G.Sailaja, Hyd, Hyderabad v. ITO, Ward-11(3), Hyderabad, Hyderabad

ITA 51/HYD/2016 | 2006-2007
Pronouncement Date: 30-11-2017 | Result: Allowed

Appeal Details

RSA Number 5122514 RSA 2016
Assessee PAN ADHPG4321L
Bench Hyderabad
Appeal Number ITA 51/HYD/2016
Duration Of Justice 1 year(s) 10 month(s) 15 day(s)
Appellant G.Sailaja, Hyd, Hyderabad
Respondent ITO, Ward-11(3), Hyderabad, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted A
Tribunal Order Date 30-11-2017
Date Of Final Hearing 03-07-2017
Next Hearing Date 03-07-2017
First Hearing Date 03-07-2017
Assessment Year 2006-2007
Appeal Filed On 14-01-2016
Judgment Text
ITA NO 51 OF 2016 AND OTHERS. PAGE 1 OF 25 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH HYDERABAD BEFORE SMT. P. MADHAVI DEVI JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN ACCOUNTANT MEMBER ITA NOS.51 & 579/HYD/2016 716/HYD/2015 & 52/HYD/20 16 (ASSESSMENT YEARS: 2006-07 2007-08 & 2011-12) SMT. G. SAILAJA HYDERABAD PAN: ADHPG 4321 L VS I. T. O WARD 11 ( 3 ) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A.V. RAGHURAM FOR REVENUE : SMT. SUMAN MALIK DR O R D E R PER SMT. P. MADHAVI DEVI J.M. ALL THE ABOVE ARE ASSESSEES APPEALS AGAINST ASSESSMENTS U/S 143(3) OF THE ACT FOR THE A.YS 2006 -07 2007-08 AND 2011-12 RESPECTIVELY. ITA NOS. 51 & 52/HYD/2016 ARE AGAINST THE ORDER OF THE CIT (A)-5 HYDERABAD DATED 29.09.2015 FOR A.YS 2006-07 & 2011-12 WHILE ITA NO.716/HYD/20 16 IS AGAINST THE ORDER OF THE CIT (A)-5 HYDERABAD DATE D 12.3.2015 FOR THE A.Y 2007-08. ITA NO.579/HYD/2015 IS AGAINST THE ORDER OF THE CIT (A)-5 HYDERABAD DATED 22.3.2016 CONFIRMIN G THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE ACT FOR THE A .Y 2006-07. ITA NO.51/HYD/2016 2. AT THE OUTSET IT IS SEEN THAT THERE IS A DELAY OF 38 DAYS IN FILING OF THIS APPEAL BEFORE US. THE ASSESS EE HAS FILED AN DATE OF HEARING: 12.09.2017 DATE OF PRONOUNCEMENT: 30 . 1 1 .2017 ITA NO 51 OF 2016 AND OTHERS. PAGE 2 OF 25 APPLICATION FOR CONDONATION OF DELAY ALONG WITH HER AFFIDAVIT STATING THAT SINCE SHE IS A SENIOR CITIZEN THE AFF AIRS OF THE PROPERTY ARE LOOKED AFTER BY HER SON MR. G. MADHAV PRASAD A ND THAT ON RECEIPT OF THE ORDER OF THE CIT (A) SHE HAD HANDED OVER THE SAME TO HER SON AND THEY WERE UNDER THE IMPRESSION THAT THE APPEALS IN RESPECT OF THE A.YS 2006-07 AND 2011-12 ARE NOT REQUIRED TO BE FILED IN VIEW OF THE FACT THAT THE ASSESSEES APPEA L NO.716/HYD/2015 FOR THE A.YS 2007-08 IS PENDING BEF ORE THE TRIBUNAL AND IF THE RELIEF SOUGHT FOR IN THE A.Y 20 07-08 IS GRANTED IT WOULD APPLY TO THESE A.YS AS WELL AND THEREFORE THE APPEALS WERE NOT FILED. IT IS FURTHER STATED THAT THE ASSES SEES SON HAD THEREAFTER LEFT FOR THEIR NATIVE PLACE AND AFTER RE TURNING FROM THE NATIVE PLACE AND AFTER DISCUSSION WITH THE ASSESSEE S COUNSEL THEY REALIZED THAT THE APPEALS HAVE TO BE FILED FOR THESE YEARS ALSO AND THEREFORE THE APPEALS WERE FILED BEFORE THE TR IBUNAL ON 14.03.2016 RESULTING IN THE DELAY OF 38 DAYS. THERE FORE SHE PRAYED THAT THE DELAY MAY BE CONDONED. 3. THE LEARNED DR HOWEVER OPPOSED THE CONDONATION OF THE DELAY STATING THAT THE ASSESSEE HAS FAILED TO E XPLAIN THE REASONABLE CAUSE FOR THE DELAY OF 38 DAYS. 4. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD WE ARE SATISFIED THAT THE DELAY IS NEITH ER WILFUL NOR WANTON AND THAT THERE IS A REASONABLE CAUSE FOR NOT FILING OF THE APPEAL BEFORE THE TRIBUNAL IN TIME. THE DELAY IS AC CORDINGLY CONDONED. ITA NO 51 OF 2016 AND OTHERS. PAGE 3 OF 25 5. AS REGARDS THE MERITS OF THE CASE BRIEF FACTS A RE THAT THE ASSESSEE BEING AN INDIVIDUAL HAD FILED HER RET URN OF INCOME FOR THE A.Y 2006-07 ON 29.9.2006 DECLARING TOTAL IN COME OF RS.11 292. THE AO LEARNT THAT THE ASSESSEE WAS THE 1/6 TH OWNER OF A LANDED PROPERTY ADMEASURING 1 ACRE AND 39 GUNT AS IN SURVEY NO.77/B HYDERBAGAR VILLAGE BALANAGAR MANDAL R.R. DISTT. WHICH WAS PURCHASED BY HER VIDE DOCUMENT NO.7569/2993 DAT ED 27.10.2003 AND THAT SUBSEQUENTLY ALL THE OWNERS EN TERED INTO A DEVELOPMENT AGREEMENT-CUM-GPA WITH M/S VERTEX HOMES PVT. LTD ON 9.1.2006 VIDE DOCUMENT NO.1370/2006 AND AS P ER THE SAID DEED THE TOTAL AREA TO BE BUILT UP WAS TWO LAKH SF T AND THE ESTIMATED MARKET VALUE OF SUCH BUILT UP PROPERTY WA S RS.8.80 CRORES. FURTHER AS PER THE DEED THE OWNERS WERE E NTITLED TO 46% SHARE IN THE CONSTRUCTED AREA. HE OBSERVED THAT THO UGH THE CAPITAL GAIN HAS ARISEN TO THE ASSESSEE ON ACCOUNT OF THE DEVELOPMENT AGREEMENT SHE HAS NOT OFFERED IT FOR T AXATION IN HER RETURN OF INCOME FOR THE A.Y 2006-07. 6. THEREFORE THE CASE WAS RE-OPENED BY ISSUANCE OF A NOTICE U/S 148 OF THE ACT. THE ASSESSEE FILED A LET TER STATING THAT THE RETURN ORIGINALLY FILED MAY BE TREATED AS THE R ETURN FILED IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. THEREAFT ER THE AO ISSUED A SHOW-CAUSE NOTICE PROPOSING TO BRING TO TA X THE ESCAPED INCOME OF RS.67 46 666 (BEING 1/6 TH OF THE SHARE OF RS.8.80 CRORES X 46%). THE ASSESSEE FILED A LETTER STATING THAT SH E HAD ADMITTED THE CAPITAL GAINS IN THE A.Y 2011-12 ON GETTING POS SESSION OF THE FLATS AND FURTHER STATED THAT AS PER THE SUPPLEMENT ARY DEVELOPMENT AGREEMENT DATED 10.04.2010 THE ENTITLE MENT OF THE LAND OWNERS HAS COME DOWN TO 43% FROM THE EARLIER 4 6%. THE ITA NO 51 OF 2016 AND OTHERS. PAGE 4 OF 25 ASSESSEE ALSO RELIED UPON THE GROUNDS RAISED BY THE REVENUE BEFORE THE HON'BLE HIGH COURT OF ANDHRA PRADESH IN THE CASE OF DR. MAYA SHENOY (124 TTJ 692) FOR THE A.Y 2006-07 TO ARGUE THAT THE CAPITAL GAINS ONLY ARISES IN THE YEAR IN WHICH THE POSSESSION OF THE FLATS IS GIVEN. THE AO HOWEVER WAS NOT CON VINCED WITH THE ASSESSEES ARGUMENTS AND HELD THAT SINCE THE ASSESS EE AND THE OTHER OWNERS HAVE HANDED OVER THE POSSESSION OF THE PROPERTY TO THE DEVELOPER IN THE RELEVANT P.Y ONLY ON EXECUTION OF THE DEVELOPMENT AGREEMENT THERE IS A TRANSFER IN THE R ELEVANT FINANCIAL YEAR AND THAT THE CAPITAL GAINS ARISING T HEREFROM HAS TO BE BROUGHT TO TAX IN THIS YEAR. THEREAFTER HE PROC EEDED TO ACCEPT THE SHARE OF THE CONSTRUCTED AREA TO THE LAND OWNER S AT 43% AS PER THE SUPPLEMENTARY AGREEMENT AND CALCULATED 1/6 TH SHARE OF THE ASSESSEE THEREON. FOR THE PURPOSE OF COMPUTING THE SALE CONSIDERATION FOR TRANSFER OF LAND HE ADOPTED THE SRO VALUE BEING RS.2200 PER SQ. YARD AND DETERMINED THE SHORT TERM CAPITAL GAIN AT RS.19 24 956. 7. AGGRIEVED THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE CIT (A) CHALLENGING (I) THE VALIDITY OF THE REOPEN ING OF THE ASSESSMENT; (II) THE YEAR OF THE TAXABILITY OF THE CAPITAL GAIN; AND (III) THE ADOPTION OF THE SRO VALUE AS THE SALE CON SIDERATION. THE CIT (A) CONFIRMED THE VALIDITY OF THE RE-ASSESSMENT PROCEEDINGS BY HOLDING THAT THE ASSESSEE HAS FAILED TO OFFER THE C APITAL GAINS TO TAX IN THE YEAR OF TRANSFER AND FURTHER THAT THE RE TURN WAS ONLY PROCESSED U/S 143(1) OF THE ACT AND NO SCRUTINY ASS ESSMENT WAS UNDERTAKEN. ITA NO 51 OF 2016 AND OTHERS. PAGE 5 OF 25 8. AS REGARDS THE YEAR OF TAXABILITY HE CONSIDERED THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CA SE OF CHATURBHUJ DWARKADAS KAPADIA VS. CIT (2003) 260 ITR 491 TO HOLD THAT THE YEAR OF EXECUTION OF THE DEVELOPMENT AGREEMENT COUPLED WITH THE HANDING OVER OF THE POSSESSION OF THE LAND TO THE DEVELOPER IS THE YEAR OF TAXABILITY. THE CIT (A) D ID NOT THEREFORE ACCEPT THE ASSESSEES CONTENTION THAT THE YEAR OF R ECEIPT OF CONSTRUCTED AREA IN THE YEAR OF TAXABILITY OR IN TH E ALTERNATIVE SINCE THE SUPPLEMENTARY AGREEMENT HAS BEEN ENTERED INTO SUBSEQUENT TO THE DEVELOPMENT AGREEMENT HAS BEEN EN TERED INTO AND THEREFORE THE YEAR IN WHICH THE SUPPLEMENTARY AGREEMENT HAS BEEN EXECUTED SHOULD BE CONSIDERED AS THE YEAR OF TAXABILITY. 9. AS REGARDS THE QUANTUM OF THE CAPITAL GAINS THE CIT (A) OBSERVED THAT THE DEVELOPMENT AGREEMENT ITSELF CONTAINS THE MARKET VALUE OF THE PROPERTY AT RS.8.80 CRORES AND OBSERVED THAT THE ASSESSEES SHARE BEING 1/6 TH SHARE OF THE 43% OF THE CONSTRUCTED AREA WOULD COME TO RS.67 46 666. HE OB SERVED THAT THE AO HAS ADOPTED THE SALE PRICE AT RS.2200 PER SQ . YARD WHICH IS MUCH LOWER THAN THE VALUE MENTIONED IN THE DEVEL OPMENT AGREEMENT. HE THEREFORE ISSUED A SHOW-CAUSE NOTICE FOR ENHANCEMENT OF THE CAPITAL GAIN. THE ASSESSEE SUBMI TTED THAT THE VALUE OF RS.8.80 CRORES IS NOT ONLY A COMPOSITE VAL UE OF THE SUPER STRUCTURE AND THE LAND BUT IS ALSO FOR THE ENTIRE L AND AND THAT SUCH COMPOSITE VALUE IS FIXED BASED ON SALE PRICE Q UOTED BY THE BUILDER. THE ASSESSEE SUBMITTED THAT THE VALUE THAT IS LIKELY TO ARISE AFTER AN UNCERTAIN PERIOD CANNOT BE THE BASIS FOR ADOPTING THE SALE CONSIDERATION IN THE YEAR OF AGREEMENT. TH E CIT (A) HOWEVER WAS NOT CONVINCED AND HELD THAT THE INSTAN CE OF THE ITA NO 51 OF 2016 AND OTHERS. PAGE 6 OF 25 TRANSFER OF THE LAND AND THE SALE CONSIDERATION IS ALREADY MENTIONED IN THE AGREEMENT AND THEREFORE THE SAID CONSIDERATION SHOULD BE TAKEN INTO CONSIDERATION FOR COMPUTING TH E CAPITAL GAIN. THE CIT (A) DIRECTED THE AO ACCORDINGLY. THEREAFTER THE CIT (A) ALSO EXAMINED THE ASSESSEES CLAIM OF EXPENDITURE O F RS.80.00 LAKHS WHICH IS CLAIMED TO HAVE BEEN PAID TO ONE SH RI GNANESHWAR FOR ARRANGING THE DEVELOPMENT AGREEMENT. IN THE ABSENCE OF ANY EVIDENCE TO SUPPORT THIS CONTENTION THE CIT (A) DISALLOWED THE CLAIM. 10. AGAINST THIS ORDER OF THE CIT (A) THE ASSESSE E IS IN APPEAL BEFORE US. IN THE GROUNDS OF APPEAL FILED AL ONG WITH FORM NO.36 THE ASSESSEE HAS CHALLENGED THE ORDER OF THE CIT (A) IN CONFIRMING THE ASSESSMENT U/S 147 OF THE ACT EVEN T HOUGH THERE IS NO ESCAPEMENT OF INCOME IN THE HANDS OF THE ASSE SSEE FOR THE A.Y UNDER CONSIDERATION AS THE ASSESSEE HAS ADMITTE D THE INCOME ARISING UNDER THE DEVELOPMENT AGREEMENT IN THE YEAR OF DELIVERY OF THE FLATS IN A.Y 2011-12. THE ASSESSEE HAS ALSO CHA LLENGED THE A.Y 2006-07 AS THE YEAR OF THE TAXABILITY AND THE COMPU TATION OF THE CAPITAL GAIN BY THE CIT (A) AND DISALLOWANCE OF THE CLAIM OF EXPENDITURE OF RS.80.00 LAKHS BY THE CIT (A). 11. IN ADDITION TO THESE GROUNDS OF APPEAL THE ASS ESSEE HAS ALSO RAISED AN ADDITIONAL GROUND OF APPEAL CONT ENDING THAT IN VIEW OF THE CLARIFICATORY AMENDMENT BROUGHT IN BY F INANCE ACT OF 2017 BY WAY OF INSERTION OF SUB-SECTION (5A) TO SE CTION 45 OF THE I.T. ACT 1961 THE ORDERS OF THE AUTHORITIES BELOW BRINGING THE CAPITAL GAINS TO TAX IN THE A.Y UNDER CONSIDERATION IS ERRONEOUS ITA NO 51 OF 2016 AND OTHERS. PAGE 7 OF 25 AND UNSUSTAINABLE. IN THE APPLICATION SEEKING ADMIS SION OF THE ADDITIONAL GROUND IT IS STATED THAT THIS PROVISION HAS BEEN BROUGHT IN BY THE FINANCE ACT 2017 AND THAT IT BE ING A LEGAL GROUND SHOULD BE ADMITTED AND REMANDED TO THE FILE OF THE AO AS PER THE LAW LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. NTPC (229 ITR 393). THE LEARNED COUNSEL FOR THE ASSESSEE ALSO RELIED UPON THE FOLLOWING JUDGMENTS OF THE HON 'BLE SUPREME COURT TO PLEAD THAT THE ABOVE PROVISION IS APPLICAB LE RETROSPECTIVELY: (I) CIT VS. ALOM EXTRUSION LTD (2010) 1 SCC 489 (II) CIT DELHI VS. VATIKA TOWNSHIP P LTD (2015) 1 SCC 1. 