M/S.coromondel Cabeles P. Ltd.,A v. The Assistant Commissioner Of Income Tax,Company Circle – I (3),Chennai

T.C.A.Nos.294 of 2018 & etc., batch IN THE HIGH COURT OF JUDICATURE AT MADRAS Reserved On Pronounced On 21.10.2024 09.05.2025 Coram: THE HON'BLE MR.JUSTICE R.SURESH KUMARand THE HON'BLE MR.JUSTICE C.SARAVANAN T.C.A.Nos.294 to 299 of 2018 and T.C.A.Nos.355, 356, 378, 389,390, 393, 396, 401, 402, 409 & 411 of 2021 T.C.A.Nos.294 to 299 of 2018: M/s.Coromondel Cabeles P. Ltd.,A-7, 6[th] Cross Street, Indira Nagar, Adyar,Chennai – 600 020.PAN: ... Appellant Versus The Assistant Commissioner of Income Tax,Company Circle – I (3),Chennai. ... Respondent T.C.A.Nos.355, 356, 378, 389, 390, 393,396, 401, 402, 409 & 411 of 2021: The Commissioner of Income Tax, Chennai. ... Appellant Versus M/s.Coromondel Cabeles P. Ltd.,A-7, 6[th] Cross Street, Indira Nagar, Adyar,Chennai – 600 020. PAN: ... Respondent 1/67 T.C.A.Nos.294 of 2018 & etc., batch Prayer in T.C.A.Nos.294 to 299 of 2018: Tax Case Appeals filed under Section 260A of the Income Tax Act, 1961 against the common order of the Income Tax Appellate Tribunal 'C' Bench, Chennai in I.T.A.No.1779/Mds/2013 dated 04.03.2016.Prayer in T.C.A.Nos.355 & 356 of 2021: Tax Case Appeals filed under Section 260A of the Income Tax Act, 1961 against the separate orders of the Income Tax Appellate Tribunal 'C' Bench, Chennai in M.A.No.41/Mds/2017 in I.T.A.No.1782/Mds/2013 and M.A.No.43/Mds/2017 in I.T.A.No.1784/Mds/2013 dated 12.05.2017 respectively. Prayer in T.C.A.Nos.378, 389, 390, 393, 396, 401, 402, 409 & 411 of 2021: Tax Case Appeals filed under Section 260A of the Income Tax Act, 1961 against the separate orders of the Income Tax Appellate Tribunal 'C' Bench, Chennai in I.T.A.No.1949/Mds/2013, I.T.A.No.1782/Mds/2013, I.T.A.No.1786/Mds/2013,I.T.A.No.1944/Mds/2013, I.T.A.No.1785/Mds/2013, I.T.A.No.1779/Mds/2013, I.T.A.No.1947/Mds/2013,I.T.A.No.1784/Mds/2013, I.T.A.No.1788/Mds/2013 dated 04.03.2016 respectively. For Appellant in T.C.A.Nos.294 to 299 of 2018andFor Respondent in T.C.A.Nos.355, 356, 378, 389,390, 393, 396, 401, 402, 409& 411 of 2021: Mr.M.Gopinath For Respondent in T.C.A.Nos.294 to 299 of 2018andFor Appellant in T.C.A.Nos.355, 356, 378, 389,390, 393, 396, 401, 402, 409& 411 of 2021 T.C.A.Nos.294 of 2018 & etc., batch : Mr.T.Ravikumar, Senior Standing Counsel COMMON JUDGMENT (Judgment of the Court was delivered by C.SARAVANAN, J.) These appeals have been filed by the Assessee and the Income Tax Department under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as 'IT' Act). They are being disposed of by this Common Judgment. 2. The dispute in these appeals arise out of the impugned Common Order dated 04.03.2016 passed by the Income Tax Appellate Tribunal (hereinafter referred to as “ITAT”) in Appeal in I.T.A.Nos.1779-1788/Mds/2013 filed by the Assessee and Appeal in I.T.A.Nos.1944-1949/Mds/2013 filed by the Income Tax Department for the respective Assessment Years viz., Assessment Years 2006-2007 to 2011-2012. T.C.A.Nos.294 of 2018 & etc., batch 3. For the sake of clarity, instead of refererring the parties as Appellant and Respondent, we shall use the expression, 'Assessee' and 'Income Tax Department' as both of them are Appellants and Respondents in these batch of appeals. 4. The dispute in these appeals pertain to the Assessment Years 2006-2007 to 2011-2012. Some of the appeals have been filed by the Income Tax Department against Miscellaneous Orders passed by the Appellate Tribunal. Details of the Appeals filed by the Assessee and the Income Tax Department are tabulated below:- Table I T.C.A.Nos.294 of 2018 & etc., batch Note: 1. # dated 12.05.2017; 2. Rest of the orders are dated 04.03.2016; 3. * Appeal filed by the Income Tax Department before ITAT in Column (v) T.C.A.Nos.294 of 2018 & etc., batch 3. For the sake of clarity, instead of refererring the parties as Appellant and Respondent, we shall use the expression, 'Assessee' and 'Income Tax Department' as both of them are Appellants and Respondents in these batch of appeals. 4. The dispute in these appeals pertain to the Assessment Years 2006-2007 to 2011-2012. Some of the appeals have been filed by the Income Tax Department against Miscellaneous Orders passed by the Appellate Tribunal. Details of the Appeals filed by the Assessee and the Income Tax Department are tabulated below:- Table I T.C.A.Nos.294 of 2018 & etc., batch Note: 1. # dated 12.05.2017; 2. Rest of the orders are dated 04.03.2016; 3. * Appeal filed by the Income Tax Department before ITAT in Column (v) 4. Rest of the appeals before ITAT in Colum (iv) & (vi) were filed by the Assessee.Assessee. 5. The Assessee's appeals in T.C.A.Nos.294 to 299 of 2018 were admitted by this Court on 29.06.2018. At the time of admission, the following substantial questions of law were framed for being answered:- (i) Whether the Appellate Tribunal is correct in law in rejecting the computation of Long Term Capital Gains based on the sale agreement followed by the execution of the sale deeds and reporting of Long Term Capital Gains in the subsequent assessment years while approving impliedly the computation of Long Term Capital Gains in those subsequent assessment years based on unregistered JDA?rejecting the computation of Long Term Capital Gains based on the sale agreement followed by the execution of the sale deeds and reporting of Long Term Capital Gains in the subsequent assessment years while approving impliedly the computation of Long Term Capital Gains in those subsequent assessment years based on unregistered JDA? (ii) Whether the Appellate Tribunal is correct in Law in rejecting the grounds alternatively raised for taxing the surplus based on Section 45 (2) of the Act read with the transaction presumed to be executed as per the unregistered JDA in treating the Appellant Company as a Joint Developer?rejecting the grounds alternatively raised for taxing the surplus based on Section 45 (2) of the Act read with the transaction presumed to be executed as per the unregistered JDA in treating the Appellant Company as a Joint Developer? (iii) Whether the Appellate Tribunal is correct in not deleting the share of profit from the housing project taxed based on the execution of the transaction through the unregistered JDA despite the tacit acceptance of the taxation of the financial results from the joint development in the status of AOP?deleting the share of profit from the housing project taxed based on the execution of the transaction through the unregistered JDA despite the tacit acceptance of the taxation of the financial results from the joint development in the status of AOP? 6. In the appeals filed by the Income Tax Department as detailed in Column (v) to above Table I in Paragraph No.4,no questions of law were framed by this Court at the time of their admission. They were admitted during the period when the Country was still under lockdown due to the outbreak of Covid-19 Pandemic. 7. In these appeals, the Income Tax Department has raised identical substantial questions of law which are as follows:- 6. In the appeals filed by the Income Tax Department as detailed in Column (v) to above Table I in Paragraph No.4,no questions of law were framed by this Court at the time of their admission. They were admitted during the period when the Country was still under lockdown due to the outbreak of Covid-19 Pandemic. 7. In these appeals, the Income Tax Department has raised identical substantial questions of law which are as follows:- 1. Whether on the facts and in the circumstance of the case, the Tribunal was right in holding that the transaction emanating from the Joint Development Agreement dated 23.11.2005 by which 62.46% of land was transfered cannot be liable to tax in Assessment Year 2006-07 as per Section 2(47)(v) of the Income Tax Act, 1961 r/w. 53A of the Transfer of Property Act, 1882?the case, the Tribunal was right in holding that the transaction emanating from the Joint Development Agreement dated 23.11.2005 by which 62.46% of land was transfered cannot be liable to tax in Assessment Year 2006-07 as per Section 2(47)(v) of the Income Tax Act, 1961 r/w. 53A of the Transfer of Property Act, 1882? 2. Whether reasoning and finding of the Tribunal is proper by holding that no transfer took place in the previous year relevant to the Assessment Year 2006-07 when all the conditions stipulated under Section 53A on the T.P.Act were satisfied and the Transferee had also taken possession of the property and the Transferee was ready and willing to perform the contract was also satisfied?proper by holding that no transfer took place in the previous year relevant to the Assessment Year 2006-07 when all the conditions stipulated under Section 53A on the T.P.Act were satisfied and the Transferee had also taken possession of the property and the Transferee was ready and willing to perform the contract was also satisfied? 3. Whether on the facts and circumstances of the case, the Tribunal was justified in holding that the assessment for the assessment year 2007-08 and 2008-09 as substantive when the substantive assessment for the assessment of capital gains on transfer of land was made for the assessment year 2006-07 when possession was given?case, the Tribunal was justified in holding that the assessment for the assessment year 2007-08 and 2008-09 as substantive when the substantive assessment for the assessment of capital gains on transfer of land was made for the assessment year 2006-07 when possession was given? 4. Is not the finding of the Tribunal perverse and bad by holding that the capital gains on transfer of 62.46% of land is taxable in the Assessment Year 2007-08 especially when the developer has sold part of the undivided share of the land falling under his share using the power of attorney given by the Assessee in the Financial Year 2006-07 which could happen only when the possession of the land given to the Developer?bad by holding that the capital gains on transfer of 62.46% of land is taxable in the Assessment Year 2007-08 especially when the developer has sold part of the undivided share of the land falling under his share using the power of attorney given by the Assessee in the Financial Year 2006-07 which could happen only when the possession of the land given to the Developer? 5. Whether on the facts and circumstances of the case the Tribunal was right in holding that only the sale value of the land is to be taken as a consideration from the Joint Development case the Tribunal was right in holding that only the sale value of the land is to be taken as a consideration from the Joint Development 7/67 Agreement as against the Market value of 37.54% of constructed area received by the Assessee in terms of the Joint Development Agreement? 5. Whether on the facts and circumstances of the case the Tribunal was right in holding that only the sale value of the land is to be taken as a consideration from the Joint Development case the Tribunal was right in holding that only the sale value of the land is to be taken as a consideration from the Joint Development 7/67 Agreement as against the Market value of 37.54% of constructed area received by the Assessee in terms of the Joint Development Agreement? 