PRAMOD REDDY TEKULA,HYDERABAD V. ACIT,CENTRAL CIRCLE-1(1), HYDERABAD

MA 18/HYD/2025

AI Insights

The case revolves around a Miscellaneous Application filed by Shri Pramod Reddy Tekula, the assessee, against an order of the Income Tax Appellate Tribunal (ITAT) dated 22.10.2024. The original dispute concerned the assessment year 2016-2017, following a search and seizure operation under section 132 of the Income Tax Act, 1961, which led to the discovery of a development agreement. The assessee contested the assessment of short-term capital gains, arguing that the transfer of property under the development agreement did not occur until municipal permissions were obtained, which was after the relevant assessment year. The Tribunal's earlier decision, which the assessee sought to rectify, had upheld the assessment officer's view that the transfer was effective from the date of the agreement. The Tribunal dismissed the M.A., stating that the assessee was essentially seeking a review of the decision, which is not allowed under the Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126771 (ITAT-HYDERABAD)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-04-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2016-2017
• Other Referred Cases: M/s Sheshasayee Steels Pvt Ltd Vs ACIT 421 ITR 421 (SC), Potla Nageswara Rao vs DCIT [2014] 8-TMI-636- AP-HC, CIT vs Balbir Singh Maini [2018] 12 SCC 354 (SC), ACIT vs Saurashtra Kutch Stock Exchange Ltd [2008] 305 ITR 227 (SC), CIT vs Reliance Telecom Ltd [2021] 133 taxmann.com 41 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SRINATH SADANALA
• Assessee Lawyers: MOHD. AFZAL
• Keywords: Capital asset; Capital Gains; Search and seizure
• Section: 254(2); 132; 153C; 139(4)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “A” BENCH : HYDERABAD BEFORE SHRI MANJUNATHA G, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER M.A.No.18/Hyd./2025 Arising out of ITA.No.611/Hyd/2022 - Assessment Year 2016-2017 Shri Pramod Reddy Tekula, Hyderabad. PAN AKDPT7293H vs. The ACIT, Central Circle-1(1), Hyderabad. (Applicant) (Respondent) For Assessee : Shri Mohd. Afzal, Advocate For Revenue : Shri Srinath Sadanala, Sr. AR Date of Hearing : 25.04.2025 Date of Pronouncement : 25.04.2025 ORDER PER MANJUNATHA G, A.M. : The above Miscellaneous application has been moved by the assessee requesting to rectify the mistakes crept in the common order of the Tribunal dated 22.10.2024 in ITA.No.611/Hyd./2022 by exercising it’s jurisdiction u/sec.254(2) of the Income Tax Act, 1961. 2 MA.No.18/Hyd./2025 2. Shri Mohd. Afzal, Advocate-Learned Counsel for the Assessee has narrated the facts of the case and mistakes stated by the Assessee on record from the common order of the Tribunal dated 22.10.2024 in ITA.No.611/Hyd./ 2022 for the assessment year 2016-2017 and pleaded that the mistakes pointed-out by him in the M.A. filed by the assessee may please be rectified in the interest of justice. The relevant contents of the M.A. filed by the Assessee are reproduced as under : “1. The assessee is an individual filed his return of income u/s 139(4) of the IT Act on 03.12.2016, admitting an income of Rs.5,46,030/-. A search and seizure operation u/s 132 was taken place on 26.04.2018 in the case of Allam Raja Reddy of M/s Gandhari Constructions Group. During the course of search a copy of Development Agreement cum GPA dt: 27.06.2015 entered into by the assessee and four others was found. Subsequently, notice u/s 153C was issued to the assessee on 09.02.2021 and the assessee filed return of income in response to notice u/s 153C, admitting the same income as admitted in the original return i.e. Rs.5,46,030/-. 2. Subsequently, the case was selected for scrutiny and during the course of assessment proceedings, the assessee submitted that a development agreement cum GPA was executed on 27.06.2015 and registered vide document No.8396/2015, no consideration was received by the assessee on account of execution of Development Agreement. The assessee also stated that the developer has not yet obtained the Municipal permission for construction of the proposed building. The assessee further stated that none of the conditions mentioned in the development agreement are fulfilled by the developer. It is also stated that the possession is given only for the limited purpose of development/ construction of land and it is not an outright possession but it is licence to construct the proposed project. The assessee also stated that the builder has not obtained permission from Municipal Authorities for the purpose of development of the project. During the course of assessment proceedings the assessee brought to the notice of AO, the rationale of the Supreme Court decision in the case 3 MA.No.18/Hyd./2025 of M/s Sheshasayee Steels Pvt Ltd Vs ACIT 421 ITR 421 (SC). However, the learned Assessing Officer determined the short term capital gains at Rs.32,14,976/- assuming that the transfer of the property has taken place the moment assessee entered into an development agreement. The learned CIT confirmed the order of the Assessing Officer, therefore, the assessee filed an appeal before the Hon'ble ITAT. Before the Hon'ble ITAT the assessee filed paper book providing the copy of development agreement and case laws including that of the Supreme Court decision in the case of M/s Sheshasayee Steels Pvt Ltd Vs ACIT 421 ITR 421 (SC). The assessee also provided the letter of the HMDA, according to which the technical approval of the project vide letter dt: 05.01.2021 was accorded and the assessee was directed to approach the Commissioner Municipal Bandlaguda, Municipal Corporation R.R.District for release of plans. After this approval only the property was handed over to the developer, even though the development agreement was entered on 27.06.2015. 