12. SINCE THE ADDITIONAL GROUND OF APPEAL AS TO THE APPLICABILITY OF THE SAID PROVISION WITH RETROSPECT IVE EFFECT IS A LEGAL ISSUE WE DEEM IT FIT AND PROPER TO CONSIDER ITS ADMISSIBILITY AT THIS STAGE. FINANCE ACT 2017 HAS INSERTED SUB-SE CTION (5A) TO SECTION 45 OF THE I.T. ACT 1961 WHICH PROVIDES THA T THE CAPITAL GAINS SHALL BE TAXED IN THE YEAR IN WHICH THE CERTI FICATE OF COMPLETION FOR THE WHOLE OR PART OF THE PROJECT IS ISSUED BY THE COMPETENT AUTHORITY AND WHERE THE PROPERTY IS TRANS FERRED BEFORE THE DATE OF ISSUE OF THE SAID CERTIFICATE OF COMPLE TION THE CAPITAL GAINS SHOULD BE DEEMED TO BE THE INCOME OF THE PREV IOUS YEAR IN WHICH SUCH TRANSFER TAKES PLACE. THIS PROVISION HAS BEEN INTRODUCED W.E.F. 1.4.2018 AND IT IS A SUBSTANTIVE PROVISION INTRODUCED BY THE ACT AND NOT A PROVISO OR AN EXPLA NATION. IN THE CASE OF VATIKA TOWNSHIP PVT LTD THE HON'BLE SUPREM E COURT WAS CONSIDERING THE PROSPECTIVE/RETROSPECTIVE APPLICABI LITY OF THE PROVISO TO SECTION 113 INTRODUCED BY THE FINANCE AC T OF 2002 AND HELD IT TO BE PROSPECTIVE IN OPERATION AS IT INTEND ED TO CREATE A CHARGE OR BURDEN ON THE ASSESSEES. THE HON'BLE SUPR EME COURT ITA NO 51 OF 2016 AND OTHERS. PAGE 8 OF 25 HAS ELABORATELY DISCUSSED THE LAW RELATING TO INTER PRETATION OF TAXING STATUES PARTICULARLY THE PROSPECTIVE/RETROSP ECTIVE OPERATION OF AMENDMENTS. AT PARAS 27 TO 36 THE HON'BLE SUPRE ME COURT CULLED OUT THE GENERAL PRINCIPLES CONCERNING THE RE TROSPECTIVITY OF A LEGISLATION AS UNDER: GENERAL PRINCIPLES CONCERNING RETROSPECTIVITY 27. A LEGISLATION BE IT A STATUTORY ACT OR A STATU TORY RULE OR A STATUTORY NOTIFICATION MAY PHYSICALLY CONSIST S OF WORDS PRINTED ON PAPERS. HOWEVER CONCEPTUALLY IT I S A GREAT DEAL MORE THAN AN ORDINARY PROSE. THERE IS A SPECIAL PECULIARITY IN THE MODE OF VERBAL COMMUNICA TION BY A LEGISLATION. A LEGISLATION IS NOT JUST A SERIE S OF STATEMENTS SUCH AS ONE FINDS IN A WORK OF FICTION/ NON FICTION OR EVEN IN A JUDGMENT OF A COURT OF LAW. TH ERE IS A TECHNIQUE REQUIRED TO DRAFT A LEGISLATION AS WELL A S TO UNDERSTAND A LEGISLATION. FORMER TECHNIQUE IS KNOWN AS LEGISLATIVE DRAFTING AND LATTER ONE IS TO BE FOUND IN THE VARIOUS PRINCIPLES OF INTERPRETATION OF STATUTES. VIS-- VIS ORDINARY PROSE A LEGISLATION DIFFERS IN ITS PROVENANCE LAY-OUT AND FEATURES AS ALSO IN THE IMPLICATION AS TO ITS MEANING THAT ARISE BY PRESUMP TIONS AS TO THE INTENT OF THE MAKER THEREOF. 28. OF THE VARIOUS RULES GUIDING HOW A LEGISLATION HAS TO BE INTERPRETED ONE ESTABLISHED RULE IS THAT UNLESS A CONTRARY INTENTION APPEARS A LEGISLATION IS PRESUM ED NOT TO BE INTENDED TO HAVE A RETROSPECTIVE OPERATIO N. THE IDEA BEHIND THE RULE IS THAT A CURRENT LAW SHOULD G OVERN CURRENT ACTIVITIES. LAW PASSED TODAY CANNOT APPLY T O THE EVENTS OF THE PAST. IF WE DO SOMETHING TODAY WE DO IT KEEPING IN VIEW THE LAW OF TODAY AND IN FORCE AND N OT TOMORROWS BACKWARD ADJUSTMENT OF IT. OUR BELIEF IN THE NATURE OF THE LAW IS FOUNDED ON THE BED ROCK THAT E VERY HUMAN BEING IS ENTITLED TO ARRANGE HIS AFFAIRS BY R ELYING ON THE EXISTING LAW AND SHOULD NOT FIND THAT HIS PL ANS HAVE BEEN RETROSPECTIVELY UPSET. THIS PRINCIPLE OF LAW IS KNOWN AS LEX PROSPICIT NON RESPICIT : LAW LOOKS FOR WARD NOT BACKWARD. AS WAS OBSERVED IN PHILLIPS VS. EYRE[ 3] A RETROSPECTIVE LEGISLATION IS CONTRARY TO THE GENERA L PRINCIPLE THAT LEGISLATION BY WHICH THE CONDUCT OF MANKIND IS TO BE REGULATED WHEN INTRODUCED FOR THE FIRST ITA NO 51 OF 2016 AND OTHERS. PAGE 9 OF 25 TIME TO DEAL WITH FUTURE ACTS OUGHT NOT TO CHANGE T HE CHARACTER OF PAST TRANSACTIONS CARRIED ON UPON THE FAITH OF THE THEN EXISTING LAW. 29. THE OBVIOUS BASIS OF THE PRINCIPLE AGAINST RETROSPECTIVITY IS THE PRINCIPLE OF 'FAIRNESS WHI CH MUST BE THE BASIS OF EVERY LEGAL RULE AS WAS OBSERVED IN THE DECISION REPORTED IN LOFFICE CHERIFIEN DES PHOSPHA TES V. YAMASHITA-SHINNIHON STEAMSHIP CO.LTD[4]. THUS LEGISLATIONS WHICH MODIFIED ACCRUED RIGHTS OR WHICH IMPOSE OBLIGATIONS OR IMPOSE NEW DUTIES OR ATTACH A NEW DISABILITY HAVE TO BE TREATED AS PROSPECTIVE UN LESS THE LEGISLATIVE INTENT IS CLEARLY TO GIVE THE ENACT MENT A RETROSPECTIVE EFFECT; UNLESS THE LEGISLATION IS FOR PURPOSE OF SUPPLYING AN OBVIOUS OMISSION IN A FORMER LEGISL ATION OR TO EXPLAIN A FORMER LEGISLATION. WE NEED NOT NOT E THE CORNUCOPIA OF CASE LAW AVAILABLE ON THE SUBJECT BEC AUSE AFORESAID LEGAL POSITION CLEARLY EMERGES FROM THE VARIOUS DECISIONS AND THIS LEGAL POSITION WAS CONCE DED BY THE COUNSEL FOR THE PARTIES. IN ANY CASE WE SHA LL REFER TO FEW JUDGMENTS CONTAINING THIS DICTA A LITTLE LA TER 30. WE WOULD ALSO LIKE TO POINT OUT FOR THE SAKE O F COMPLETENESS THAT WHERE A BENEFIT IS CONFERRED BY A LEGISLATION THE RULE AGAINST A RETROSPECTIVE CONST RUCTION IS DIFFERENT. IF A LEGISLATION CONFERS A BENEFIT ON SOME PERSONS BUT WITHOUT INFLICTING A CORRESPONDING DETRIMENT ON SOME OTHER PERSON OR ON THE PUBLIC GENERALLY AND WHERE TO CONFER SUCH BENEFIT APPEARS TO HAVE BEEN THE LEGISLATORS OBJECT THEN THE PRESUMPT ION WOULD BE THAT SUCH A LEGISLATION GIVING IT A PURPO SIVE CONSTRUCTION WOULD WARRANT IT TO BE GIVEN A RETROSPECTIVE EFFECT. THIS EXACTLY IS THE JUSTIFICA TION TO TREAT PROCEDURAL PROVISIONS AS RETROSPECTIVE. IN GOVERNMENT OF INDIA & ORS. V. INDIAN TOBACCO ASSOCIATION[5] THE DOCTRINE OF FAIRNESS WAS HELD T O BE RELEVANT FACTOR TO CONSTRUE A STATUTE CONFERRING A BENEFIT IN THE CONTEXT OF IT TO BE GIVEN A RETROSP ECTIVE OPERATION. THE SAME DOCTRINE OF FAIRNESS TO HOLD T HAT A STATUTE WAS RETROSPECTIVE IN NATURE WAS APPLIED IN THE CASE OF VIJAY V. STATE OF MAHARASHTRA & ORS.