MELONGOS INDIA PVT. LTD.,CHENNAI V. ITO, CORPORATE WARD-4(1), CHENNAI

ITA 2281/CHNY/2024

AI Insights

The case involves multiple appeals by Melongos India Private Limited against orders passed by the Commissioner of Income Tax (Appeals) and the Assessing Officer concerning the assessment of long-term capital gains from the sale of immovable property over several financial years. The primary legal issues revolved around the correct year of taxability of capital gains, the applicability of section 50C, and the validity of reassessment under section 147. The Tribunal found that capital gains should be taxed in the respective years of transfer as per section 45 of the Act and upheld the use of the stamp duty value for computing these gains under section 50C. However, it also noted the need for a fresh examination of the valuation and the claims for deductions under sections 54D, 54F, and 54G.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 847411 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Chennai
• Assessment Year: 2013-2014
• Appeal Filed On: 29-08-2024
• Other Referred Cases: Goetze (India) Ltd. vs. CIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C. SIVAKUMAR
• Assessee Lawyers: N. ARJUN RAJ
• Keywords: Set aside; Difference of opinion; Change of opinion; Capital asset; Opportunity of being heard; Revised return; Reasonable cause; Reassessment proceedings; Sale consideration of property below Jantri Value; Fair market value; Cost of acquisition; Capital Gains; Principle of natural justice; Valuation report; Reason to believe; Value adopted by valuation officer; Tangible material
• Section: 143(3); 271(1)(c); 54F; 50C; 115JB

Judgement Text

"आयकर अपीलीय अिधकरण ‘ए’ \u000eा यपीठ, चे\u0013ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI मा ननीय \u0018ीमनु क ुमा र िग\u001bर ,\u000eा ियक सद एवं मा ननीयएस. आर. रघुना था , लेखा सद क े सम% BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER आयकरअपीलसं./ITA Nos.2280, 2281, 2282, 2283 & 2284/Chny/2024 नधा\u000fरणवष\u000f/Assessment Years: 2013-14, 2013-14, 2014-15, 2015-16 & 2015-16 Melongos India Private Limited, 106, Mahaveer Nagar, Thiruninravur, Chennai – 602 024. v. ITO, Corporate Ward -4(1), Chennai. [PAN:AABCM 8934 H] (अपीलाथ\u0014/Appellant) (\u0015\u0016यथ\u0014/Respondent) अपीला थ& की ओर से/ Appellant by : Mr. N. Arjun Raj, Advocate ()थ& की ओर से /Respondent by : Mr. C. Sivakumar, Addl. CIT सुनवाईक\u0019तार\u001bख/Date of Hearing : 06.01.2026 घोषणाक\u0019तार\u001bख /Date of Pronouncement : 25.03.2026 आदेश / O R D E R PER BENCH: These five appeals in ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 for A.Ys. 2013-14, 2013-14, 2014-15, 2015-16 & 2015-16 filed by the assessee are directed against separate orders dated 25.07.2024, 29.07.2024, 25.07.2024, 25.07.2024 & 29.07.2024 respectively passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi. Now we will deal with the captioned cases herein below: Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 2 -: 2. ITA 2280: 2013-14 This appeal is directed against the order passed by the Commissioner of Income Tax (Appeals) [CIT(A)] arising out of the reassessment completed u/s. 143(3) r.w.s. 147 of the Act for the assessment year 2013-14. 2.1 Brief facts of the case are that the assessee is a company engaged in business and had filed its return of income declaring total income of Rs.4,75,993/-. The assessee had transferred an immovable property admeasuring 17,329 sq. ft. through multiple sale deeds executed over different financial years, viz., FY 2012- 13, FY 2013-14 and FY 2014-15. However, the assessee offered the entire long-term capital gains arising from such transfer in the assessment year 2014-15.During the course of scrutiny assessment for AY 2014-15, the Assessing Officer observed that the property was not transferred in a single year but in tranches over multiple years. Accordingly, the AO restricted the capital gains in AY 2014-15 only to the portion transferred during FY 2013-14.Subsequently, the AO reopened the assessment for AY 2013-14 u/s. 147 of the Act and brought to tax the long-term capital gains attributable to the portion of property transferred during FY 2012-13. The reassessment was completed determining long-term capital gains by invoking provisions of section 50C based on stamp duty value/DVO valuation. 