6. Whether on the facts and circumstance of the case the Tribunal was justified in remitting the claim of Rs.68,99,590/- as the cost of improvement for the Assessment Year 2007-08 to the file of Assessing Officer without recording any reasons to differ from the findings given by the Assessing Officer and the CIT (Appeals) especially all the material was available before it?case the Tribunal was justified in remitting the claim of Rs.68,99,590/- as the cost of improvement for the Assessment Year 2007-08 to the file of Assessing Officer without recording any reasons to differ from the findings given by the Assessing Officer and the CIT (Appeals) especially all the material was available before it? 7. Whether on the facts and circumstances of the case the Tribunal erred in law in remitting the claim of cost of improvement when it was clearly proved the assessment proceedings that it was a bogus transaction and bills were supplied by Hawala Operator in Bombay?case the Tribunal erred in law in remitting the claim of cost of improvement when it was clearly proved the assessment proceedings that it was a bogus transaction and bills were supplied by Hawala Operator in Bombay? 8. Whether on the facts and circumstance of the case the Tribunal was justified in directing the Assessing Officer to compute the short term capital gains and the sale value of the building for the Assessment Year 2008-09 to 2011-12 when the receipt of such building through joint development agreement was not brought to tax in the Assessment Year 2006-07 and the said direction of the Tribunal is perverse?case the Tribunal was justified in directing the Assessing Officer to compute the short term capital gains and the sale value of the building for the Assessment Year 2008-09 to 2011-12 when the receipt of such building through joint development agreement was not brought to tax in the Assessment Year 2006-07 and the said direction of the Tribunal is perverse? 9. Whether on the facts and circumstance of the case the Tribunal was correct and justified in cancelling the penalty levied u/s.271(1)(c) especially when the quantum assessment had not attained finality as appeals are pending?case the Tribunal was correct and justified in cancelling the penalty levied u/s.271(1)(c) especially when the quantum assessment had not attained finality as appeals are pending? 10.Whether on the facts and circumstance of the case the Tribunal was right in setting aside the levy of penalty when the act of concealment of income had been substantiated beyond doubt especially in a situation where the return of income was not filed within the due date and the Original JDA was found during survey operation and return was filed in response to Section 148 notice issued thereafter only?”case the Tribunal was right in setting aside the levy of penalty when the act of concealment of income had been substantiated beyond doubt especially in a situation where the return of income was not filed within the due date and the Original JDA was found during survey operation and return was filed in response to Section 148 notice issued thereafter only?” T.C.A.Nos.294 of 2018 & etc., batch8. At the time of the disposal of the main appeal by ITAT vide T.C.A.Nos.294 of 2018 & etc., batch8. At the time of the disposal of the main appeal by ITAT vide Impugned Common Order dated 04.03.2016 which was heard on 29.12.2015, the Assessee had taken an alternative plea that the Assessee was entitled to the benefit of Section 80IB(10) of the IT Act which according to the Assesee was not considered by the ITAT while passing the Impugned Common Order dated 04.03.2016. 9. The learned counsel for the Assessee submitted that the Assessee will be satisfied, if the below mentioned substantial question of law is decided. It reads as under:- 4. Whether the Appellate Tribunal is correct in Law in rejecting the alternate grounds for computing such surplus/profits from the housing project pertainng to the share of Appellant Company under the head - “Income from Business” which alternate ground was based on the Revenue's stnad as well as the decision to compute capital gains based on the unregistered JDA?”rejecting the alternate grounds for computing such surplus/profits from the housing project pertainng to the share of Appellant Company under the head - “Income from Business” which alternate ground was based on the Revenue's stnad as well as the decision to compute capital gains based on the unregistered JDA?” 10. It is noticed that though the Assesee also raised above question of law as substantial question of law, it was omitted to be framed as a substantial question of law to be answered in the Assessee's Appeal in T.C.A.Nos.294 to 299 of 2018. T.C.A.Nos.294 of 2018 & etc., batch 11. After hearing the arguments, we proceed to frame the following substantial question of law as the only substantial question of law to be answered based on the articulation of the case facts and dispute by the counsels. 12. For the sake of clarity, the above substantial question of law is re-phrased as follows:- “Whether the assessee was entitled to the benefit of Section 80IB(10) of the IT Act, in absence of a claim for deduction under Section 80AC of the IT Act, in the Return of Income filed under Section 139 of the IT Act?” 13. It is the case of the Assessee that if the benefit of Section 80IB(10) of the IT Act is extended, it will efface the entire demand which was confirmed by the Assessing Officer vide Assessment Orders dated 14.05.2012, 14.06.2012 and 15.06.2012 which decision was partly affirmed by the Appellate Commissioner vide Order dated 28.08.2013 and by the ITAT vide the Impugned Order dated 04.03.2016. 