSESSED FOR THE ASSESSMENT YEAR 2005-06. BUT YOU NEITHER FILED YOU R INCOME TAX RETURN NOR DISCLOSED ANY CAPITAL GAIN. THEREFORE, IT IS PROPO SED TO ASSESS THE CAPITAL GAIN ON TRANSFER OF IMMOVABLE PROPERTY IN ASSESSMENT YEAR 2 005-06. YOUR EXPLANATION/OBJECTION IN THIS REGARD MAY BE FILED. I.T.A. NO. 188/COCH/2009 3 BASED ON THIS LETTER, THE ASSESSEE IS NOW CONTENDIN G THAT THE AO, HAVING DECIDED TO ASSESS THE CAPITAL GAIN IN THE ASSESSMENT YEAR 2005 -06, HE COULD NOT HAVE ASSESSED THE SAME IN THE ASSESSMENT YEAR 2003-04. HOWEVER, THE ASSESSEE HAS FAIRLY CONCEDED THAT THE AO HAS RECORDED IDENTICAL REASONS FOR THE ASSES SMENT YEARS 2003-04 AND 2004-05. IT IS WELL SETTLED PROPOSITION THAT IT IS NOT NECES SARY FOR THE AO TO COME TO A DEFINITE CONCLUSIONS AT THE TIME OF ISSUING NOTICE U/S 148 O F THE ACT SO LONG AS HE HAS REASONS TO BELIEVE THAT THERE IS ESCAPEMENT OF INCOME. THERE IS NO DOUBT THAT THE AGREEMENT WAS ENTERED BY THE ASSESSEE WITH THE COMPANY ON 14.4.20 02. IN THE SAID AGREEMENT, IT IS AVERRED THAT THE DATE OF POSSESSION OF LAND SHALL B E THE DATE ON WHICH THE COMPANY (BUILDER) HANDED OVER THE POSSESSION OF THE CONSTRU CTED AREA BELONGING TO THE ASSESSEE. IN ANOTHER AFFIRMATION WRITTEN ON A STAMP PAPER, THE ASSESSEE HAS AFFIRMED THAT THE POSSESSION OF THE APARTMENTS WAS HANDED OV ER TO THE ASSESSEE ON 21.04.2004. ON EXAMINATION OF THE AGREEMENT DATED 14.4.2002 AND ALSO THE AFFIRMATION LETTER DATED 21.4.2004, IT APPEARS THAT THE AO HAS ARRIVED AT TH E BELIEF THAT THE CAPITAL GAINS WOULD BE ASSESSABLE IN THE ASSESSMENT YEARS 2003-04 TO 20 05-06. THESE DISCUSSIONS WOULD SHOW THAT THE AO HAD ENOUGH REASONS TO DRAW A BELIE F OF ESCAPEMENT OF INCOME IN THESE THREE YEARS. AS STATED EARLIER, IT CANNOT BE SAID THAT THE AO HAD REACHED FIRM CONCLUSION ON THE ISSUE OF YEAR OF ASSESSMENT OF TH E CAPITAL GAINS AT THE TIME OF ISSUING NOTICE U/S 148 OF THE ACT. HENCE, WE ARE UNABLE TO AGREE WITH THE CONTENTIONS OF THE ASSESSEE ON THIS POINT AND ACCORDINGLY DISMISS THE GROUNDS RAISED WITH REGARD TO THE VALIDITY OF THE NOTICE ISSUED U/S 148 OF THE ACT FO R THE YEAR UNDER CONSIDERATION. 