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II. Useful Caselaws:
1. CIT Vs. Delhi Apartments Pvt. Ltd. ITA No. 569/2012, Date of Decision: 07-03-2013, High Court of Delhi
a. Advance received against sale of land is not taxable in the year of receipt.
“No agreement
has been signed in this year. The possession has also not been delivered
in this year. The twin conditions of execution of written agreement and
handing over of the possession have to be cumulatively satisfied. None
of these conditions are satisfied. Therefore, it is held that the
property has not been transferred in this year”.
b. An
assessee could hold lands either for business or as an investment.
Accordingly it may offer for taxation under the head ‘Capital gain”.
“The assessee
could very well be a trader in land as well as an investor in land
simultaneously, depending on what his intention was and how he treated
the asset in question. The land was purchased and was shown as an asset
in the balance sheet. There was no evidence that borrowed capital had
been used for the purchase. Hence the assessee had appropriately taxed
under the head ‘capital gains”.
If there is no failure on the part of assessee to disclose the income, there was no escapement of income
If the
assessment is sought to be reopened after a period of four years from
the end of the relevant assessment year, it is incumbent upon the AO,
under the first proviso to section 147, to show that the escapement of
income was on account of failure of the assessee to file the return of
income or to furnish fully and truly all material facts relating to the
assessment. As there was no failure to disclose the income, there is no
escapement of income. In the relevant assessment year, there was no
difference in the rate of tax applicable to capital gains. Therefore,
neither is there any escapement of income nor is there any under
assessment. Hence the reassessment was without jurisdiction.
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