3. The Hon'ble ITAT 'A' Bench, in their order in ITA No.611/Hyd/2022, dt: 22.10.2024, heard the case. The assessees AR Mohd Afzal brought to the notice of the Bench the decision of the Hon'ble Supreme Court in the case of Seshashayce Steels (P) Ltd Vs ACIT 421 ITR 0046 for consideration, wherein, the transfer of property u/s 2(47) of the IT Act considering the provisions of section 53A of the TP Act was explained. The Hon'ble Bench reproduced a part of the order of the Supreme Court in their order in the case of assessee. However, while deciding the issue the facts of the Hon'ble Supreme Court are not distinguished with that of the facts of the assessee. The Hon'ble Bench has not stated that the facts and circumstances of the case, not to consider the rationale of the Supreme Court Judgment. Non consideration of the rationale of the Supreme Court decision is a mistake apparent from record, therefore, this petition for rectification u/s 254(2) of the IT Act for recalling the order of the Hon'ble ITAT in ITA No.611/ Hyd/2022, dt: 01.11.2024, for appropriate action. 4. The Hon'ble Supreme Court in the case of ACIT Vs Saurashtra Kutch Stock Excharige Ltd 2008 305 ITR 227, held that non consideration of a decision of Jurisdictional High Court or Supreme Court can be said to be a mistake apparent from record, which can be rectified u/s 254(2) of the IT Act. Therefore, the Hon'ble Bench is requested to apply the rationale of the Hon'ble Supreme Court in the case of assessee, in respect of taxation of capital gains in the financial year in which the Development Agreement is entered and the Developer has not adhered to the any of the clauses of the Development agreement. Submitted for the kind consideration of the Hon'ble Bench.” 4 MA.No.18/Hyd./2025 3. Shri Srinath Sadanala, learned Sr. AR for the Revenue, on the other hand, strongly relied on the order of the Tribunal dated 22.10.2024 passed in ITA.No.611/Hyd./ 2024. He submitted that, the assessee seeks to review the orders of the Tribunal dated 22.10.2024 under the garb of rectification and that, the Tribunal has no power to review it’s own order. He, accordingly submitted that, there are no merits in the M.A. filed by the assessee and, therefore, the M.A. filed by the assessee deserves to be dismissed. 4. We have heard both the parties and considered relevant contents of the M.A. filed by the assessee u/sec.254(2) of the Act in light of the common order of the Tribunal dated 22.10.2024 passed in ITA.No.611/Hyd./ 2024 and more particularly, paras 8 to 8.2 where the Tribunal has considered the arguments of the assessee in light of the decision of Hon’ble Supreme Court in the case of M/s. Sheshasayee Steels Pvt. Ltd., vs., ACIT 421 ITR 421 (SC) and after considering relevants and also by following decision of the Hon’ble High Court of Andhra Pradesh in the case of Potla Nageswara Rao vs., DCIT [2014] 8-TMI-636- 5 MA.No.18/Hyd./2025 AP-HC held that, the year of taxability of transfer in pursuance to JDA is the year in which such Development Agreement [in short “JD”] cum General Power of Attorney [in short “GPA] is registered. In the present case, going by the facts available on record, since the DA cum GPA was registered on 27.06.2015, the year of taxation would be assessment year 2016-2017. Therefore, in our considered view, the findings of fact recorded by the Tribunal in the given facts of the case is in accordance with the decision of Hon’ble High Court of Andhra Pradesh in the case of Potla Nageswara Rao vs., DCIT (supra) and the decision of Hon’ble Supreme Court in the case of CIT vs., Balbir Singh Maini [2018] 12 SCC 354 (SC). Further, the Tribunal has also considered the ratio of the Hon’ble Supreme Court in the case of M/s. Sheshasayee Steels Pvt. Ltd., vs., ACIT (supra). Therefore, in our considered view, there is no merit in the application filed by the assessee u/sec.254(2) of the Act to recall the common order of the Tribunal dated 22.10.2024 in ITA.No.611/Hyd./2024. Further, the applicant-assessee fails to make-out a prima facie mistake apparent on record 6 MA.No.18/Hyd./2025 as contemplated u/sec.254(2) of the Act, but, what is canvassed through the present M.A. is to review the order of the Tribunal dated 22.10.2024 in ITA.No.611/Hyd./2024 in the guise of rectification which is not permissible in law in light of decisions of Hon’ble Supreme Court in the case of ACIT vs., Sourashtra Kutch Stock Exchange Ltd., [2008] 305 ITR 227 (SC) and CIT vs., Reliance Telecom Ltd,., [2021] 133 taxmann.com 41 (SC). Thus, we dismiss the M.A. filed by the assessee. 5. In the result, M.A. of the Assessee is dismissed. Order pronounced in the open court on 25.04.2025. Sd/- Sd/- [RAVISH SOOD] [MANJUNATHA G] JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated 25th April, 2025 VBP Copy to 1. Shri Pramod Reddy Tekula, Hyderabad. C/o. Shri Mohd. Afzal, Advocate, #402, Sherson’s Residency, 11-5-465, Criminal Court Road, Red Hills, Hyderabad – 500 004. 2. The ACIT, Central Circle-1(1), Hyderabad. 3. The Pr. CIT (Central), Hyderabad 4. The DR ITAT “A” Bench, Hyderabad. 5. Guard File. //By Order// //True Copy// "