[6] IT WAS HELD THAT WHERE A LAW IS ENACTED FOR THE BENEFIT OF COMMUNITY AS A WHOLE EVEN IN THE ABSENCE OF A PROVISION THE STATUTE MAY BE HELD TO BE RETROSPECTI VE IN NATURE. HOWEVER WE ARE CONFRONTED WITH ANY SUCH SITUATION HERE. ITA NO 51 OF 2016 AND OTHERS. PAGE 10 OF 25 31. IN SUCH CASES RETROSPECTIVELY IS ATTACHED TO B ENEFIT THE PERSONS IN CONTRADISTINCTION TO THE PROVISION IMPOSING SOME BURDEN OR LIABILITY WHERE THE PRESUMPTION ATTACHES TOWARDS PROSPECTIVITY. IN THE INSTANT CASE THE PROVISO ADDED TO SECTION 113 OF T HE ACT IS NOT BENEFICIAL TO THE ASSESSEE. ON THE CONTRARY IT IS A PROVISION WHICH IS ONEROUS TO THE ASSESSEE. THEREFO RE IN A CASE LIKE THIS WE HAVE TO PROCEED WITH THE NORMA L RULE OF PRESUMPTION AGAINST RETROSPECTIVE OPERATION. THU S THE RULE AGAINST RETROSPECTIVE OPERATION IS A FUNDAMENTAL RULE OF LAW THAT NO STATUTE SHALL BE CONSTRUED TO HAVE A RETROSPECTIVE OPERATION UNLESS SUCH A CONSTRUCTION APPEARS VERY CLEARLY IN THE TERMS OF THE ACT OR ARISES BY NECESSARY AND DISTINCT IMPLICATIO N. DOGMATICALLY FRAMED THE RULE IS NO MORE THAN A PRESUMPTION AND THUS COULD BE DISPLACED BY OUT WEIGHING FACTORS. 32. LET US SHARPEN THE DISCUSSION A LITTLE MORE. WE MAY NOTE THAT UNDER CERTAIN CIRCUMSTANCES A PARTICULAR AMENDMENT CAN BE TREATED AS CLARIFICATORY OR DECLARATORY IN NATURE. SUCH STATUTORY PROVISIONS AR E LABELED AS DECLARATORY STATUTES. THE CIRCUMSTANCE S UNDER WHICH A PROVISION CAN BE TERMED AS DECLARATO RY STATUTES IS EXPLAINED BY JUSTICE G.P. SINGH[7] IN THE FOLLOWING MANNER: DECLARATORY STATUTES: THE PRESUMPTION AGAINST RETROSPECTIVE OPERATION IS NOT APPLICABLE TO DECLARATORY STATUTES. AS STATED IN CR AIES AND APPROVED BY THE SUPREME COURT : FOR MODERN PURPOSES A DECLARATORY ACT MAY BE DEFINED AS AN ACT TO REMOVE DOUBTS EXISTING AS TO THE COMMON LAW OR THE MEANING OR EFFECT OF ANY STATUTE. SUCH ACTS ARE USU ALLY HELD TO BE RETROSPECTIVE. THE USUAL REASON FOR PASS ING A DECLARATORY ACT IS TO SET ASIDE WHAT PARLIAMENT DEE MS TO HAVE BEEN A JUDICIAL ERROR WHETHER IN THE STATEMEN T OF THE COMMON LAW OR IN THE INTERPRETATION OF STATUTES . USUALLY IF NOT INVARIABLY SUCH AN ACT CONTAINS A PREAMBLE AND ALSO THE WORD 'DECLARED' AS WELL AS T HE WORD 'ENACTED'. BUT THE USE OF THE WORDS 'IT IS DEC LARED' IS NOT CONCLUSIVE THAT THE ACT IS DECLARATORY FOR THES E WORDS MAY AT TIMES BE USED TO INTRODUCED NEW RULES OF L AW AND THE ACT IN THE LATTER CASE WILL ONLY BE AMENDIN G THE LAW AND WILL NOT NECESSARILY BE RETROSPECTIVE. IN ITA NO 51 OF 2016 AND OTHERS. PAGE 11 OF 25 DETERMINING THEREFORE THE NATURE OF THE ACT REGA RD MUST BE HAD TO THE SUBSTANCE RATHER THAN TO THE FOR M. IF A NEW ACT IS 'TO EXPLAIN' AN EARLIER ACT IT WOULD BE WITHOUT OBJECT UNLESS CONSTRUED RETROSPECTIVE. AN EXPLANATORY ACT IS GENERALLY PASSED TO SUPPLY AN OBVIOUS OMISSION OR TO CLEAR UP DOUBTS AS TO THE ME ANING OF THE PREVIOUS ACT. IT IS WELL SETTLED THAT IF A S TATUTE IS CURATIVE OR MERELY DECLARATORY OF THE PREVIOUS LAW RETROSPECTIVE OPERATION IS GENERALLY INTENDED. THE LANGUAGE 'SHALL BE DEEMED ALWAYS TO HAVE MEANT' IS DECLARATORY AND IS IN PLAIN TERMS RETROSPECTIVE. I N THE ABSENCE OF CLEAR WORDS INDICATING THAT THE AMENDING ACT IS DECLARATORY IT WOULD NOT BE SO CONSTRUED WHEN T HE PRE-AMENDED PROVISION WAS CLEAR AND UNAMBIGUOUS. AN AMENDING ACT MAY BE PURELY CLARIFICATORY TO CLEAR A MEANING OF A PROVISION OF THE PRINCIPAL ACT WHICH W AS ALREADY IMPLICIT. A CLARIFICATORY AMENDMENT OF THIS NATURE WILL HAVE RETROSPECTIVE EFFECT AND THEREFOR E IF THE PRINCIPAL ACT WAS EXISTING LAW WHICH THE CONSTITUTION CAME INTO FORCE THE AMENDING ACT ALSO WILL BE PART OF THE EXISTING LAW. THE ABOVE SUMMING UP IS FACTUALLY BASED ON THE JUDGMENTS OF THIS COURT AS WELL AS ENGLISH DECISION S. 13. THUS ONLY DECLARATORY EXPLANATORY OR CLARIFIC ATORY STATUES OR AMENDMENTS ARE APPLICABLE RETROSPECTIVEL Y. THEREFORE IT IS NECESSARY TO EXAMINE IF THE SUB-SECTION (5A) TO SECTION 45 IS DECLARATORY OR CLARIFICATORY. THE NOTES ON CLAUSES AND MEMORANDUM OF FINANCE BILL OF 2017 WOULD SHED SOME LIGHT ON THIS ASPECT. THE RELEVANT PORTION OF THE BILL READS AS UNDER: SPECIAL PROVISIONS FOR COMPUTATION OF CAPITAL GAINS IN CASE OF JOINT DEVELOPMENT AGREEMENT. UNDER THE EXISTING PROVISIONS OF SECTION 45 CAPIT AL GAIN IS CHARGEABLE TO TAX IN THE YEAR IN WHICH TRANSFER TAK ES PLACE EXCEPT IN CERTAIN CASES. THE DEFINITION OF 'TRANSFER' INTER ALIA INCLUDES ANY ARRANGEMENT OR TRANSACTION WHERE ANY RIGHTS ARE HAN DED OVER IN EXECUTION OF PART PERFORMANCE OF CONTRACT EVEN THO UGH THE LEGAL TITLE HAS NOT BEEN TRANSFERRED. IN SUCH A SCENARIO EXECUTION OF JOINT DEVELOPMENT AGREEMENT BETWEEN THE OWNER OF IMMOVABL E PROPERTY AND THE DEVELOPER TRIGGERS THE CAPITAL GAI NS TAX