3. The AO held that the assessee had executed five sale deeds during FY 2012-13 and, therefore, capital gains pertaining to such transfers were taxable in AY 2013-14 in terms of section 45 of the Act.The AO further held that the sale consideration disclosed by Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 3 -: the assessee was lower than the value adopted by the stamp valuation authority and hence provisions of section 50C were applicable.Based on the DVO’s report, the full value of consideration was recomputed and long-term capital gains of Rs.4,44,24,234/- were brought to tax by the AO.The AO also rejected the assessee’s objections regarding valuation and claim of double taxation. 4. On further appeal, the ld. CIT(A) confirmed the action of the AO both on jurisdiction as well as on merits by holding that the original return was not subjected to scrutiny u/s. 143(3).The AO had gathered information during AY 2014-15 proceedings regarding non-offering of capital gains in AY 2013-14.Therefore, reopening u/s. 147 was valid and in accordance with law. 4.1 On the taxability of Capital Gains, the ld.CIT(A) held that the property was transferred in different financial years through separate sale deeds.As per section 45, capital gains are chargeable to tax in the year in which transfer takes place.Hence, capital gains relating to FY 2012-13 were rightly taxed in AY 2013- 14. Regarding applicability of Section 50C the ld.CIT(A) held that the actual sale consideration was less than the stamp duty value.Accordingly, provisions of section 50C were rightly invoked.The valuation adopted based on DVO’s report was upheld. 4.2 The ld.CIT(A) also held that the contention of the assessee that income was already taxed in AY 2014-15 was not accepted.The ld.CIT(A) held that correct year of taxability must prevail and the income has to be taxed in respective years of transfer. In respect of the deduction u/s. 54G, the ld.CIT(A) held Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 4 -: that the claim of deduction u/s. 54G was rejected as the same was not made in the return of income nor through a revised return.Reliance was placed on the decision of the Hon’ble Supreme Court in the case of Goetze (India) Ltd.Accordingly, the ld.CIT(A) confirmed the addition made by the AO.In view of the above, the ld.CIT(A) upheld the reassessment proceedings as well as the addition of long-term capital gains computed by invoking section 50C of the Act. The claim of deduction u/s. 54G was also rejected. 5. ITA 2282 : 2014-15 This appeal filed by the assessee is directed against the order passed by the Assessing Officer u/s. 143(3) r.w.s. 263 of the Income-tax Act, 1961 dated 31.03.2022 for the assessment year 2014-15. 5.1 Brief Facts of the Case are that the assessee is a company and filed its return of income on 05.01.2015 declaring total income of Rs.8,00,570/-. The case was selected for scrutiny and assessment was completed u/s. 143(3) on 30.06.2017.During the course of original assessment proceedings, the Assessing Officer noticed that the assessee had sold immovable property admeasuring 17,329 sq. ft. and computed long-term capital gains at NIL after claiming deduction u/s. 54D.The AO observed that the property was not sold in a single year but through multiple sale deeds executed across three financial years, i.e., FY 2012-13, FY 2013- 14 and FY 2014-15. Accordingly, the AO restricted the capital gains for AY 2014-15 only to the portion of land measuring 2620 sq. ft. transferred during FY 2013-14 and recomputed the capital gains by invoking section 50C at Rs.1,63,31,907/- and denied Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 5 -: deduction u/s. 54D.Subsequently, the assessments for AY 2013- 14 and AY 2015-16 were reopened and capital gains for respective portions were brought to tax. 5.2 Thereafter, the Principal Commissioner of Income Tax invoked revisionary jurisdiction u/s. 263 vide order dated 22.03.2021 holding that the capital gains arising from sale of land and building were not properly computed, and directed the AO to recompute capital gains by considering applicability of section 50. 5.3 Pursuant to the said directions, the AO passed the impugned order u/s. 143(3) r.w.s. 263 on 31.03.2022 recomputing the long- term capital gains at Rs.8,14,86,964/- by adopting stamp duty value u/s. 50C for the entire property. Aggrieved, the assessee is in appeal before CIT(A). 6. Regarding the impugned order is barred by limitation, without jurisdiction and in violation of principles of natural justice, the ld.CIT(A) held that the order u/s. 263 was passed on 22.03.2021 and as per statutory provisions, the consequential order ought to have been passed within 12 months from the end of the financial year in which such order was passed. The impugned order having been passed on 31.03.2022 is well within the prescribed time limit. 