Sonnenahalli Venkataramanappa Narayana Swamy Vs ITO (ITAT Bangalore)
Material Facts: The appeal related to Assessment Year (AY) 2008-09 and challenged the validity of reopening the assessment as well as the addition made on merits. The assessee, along with his brother, owned land that was the subject of a Joint Development Agreement (JDA) dated 29.03.2007. Under the JDA, the assessee was to receive a portion of the constructed area in exchange for transfer of the land.
Earlier, for AY 2007-08, the assessment had been reopened on the premise that the transfer under Section 2(47) of the Income-tax Act was completed on the date of the JDA. An assessment under Sections 143(3) read with 147 was completed on 23.03.2015 by bringing capital gains to tax.
The assessee’s appeal before the Commissioner of Income Tax (Appeals) was dismissed on 02.02.2017. However, the Tribunal, by order dated 21.11.2017 in ITA No. 724/Bang/2017, held that reopening for AY 2007-08 was invalid since the land was converted from agricultural to non-agricultural use only on 04.02.2008. The reassessment for AY 2007-08 was accordingly quashed.
Treating the Tribunal’s order for AY 2007-08 as a finding or direction under Section 150(1), the Assessing Officer issued a notice under Section 148 on 19.03.2018 for AY 2008-09. The assessee objected to the reopening, contending that the Tribunal’s order contained no finding or direction for reopening AY 2008-09 and that the notice was barred by limitation. The objections were rejected, and reassessment under Sections 143(3) read with 147 was completed on 28.12.2018, making an addition of capital gains of ₹3,24,25,254. The Commissioner (Appeals) upheld the reopening, leading to the present appeal.