LIABILITY IN THE HANDS OF THE OWNER IN THE YEAR IN WHICH THE POS SESSION OF ITA NO 51 OF 2016 AND OTHERS. PAGE 12 OF 25 IMMOVABLE PROPERTY IS HANDED OVER TO THE DEVELOPER FOR DEVELOPMENT OF A PROJECT. WITH A VIEW TO MINIMISE THE GENUINE HARDSHIP WHICH THE OWNER OF LAND MAY FACE IN PAYING CAPITAL GAINS TAX IN THE YE AR OF TRANSFER IT IS PROPOSED TO INSERT A NEW SUB-SECTION (5A) IN SECTIO N 45 SO AS TO PROVIDE THAT IN CASE OF AN ASSESSEE BEING INDIVIDUA L OR HINDU UNDIVIDED FAMILY WHO ENTERS INTO A SPECIFIED AGREE MENT FOR DEVELOPMENT OF A PROJECT THE CAPITAL GAINS SHALL B E 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. IT IS FURTHER PROPOSED TO PROVIDE THAT THE STAMP DU TY VALUE OF HIS SHARE BEING LAND OR BUILDING OR BOTH IN THE PROJE CT ON THE DATE OF ISSUING OF SAID CERTIFICATE OF COMPLETION AS INCREA SED BY ANY MONETARY CONSIDERATION RECEIVED IF ANY SHALL BE D EEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF THE TRANSFER OF THE CAPITAL ASSET. IT IS ALSO PROPOSED TO PROVIDE THAT BENEFIT OF THIS PROPOSED REGIME SHALL NOT APPLY TO AN ASSESSEE WHO TRANSFERS HIS SH ARE IN THE PROJECT TO ANY OTHER PERSON ON OR BEFORE THE DATE OF ISSUE OF SAID CERTIFICATE OF COMPLETION. IT IS ALSO PROPOSED TO PROVIDE THAT IN SUCH A SITUATION THE CAPITAL GAINS AS DETERMINED UNDER GENERAL PROVI SIONS OF THE ACT SHALL BE DEEMED TO BE THE INCOME OF THE PREVIOUS YE AR IN WHICH SUCH TRANSFER TOOK PLACE AND SHALL BE COMPUTED AS PER PR OVISIONS OF THE ACT WITHOUT TAKING INTO ACCOUNT THIS PROPOSED PROVI SIONS. IT IS ALSO PROPOSED TO DEFINE THE FOLLOWING EXPRESS IONS 'COMPETENT AUTHORITY' 'SPECIFIED AGREEMENT' AND 'STAMP DUTY V ALUE' FOR THIS PURPOSE. IT IS ALSO PROPOSED TO MAKE CONSEQUENTIAL AMENDMENT IN SECTION 49 SO AS TO PROVIDE THAT THE COST OF ACQUISITION OF TH E SHARE IN THE PROJECT BEING LAND OR BUILDING OR BOTH IN THE HAND S OF THE LAND OWNER SHALL BE THE AMOUNT WHICH IS DEEMED AS FULL V ALUE OF CONSIDERATION UNDER THE SAID PROPOSED PROVISION. THESE AMENDMENTS WILL TAKE EFFECT FROM 1ST APRIL 2 018 AND WILL ACCORDINGLY APPLY IN RELATION TO THE ASSESSMENT YE AR 2018-19 AND SUBSEQUENT YEARS. IT IS ALSO PROPOSED TO INSERT A NEW SECTION 194-IC IN THE ACT SO AS TO PROVIDE THAT IN CASE ANY MONETARY CONSIDERATION IS PAYABLE UNDER THE SPECIFIED AGREEMENT TAX AT THE RATE OF TEN PER CENT SHALL BE DEDUCTIBLE FROM SUCH PAYMENT. THIS AMENDMENT WILL T AKE EFFECT FROM 1ST APRIL 2017. ITA NO 51 OF 2016 AND OTHERS. PAGE 13 OF 25 14. FROM THE ABOVE IT IS CLEAR THAT BY INSERTION O F SUB SECTION (5A) IT IS INTENDED TO MINIMIZE THE GENUIN E HARDSHIP WHICH THE OWNER OF LAND MAY FACE IN PAYING CAPITAL GAINS TAX IN THE YEAR OF TRANSFER. THE EXISTING LEGAL POSITION H AS BEEN ENUMERATED BEFORE SETTING OUT THE PURPOSE OF INSERT ION OF THE SUB- SECTION. THUS THE CLEAR INTENTION OF THE LEGISLATU RE IS NOT TO CURE ANY DEFECT BUT IT IS TO GIVE BENEFIT PROSPECTIVELY . 15. THE SPECIAL BENCH OF THE TRIBUNAL AT MUMBAI IN THE CASE OF M/S. BHARATI SHIPARD LTD IN ITA NO.2404/MU M/2009 (SB) DATED 9.9.2011 HAS CONSIDERED THE RETROSPECTI VE AND PROSPECTIVE EFFECT OF A SUBSTANTIVE PROVISION WHILE CONSIDERING THE EFFECT OF AMENDMENT TO SECTION 40(A)(IA) BY FINANCE ACT OF 2010 AND AT PARAS 35 TO 41 HAS CULLED THE PRINCIPLES AS UNDER: 35. FROM THE ABOVE DISCUSSION IT IS CRYSTAL CLEAR T HAT RETROSPECTIVE EFFECT TO A PROVISION CANNOT BE ORDINARILY GIVEN BY JUDICIAL OR QUASI JUDICIAL AUTHORITIES UNLESS IT IS EXPRESSLY GIVEN B Y THE LEGISLATURE. THERE MAY BE CERTAIN SITUATIONS REQUIRING THE GIVING OF R ETROSPECTIVE EFFECT. THE SCOPE FOR THE COURTS TO VALIDLY GIVE RETROSPECT IVE EFFECT TO A PROVISION DESPITE NOT BEING CLEARLY GIVEN SO BY TH E LEGISLATURE IS LIMITED. IT EXTENDS TO CASES WHERE THE LEGISLATIVE INTENT HAS LATER BEEN MADE EXPLICIT WHICH WAS EARLIER IMPLICIT IN THE PRO VISION OR THE EXISTING PROVISION LED TO THE UNINTENDED CONSEQUENC ES AND MADE THE INTENTION OF THE LEGISLATURE UNWORKABLE. ANY AMENDM ENT WHICH HAS NOT BEEN GIVEN RETROSPECTIVE EFFECT BY THE LEGISLAT URE CANT BE CONSTRUED AS RETROSPECTIVE ON THE SOLITARY GROUND T HAT THE ORIGINAL PROVISION CAUSED SOME HARDSHIP TO THE ASSESSEES. TH E RELEVANT CRITERIA TO BE TAKEN INTO CONSIDERATION FOR ARRIVIN G AT THE DECISION ABOUT THE RETROSPECTIVE OR PROSPECTIVE EFFECT OF A LATER PROVISION IS TO UNEARTH THE INTENTION OF THE LEGISLATURE AT THE TIM E OF INTRODUCING THE ORIGINAL PROVISION AND NOT WHETHER IT CAUSED HARDSH IP TO THE TAXPAYERS. IF IT WAS VERY WELL KNOWN AT THE TIME OF INSERTING THE ORIGINAL PROVISION THAT IT IS GOING TO BE HARSH TH EN ANY SUBSEQUENT RELAXATION IN IT WILL NOT BE RETROSPECTIVE UNLESS E XPRESSLY STATED. THE REASON FOR NOT HOLDING SUCH LATER AMENDMENT AS RETR OSPECTIVE IS MANIFEST THAT THE LEGISLATURE IN ITS WISDOM INTENDE D TO IMPOSE A HARSH LEVY. IN SUCH A CASE THE JUDICIAL OR QUASI JU DICIAL AUTHORITIES ITA NO 51 OF 2016 AND OTHERS. PAGE 14 OF 25 CANNOT HELP THE SITUATION BY GRABBING THE LEGISLATI VE POWER IN HOLDING SUCH LATER RELAXATION AS RETROSPECTIVE WHEN THE LE GISLATURE HAS ITSELF MADE IT PROSPECTIVE. 