6. WITH REGARD TO THE VALIDITY OF ASSESSMENT OF CAPITAL GAINS IN THE YEAR UNDER CONSIDERATION, I.E., IN THE ASSESSMENT YEAR 2003-04 , THE ASSESSEE HAS RAISED FOLLOWING CONTENTIONS:- (A) THE POSSESSION WAS GIVEN ONLY ON 21.4.2004 AN D HENCE THE CAPITAL GAIN IS ASSESSABLE IN THE ASSESSMENT YEAR 2005-06 ONLY. (B) SEC. 53A OF THE TRANSFER OF PROPERTY ACT HAS UNDERGONE A CHANGE WITH EFFECT FROM 24.9.2001, I.E. ABOUT EIGHT MONTHS PRIOR TO TH E DATE OF AGREEMENT AND ACCORDING TO THE SAID AMENDMENT; UNREGISTERED AGREEMENTS SHAL L NOT HAVE ANY EFFECT FOR THE PURPOSES OF SEC. 53A OF THE ACT. HENCE THE AO WAS WRONG IN INVOKING THE PROVISIONS OF I.T.A. NO. 188/COCH/2009 4 SEC. 2(47)(V) OF THE ACT FOR THE PURPOSE OF ASSESSI NG CAPITAL GAINS DURING THE ASSESSMENT YEAR 2003-04. (C) THE AO OUGHT TO HAVE EXCLUDED THE SALE CONSID ERATION ALREADY DECLARED BY THE ASSESSEE IN THE ASSESSMENT YEARS 2005-06 (RS.34 ,74,839/-) AND 2006-07 (RS.14,00,000) FOR THE VERY SAME PROPERTY. 7. THE FIRST POINT PERTAINS TO THE FIXATION OF M ATERIAL DATE FOR THE PURPOSE OF ASSESSING THE CAPITAL GAIN. THERE IS NO DISPUTE WI TH REGARD TO THE FACT THAT THE ASSESSEE HAS ENTERED THE AGREEMENT ON 14.4.2002. AS PER CLA USE 1.2 OF THE SAID AGREEMENT, THE BUILDER WOULD COMMENCE THE DEVELOPMENT OF PROPERTY ON THE DELIVERY OF THE POSSESSION OF THE LAND. HOWEVER, IN THE SAID CLAUSE, IT IS AL SO MENTIONED THAT PROVIDED HOWEVER THAT NOTHING HEREIN CONTAINED SHALL BE CONSTRUED AS DELIVERY OF POSSESSION IN PART PERFORMANCE OF THIS OR ANY AGREEMENT OF SALE. FU RTHER AS PER CLAUSE 5.2 OF THE AGREEMENT, THE POSSESSION OF VACANT LAND WAS HANDED OVER THE DEVELOPER ONLY ON 21.4.2004, I.E., UPON RECEIVING THE ASSESSEES PORT ION OF CONSTRUCTED AREA. ACCORDINGLY, IT IS CONTENDED BY THE ASSESSEE THAT HE HAS NOT GIV EN POSSESSION OF THE LAND AS CONTEMPLATED IN SEC. 53A OF THE TRANSFER OF PROPERT Y ACT. IT IS THE CONTENTION OF THE ASSESSEE THAT THE POSSESSION WAS HANDED OVER ONLY O N 21.4.2004. 8. IN THIS REGARD, WE MAY EXTRACT BELOW THE REL EVANT PORTION OF THE AFFIRMATION LETTER ENTERED ON 21.4.2004 BY THE ASSESSEE ON A STAMP PAP ER WITH REGARD TO THE DATE OF HANDING OVER OF THE POSSESSION. AND WHEREAS THE SAID COMPANY HAS SINCE COMPLETED TH E CONSTRUCTION OF THE SAID APARTMENT TO MY FULL SATISFACTION AS PER THE T ERMS AND CONDITIONS STIPULATED IN THE AGREEMENT EXECUTED ON THE FOURTEENTH DAY OF APRIL 2002 AND HANDED OVER TO ME FORMAL POSSESSION OF THE SAID APARTMENTS ON THE TWENTY FIRST DAY OF APRIL 2004 . THUS, IT IS SEEN THAT THE AFFIRMATION LETTER DATED 21.4.2004 TALKS ABOUT THE HANDING OVER OF THE POSSESSION OF THE CONSTRUCTED APARTMENTS TO THE ASSESSEE. THERE MAY NOT BE ANY DISPUTE THAT THE INCOME TAX DEPARTMENT IS CONCE RNED WITH THE HANDING OVER THE POSSESSION OF THE VACANT LAND TO THE BUILDER UNDER THE DEVELOPMENT AGREEMENT. AS PER THE ASSESSEE, THE POSSESSION OF VACANT LAND WAS HAN DED OVER THE DEVELOPER ONLY ON I.T.A. NO. 188/COCH/2009 5 21.4.2004, I.E., UPON RECEIVING THE ASSESSEES PORT ION OF CONSTRUCTED AREA AS PER CLAUSE 5.2 OF THE AGREEMENT. 