6.1 With respect to the assessee’s contention that the addition results in double taxation as capital gains were already offered in different assessment years. The ld.CIT(A) held that the assessee itself had offered the entire capital gains in AY 2014-15 in the Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 6 -: return of income. The principle of taxation u/s. 45 mandates that capital gains shall be taxed in the year in which transfer takes place.Therefore, merely because the assessee has incorrectly offered income in a particular year, it cannot preclude the Revenue from taxing the income in the correct assessment year.However, we direct that if any part of the income is subjected to tax in more than one assessment year, necessary relief shall be granted to avoid double taxation. 6.2 The ld.CIT(A) further held thatit is an admitted fact that the assessee transferred property admeasuring 17,329 sq. ft. through eight sale deeds executed over three financial years. The details clearly demonstrate that transfers were effected in FY 2012-13, FY 2013-14 and FY 2014-15.As per section 45 of the Act, capital gains arise in the year in which transfer takes place. Therefore, the capital gains relating to different sale deeds are required to be assessed in the respective years of transfer and not in a single year. He further, observed that the sale consideration disclosed by the assessee is significantly lower than the value adopted by the stamp valuation authorities. Therefore, provisions of section 50C are clearly attracted. The AO has rightly adopted the stamp duty value/DVO value as the full value of consideration. He also noted that the assessee adopted total sale consideration at Rs.7.40 crore, whereas actual consideration as per sale deeds is Rs.9.15 crore.No satisfactory explanation was furnished for such variation.The indexed cost of acquisition claimed by the assessee was not substantiated with evidence.The claim relating to existence and transfer of building is not supported by sale deeds, which indicate transfer of undivided share of land only. In view of Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 7 -: the above, hehold that the capital gains for AY 2014-15 should be restricted only to the portion of land measuring 2620 sq. ft. transferred on 07.03.2014.Hence he directed the AO to compute capital gains only in respect of 2620 sq. ft. transferred during FY 2013-14 and to adopt full value of consideration as per section 50C read with DVO report and allow indexed cost of acquisition on proportionate basis.The capital gains relating to transfers in FY 2012-13 and FY 2014-15 shall be assessed in AY 2013-14 and AY 2015-16 respectively. 6.3 The assessee raised a fresh claim of deduction u/s. 54F during appellate proceedings. The ld.CIT(A) held that it is settled law as per the decision of the Hon’ble Supreme Court in the case of Goetze (India) Ltd. that a new claim cannot be entertained otherwise than by filing a revised return.Since the assessee has not filed a revised return claiming deduction u/s. 54F, the same is not admissible. In the result, he partly allowedthe appeal of the assessee is for statistical purposes in terms indicated above. 7. ITA 2283: 2015-16 This appeal filed by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals) confirming the reassessment made u/s. 143(3) r.w.s. 147 of the Income-tax Act, 1961 for the assessment year 2015-16. 7.1 Brief Facts of the case are that the assessee, a company, filed its return of income on 14.11.2015 declaring total income of Rs.6,36,586/-.During the course of scrutiny assessment for AY 2014-15, the Assessing Officer noticed that the assessee had sold Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 8 -: immovable property admeasuring 17,329 sq. ft. and offered the capital gains to tax in that year. However, on verification of sale deeds, it was observed that the property was not transferred in a single year but in tranches across FY 2012-13, FY 2013-14 and FY 2014-15.Accordingly, the AO restricted the capital gains in AY 2014-15 only to the portion transferred during FY 2013-14. Thereafter, the AO reopened the assessment for AY 2015-16 and brought to tax the long-term capital gains attributable to the portion of property transferred during FY 2014-15 vide order passed u/s. 143(3) r.w.s. 147 dated 26.12.2018.The