ITAT HYDERABAD BENCH ‘B’
Assistant Commissioner of Income-tax
vs.
A. Ram Reddy
IT APPEAL NOs. 407, 408, 409, 483 and 484 (HYD.) OF 2011
[ASSESSMENT YEARs 2002-03 and 2008-09]
JULY 2, 2012
ORDER
Chandra Poojari, Accountant Member
ITA No. 483/Hyd/2011 and 484/Hyd/2011 are appeals by different assessees and ITA Nos. 407 to 409/Hyd/2011 are Departmental appeals. As certain issues involved in these appeals are common in nature, all these appeals are clubbed, heard and disposed of together by this common order for the sake of convenience.
2. Firstly we will take up assessee’s appeals. The issue is common in nature. The common grounds are follows:
1. The appellant submits that the First Appellate Authority erred both on law and on fact in deciding the appeal.
2. The appellant submits that the transaction entered into by the appellant namely the Development Agreement with the builder is not a transaction of transfer within the meaning of Sec. 2(47) of the Income Tax Act and as such no capital gains arise.
3. The appellant submits that the First Appellate Authority having recognized that the Development Agreement has been cancelled should have held that no capital gains arise to the appellant.
4. The appellant submits that the First Appellate Authority erred in considering the totality of the facts and circumstances of the case of the appellant.
5. The appellant submits that the Assessing Officer and the learned First Appellate Authority erred in holding a uniform rate for both the built-up area as well as the parking area.
6. On the basis of the above grounds and any grounds that may be permitted to be raised in the course of the appellate proceedings, the-appellant prays that the addition on account of capital gains assessed on the transaction with the developer be deleted.
3. For brevity we consider the facts in the case of Sri B. Jogi Reddy in ITA No. 483/Hyd/2011. Facts of the case, in brief, are that the assessee is an individual deriving income under the head “Other Sources” was originally an assessee on record with the Income Tax Officer, Ward 4(3), Hyderabad with PAN No. AGQPB 2894 M. The assessee is the owner of land admeasuring Ac 2-01 Guntas, situated at Mahadevpur Village, Alwal Municipality, Malkajgiri Mandal, Ranga Reddy District. The assessee entered into a Development Agreement in respect of the said land with M/s. Janapriya Engineers Syndicate Limited, a company engaged in the business of construction of residential apartments. The Development agreement was entered into on 04-03-2008 and is registered with the Sub-Registrar, Vallab Nagar vide Doc. No. 913/08.
3.1 Consequent to search operations in the case of the said Janapriya Engineers Syndicate Limited, the case of the assessee was notified to Central Circle -6, Hyderabad and a notice under section 148 for the assessment year 2008-09 was issued to the assessee by the Deputy Commissioner of Income Tax, Central Circle-6, Hyderabad. In response to the said notice, the assessee filed his return of income admitting an amount of Rs. 2,04,000/-as income under the head Other Sources. The assessing officer vide his order under section 143(3) r.w.s. 147 dated December 31, 2009 determined Long Term Capital gains on the transaction of Development Agreement and arrived at an assessed income of Rs. 9,00,09,850/- of which the capital gain part constitutes Rs. 8,98,05,850/-. (Balance Rs. 2,04,000/- admitted by the assessee).
3.2 The Capital Gain of Rs. 8,98,05,850/- was arrived at by the assessing officer as under:
