DCIT Vs Chaitanya Properties Pvt. Ltd. (ITAT Bangalore)
Finality Matters: Once Settled, Always Settled: Revenue Can’t Reopen JDA Taxability Again-
Bangalore ITAT “A” Bench, in DCIT Vs Chaitanya Properties Pvt. Ltd. (ITA No. 1158/Bang/2024, AY 2011-12; order dated 31.01.2025), dismissed Revenue’s appeal holding that issues relating to taxability of income arising from Joint Development Agreement (JDA) had already attained finality in earlier round of litigation.
Assessee, engaged in property development, was subjected to proceedings u/s 153C pursuant to search at Srinivasa Trust, during which a JDA dated 05.02.2005 with Prestige Estate Projects Ltd. was found. AO made massive additions treating income from JDA as business income, STCG & LTCG for AY 2011-12. CIT(A) deleted the additions, which initially led to Revenue’s appeal. In the first round, ITAT (order dated 23.05.2022) upheld validity of assessment but categorically held on merits that income from JDA could arise only from AY 2012-13 onwards, since sale deeds of developed units commenced only from that year, and any taxation in AY 2011-12 would result in double taxation.
While remanding only the issue of disallowance u/s 14A to CIT(A), Tribunal had made it clear that JDA-related issues stood concluded. However, CIT(A), in the second round, again decided JDA issues in Assessee’s favour, following binding precedents in Assessee’s own case & Jurisdictional ITAT rulings affirmed by Karnataka High Court.
ITAT held that Revenue’s second-round appeal on an issue already settled was not maintainable, reiterating that when land is held as stock-in-trade, income accrues only upon execution of registered sale deeds, and non-refundable deposits under JDA fructify into income only proportionately when built-up area is handed over. Tribunal also noted that Assessee had consistently offered income from JDA from AY 2012-13 onwards, eliminating any allegation of tax evasion.
Accordingly, Revenue’s appeal was dismissed, reinforcing the principle that finality of litigation cannot be disturbed by repeated appeals on the same settled issue
FULL TEXT OF THE ORDER OF ITAT BANGALORE