assessee challenged the reassessment before the CIT(A), who initially passed an ex-parte order confirming the addition. On further appeal, the Tribunal set aside the matter to the file of the ld. CIT(A) for fresh adjudication. Pursuant thereto, the CIT(A) again confirmed the addition by holding that the original return filed by the assessee was not subjected to scrutiny u/s. 143(3). The AO, based on information gathered during the assessment proceedings for AY 2014-15, noticed that capital gains relating to transfer of property in FY 2014-15 had not been offered to tax in AY 2015- 16.Thus, there existed tangible material leading to formation of belief that income had escaped assessment. Therefore, the reopening u/s. 147 is valid and in accordance with law. 7.2 Regarding Year of Taxability he held that it is an undisputed fact that the assessee transferred the property through eight sale deeds executed over three financial years.As per section 45 of the Act, capital gains are chargeable to tax in the year in which the transfer takes place. Therefore, the gains arising from transfers executed during FY 2014-15 are liable to be taxed in AY 2015- Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 9 -: 16.The contention of the assessee that entire capital gains were offered in AY 2014-15 cannot override the statutory provisions. With respect to the applicability of Section 50C, he observed that the sale consideration declared by the assessee is lower than the value adopted by the stamp valuation authorities.Therefore, provisions of section 50C are clearly attracted. The AO has rightly adopted the stamp duty value, supported by DVO’s report, as the full value of consideration. 7.3 Regarding assessee’s contention that taxing the same income in multiple years would result in double taxation he held that income has to be assessed in the correct year of taxability. However, if the same income has been taxed in more than one assessment year, the assessee is entitled to appropriate relief in accordance with law. He conclusively held that in the present case, the AO has computed long-term capital gains in respect of 2900 sq. ft. of land transferred through two sale deeds during FY 2014- 15.Considering the facts and the provisions of section 50C, hefind no infirmity in the action of the AO in computing capital gains by adopting stamp duty value and allowing proportionate indexed cost of acquisition. 7.4 Regarding the assessee raised a claim for deduction u/s. 54G during appellate proceedings he held that it is settled law, as held by the Hon’ble Supreme Court in the case of Goetze (India) Ltd., that a fresh claim cannot be entertained without filing a revised return.Since the assessee has not filed a revised return claiming such deduction, the same cannot be allowed. Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 10 -: 8. ITA 2281: 2013-14 This appeal filed by the assessee is directed against the order passed by the Assessing Officer levying penalty u/s. 271(1)(c) of the Income-tax Act, 1961 for the assessment year 2013-14. 8.1The assessee, a company, filed its return of income on 13.10.2013 declaring total income of Rs.4,75,993/-.The assessee owned an immovable property measuring 17,329 sq. ft., which was sold in smaller parcels to different buyers over three financial years, viz., FY 2012-13, FY 2013-14 and FY 2014-15. However, the assessee offered the entire capital gains arising from such transfer in a single year, i.e., AY 2014-15.Since, as per section 45 of the Act, capital gains are chargeable to tax in the year in which transfer takes place, the Assessing Officer reopened the assessment for AY 2013-14 and brought to tax long-term capital gains of Rs.4,44,24,234/- attributable to 12,200 sq. ft. of land transferred during FY 2012-13 vide order passed u/s. 143(3) r.w.s. 147 dated 26.12.2018.The addition was confirmed by the CIT(A). Consequent thereto, the AO levied penalty of Rs.96,08,960/- u/s. 271(1)(c) for concealment of income. 