9. IT IS A WELL SETTLED PROPOSITION OF LAW THAT THE SUBSTANCE SHALL PREVAIL OVER THE FORM. THOUGH IT IS MENTIONED IN THE AGREEMENT THAT THE POSSESSION OF LAND SHALL BE HANDED OVER ONLY AFTER HANDING OVER OF THE ASSESSEE S PORTION OF CONSTRUCTED AREA, YET THE BUILDER, UNDER PRACTICAL CIRCUMSTANCES, CANNOT START CONSTRUCTION UNLESS THE PHYSICAL POSSESSION OF LAND IS HANDED OVER TO HIM. HENCE, F OR ALL PRACTICAL PURPOSES, WE ARE OF THE VIEW THAT THE PHYSICAL POSSESSION WAS HANDED OV ER TO THE BUILDER AFTER ENTERING INTO THE AGREEMENT DATED 14.4.2002. 10. IT IS ALSO THE ALTERNATIVE CONTENTION OF THE ASSESSEE THAT SEC. 53A OF THE TRANSFER OF PROPERTY ACT SHALL NOT APPLY SINCE THE DEVELOPME NT AGREEMENT IS NOT REGISTERED. IT IS POINTED OUT BY THE ASSESSEE THAT THE WORDS THOUGH REQUIRED TO BE REGISTERED HAS NOT BEEN REGISTERED, WHICH WAS EXISTING IN SEC. 53A WA S OMITTED WITH EFFECT FROM 24.9.2001. 11. THE ASSESSEE HAS TAKEN THIS ALTERNATIVE PLEA , SINCE THE AO HAS INVOKED THE PROVISIONS OF SEC. 2(47)(V) OF THE ACT FOR THE PURP OSE OF ASSESSING THE CAPITAL GAINS IN THE YEAR UNDER CONSIDERATION. DURING THE COURSE OF ARGUMENTS, THE LD D.R SUBMITTED THAT THE PROVISIONS OF SEC. 2(47)(VI) SHALL ALSO EQ UALLY APPLY TO THE IMPUGNED TRANSACTION. FOR THE SAKE OF CONVENIENCE, WE EXTRA CT BELOW THE PROVISIONS OF CLAUSE (V) AND (VI) OF SEC. 2(47) OF THE ACT:- 2(47) TRANSFER, IN RELATION TO A CAPITAL ASSET, INCLUDES,- ...... (V) 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 NATURE REFERRED TO IN SEC. 53A OF T HE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882); OR (VI) ANY TRANSACTION (WHETHER BY WAY OF BECOMING A MEMBER OF, OR ACQUIRING SHARES IN, A CO-OPERATIVE SOCIETY, COMPAN Y OR OTHER ASSOCIATION OF I.T.A. NO. 188/COCH/2009 6 PERSONS OR BY WAY OF AGREEMENT OR ANY ARRANGEMENT O R IN ANY OTHER MANNER WHATSOEVER) WHICH HAS THE EFFECT OF TRANSFER RING, OR ENABLING THE ENJOYMENT OF, ANY IMMOVABLE PROPERTY. 12. ON A CAREFUL READING OF THE AGREEMENT DATED 14.4.2002 ENTERED BETWEEN THE ASSESSEE AND THE BUILDER, WE NOTICE THAT THE SAID A GREEMENT IS A DEVELOPMENT AGREEMENT, UNDER WHICH THE BUILDER HAS AGREED FOR T HE DEVELOPMENT OF THE SCHEDULE PROPERTY INTO MULTI STORIED RESIDENTIAL BUILDING BY NAME NIKUNJAM APARTMENTS. 