14. It is submitted that if the benefit of the Order of Section 80IB(10) of the IT Act is extended to the Assesse, Impugned Orders of T.C.A.Nos.294 of 2018 & etc., batch the Tribunal will have to be set aside and consequently, the Department's appeal also will have to be dismissed. 15. The brief facts of the case are that the Assessee Company had signed a Joint Venture Development Agreement and an Agreement for Sale both dated 23.11.2005 with a Developer named M/s.Doshi Housing, a Partnership Firm. As per these Agreements, the Assessee was required to transfer proportionate share in the land to the said Developer and as a consideration, for such transfer, the Assessee was entitled to sell 37.54% of the built up area. 16. The son of the Managing Director of the Assessee Company was introduced as a partner of the Developer Firm which was engaged to develop the land which belonged to the Assessee under these Agreements. 17. A part of the sale consideration from the transfer of the land to the Developer was upfront paid to the son of the Managing Director of the Assessee who was a partner of the Developer Firm. This was not reflected in the Returns that were filed by the Assessee. T.C.A.Nos.294 of 2018 & etc., batch 18. Assessment was also completed based on the Returns filed by the Assessee on the capital gains declared by the Assessee Company on account of the Joint Venture Development Agreement and Agreement For Sale [JVDA & AOS] both dated 23.11.2005. 16. The son of the Managing Director of the Assessee Company was introduced as a partner of the Developer Firm which was engaged to develop the land which belonged to the Assessee under these Agreements. 17. A part of the sale consideration from the transfer of the land to the Developer was upfront paid to the son of the Managing Director of the Assessee who was a partner of the Developer Firm. This was not reflected in the Returns that were filed by the Assessee. T.C.A.Nos.294 of 2018 & etc., batch 18. Assessment was also completed based on the Returns filed by the Assessee on the capital gains declared by the Assessee Company on account of the Joint Venture Development Agreement and Agreement For Sale [JVDA & AOS] both dated 23.11.2005. 19. The capital gain was confined to the indexed value of the land and was calculated on the Guideline Value of the land. The difference between the Market Value and the Guideline Value of the land was to be paid directly to the son of the Managing Director of the Asseesse. 20. Meanwhile, a Survey was conducted under Section 133A of the IT Act during the year 2012 by the Income Tax Department. During the survey, statements were also recorded from the Managing Director of the Assessee Company on 24.01.2012, wherein, it was confirmed that the share in the profit from the venture was partly given as a consideration to the son of the Managing Director of the Assessee who was introduced as a Partner in the Developer Firm, viz., M/s.Doshi Housing. 21. Thus, assessments were completed for the respective Assessment Years under Section 143(3) read with Section 147 of the IT 12/67 Act on various dates. The details of the Assessment Orders for the respective Assessment Years are as follows:- TABLE II 22. These Assessment Orders were thus the subject matter of the Appeal before the Appellate Commissioner in I.T.A.Nos.21 & 32 to 36/12-13/A-I by the Assessee. 23. The Appellate Commissioner dismissed the appeal of the Assessee for the Assessment Year 2006-2007 vide Order dated 28.08.2013 holding that AOS & JVDA dated 23.11.2005 came into effect from the same date. Therefore, the Assessee was held liable to pay tax on capital gains from the sale value of the project equivalent to 37.54 % of the saleable area that was receiveable by the Assessee in view of Section 2(47) of the IT Act. 24. Operative portion of the Order dated 28.08.2013 of the Appellate Commissioner in I.T.A.Nos.21 & 32 to 36/12-13/A-I is reproduced below:- TABLE II 22. These Assessment Orders were thus the subject matter of the Appeal before the Appellate Commissioner in I.T.A.Nos.21 & 32 to 36/12-13/A-I by the Assessee. 23. The Appellate Commissioner dismissed the appeal of the Assessee for the Assessment Year 2006-2007 vide Order dated 28.08.2013 holding that AOS & JVDA dated 23.11.2005 came into effect from the same date. Therefore, the Assessee was held liable to pay tax on capital gains from the sale value of the project equivalent to 37.54 % of the saleable area that was receiveable by the Assessee in view of Section 2(47) of the IT Act. 24. Operative portion of the Order dated 28.08.2013 of the Appellate Commissioner in I.T.A.Nos.21 & 32 to 36/12-13/A-I is reproduced below:- “5. I have carefully considered all the facts of the case and submissions of the learned AR. As was discussed elaborately in foregoing paragraphs, it was concluded that retraction by the appellant was countered by the department successfully. Once this retraction is treated as meaningless, then all the facts revealed in the statement given by the MD and others will hold good. This means all JDA is in operation with effect from 23.11.2005. The ensuing inference would automatically mean the long term capital gains would attract from