8.2 Aggrieved, the assessee filed appeal before the ld.CIT(A) who partly allowed the appeal by holding as under: We find that the provisions of section 45 clearly mandate that capital gains shall be taxed in the year in which transfer takes place. In the present case, there is no dispute that 12,200 sq. ft. of land was transferred during FY 2012-13 relevant to AY 2013- 14.The assessee, however, offered the entire capital gains in AY Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 11 -: 2014-15, which is not in accordance with law. The AO has rightly brought the income to tax in the correct year by invoking section 147.Merely because income has been offered in an incorrect year does not absolve the assessee from penalty where income chargeable to tax has not been offered in the correct assessment year.Therefore, we do not find merit in the contention of the assessee. With regard to issue relating to applicability of penalty on additions u/s. 50C, he appreciated the contention of the assessee that no penalty is leviable on additions arising due to deeming provisions u/s. 50C. He held that in the present case, part of the addition to capital gains arises due to substitution of sale consideration by stamp duty value u/s. 50C, which is a deeming fiction.It is well settled that where addition is made purely on account of deeming provisions without any independent evidence of concealment, penalty u/s. 271(1)(c) is not fully justified.Accordingly, he directed the AO to restrict the levy of penalty only to the extent of capital gains computed based on actual sale consideration as per sale deeds. No penalty shall be levied on the differential addition arising solely on account of section 50C. 9. ITA 2284: 2015-16 The present appeal is similar to the appeal being ITA No.2281 for AY 2013-14 and orders of the authorities below are the same. 10. Before this Tribunal the ld.AR for the assessee contended that it had sold a composite immovable property comprising land and building situated at Millers Road, Kilpauk, Chennai, measuring 7 grounds and 549 sq. ft., which was acquired during FY 2004-05 Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 12 -: for a total consideration of Rs.3,00,00,000/-. The said property was subsequently sold through eight separate sale deeds executed between FY 2012-13 and FY 2014-15 for an aggregate consideration of Rs.7,40,95,500/-.It was submitted that the entire capital gains arising from the said transactions were duly offered to tax in the return of income filed for AY 2014-15, which was subjected to scrutiny assessment under section 143(3). During such assessment, the Assessing Officer examined all the sale deeds and made limited additions under section 50C and denied deduction under section 54D.Subsequently, the Assessing Officer initiated reassessment proceedings for AYs 2013-14 and 2015-16 within three days from completion of the scrutiny assessment for AY 2014-15, merely based on the same material already available on record. It was contended that such reopening amounts to a mere change of opinion and lacks any fresh tangible material, thereby rendering the assumption of jurisdiction under section 147 invalid.The assessee further submitted that the returns for AYs 2013-14 and 2015-16 were processed under section 143(1), and no notice under section 143(2) was issued. Therefore, the reopening based on already examined material, particularly immediately after completion of scrutiny for AY 2014-15, is arbitrary and unsustainable in law.It was also contended that there is no escapement of income, as the entire capital gains had already been disclosed and offered to tax in AY 2014-15. The subsequent reassessment proceedings result in double taxation of the same income across multiple assessment years.The assessee further relied on the fact that in the consequential order passed under section 143(3) r.w.s. 263 for AY 2014-15, the Assessing Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 13 -: Officer himself accepted that the correct course would be to assess the entire capital gains in AY 2014-15 in consonance with the books of account, thereby contradicting the stand taken in reassessment proceedings for AYs 2013-14 and 2015-16.It was thus argued that such inconsistent and contradictory stand by the Department vitiates the “reason to believe” required under section 147 and demonstrates lack of application of mind. 11. Further, for AY 2013-14, the reopening being beyond four years from the end of the relevant assessment year is invalid in the absence of any allegation or finding regarding failure on the part of the assessee to disclose fully and truly all material facts, as required under the proviso to section 147. 