13. THE YEAR OF TAXABILITY OF THE CAPITAL GAIN IN THE CASE OF DEVELOPMENT AGREEMENTS CAME TO BE CONSIDERED BY THE HONBLE BOMBAY HIGH CO URT IN THE CASE OF CHATURBHU DWARKADAS KAPADIA VS. CIT ( 260 ITR 491). IT IS PE RTINENT TO NOTE THAT THE HIGH COURT ALSO NOTED BOTH CLAUSES (V) AND (VI) OF SEC. 2(47) EXTRACTED ABOVE IN ITS DECISION. WE FEEL IT PERTINENT TO EXTRACT BELOW THE RELEVANT OBS ERVATIONS MADE BY THE HONBLE BOMBAY HIGH COURT IN THAT CASE. BEFORE US, IT WAS ARGUED ON BEHALF OF THE ASSESSEE THAT THE DATE ON WHICH POSSESSION IS PARTED WITH BY THE TRANSFEROR IS THE DATE WHICH SHOULD BE TAKEN INTO ACCOUNT FOR DETERMINING THE RELEVANT ACCOUNTING YEA R IN WHICH THE LIABILITY ACCRUES. IT WAS ARGUED ON BEHALF OF THE ASSESSEE TH AT IN THIS CASE, IRREVOCABLE LICENSE WAS GIVEN IN TERMS OF THE CONTRACT ONLY DUR ING THE FINANCIAL YEAR ENDING MARCH 31, 1999, AND, THEREFORE, THERE WAS NO TRANSF ER DURING THE FINANCIAL YEAR ENDING MARCH 31, 1996. ON THE OTHER HAND, IT WAS A RGUED ON BEHALF OF THE REVENUE THAT ONE HAS TO GO BY THE DATE ON WHICH THE DEVELOPER SUBSTANTIALLY PERFORMED THE CONTRACT. IT WAS ARGUED ON BEHALF OF THE DEPARTMENT THAT SINCE SUBSTANTIAL PAYMENTS WERE MADE DURING THE FINANCIAL YEAR ENDING MARCH 31, 1996, AND SINCE MAJORITY OF PERMISSIONS WERE OBTAIN ED DURING THAT YEAR, THE LIABILITY TO PAY CAPITAL GAINS TAX ACCRUED DURING T HE ASSESSMENT YEAR 1996-97. IN THIS CASE, THE AGREEMENT IS A DEVELOPMENT AGREEMENT AND IN OUR VIEW THE TEST TO BE APPLIED TO DECIDE THE YEAR OF CHARGE ABILITY IS THE YEAR IN WHICH THE TRANSACTION WAS ENTERED INTO. WE HAVE TA KEN THIS VIEW FOR THE REASON THAT THE DEVELOPMENT AGREEMENT DOES NOT TRANSFER THE INTEREST IN THE PROPERTY TO THE DEVELOPER IN GENERA L LAW AND, THEREFORE, SECTION 2(47)(V) HAS BEEN ENACTED AND IN SUCH CASES , EVEN ENTERING INTO SUCH A CONTRACT COULD AMOUNT TO TRANSFER FROM THE DATE OF AGREEMENT ITSELF. .....AT THE SAME TIME, IF ONE READS THE CONTRACT AS A WHOLE, IT IS CLEAR THAT A DICHOTOMY IS CONTEMPLATED BETWEEN T HE LIMITED POWER OF ATTORNEY AUTHORISING THE DEVELOPER TO DEAL WITH THE PROPERTY VIDE PARA. 8 AND AN IRREVOCABLE LICENCE TO ENTER UPON THE PROPERTY AFTE R THE DEVELOPER OBTAINS THE REQUISITE APPROVALS OF VARIOUS AUTHORITIES. IN FA CT, THE LIMITED POWER OF ATTORNEY I.T.A. NO. 188/COCH/2009 7 MAY NOT BE ACTUALLY GIVEN, BUT ONCE UNDER CLAUSE 8 OF THE AGREEMENT A LIMITED POWER OF ATTORNEY IS