AY 2006-07 and sale value of the project equivalent to 37.54% of the salable value is receivable in the hands of the appellant. It is also clear from the statements and other evidences that the amount only to the extent of guideline value was accounted in the books of the appellant willfully and the balance amount was diverted to Shri.Surendernath's account as share profit in the Doshi Housing, the developer. The AO could orchestrate the facts in this case successfully within the frame work of law. In view of the matter, the assessments done by AO are upheld for all the assessment years. However, the sale proceeds for the projects 'Etopia-I' started reaching the appellant with regard to its share of built up area for AY 2009-10 onwards, there was no capital gain arisen for AY 2007-08 and 2008-09. Therefore, the protective assessments made by the AO for these two years are deleted. Relief given to this extent.”submissions of the learned AR. As was discussed elaborately in foregoing paragraphs, it was concluded that retraction by the appellant was countered by the department successfully. Once this retraction is treated as meaningless, then all the facts revealed in the statement given by the MD and others will hold good. This means all JDA is in operation with effect from 23.11.2005. The ensuing inference would automatically mean the long term capital gains would attract from AY 2006-07 and sale value of the project equivalent to 37.54% of the salable value is receivable in the hands of the appellant. It is also clear from the statements and other evidences that the amount only to the extent of guideline value was accounted in the books of the appellant willfully and the balance amount was diverted to Shri.Surendernath's account as share profit in the Doshi Housing, the developer. The AO could orchestrate the facts in this case successfully within the frame work of law. In view of the matter, the assessments done by AO are upheld for all the assessment years. However, the sale proceeds for the projects 'Etopia-I' started reaching the appellant with regard to its share of built up area for AY 2009-10 onwards, there was no capital gain arisen for AY 2007-08 and 2008-09. Therefore, the protective assessments made by the AO for these two years are deleted. Relief given to this extent.” 25. Since the Assessee received income with regard to its share of the built up area only from the Assessment Year 2009-2010 onwards, it T.C.A.Nos.294 of 2018 & etc., batch was held that there was no capital gain during the Assessment Years 2007-2008 and 2008-2009. 25. Since the Assessee received income with regard to its share of the built up area only from the Assessment Year 2009-2010 onwards, it T.C.A.Nos.294 of 2018 & etc., batch was held that there was no capital gain during the Assessment Years 2007-2008 and 2008-2009. 26. Therefore, the Protective Assessments for these Assessment Years were deleted. Thus, the appeals were partly allowed and were partly dismissed by the Appellate Commissioner. 27. On further appeal before the ITAT in appeals as specified in Column Nos. (iv) & (vi) of Table I to Paragraph No. 4 of this Order, the ITAT passed the Impugned Common Order dated 04.03.2016 which are the subject matter of these appeals. 28.The Appellate Commissioner had partly allowed the appeals filed by the Assessee against penalty that was earlier imposed by the Assessing Officer under Section 271(1)(c) of the IT Act pursuant to Assessment Orders dated 14.05.2012, 14.06.2012 and 15.06.2012 for these Assessment Years. The Appellate Commissioner had partly allowed the appeal by restricting the penalty to 100% from 300%for these Assessment Years. T.C.A.Nos.294 of 2018 & etc., batch 29. Aggrieved by the aforesaid Common Order dated 28.08.2013 in I.T.A.Nos.21, 32 to 36 of 2012-13/A1 of the Appellate Commissioner, the Assessee filed Appeals in I.T.A.Nos.1779-1784/Mds/2013 before the ITAT. 30. The Assessee had also filed appeals against the Common Order dated 28.08.2013 of theAppellate Commissioner in I.T.A.Nos.1785 to 1788/Mds/2013 before the ITAT insofar as Penalty Order passed under Section 271(1)(c) of the IT Act pursuant to Assessment Orders dated 14.05.2012, 14.06.2012 and 15.06.2012 for these Assessment Years. 31. Similarly, the Income Tax Department also filed Appeals before the ITAT in I.T.A.Nos.1944-1949/Mds/2013 against the aforesaid Common Order dated 28.08.2013 in I.T.A.Nos.21, 32 to 36 of 2012-13/A1 of the Appellate Commissioner. 32. The ITAT partly allowed and partly dismissed these appeals vide Common Order dated 04.03.2016 which are impugned in these Tax Case Appeals as detailed in the Table I in Paragraph No.4 of this Order. T.C.A.Nos.294 of 2018 & etc., batch 33. Insofar as the Impugned Common Order dated 04.03.2016 dropped the penalty imposed on the Assessee under Section 271 of the IT Act and on other issues arising out of the aforesaid Common Order dated 04.03.2016, the Income Tax Department had earlier filed about 55 Appeals in T.C.A.Nos.354 to 358 of 2021 & T.C.A.Nos.364 to 413 of 2021. 34. Out of these 55 Appeals filed by the Income Tax Department, only 11 Appeals along with 6 Appeals of the Assessee survive for consideration before us in these Tax Case Appeals as detailed in Column No.(iii) & Column No.(iv) of Table I in Paragraph No.4 of this Order. 