36. IN OUR CONSIDERED OPINION THE BORDER LINE BETWE EN A SUBSTANTIVE PROVISION HAVING RETROSPECTIVE OR PROSPECTIVE EFFEC T IS QUITE PROMINENT. ONE NEEDS TO APPRECIATE THE NATURE OF TH E ORIGINAL PROVISION IN CONJUNCTION WITH THE AMENDMENT. ONCE A PROVISION HAS BEEN GIVEN RETROSPECTIVE EFFECT BY THE LEGISLATURE IT SHALL CONTINUE TO BE RETROSPECTIVE. IF ON THE OTHER HAND IF THE STATU TE DOES NOT AMEND RETROSPECTIVELY THEN ONE HAS TO DIG OUT THE INTENT ION OF THE PARLIAMENT AT THE TIME WHEN THE ORIGINAL PROVISION WAS INCORPORATED AND ALSO THE NEW AMENDMENT. IF THE LATER AMENDMENT SIMPLY CLARIFIES ITS INTENTION OF THE ORIGINAL PROVISION IT WILL AL WAYS BE CONSIDERED AS RETROSPECTIVE. LIKE THE CASE OF GOLD COIN HEALTH FO OD P. LTD. (SUPRA) IN WHICH THE HONBLE SUPREME COURT HELD THAT THE AMEND MENT TO EXPLANATION 4 TO SECTION 271(1)(C)(III) SIMPLY CLAR IFIED THE POSITION WHICH WAS EXISTING SINCE INCEPTION OF THE PROVISION THAT THE PENALTY IS LEVIABLE ON CONCEALMENT IRRESPECTIVE OF THE FACT WH ETHER ULTIMATELY ASSESSED INCOME IS POSITIVE OR NEGATIVE. SIMILARLY IN THE CASE OF KANJI SHIVJI AND CO. (SUPRA) THE HONBLE SUPREME COURT H ELD THAT THE PURPOSE OF EXPLANATION 2 TO SECTION 40(B) WAS SIMPL Y TO CLARIFY THAT THE INCOME-TAX ACT RECOGNIZES INDIVIDUAL STATUES OF A PERSON AS DIFFERENT FROM HIS REPRESENTATIVE CAPACITY. THIS EX PLANATION DID NOT BRING IN A NEW PROVISION BUT CLARIFIED THAT THE POS ITION WAS SO SINCE THE INTRODUCTION OF THE PROVISION ITSELF. IN THIS C ATEGORY OF CLARIFICATORY OR EXPLANATORY AMENDMENTS TO THE SUBSTANTIVE PROVIS IONS THE OBJECT IS ALWAYS TO CLARIFY THE INTENTION OF THE LEGISLATU RE AS IT WAS THERE AT THE TIME OF INSERTION OF THE ORIGINAL PROVISION. TH AT IS THE REASON FOR WHICH THE CLARIFICATORY AMENDMENTS ARE ALWAYS RETRO SPECTIVE IRRESPECTIVE OF THE DATE FROM WHICH EFFECT HAS BEEN GIVEN TO THEM BY THE LEGISLATURE. 37. THE SECOND CATEGORY INCLUDES THE CASES IN WHICH THERE WAS NO AMBIGUITY IN THE LANGUAGE OF THE PROVISION AT THE T IME OF ITS INTRODUCTION AND THE OBJECT SOUGHT WAS FULLY ATTAIN ABLE. BUT WHILE MAKING THE PROVISION WORKABLE BESIDES THE DESIRED RESULTS CERTAIN UNINTENDED CONSEQUENCES ALSO CROP UP. IN OTHER WORD S THE SECTION WAS INTRODUCED ORIGINALLY WITH A PARTICULAR PURPOSE BUT WHILE GIVING EFFECT TO THE PROVISION IN THE ATTAINMENT OF THAT P URPOSE CERTAIN OUTCOMES WHICH WERE NEVER DESIRED OR INTENDED BY TH E LEGISLATURE ALSO FOLLOW. ANY AMENDMENT TO REMOVE SUCH UNINTENDE D EFFECTS IS ALSO ALWAYS CONSIDERED TO BE RETROSPECTIVE FROM THE DATE OF THE INSERTION OF THE MAIN PROVISION. 38. THE SECOND CATEGORY OF CASES ARE TO BE DIFFEREN TIATED FROM THE FIRST CATEGORY. IN BOTH THESE CATEGORIES THERE IS NO DIFFICULTY IN IMPLEMENTING THE PROVISION AS SUCH. WHEREAS THE FI RST CATEGORY REFERS TO THE CASES IN WHICH THE INTENTION OF THE L EGISLATURE BEHIND THE PROVISION WAS NOT PROPERLY UNDERSTOOD THE SECOND R EFERS TO THE CASES ITA NO 51 OF 2016 AND OTHERS. PAGE 15 OF 25 IN WHICH WHILE GIVING EFFECT TO SUCH PROVISION CER TAIN UNINTENDED CONSEQUENCES FOLLOW. THE CASES OF ALLIED MOTORS (P. ) LTD. (SUPRA) AND ALOM EXTRUSIONS LTD. (SUPRA) FIT INTO THIS SECOND C ATEGORY OF CASES. IN ALLIED MOTORS (P.) LTD. (SUPRA) THE AMENDMENT WAS H ELD TO BE RETROSPECTIVE ON THE GROUND THAT IT WAS IMPOSSIBLE TO PAY SALES-TAX FOR THE LAST QUARTER BEFORE THE CLOSE OF THE YEAR A S THE LIABILITY TO PAY WOULD ARISE ONLY ON OR AFTER 1ST APRIL. AS IT COULD NEVER HAVE BEEN THE INTENTION OF THE LEGISLATURE TO REQUIRE THE ASSESSE E TO DO IMPOSSIBLE THE AMENDMENT MADE TO SECTION 43B WAS HELD TO HAVE RETROSPECTIVE EFFECT FROM THE DATE OF INSERTION OF THE PROVISION. SIMILARLY IN ALOM EXTRUSIONS LTD. (SUPRA) THE IMPLEMENTATION OF THE PROVISION LED TO THE DENIAL OF DEDUCTION FOR ALL TIMES NOTWITHSTANDING T HE INTENTION THE LEGISLATURE TO ALLOW DEDUCTION ON PAYMENT BASIS. 39. HERE IT IS IMPORTANT TO NOTE THAT THE CASES OF ALLIED MOTORS (P.) LTD. (SUPRA) AND ALOM EXTRUSIONS LTD. (SUPRA) ARE B ASED ON THE PROPOSITION THAT THE IMPLEMENTATION OF THE EARLIER PROVISIONS LED TO THE CONSEQUENCES WHICH WERE NEVER ENVISAGED. THE EM PHASIS IS ON THE REMOVAL OF UNINTENDED CONSEQUENCES AND NOT INTE NDED CONSEQUENCES EVEN IF HARSH. IT IS SETTLED LEGAL PO SITION THAT THERE CANNOT BE ANY EQUITY ABOUT THE TAX. IT IS FOR THE P ARLIAMENT TO DECIDE AS TO IN WHAT MANNER THE TAX IS TO BE LEVIED AND CO LLECTED. IF A PROVISION IS MADE WHICH IS HARSH BUT OTHERWISE CONS TITUTIONAL AND PRACTICAL OF IMPLEMENTATION THERE CANNOT BE ANY QU ESTION OF READING DOWN SUCH PROVISION ON THE GROUND OF EQUITY OR HARD SHIP. INTERVENTION BECOMES NECESSARY WHEN AS A RESULT OF IMPLEMENTATIO N OF A PROVISION CERTAIN SUCH CONSEQUENCES FOLLOW WHICH W ERE NEVER INTENDED. IF SUBSEQUENTLY THE RIGOR OF THE PROVISIO N IS TONED DOWN FOR ADDRESSING TO SUCH UNINTENDED HARDSHIP TO THE ASSES SEES IT WOULD BE CONSIDERED AS RETROSPECTIVE. ON THE OTHER HAND IF I T WAS CLEAR AT THE TIME OF THE INSERTION OF THE PROVISION THAT SOME HA RDSHIP FROM THE ASSESSEES PERSPECTIVE IS GOING TO BE CAUSED THEN A SUBSEQUENT AMENDMENT TO REDUCE SUCH HARDSHIP FROM A HIGHER LEV EL TO LOWER LEVEL CANNOT BE CONSIDERED AS RETROSPECTIVE UNLESS EXPRESSLY STATED. THE REASON IS OBVIOUS THAT IN SUCH CASES THE HARDSH IP WHICH WAS FACED BY THE ASSESSEES AT THE TIME OF INTRODUCTION OF THE PROVISION WAS VERY MUCH INTENDED AND FORESEEN AND THE SUBSEQUENT AMEND MENT IS REDUCTION IN THE INTENDED HARDSHIP AND NOT THE REMO VAL OF UNINTENDED HARDSHIP. 