INTENDED TO BE GIVEN TO THE DE VELOPER TO DEAL WITH THE PROPERTY, THEN WE ARE OF THE VIEW THAT THE DATE OF THE CONTRACT, VIZ., AUGUST 18, 1994 WOULD BE RELEVANT DATE TO DECIDE THE DATE OF T RANSFER UNDER SECTION 2(47)(V) AND, IN WHICH EVENT, THE QUESTION OF SUBST ANTIAL PERFORMANCE OF THE CONTRACT THEREAFTER DOES NOT ARISE..... IF THE CONTRACT, READ AS A WHOLE, INDICATES PASSING OF OR TRANSFERRING OF COMPLETE CO NTROL OVER THE PROPERTY IN FAVOUR OF THE DEVELOPER, THEN THE DATE OF THE CONTRACT WOULD BE RELEVANT TO DECIDE THE YEAR OF CHARGEABILI TY. IN THE INSTANT CASE ALSO, THE BUILDER SHALL COMMENC E CONSTRUCTION WITHIN 30 DAYS FROM THE DATE OF ENTERING THE SCHEDULE PROPERTY FOR THE PURPOSE OF CONSTRUCTION (CLAUSE 6.1). FURTHER IT IS THE RESPONSIBILITY OF THE BUILDER TO OBTAIN NECESSARY APPROVALS. IT IS ALSO MENTIONED IN CLAUSE 2 OF THE AGREEMENT THAT THE ASS ESSEE HAS EXECUTED A REGISTERED GENERAL POWER OF ATTORNEY IN FAVOUR OF THE BUILDER ON THE VERY SAME DATE, I.E ., ON 14.4.2002. HENCE, THE IMPUGNED AGREEMENT, BEING A D EVELOPMENT AGREEMENT, A MERE MENTIONING IN ONE OF THE CLAUSES OF THE AGREEMENT T O THE EFFECT THAT THERE IS NO HANDING OVER OF POSSESSION, IN OUR VIEW, SHALL NOT TAKE AWA Y THE ACTUAL FACT THAT THE PHYSICAL POSSESSION WAS HANDED OVER TO THE BUILDER. 14. ACCORDING TO THE ASSESSEE, SEC. 53A OF THE TR ANSFER OF PROPERTY ACT HAS UNDER GONE CHANGES AND ACCORDING TO AMENDED SECTION, THE UNREGISTERED DOCUMENTS SHALL NOT FALL IN THE PURVIEW OF SEC. 53A OF THE TRANSFER OF PROPERTY ACT. IF WE CAREFULLY READ CLAUSE (V) OF SEC.2(47) OF THE ACT, WE CAN NOTICE T HAT THE REFERENCE IS TO THE TRANSACTIONS .... OF THE NATURE REFERRED TO IN SE CTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882., I.E., CLAUSE (V) TALKS ABOUT THE TYPE O R NATURE OF TRANSACTION ONLY AND IT DOES NOT MANDATE INVOKING OF THE PROVISIONS OF SEC. 53A OF THE TRANSFER OF PROPERTY ACT FULLY. THUS, THE STRESS IN CLAUSE (V) IS GIVEN TO (OR) THE INCOME TAX ACT IS CONCERNED WITH THE TYPE OR NATURE OF TRANSACTION REFERRED TO IN SEC. 5 3A OF THE ACT AND HENCE THE AMENDMENT BROUGHT INTO THAT SECTION WITH REGARD TO THE REGISTRATION OF THE DOCUMENT, IN OUR VIEW, SHALL NOT HAVE ANY EFFECT ON CLAUSE (V ) OF SEC. 2(47) OF THE ACT. EVEN OTHERWISE THE CONTRACT ENTERED INTO BY THE ASSESSEE WOULD BE HIT BY CLAUSE (VI) OF SEC. 2(47) OF THE ACT AND AS PER SEC. 292B OF THE ACT, T HE IMPUGNED ASSESSMENT, BEING IN SUBSTANCE AND EFFECT IN CONFORMITY WITH