35. We were informed that many of the appeals filed by the Income Tax Department were dismissed / disposed on account of Monetary / Litigation Policy of the Government issued from time to time. 36. Out of 11 Appeals of the Income Tax Department, Appeals in T.C(A) Nos.355 and 356 of 2021 arise out of ImpugnedCommon T.C.A.Nos.294 of 2018 & etc., batch Orderdated12.05.2017inM.A.Nos.41&43/Mds/2017in I.T.A.Nos.1782 &1783/Mds/2013. 37.The Assessee had earlier filed M.A Nos.39 to 43/Mds/2017 to modify Impugned Common Order dated 04.03.2016 of the ITAT in I.T.A.Nos.1779 to 1788/Mds/2013 which were disposed of along with the Appeals of the Income Tax Department in I.T.A.Nos.1944 to 1949/Mds/2013. 38. T.C.A.No.396 of 2021, T.C.A.No.390 of 2021 and T.C.A.No.411 of 2021 have been filed by the Income Tax Department against Impugned Common Order dated 04.03.2016 of the ITATin the following Appeals whereby penalty imposed were dropped / modified. The other surviving appeals of the Income Tax Department insofar as reduction in penalty imposed under Section 271(1)(c) of the IT Act from 300% to 100% . T.C.A.Nos.294 of 2018 & etc., batch Orderdated12.05.2017inM.A.Nos.41&43/Mds/2017in I.T.A.Nos.1782 &1783/Mds/2013. 37.The Assessee had earlier filed M.A Nos.39 to 43/Mds/2017 to modify Impugned Common Order dated 04.03.2016 of the ITAT in I.T.A.Nos.1779 to 1788/Mds/2013 which were disposed of along with the Appeals of the Income Tax Department in I.T.A.Nos.1944 to 1949/Mds/2013. 38. T.C.A.No.396 of 2021, T.C.A.No.390 of 2021 and T.C.A.No.411 of 2021 have been filed by the Income Tax Department against Impugned Common Order dated 04.03.2016 of the ITATin the following Appeals whereby penalty imposed were dropped / modified. The other surviving appeals of the Income Tax Department insofar as reduction in penalty imposed under Section 271(1)(c) of the IT Act from 300% to 100% . 39. The Income Tax Department had filed I.T.A.Nos.1945 & 1946/Mds/2013 for the Assessment Year 2007-2008 and the Assessment T.C.A.Nos.294 of 2018 & etc., batch Year 2008-2009 against the cancellation of protective demand for these Assessment Years. 40. I.T.A.Nos.1944, 1947, 1948 & 1949/Mds/2013 were filed before the ITAT against the Order of the Appellate Commissioner by the Income Tax Department, whereby 300% penalty imposed by the Assessing Officer for the Assessment Year 2006-2007, 2009-2010, 2010-2011 and 2011-2012 under Section 271(1)(c) of the IT Act was reduced to 100%. 41. These Appeal inI.T.A.Nos.1944, 1947, 1948 & 1949/Mds/2013 were filed by Income Tax Department before the ITAT. 42. Details of these Appeals are as under:- Table III 19/67 T.C.A.Nos.294 of 2018 & etc., batch 43. Earlier, the Assessee filed M.A.Nos.41 & 42/Mds/2016 in I.T.A.Nos.1780 & 1781 of 2013 under Section 154 of the IT Act to modify Order dated 04.03.2016 of the ITAT in the following Appeals of the Assessee:- Table IV T.C.A.Nos.294 of 2018 & etc., batch44. These Miscellaneous Applications were disposed of by the ITAT vide its Order dated 20.05.2016. Operative Portion of the Order dated 20.05.2016 of the ITAT in M.A.No.41/Mds/2016 in I.T.A.No.1780 of 2013 and M.A.No.42/Mds/2016 in I.T.A.No.1781 of 2013 for the Assessment Year 2007-2008 and the Assessment Year 2008-2009 respectively are reproduced below:- “3. We have gone through the Order of the Tribunal. Admittedly, there is a mistake in mentioning the figure as Rs.8,99,590/- instead of Rs.68,99,590/-. It is a typographical mistake and it should be read as Rs.68,99,590/- in para 20 at page 73. 4. ..... 5. We have heard both the parties. In our opinion for the assessment year 2008-09, the assessment is to be treated as substantive assessment and the income has to be computed as short term capital gains or long term capital gains as the case may be. Thus, the amended para 23 reads as follows: “23. Since, we have vacated the finding of the CIT (Appeals), for the assessment year 2006-07 by observing that there is no transfer u/s.2(47)(v) of the Act, the assessment for the assessment year 2008-09 is to be treated as substantive as discussed in earlier paragraph for the assessment year 2007-08 and the income has to be computed as long term capital gains or short term capital gains, as the case may be, after giving an opportunity 21/67 of hearing to the assessee and the AO shall work out the capital gains afresh. Accordingly, the levy of interest u/s.234A for the Assessment Year 2009-09 is to be computed, which is mandatory in nature.” 6. ..... 7. In our opinion, the assessment year in para 25 was wrongly mentioned as 2009-2010 instead of Assessment Year 2008-2009 and it should be read as Assessment Year 2008-09 only. After this correction, para 25 to be read as follows: 21/67 of hearing to the assessee and the AO shall work out the capital gains afresh. Accordingly, the levy of interest u/s.234A for the Assessment Year 2009-09 is to be computed, which is mandatory in nature.” 6. ..... 7. In our opinion, the assessment year in para 25 was wrongly mentioned as 2009-2010 instead of Assessment Year 2008-2009 and it should be read as Assessment Year 2008-09 only. After this correction, para 25 to be read as follows: “25. Before us, the ld. AR submitted that report as well as document have no relavance with the assessment of the assessee. However, the assessee has not produced anything to prove the cost of construction. It is the duty of the assessee to produce necessary evidence to show that the assessee actually incurred towards improvement of capital asset. However, the assessee asked one more opportunity to see the document collected by the A.O., which was relied upon by him, at the back of the assessee. In view of this, we remit this issue to the file of the AO for fresh consideration and the assessee is directed to produce necessary evidence in support of the claim of the assessee, as the AO used the report collected from the Commercial Department, Maharashtra viz. MahaVat without providing the same to the assessee. Accordingly, in the assessment year 2008-09, the income has to be computed as short term capital gains or long term capital gains, as the case may be.” 7.1. Further, we make it clear that there is no change in final result of the appeals. 