DCIT Vs Raja Rao Parachuri (ITAT Visakhapatnam)
The present appeal filed by the revenue before the ITAT Visakhapatnam arises from the assessment order passed under Section 143(3) read with Section 147 of the Income-tax Act, 1961, for A.Y. 2013-14, and the subsequent appellate order of the CIT(A), National Faceless Appeal Centre (NFAC), Delhi. The revenue challenged the CIT(A)’s deletion of an addition of Rs. 11,26,01,500/- made by the Assessing Officer (AO) towards long-term capital gains (LTCG) on a Joint Development Agreement (JDA). The assessee had filed his return of income belatedly on 21.01.2017 declaring income of Rs. 1,73,79,050/- along with agricultural income of Rs. 1,22,290/-. The AO, on information that the assessee along with three other co-owners entered into a JDA with M/s BBCL Vajra for development of land measuring 1.45 acres in Nolambur Village, Tamil Nadu for a total consideration of Rs. 23.94 crores, noticed that the assessee had not offered capital gains in A.Y. 2013-14 despite the other co-owners doing so.
The AO contended that as per Clause 17 of the unregistered JDA dated 25.04.2012, possession of the property had been handed over to the developer to commence construction activities. Invoking Section 2(47)(v) read with Section 53A of the Transfer of Property Act, 1882, the AO held that the assessee had realized long-term capital gains of Rs. 11,26,01,500/- in the relevant year and included the same in the assessment, raising total income to Rs. 13,10,30,550/-, along with an addition of Rs. 10,50,000/- on account of unexplained cash deposits.