OR ACCORDIN G TO THE INTENT AND PURPOSE OF THE I.T.A. NO. 188/COCH/2009 8 INCOME TAX ACT, THE ASSESSMENT ORDER IS SAVED BY TH E PROVISIONS OF SEC. 292B OF THE ACT. 15. IN VIEW OF THE FOREGOING DISCUSSIONS, WE AR E OF THE VIEW THAT THE LD CIT(A) WAS RIGHT IN LAW IN CONFIRMING THE ACTION OF THE ASSESS ING OFFICER IN ASSESSING THE CAPITAL GAIN IN THE ASSESSMENT YEAR 2003-04, SINCE THE DEVELOPME NT AGREEMENT WAS ENTERED INTO ON 14.4.2002. 16. THE ASSESSEE HAS TAKEN A PLEA THAT HE HAS A LREADY DECLARED CAPITAL GAINS IN THE ASSESSMENT YEARS 2005-06 AND 2006-07 AND HENCE THE SALE CONSIDERATION DECLARED IN THOSE YEARS ARE REQUIRED TO BE EXCLUDED IN THE ASSE SSMENT YEAR 2003-04. IN OUR VIEW, THE SAID PLEA IS AGAINST THE SCHEME OF TAXATION UND ER THE INCOME TAX ACT. IT IS A WELL SETTLED PROPOSITION OF LAW THAT TAX CAN BE LEVIED I N A PARTICULAR ASSESSMENT YEAR ONLY IN RESPECT OF THE INCOME ASSESSABLE IN THAT YEAR. HEN CE, IT IS NEITHER THE PREROGATIVE OF THE ASSESSEE NOR THE PREROGATIVE OF THE ASSESSING O FFICER TO OFFER/ASSESS THE INCOME OF A PARTICULAR YEAR IN ANY OTHER YEAR. WE HAVE ALREADY HELD THAT THE CAPITAL GAIN IS ASSESSABLE IN ASSESSMENT YEAR 2003-04. HENCE, THE RIGHT COURSE FOR THE ASSESSEE WOULD BE TO APPROACH THE TAX AUTHORITIES FOR EXCLUS ION OF THE INCOME, WHICH WAS WRONGLY OFFERED BY HIM IN THE SUBSEQUENT ASSESSMENT YEARS. IN THE INTEREST OF NATURAL JUSTICE, THE TAX AUTHORITIES MAY CONSIDER ANY SUCH REQUEST MADE BY THE ASSESSEE IN A LIBERAL MANNER. 17. THE ASSESSEE HAS TAKEN A GROUND THAT THE ASS ESSING OFFICER HAS FAILED TO GIVE DEDUCTION U/S 54/54F OF THE ACT WHILE COMPUTING THE CAPITAL GAINS. THE ASSESSEE IS URGING THIS PLEA FOR THE FIRST TIME BEFORE US. IN THE INTEREST OF NATURAL JUSTICE, WE SET ASIDE THIS MATTE TO THE FILE OF THE AO WITH THE DIR ECTION TO EXAMINE THE CLAIM OF THE ASSESSEE IN ACCORDANCE WITH THE LAW AFTER AFFORDING NECESSARY OPPORTUNITY OF BEING HEARD. I.T.A. NO. 188/COCH/2009 9 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY ON 28-09-2012 SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 28 TH SEPTEMBER, 2012 GJ COPY TO: 1. SHRI G. SREENIVASAN, REP. BY L/H DR. JYOTHI KAMA LAM, JYOTHY NIVAS, MOONNAMANACKAL, PETTAH, TRIVANDRUM. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL C IRCLE, TRIVANDRUM. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-III, KO CHI. 4. THE COMMISSIONER OF INCOME-TAX, CENTRAL, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) ITAT, COCHIN