Assistant Commissioner Of Income Tax, Circle- 4(3)(1), Bangalore V. G Jayarama Reddy (HUF), Bangalore

ITA 275/BANG/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2335 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 24-11-2020
• Assessment Year: 2015-2016
• Appeal Filed On: 28-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: V. SRINIVASAN
• Keywords: Capital Gains
• Section: 147; 148; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI CHANDRA P OOJA RI , ACCOUNTANT MEMBER ITA NO. 275/ BANG/2020 ASSESSMENT YEAR : 2015 - 16 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 4(3)(1), BENGALURU. VS. G. JAYARAMA REDDY (HUF), 9, PARK VISTA COMPOUND, HARALUR ROAD, AMBALIPURA, OFF SARJAPURA ROAD, BANGALORE 560 102. PAN: AADHG 9259C APPELLANT RESPONDENT APPELLANT BY : SHRI MUZAFFAR HUSSAIN, CIT(DR)(ITAT), BENGALURU. RESPONDENT BY : SHRI V . SRINIVASAN, ADVOCATE D ATE OF HEARING : 24. 11. 2020 DATE OF PRONOUNCEMENT : 24 . 11 .2020 O R D E R PER N.V. VASUDEVAN, VICE PRESIDENT THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER DATED 25.10.2019 OF CIT(APPEALS)-4, BENGALURU RELATING TO ASSESSMENT YEAR 2015-16. 2. THE ISSUE SOUGHT TO BE RAISED IN THIS APPEAL IS , WHETHER THE CIT(APPEALS) WAS JUSTIFIED IN DELETING THE ADDITION ON ACCOUNT OF CAPITAL GAINS TO THE EXTENT OF RS.6,40,89,016 MADE IN THE H ANDS OF ASSESSEE ON PROTECTIVE BASIS FOR THE AY 2015-16, THE SUBSTANTIV E ADDITION HAVING BEEN MADE IN THE YEAR 2011-12. THE GRIEVANCE OF THE REV ENUE AS PROJECTED IN GROUNDS OF APPEAL IS THAT THE ASSESSEE HAS NOT ACCE PTED THE ASSESSMENT OF ITA NO. 275/BANG/2020 PAGE 2 OF 3 CAPITAL GAINS IN AY 2011-12 AND THEREFORE THE ASSES SMENT OF CAPITAL GAINS MADE ON A SUBSTANTIVE BASIS IN AY 2011-12 IS NOT CO NCLUSIVE. 3. THE BRIEF FACTS ARE THAT THE ASSESSEE ALONG WITH HIS BROTHER, SHRI G. DAYANANDA REDDY ENTERED INTO A JOINT DEVELOPMENT AG REEMENT (JDA) ON 20.10.2010 WITH SJR ENTERPRISES, BANGALORE IN RESPE CT OF LANDS SITUATED IN KAIKONRAHALLI VILLAGE, VARTHUR HOBLI, BANGALORE EAS T TALUK. THE ASSESSEE FILED RETURN OF INCOME FOR AY 2015-16 ON 8.10.2016 DECLARING LONG TERM CAPITAL GAIN OF RS.6,40,89,016 UNDER THE JDA. IT W AS THE PLEA OF ASSESSEE THAT CAPITAL GAINS ACCRUES OR ARISES ONLY ON COMPLE TION OF THE DEVELOPMENT BY THE DEVELOPER UNDER THE JDA AND WHEN THE ASSESSE E RECEIVES ITS SHARE OF BUILT-UP AREA. 4. THE AO ISSUED A NOTICE U/S. 148 DATED 9.2.2015 F OR AY 2011-12 TAKING A VIEW THAT TRANSFER OF THE PROPERTY UNDER T HE JDA TOOK PLACE ON THE DATE OF AGREEMENT DATED 20.10.2010 AND THEREFORE CA PITAL GAIN IS TO BE ASSESSED IN AY 2011-12. ACCORDINGLY, THE AO ASSESS ED THE CAPITAL GAIN ON THE JDA FOR AY 2011-12 BY AN ORDER U/S. 143(3) R.W. S. 147 OF THE ACT DATED 29.3.2016. AS FAR AS AY 2015-16 IS CONCERNED, THE AO MADE A PROTECTIVE ASSESSMENT OF THE CAPITAL GAIN BECAUSE SUBSTANTIVE ADDITION WAS MADE IN THE AY 2011-12. 5. THE ASSESSEE FILED APPEAL AGAINST THE ORDER OF A SSESSMENT DATED 29.3.2016 FOR AY 2011-12 AND ALSO AGAINST THE ORDER OF ASSESSMENT FOR AY 2015-16 DATED 28.12.2017 MAKING A PROTECTIVE ASSESS MENT. THE CIT(APPEALS) CONFIRMED THE SUBSTANTIVE ASSESSMENT I N AY 2011-12 AND DELETED THE PROTECTIVE ASSESSMENT IN AY 2015-16. 6. THE ASSESSEE FILED APPEAL AGAINST THE ORDER OF C IT(APPEALS) FOR AY 2011-12 BEFORE THE TRIBUNAL IN ITA NO.2540/BANG/201 9. THE ASSESSEE, HOWEVER, OPTED FOR SETTLEMENT OF THE DISPUTE UNDER THE DIRECT TAXES - VIVAD ITA NO. 275/BANG/2020 PAGE 3 OF 3 SE VISHWAS SCHEME ACT, 2020 [VSVS] AND ACCORDINGLY WITHDREW THE APPEAL FILED BEFORE THE TRIBUNAL. THUS, THE SUBSTA NTIVE ASSESSMENT OF CAPITAL GAIN IN AY 2011-12 HAS BECOME FINAL. 7. SINCE THE CAPITAL GAIN HAS BEEN ASSESSED SUBSTAN TIVELY IN THE AY 2011-12, THE SAME CAPITAL GAIN CANNOT BE PROTECTIVE LY ASSESSED IN AY 2015-16. THEREFORE, THE ORDER OF CIT(APPEALS) DELE TING THE PROTECTIVE ASSESSMENT OF CAPITAL GAIN IN AY 2015-16 IS IN ORDE R. THE GRIEVANCE OF THE REVENUE AS PROJECTED IN GROUND NO.1 OF THE GROUNDS OF APPEAL TO THE EFFECT THAT SUBSTANTIVE ASSESSMENT FOR AY 2011-12 HAS NOT ATTAINED FINALITY IS NO LONGER VALID IN VIEW OF THE SUBSTANTIVE ASSESSMENT OF THE CAPITAL GAIN IN AY 2011-12 HAVING BECOME FINAL. IN THESE CIRCUMSTANC ES, WE ARE OF THE VIEW THAT THERE IS NO MERIT IN THIS APPEAL BY THE REVENU E. ACCORDINGLY, THE APPEAL BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 24 TH DAY OF NOVEMBER, 2020. SD/- SD/- ( CH ANDRA POOJARI ) ( N V VASUDEVAN ) ACCOUNTANT MEMBER VICE PRESIDENT BANGALORE, DATED, THE 24 TH NOVEMBER, 2020. / DESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.