11.1 On merits, the assessee submitted that the adoption of stamp duty value under section 50C and recomputation of capital gains is erroneous and requires reconsideration, particularly in light of the composite nature of the property and actual consideration received.Accordingly, the assessee prayed for quashing of reassessment proceedings for AYs 2013-14 and 2015- 16 as being without jurisdiction and deletion of consequential additions and penalty orders. In the alternative he prayed for, remand of the issue for AY 2014-15 for proper recomputation of capital gains after granting adequate opportunity and deletion of penalties levied under section 271(1)(c). 12. Per contra, the ld.DR fully supported the orders of the ld.CIT(A) and read out the findings of the authorities below. Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 14 -: 13. We have heard the rival submissions and perused the record and paper book filed.The ld. AR for the assessee submitted that the assessee company had sold a composite immovable property comprising land and building situated at Millers Road, Kilpauk, Chennai, admeasuring 7 grounds and 549 sq. ft., which was originally acquired during the financial year 2004-05 for a consideration of Rs. 3,00,00,000/-. The said property was subsequently transferred through eight separate sale deeds executed over a period spanning FY 2012-13 to FY 2014-15 for an aggregate sale consideration of Rs. 7,40,95,500/-.It was submitted that the assessee, based on its bona fide understanding of the transaction, had offered the entire capital gains arising from all the eight sale deeds to tax in the return of income filed for the assessment year 2014-15. The said return was selected for scrutiny and assessment was completed under section 143(3), wherein the Assessing Officer examined all the sale deeds and made only limited additions under section 50C and disallowed deduction claimed under section 54D.The ld. AR contended that immediately after completion of the scrutiny assessment for AY 2014-15, the Assessing Officer initiated reassessment proceedings under section 147 for AYs 2013-14 and 2015-16 within a span of three days, solely based on the same material already available on record. It was argued that such reopening amounts to a mere change of opinion, without any fresh tangible material, and therefore the assumption of jurisdiction under section 147 is bad in law.It was further submitted that the returns for AYs 2013-14 and 2015-16 were only processed under section 143(1) and no scrutiny proceedings were initiated. Hence, reopening based on Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 15 -: already examined material, particularly in close proximity to completion of scrutiny for AY 2014-15, is arbitrary and unsustainable. It was also contended that there was no escapement of income, as the entire capital gains had already been disclosed and offered to tax in AY 2014-15, and the reassessment proceedings have resulted in double taxation of the same income.The ld. AR further drew attention to the consequential order passed under section 143(3) read with section 263 for AY 2014-15, wherein the Assessing Officer himself observed that the correct course would be to assess the entire capital gains in AY 2014-15 in consonance with the books of account. It was argued that this contradictory stand taken by the Department clearly demonstrates lack of application of mind and vitiates the “reason to believe” required for reopening under section 147.It was also contended that in so far as AY 2013-14 is concerned, the reopening was beyond four years from the end of the relevant assessment year and in the absence of any allegation regarding failure on the part of the assessee to disclose fully and truly all material facts, the reassessment is liable to be quashed in view of the proviso to section 147. 14. On the issue of year of taxability, the ld. AR submitted that the property was transferred through eight sale deeds executed under two Power of Attorney arrangements. Though the documents bear different execution dates, the assessee, based on its bona fide understanding, considered that the transfer was effectively completed only during the previous year relevant to AY 2014-15.It was submitted that out of the eight documents, six were effectively completed and validated during AY 2014-15, as Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 16 -: the stamp duty authorities regularised the earlier presented documents during that year. In respect of the remaining two documents, though executed in FY 2014-15, the same were governed by the second Power of Attorney dated 07.02.2014, thereby linking the transactions to AY 2014-15.It was thus contended that the entire transaction constituted a composite transfer falling within the ambit of section 45 read with section 