The Income Tax Appellate Tribunal (ITAT), quashed revision order since no taxable capital-gain from Joint Development Agreement (JDA).
The assessee-individual, Arun Mittal submitted his return of income declaring a total income of Rupees five lakhs which was subjected to scrutiny by issuing notices u/s 143(2) or 142(1) of the Income Tax Act. Finally, Assessing Officer (AO) completed assessment at a total income of Rupees seven lakhs after making certain additions. Subsequently thereafter, the PCIT examined the record of assessment-proceeding and observed that the assessment-order passed by AO is erroneous in so far it is prejudicial to the interest of revenue.
During the proceeding before PCIT, the assessee made a detailed submission to demonstrate that the assessment-order was neither erroneous nor prejudicial as alleged in the show-cause notice. However, CIT(A) was not satisfied with assessee’s submission and passed revision order u/s 263 of the Income Tax Act wherein the assessment-order was set aside with a direction to AO to re-examine the issue and pass assessment order afresh. Aggrieved by such revision-order, the assessee is in appeal before the Tribunal.
The Counsel for the assessee, submitted that AO has passed assessment-order without making required enquiries in respect of a JDA entered into by assessee with M/s Tirupati Buildcon, which, in the opinion of PCIT, giving rise to taxable capital – gain in the hands of assessee.
The Counsel further submitted that not a single condition in the Agreement suggests that the assessee had parted with ownership-right to M/s Tirupati Buildon. Hence there is no “transfer” within the meaning of section 2(47) of the Income Tax Act.
A Coram consisting of Suchitra R Kamble, Judicial Member and BM Biyani, Accountant Member observed that “, we agree that the impugned “Agreement” does not effect transfer as required u/s 2(47) of the Income Tax Act and, therefore, no taxable capital-gain accrued to the assessee from the said “Agreement” in AY 2014-15. Hence, the assessment order passed by AO cannot be said to be prejudicial to the interest of revenue.”
C.P. Rawka appeared for the assessee and Venus Rawka appeared for the Revenue.
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