Mr. D.k. Samal, Advocate v. Income Tax Officer, Ward-5(3), Bhubaneswar

IN THE HIGH COURT OF ORISSA AT CUTTACK ITA No.26 of 2024 Kanak Bhanj Deo …. Appellant Represented By Adv. – Mr. Sidhartha Ray, Sr. Advocate Mr. K.K. Sahoo, Advocate Mr. D.K. Samal, Advocate -versus- …. Respondent Income Tax Officer, Ward-5(3), Bhubaneswar Represented By Adv. – Mr. S.C. Mohanty, Senior Standing Counsel Mr. A. Kedia, Jr. Standing Counsel CORAM: THE HON'BLE MR. JUSTICE ARINDAM SINHA AND THE HON'BLE MR. JUSTICE M.S. SAHOO ORDER29.08.2024 Order No. 01. 1. Mr. Ray, learned senior advocate appears on behalf of appellant-assessee and submits, his client seeks to prefer appeal against order dated 10[th] July, 2024 of the Income Tax Appellate Tribunal (Cuttack Bench) in ITA no.21/CTK/2024 pertaining to assessment year 2017-18. He submits, his client dealt with property in year 2012. There could not be assessment of income in respect thereto in the assessment year. Revenue, unable to reopen relevant assessment, has resorted to this procedure to illegally tax his client. He draws attention to that part in impugned order, extracted and reproduced below. “10. … In the case of Smt. V. Kalpagam (supra), the ITAT Chennai Bench of the Tribunal has also explained this tax treatment and explained the incidence of the tax when the property is transferred in terms of the Joint Development Agreement and certain area received by the transferor against such development agreement. In view of the above fact since in the present case the assessee has not declared any capital gain in the assessment year 2012-2013, when it has entered into the Joint Development Agreement no relief could be granted on this score to the assessee for taxation of capital gain in that year, however, it is also a matter of fact that the assessee has received the constructed portion of her share in the developed property in the year under appeal, therefore, the same has to be taxed in the hands of the assessee when the transfer as per Section 53A of the Transfer of Property Act is completed. Accordingly, the action of the AO in taxing the capital gain in the year under consideration is held as correct.” 2. He submits, substantial question of law arises from impugned order. The appeal be admitted on such question(s) framed. In the memo there are suggested substantial questions of law. 3. Mr. Mohanty, leaned advocate, Senior Standing Counsel appears on behalf of revenue and submits, no question of law arises. appears on behalf of revenue and submits, no question of law arises. The income chargeable to tax arising from assessee’s property, dealt with for development, was correctly assessed in the assessment year under consideration. 4. Relevant provision is sub-section (5-A) under section 45 in Income Tax Act, 1961. On query from Court Mr. Ray submits, possession certificate was issued in year 2016. Income Tax Act, 1961. On query from Court Mr. Ray submits, possession certificate was issued in year 2016. 5. Aforesaid provision says, capital gain shall be chargeable to income-tax as income of the previous year, in which the certificate of completion for the whole or part of the project is issued by the competent authority. Omission on part of assessee and his developer to follow through after possession obtained in year, 2016, in obtaining completion certificate, does not give rise to any question of law. 6. The appeal is dismissed. (Arindam Sinha) Judge Signature Not Verified Digitally SignedSigned by: JYOTIPRAVA BHOLDesignation: Junior StenographerReason: AuthenticationLocation: HIGH COURT OF ORISSADate: 29-Aug-2024 18:08:38 (M.S. Sahoo) Judge Jyoti