8. In the result, the Miscellaneous Applications are partly allowed.” 45. The Assessee thereafter filed M.A.Nos.264 to 268/Mds/2016 for the Assessment Years 2007-2008 to 2011-2012. M.A.Nos.264 to 268/Mds/2016 were filed for Rectification of the Order dated 20.05.2016 of the ITAT passed in M.A.Nos.41 & 42/Mds/2016 in I.T.A.Nos. 1779 to 1784/Mds/2013. 46. Before the ITAT, it was submitted that Protective Assessment had become substantive assessment and therefore, no further directions were required from the ITAT so as to compute capital gains as the ITAT had given direction that protective assessment automatically converted into substantive assessment for the Assessment Years 2007-2008 to 2011-2012. Thus, the ITAT vide its Order dated 20.01.2017 disposed the aforesaid Miscellaneous Applications. 47. The ITAT ordered few modifications to the CommonOrder 48. Paragraph 4 of the Order dated 20.01.2017 in M.A.Nos.264 to 268/Mds/2016 for the Assessment Years 2007-2008 to 2011-2012 reads as under:- “4. We heard both the parties and perused the material on record. We find force in the argument of the Ld. AR. Admittedly, this Tribunal vacated the assessment order for the Assessment Year 2006-07 holding that there are no transfer so as to attract tax on capital gains, thereafter observed that assessment orders from the Assessment Years 2007-08 to 2011-12 to be considered as substantive assessments. Being so, there is no necessity of giving further finding by the Tribunal with regard to computation of long term capital gain and short term capital gain in these assessment years. 4.1 Accordingly, para 23 of this Tribunal order cited supra reads as follows: “23. Since, we have vacated the finding of the CIT (Appeals) for the Assessment Year 2006-07 by observing that there is no transfer u/s. 2(47)(v) of the Act, the assessment for the assessment year 2008-09 is to be treated as substantive as discussed in earlier paragraph for the Assessment Year 2007-08 and the income has to be computed after giving an opportunity of hearing to the assessee and the AO shall work out the capital gains afresh. Accordingly, the levy of interest u/s. 234A for the Assessment Year 2008-09 is to be computed, which is mandatory in nature.” 4.2 In other words, the Assessment Orders which T.C.A.Nos.294 of 2018 & etc., batch 4.1 Accordingly, para 23 of this Tribunal order cited supra reads as follows: “23. Since, we have vacated the finding of the CIT (Appeals) for the Assessment Year 2006-07 by observing that there is no transfer u/s. 2(47)(v) of the Act, the assessment for the assessment year 2008-09 is to be treated as substantive as discussed in earlier paragraph for the Assessment Year 2007-08 and the income has to be computed after giving an opportunity of hearing to the assessee and the AO shall work out the capital gains afresh. Accordingly, the levy of interest u/s. 234A for the Assessment Year 2008-09 is to be computed, which is mandatory in nature.” 4.2 In other words, the Assessment Orders which T.C.A.Nos.294 of 2018 & etc., batch were already passed for the Assessment Years 2007-08 to 2011-12 to be considered as substantive assessments and it is to be enforced subject to out findings with reference to other grounds raised by the assessee in its appeals for these Assessment Years. There are no other changes in the Order of the Tribunal cited supra, other than findings in our Order in M.A.Nos.41 & 42/Mds/2016 dated 20.05.2016.” 49. The Assessee thereafter once again filed fresh application for Rectification of the ImpugnedCommonOrder dated 04.03.2016 in I.T.A.Nos.1779 to 1788, 1944 to 1949/Mds/2013 vide following Miscellaneaous Applications as detailed below:- Table V 50. The ITAT disposed of the above Miscelleneous Applicaiton Nos.39-43/Mds/2017 vide Common Order dated 12.05.2017. The ITAT concluded that there was no development activity in the Assessment Year T.C.A.Nos.294 of 2018 & etc., batch 2006-2007 in terms of Section 2(47)(v) of the Act. Therefore, capital gain was to be computed only from the Assessment Years 2007-2008 & 2011-2012 and not from the Assessment Year 2006-2007. 51. The ITAT further held that Assessing Officer has to consider the issue of computation of capital gains on sale of assessee's share of constructed area, along with the undivided share in land, if it was actually transferred by the assessee in these Assessment Years. 52. In other words, the Assessing Officer could not bring into tax the entire share in the constructed area along with the undivided share in land, only on receipt basis of constructed area as transferred unless there is actual transferin terms of Section 45 of the Act by the assessee in the light of the Judgment of this Court in“CIT Vs. Dr.D.L.Racachandra Rao”, [199] 236 ITR 51 (Mds.) and “Statesman Limited Vs. ACIT”,114 ITD 595 (Kol.)wherein it was held that the Tribunal was right in law in directing bifurcation of the capital gains into long term capital gains pertaining to land and short term capital gains pertaining to superstructure. 