2(47) in AY 2014-15. The ld. AR emphasized that this understanding was subsequently accepted by the Assessing Officer himself in the order passed under section 143(3) read with section 263, wherein it was held that the capital gains ought to be assessed in AY 2014-15.In view of the above, it was argued that the reassessment proceedings for AYs 2013-14 and 2015-16 are untenable, being contradictory in nature, and liable to be quashed. The ld. AR submitted that the provisions of section 50C were invoked mechanically without appreciating the factual realities surrounding the transaction. It was contended that the sale was a distress sale due to downturn in the assessee’s primary business, and the actual consideration reflected in the sale deeds represents the fair market value negotiated between the parties. It was further submitted that in certain cases, even the stated consideration was not fully realised, as evidenced from the recitals in the sale deeds. It was argued that stamp duty value cannot be automatically equated with fair market value. The ld. AR also submitted that the valuation report obtained from the Departmental Valuation Officer failed to adequately consider relevant depressing factors such as locational disadvantages and Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 17 -: joint ownership issues, and that the same was not properly confronted to the assessee. Accordingly, it was prayed that the issue of valuation under section 50C be set aside and remanded to the Assessing Officer for fresh adjudication. 15. With regard to computation of capital gains, it was submitted that the indexed cost of acquisition was incorrectly computed due to rejection of the building component and splitting of transactions across different assessment years, leading to distortion in application of the Cost Inflation Index. It was contended that if the transaction is considered as a composite transfer in AY 2014-15, the cost of acquisition requires to be recomputed on a consistent basis. Accordingly, the issue was prayed to be restored to the file of the Assessing Officer. The ld. AR submitted that though the assessee had originally claimed deduction under section 54D, a revised claim under section 54G was made before the appellate authority. The rejection of such claim solely on the ground of non-filing of revised return was challenged. It was contended that appellate authorities are empowered to entertain new claims and adjudicate the same on merits. Accordingly, it was prayed that the issue be remanded to the Assessing Officer for fresh consideration. It was submitted that the computation of book profits under section 115JB is consequential to determination of capital gains. Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 18 -: Therefore, it was prayed that the issue be remanded for fresh adjudication in line with recomputation of capital gains. 16. On the issue of penalty, the ld. AR submitted that the penalty levied under section 271(1)(c) for AYs 2013-14 and 2015-16 is unsustainable. It was contended that the assessee had adopted a bona fide view that the transfer occurred in AY 2014-15 and had duly disclosed the entire capital gains in that year.It was further submitted that the issue relates merely to the year of taxability and does not involve any concealment of income or furnishing of inaccurate particulars. The ld. AR emphasized that even the Assessing Officer, in the order passed under section 143(3) read with section 263, accepted AY 2014-15 as the correct year of taxability, thereby supporting the assessee’s stand.Accordingly, it was argued that the case falls within the ambit of bona fide belief and reasonable cause as contemplated under section 273B, and hence penalty is liable to be deleted. OUR ADJUDICATION 17.ITA No. 2280, 2283/Chny/2024 – A.Y. 2013-14& A.Y. 2015-16 The first issue that arises for consideration is whether the reassessment proceedings initiated under section 147 of the Income-tax Act, 1961 are valid in law. The facts in brief are that the return of income filed by the assessee was processed under section 143(1) and no scrutiny assessment was carried out. Subsequently, based on information gathered during the scrutiny assessment for A.Y. 2014-15, the Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 19 -: Assessing Officer reopened the assessment for the year under consideration. Therefore, in our considered opinion, AO rightly invoked the assumption of jurisdiction under section 147 of the Act. Accordingly, the