ACIT Vs Lakkanna Durgappa (ITAT Bangalore)
The Bangalore ITAT held that registered JDAs and Occupancy Certificates already disclosed to the Department prior to search cannot be treated as “incriminating material” for invoking section 153A/153C in concluded assessments. Relying on the Supreme Court ruling in PCIT v. Abhisar Buildwell Pvt. Ltd., the Tribunal ruled that where no fresh incriminating material is unearthed during search, additions in completed assessments are unsustainable.
The assessee had already disclosed the JDAs and project details during proceedings under section 131 much before the search. Hence, the Tribunal held that the Department merely relied on documents already available in its possession and not on any fresh search material. Consequently, additions running into several crores made under section 153A for AYs 2017-18 to 2019-20 were deleted.
On merits also, the Tribunal held that section 45(5A) applies only prospectively and cannot be invoked for JDAs executed prior to 01.04.2017/01.04.2018. Since the JDA in the present case was executed in FY 2012-13, the Tribunal held that capital gains, if taxable, had to be examined under the pre-amendment law applicable in AY 2013-14 and could not be shifted to AY 2020-21 merely because the Occupancy Certificate was received later.
The ITAT followed the principles laid down in Chaturbhuj Dwarkadas Kapadia v. CIT and CIT v. Dr. T.K. Dayalu and distinguished the Orissa High Court ruling in Kanak Bhanj Deo v. ITO on the ground that the jurisdictional Karnataka High Court decisions were binding. The Tribunal also observed that taxing the same gains again in AY 2020-21 would effectively result in double taxation.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