40. ON THE CONTRARY WHERE THE AMENDMENT IS CARRIED OUT TO THE PROVISION WITH THE PURPOSE OF ADDING SOME ADDITIONA L BURDEN OR REDUCING THE EXISTING BURDEN OF THE ASSESSES IT IS ALWAYS PROSPECTIVE UNLESS EXPRESSLY STATED TO BE RETROSPECTIVE OR FALL ING WITHIN THE EXCEPTIONS DISCUSSED ABOVE SUCH AS CLARIFICATORY OR TO REMOVE THE UNINTENDED HARDSHIP. THE CASE OF RELIANCE JUTE AND INDUSTRIES LTD. (SUPRA) DEALS WITH A SITUATION IN WHICH THE AMENDME NT WAS CARRIED OUT TO THE SUBSTANTIVE PROVISION TAKING AWAY CERTAI N BENEFIT TO THE ASSESSEES IN TERMS OF EXTENDED PERIOD FOR SETTING O FF OF THE BROUGHT ITA NO 51 OF 2016 AND OTHERS. PAGE 16 OF 25 FORWARD LOSSES. THE CASE OF VARADARAJA THEATRE PVT. LTD. (SUPRA) IS BASED ON FACTS IN WHICH THE SUBSEQUENT AMENDMENT GR ANTED A BENEFIT TO THE ASSESSEE WHICH WAS NOT AVAILABLE AS PER THE EARLIER PROVISIONS. THUS WE HAVE NOTICED THAT IN BOTH TYPES OF CASES IN WHICH THE LATER PROVISION HAS TAKEN AWAY SOME RIGHT WHICH WAS EARLIER AVAILABLE OR GRANTED SOME BENEFIT WHICH WAS NOT EAR LIER AVAILABLE SUCH AMENDMENTS HAVE BEEN HELD TO BE PROSPECTIVE FR OM THE DATES OF INSERTION AS THESE WERE NEITHER CLARIFICATORY NOR I NTENDED TO REMOVE ANY UNINTENDED HARDSHIPS. 41. FROM THE ABOVE DISCUS SION IT CLEARLY EMERGES THAT THERE IS A CLEAR DISTINCTION BETWEEN T HE CASES IN WHICH THE LATER AMENDMENT IS IMPLIEDLY RETROSPECTIVE OR P ROSPECTIVE. THAT IS PROBABLY THE REASON THAT A QUESTION WAS RAISED BEFO RE THE HONBLE SUPREME COURT IN CIT & ORS. VS. VARAS INTERNATIONAL (P.) LTD. (2006) 283 ITR 484 (SC) FOR DECIDING AS TO WHETHER : FOR THE AMENDMENT OF A STATUTE TO BE CONSTRUED AS BEING RETROSPECTIVE S HOULD NOT THE AMENDED PROVISION ITSELF INDICATE EITHER IN TERMS OR BY NECESSARY IMPLICATION THAT IT IS TO OPERATE RETROSPECTIVELY? IN THE LIGHT OF THIS QUESTION THE HONBLE SUPREME COURT WAS CALLED UPON TO RECONSIDER ITS EARLIER JUDGMENTS IN ALLIED MOTORS (P.) LTD. (S UPRA) SUWALAL ANANDILAL JAIN (SUPRA) BRIJ MOHAN DAS LAXMAN DAS A ND PODAR CEMENT. THE BENCH OF FIVE HONBLE JUDGES IN THIS CA SE NOTED THAT THERE IS NO CONFLICT BETWEEN THE JUDGMENTS WHICH RE QUIRES RESOLUTION BY WAY OF REFERENCE. FROM THIS JUDGMENT IT IS APPAR ENT THAT THOSE EARLIER CASES BEFORE THE HONBLE SUPREME COURT FOR A DECISION AS TO WHETHER THE AMENDMENTS CONSIDERED THEREIN WERE RETR OSPECTIVE OR PROSPECTIVE WERE DECIDED ON THE BASIS OF THE NATUR E OF AMENDMENT AND THE CONCERNED BENCHES RENDERED APPROPRIATE JUDG MENTS AFTER TAKING INTO CONSIDERATION ALL THE RELEVANT CRITERIA . 16. THUS IT CAN BE SEEN THAT EVERY BENEFIT CONFERR ED BY THE LEGISLATURE IS NOT ALWAYS RETROSPECTIVE IN NATURE. 17. BY VIRTUE OF ABOVE AMENDMENT THE LEGISLATURE I NTENDS TO CONFER A BENEFIT WHICH WAS HITHERTO NOT AVAILABL E AND HENCE IT IS APPLICABLE PROSPECTIVELY. THE LEGISLATURE WAS VERY CLEAR THAT THIS PROVISION IS APPLICABLE W.E.F. 1.4.2018. WHILE INS ERTING SUB- SECTION (5A) TO SECTION 45 THE CONSEQUENT AMENDMEN T TO SECTION 49 WAS ALSO MADE BY INSERTING SUB-SECTION (7) THERE TO W.E.F. 1.4.2018 AND SECTION 194IC WAS ALSO INSERTED FOR TA X DEDUCTIONS AT SOURCE AT THE TIME OF PAYMENT APPLICABLE W.E.F. 1.4.17. THUS THE LEGISLATURE WAS AWARE OF THE CONSEQUENCES OF TH E ITA NO 51 OF 2016 AND OTHERS. PAGE 17 OF 25 AMENDMENTS AND INTENDED TO CONFER THE BENEFIT ONLY FROM 1.4.2018. THEREFORE WE ARE OF THE OPINION THAT THI S GROUND THOUGH IS A LEGAL GROUND CANNOT BE ADMITTED AT THIS STAGE AS NO USEFUL PURPOSE WOULD BE SERVED IN REMANDING THE ISS UE TO THE FILE OF THE AO AS THE SUB-SECTION ITSELF IS NOT APPLICAB LE FOR THE RELEVANT A.Y. THE ADDITIONAL GROUND OF APPEAL RAISE D BY THE ASSESSEE UNDER RULE 11 OF THE ITAT RULES IS ACCORDI NGLY REJECTED. 18. AS REGARDS THE VALIDITY OF THE RE-ASSESSMENT PROCEEDINGS WE FIND THAT THE ASSESSEE HAS FILED TH E RETURN OF INCOME BUT HAS NOT OFFERED THE CAPITAL GAINS ARISIN G OUT OF THE DEVELOPMENT AGREEMENT IN HER RETURN OF INCOME FOR T HE RELEVANT A.Y. THEREFORE THE AO HAD THE MATERIAL TO FORM A R EASONABLE BELIEF THAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT. THEREFORE WE UPHOLD THE VALIDITY OF THE RE-ASSESSM ENT PROCEEDINGS. AS REGARDS THE YEAR OF THE TAXABILITY WE FIND THAT THIS ISSUE IS NOW COVERED IN FAVOUR OF THE REVENUE BY TH E DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE O F SHRI POTLA NAGESWARA RAO VS. DCIT IN ITTA NO. 245 OF 2014 DATE D 09-04- 2014. THEREFORE THE ASSESSEES GROUNDS OF APPEAL O N THE YEAR OF TAXABILITY ARE REJECTED. 19. AS REGARDS THE ENHANCEMENT OF THE INCOME BY THE CIT (A) WE FIND THAT THE AO HAS ADOPTED THE SRO VALUE OF THE LAND ON THE DATE OF TRANSFER FOR THE PURPOSE OF COMPUTING T HE SHORT TERM CAPITAL GAINS WHILE THE CIT (A) HAS ADOPTED THE E STIMATED VALUE OF THE PROPERTY ADOPTED BY THE PARTIES TO THE DEVEL OPMENT AGREEMENT FOR REGISTERING THE DEVELOPMENT AGREEMEN T. IN THE ITA NO 51 OF 2016 AND OTHERS. PAGE 18 OF 25 DEVELOPMENT AGREEMENT THE ESTIMATED VALUE OF THE P ROPERTY IS MENTIONED AS RS.8.80 CRORES. IN OUR OPINION THE CI T (A) HAS CLEARLY ERRED IN ADOPTING THIS VALUE FOR COMPUTATIO N OF THE SHORT TERM CAPITAL GAINS. AT THE TIME OF DEVELOPMENT AGRE EMENT WHAT IS TRANSFERRED BY THE ASSESSEE IS ONLY HER SHARE OF TH E LAND AND NOT THE ENTIRE SUPER STRUCTURE ALONG WITH THE LAND. THE ESTIMATED VALUE OF THE PROPERTY AS MENTIONED IN THE DEVELOPME NT AGREEMENT IS CLEARLY FOR THE LAND AS WELL AS THE SUPER STRUCT URE TO BE BUILT UP ON SUCH LAND WHICH IS GIVEN FOR DEVELOPMENT. THOUGH THE DEVELOPMENT AGREEMENT DOES MENTION THE PERIOD OF CO MPLETION OF THE PROJECT IT CERTAINLY REMAIN UNCERTAIN AS TO WH ETHER THE CONSTRUCTION WOULD BE COMPLETED WITHIN THE STIPULAT ED PERIOD. THE MARKET CONDITION AND THE MARKET RATE WHEN THE CONST RUCTED AREA IS HANDED OVER TO THE ASSESSEE MAY ALSO VARY AND IT MAY BE MORE OR LESS THAN THE ESTIMATED VALUE OF THE PROPERTY. T HEREFORE THE SAME CANNOT BE ADOPTED FOR THE COMPUTATION OF THE C APITAL GAINS. IN OUR VIEW THE VALUE ADOPTED BY THE AO I.E. RS.22 00 PER SFT BEING THE SRO VALUE OF THE LAND ON THE DATE OF TRANSFER I S REASONABLE AND CORRECT. WE THEREFORE UPHOLD THE ORDER OF THE AO ON THE COMPUTATION OF THE SHORT TERM CAPITAL GAINS. 