reassessment proceedings for A.Y. 2013-14& 2015-16 are valid. Further, the core issue relates to determination of the correct year of taxability of capital gains.The assessee contended that the entire transaction constitutes a composite transfer taxable in A.Y. 2014-15. However, the facts on record clearly indicate that the property was transferred through multiple registered sale deeds executed in different financial years.As per section 45 read with section 2(47), capital gains arise in the year in which transfer takes place.Each registered sale deed constitutes an independent transfer of a capital asset.Therefore, the contention of the assessee that the entire transaction should be taxed in a single year cannot be accepted. Hence, we hold that capital gains are chargeable to tax in the respective assessment years in which the transfers took place. Regarding applicability of Section 50C /Adoption of stamp duty value under section 50C, the Assessing Officer has invoked section 50C and adopted the value based on the report of the Departmental Valuation Officer.The assessee has raised objections regarding correctness of valuation and lack of proper opportunity.Considering the submissions and facts on record, we are of the view that the issue requires fresh examination.Accordingly, the issue relating to computation of capital gains and applicability of section 50C is set aside to the file Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 20 -: of the Assessing Officer.The Assessing Officer is directed to re- adjudicate the issue after affording reasonable opportunity of being heard to the assessee. 18. ITA No. 2282/Chny/2024 – A.Y. 2014-15 (Order u/s.263) The Principal Commissioner of Income Tax invoked jurisdiction under section 263 directing recomputation of capital gains.The CIT(A) has restricted the computation only to the portion of property transferred during the relevant year.This approach is in consonance with the provisions of section 45.We find no infirmity in the order of the ld.CIT(A) on this issue. However, since the computation of capital gains has been restored in earlier paragraphs, this issue is also restored to the file of the Assessing Officer for limited purpose of recomputation. Deduction u/s.54D / 54F / 54G The assessee raised claims of deduction which were rejected on the ground that no revised return was filed, relying on the decision of the Hon’ble Supreme Court in Goetze (India) Ltd. vs. CIT (284 ITR 323). It is well settled that the restriction laid down in the above decision applies only to the Assessing Officer and not to appellate authorities.Accordingly, the issue is restored to the file of the Assessing Officer to examine the claim of deduction on merits. The assessee has contended that the same income has been subjected to tax in multiple years.We find merit in the contention Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 21 -: that income cannot be taxed twice.The Assessing Officer is directed to grant appropriate relief to avoid double taxation. 19. ITA Nos. 2281 & 2284/Chny/2024 – Penalty u/s.271(1)(c) The penalty has been levied for concealment of income.The facts clearly show that the assessee has disclosed the entire transaction, but offered income in a different assessment year.The issue is debatable and relates to interpretation of law.Further, part of the addition arises on account of deeming provisions u/s.50C of the Act.In our considered opinion, this is not a fit case for levy of penalty.Accordingly, the penalty levied under section 271(1)(c) for both the years are deleted. 20. In the result, all the captioned five appeals are disposed of as under: ITA Nos. AYs Result 2280/Chny/2024 2013-14 Partly allowed for statistical purposes 2282/Chny/2024 2014-15 Partly allowed for statistical purposes 2283/Chny/2024 2015-16 Partly allowed for statistical purposes 2281/Chny/2024 2013-14 Allowed 2284/Chny/2024 2015-16 Allowed Order pronounced in the open court on 25th day of March, 2026 at Chennai. Sd/- (एस. आर. रघुनाथा) (S.R. Raghunatha) लेखा सद\bय /Accountant Member Sd/- (मनु क ुमार िग\u001bर) (Manu Kumar Giri) \u000eाियक सद / Judicial Member Printed from counselvise.com ITA Nos. 2280, 2281, 2282, 2283 & 2284/Chny/2024 :- 22 -: चे$नई/Chennai, %दनांक/Dated: 25th March, 2026. SNDP Sr. SP आदेशक\u0019\u0015 त&ल'पअ(े'षत/Copy to: 1. अपीलाथ\u0007/Appellant 2. \b थ\u0007/Respondent 3. आयकरआयु\u000f/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय\bितिनिध/DR 5. गाड\u0018फाईल/GF Printed from counselvise.com "