53. Operative portion of the Impugned Common Order dated 12.05.2017 reads as under:- “6. We have heard both the parties and perused the material on record. Now, the main grievance of the assessee is with regard to computation of capital gains for assessment year 2007-08 to 2011-12. It was submitted that the assessee has not effected any sale of constructed area and the assessee only sold the land vide sale agreement dated 23.11.2005 and there cannot be any capital gains on sale of constructed area which was by the Developer only. Contrary to this, ld. D.R submitted that the assessee has received 37.54% of saleable value of property in constructed area for exchange of 62.46% area of land. So, the sale of constructed area of 37.54% of total area of constructed area was sold by the assessee in these assessment years viz., 2007-08, 2008-09, 2009-10, 2010-11 and 2011-12. Being so, it is to be taxed. In our opinion, the Tribunal has given findings on the basis of JDA entered by the assessee on 23.11.2005. Hence, consideration for transfer of 62.46% of area of land transferred by the assessee to the Developer under JDA would be the constructed area allotted to the assessee under the JDA. It was also given findings that there was no transfer in terms of Section 2(47)(v) of the Act in the A.Y 2006-07 in view of the no action by Developer in this assessment year, though the JDA was entered between the assessee and Developer on 23.11.2005. The capital gains to be computed for assessment years 2007-08 & 2011-12 and not for assessment year 2006-07 and there was no development activity in the assessment year 2006-07 in terms of Section 2(47)(v) of the Act. 7. Now, the contention of the ld. A.R is that in respect of sale of flats i.e., constructed area, it was not sold by the assessee. So, it cannot be brought to tax in the hands of assessee. In our opinion, this facts is required to be verified by the Assessing Officer whether actual sale of assessee's share in constructed area was sold by the assessee or not. In the event of sale of constructed area by assessee, then computation of capital gains on sale of T.C.A.Nos.294 of 2018 & etc., batch assessee's share of constructed area is to be brought to tax under the head “capital gains” after giving due deduction enumerated u/s. 48 of the Act. The AO has to consider this issue of computation of capital gains on sale of assessee's share of constructed area, along with the undivided share in land, if it was actually transferred by the assessee in these assessment years. In other words, the AO cannot bring into tax the entire share of constructed area along with the undivided share in land, only on receipt basis of constructed area as transferred unless there is actual transfer in terms of Section 45 of the Act by the assessee. It is needless to say that the AO has to consider the undivided share of cost in land, which is embedded with flats, which was sold by the assessee while computing capital gains. The Assessing Officer has to take note of the judgement of the jurisdictional High Court in the case of CIT Vs. Dr.D.L.Racachandra Rao in [199] 236 ITR 51 (Mds.) wherein held that the Tribunal was right in law in directing bifurcation of the capital gains into long term capital gains pertaining to land and short term capital gains pertaining to superstructure. For the same proposition, the order of the Tribunal in the case of Statesman Limited Vs. ACIT in 114 ITD 595(Kol.) wherein held that assessee company having transferred ownership rights only in respect of 56.8 percent of land to the developer under the development agreement and retained ownership of 43.2 per cent of land, and later sold four floors in the new multi-storeyed building constructed by the developer along with proportionate undivided shares in land to different purchasers, the sale consideration has to be apportioned between the land and superstructure, and gain arising and disposal of land is long term capital gain while the gain on disposal of four floors of the building is to be treated as short term capital gain. 8. With this observation, these Miscellaneous Applications filed by the assessee are disposed off accordingly.” T.C.A.Nos.294 of 2018 & etc., batch 54. The Respondent-Income Tax Department has thus filed T.C.A.Nos.355 of 2021 & 356 of 2021 as detailed in Sl.Nos.4 & 6 of Table I to Paragraph No.4 of this Order against the ImpugnedCommon MiscellaneousOrder dated 12.05.2017 passed by the Tribunal under Section 254 (2) of the IT Act. Submission of the Appellant: 55. The learned counsel for the Assessee submitted that the issue is no longer res-integra and is covered by a plethora of decisions of the Courts. Particularly, our attention was drawn to the decision of this Court rendered in “Commissioner of Income Tax Vs. Sanghvi & Doshi Enterprise”, (2013) 255 CTR (Mad) 156 and “Commissioner of Income Tax Vs. M/s.Ceebros Property”in T.C.A.No.137 & T.C.A.No.138 of 2009 dated 02.11.2012. It is submitted that the Appellant was entitled to the benefit of Section 80IB(10) of the IT Act. 56. It is submitted that the decision of this Court in “Commissioner Table I to Paragraph No.4 of this Order against the ImpugnedCommon MiscellaneousOrder dated 12.05.2017 passed by the Tribunal under Section 254 (2) of the IT Act. Submission of the Appellant: 55. The learned counsel for the Assessee submitted that the issue is no longer res-integra and is covered by a plethora of decisions of the Courts. Particularly, our attention was drawn to the decision of this Court rendered in “Commi