20. AS REGARDS THE ALLOWABILITY OF THE EXPENDITURE OF RS.80.00 LAKHS WHICH SHE CLAIMED TO HAVE PAID TO ON E SHRI GNANESHWAR FOR ARRANGING THE DEVELOPMENT AGREEMENT THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE ANY EVIDENCE OF MAKING THE PAYMENT DURING THE RELEVANT PREVIOUS YEAR EVEN BEFO RE THE TRIBUNAL IN SUPPORT OF HER CONTENTION. THEREFORE W E ARE CONSTRAINED TO CONFIRM THE DISALLOWANCE OF THE SAME . ITA NO 51 OF 2016 AND OTHERS. PAGE 19 OF 25 21. IN THE RESULT ASSESSEES APPEAL FOR THE A.Y 20 06-07 IS PARTLY ALLOWED. ITA NO.716/HYD/2015 - A.Y 2007-09 22. FOR THE RELEVANT A.Y THE BRIEF FACTS ARE THAT THE ASSESSEE OWNED TWO PIECES OF ADJOINING LAND MEASURI NG 0.35 GUNTAS IN SURVEY NO.76/B AND 0.16 GUNTAS IN SURVEY NO.76/B BY TWO SEPARATE PURCHASES MADE BY HER AND BY DOCUMENT NO.1808/2007 DATED 9.3.2007 SHE ENTERED INTO A DE VELOPMENT AGREEMENT CUM GPA WITH M/S. VERTEX HOMES PVT. LTD A S PER WHICH THE TOTAL BUILT UP AREA WAS WORKED OUT AT 1 2 5 000 SQUARE FEET AND THE ESTIMATED MARKET VALUE OF THE PROPERTY WAS RS.6 00 00 000/-. AS PER THE DEED THE OWNERS WERE ENTITLED TO 46% SHARE IN THE CONSTRUCTED AREA WHILE THE DEVELOP ER WAS ENTITLED TO 54% SHARE. THE AO NOTICED THAT THE ASSE SSEE HAS NOT OFFERED THE CAPITAL GAINS ARISING OUT OF THE ABOVE DEVELOPMENT AGREEMENT CUM GPA FOR THE A.Y 2007-08. THEREFORE O BSERVING THAT THERE IS AN ESCAPEMENT OF INCOME PURSUANT TO T HE ABOVE TRANSACTIONS THE AO ISSUED A NOTICE U/S 148 TO REO PEN THE ASSESSMENT U/S 147. IN THE RE-ASSESSMENT PROCEEDING S THE AO CALLED FOR THE ASSESSEES EXPLANATION AS TO WHY THE CAPITAL GAIN SHOULD NOT BE BROUGHT TO TAX IN THE HANDS OF THE AS SESSEE THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS OFFERED TH E CAPITAL GAINS IN THE YEAR WHEN THE BUILT UP AREA WAS ACTUALLY HAN DED OVER TO THE ASSESSEE. THE AO WAS HOWEVER NOT CONVINCED AND BROUGHT THE LONG TERM CAPITAL GAINS TO TAX BY ADOPTING THE SRO VALUE @ 35174/- PER SFT AS THE SALE CONSIDERATION. AGGRIEVE D THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) BOTH ON ACCO UNT OF RE- OPENING OF THE ASSESSMENT AS WELL AS COMPUTATION OF CAPITAL GAIN. ITA NO 51 OF 2016 AND OTHERS. PAGE 20 OF 25 THE CIT (A) CONFIRMED THE ORDER OF THE AO ON BOTH T HE COUNTS. THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 23. THE FACTS OF THIS CASE ARE SIMILAR TO THE FACT S IN A.Y 2006-07 AND FOR THE DETAILED REASONS GIVEN THEREIN WE UPHOLD THE VALIDITY OF THE ASSESSMENT PROCEEDINGS U/S 147 AND ALSO THE COMPUTATION OF THE LONG TERM CAPITAL GAIN. 24. FURTHER IN ADDITION TO THE ABOVE GROUNDS THE ASSESSEE VIDE LETTER DATED 28.10.2015 HAS RAISED AN ADDITIONAL GROUND OF APPEAL AND HAS FILED ADDITIONAL EVIDENCE IN SUPPORT THEREOF AND PRAYED FOR ADMISSION OF THE SAME. IT IS STATED THAT THE ASSESSEE COULD NOT RAISE THE SAID GROUND EARLIER A S SHE WAS AGITATING ON THE YEAR OF TAXABILITY AND PRAYED THAT IF THE YEAR OF TAXABILITY IS ADVANCED TO A.Y 2007-08 THEN THE ADD ITIONAL GROUND ON THE ALLOWABILITY OF THE EXPENDITURE IN CONNECTIO N WITH THE TRANSFER SHOULD BE CONSIDERED. 25. THE LEARNED DR HOWEVER OPPOSED THE ADMISSION OF BOTH THE ADDITIONAL GROUND AND ADDITIONAL EVIDENCE ON THE GROUND THAT THEY ARE PURE FACTUAL ISSUES. 26. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD WE FIND THAT THE ASSESSEE HAS OFFERED TH E LONG TERM CAPITAL GAIN TO TAX IN THE YEAR OF RECEIPT OF CONST RUCTED AREA AND HAS ALSO CLAIMED THE PAYMENT OF RS.80.00 LAKH TO MR . GNANESHWAR WAS AS EXPENDITURE INCURRED IN CONNECTIO N WITH THE DEVELOPMENT AGREEMENT. THEREFORE THE CLAIM IS NOT A FRESH CLAIM BUT IT IS SHIFTED TO A.Y 2007-08 I.E. THE YEAR OF P AYMENT AS THE ITA NO 51 OF 2016 AND OTHERS. PAGE 21 OF 25 LONG TERM CAPITAL GAIN IS ALSO BROUGHT TO TAX IN TH IS YEAR. THEREFORE WE ARE INCLINED TO ADMIT THE ADDITIONAL GROUND AS WELL AS THE ADDITIONAL EVIDENCE AND DEEM IT FIT AND PROP ER TO REMIT IT TO THE FILE OF THE AO FOR VERIFICATION OF THE ADDITION AL EVIDENCE AND ADJUDICATION OF THE ADDITIONAL GROUND OF APPEAL IN ACCORDANCE WITH LAW AFTER ALLOWING THE ASSESSEE SUFFICIENT OPPORTU NITY OF BEING HEARD. 27. IN THE RESULT ASSESSEES APPEAL FOR THE A.Y 20 07-08 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO.52/HYD/2016 A.Y 2011-12 28. AT THE OUTSET IT IS NOTICED THAT THERE IS A DE LAY OF 38 DAYS IN FILING OF THIS APPEAL BEFORE US AND THE REA SONS GIVEN ARE THE SAME AS GIVEN FOR THE DELAY IN A.Y 2006-07. FOR THE REASONS GIVEN BY US IN ASSESSEES APPEAL FOR A.Y 2006-07 T HE DELAY IS CONDONED. 29. AS REGARDS THE MERITS OF THE CASE THE FACTS FO R THE RELEVANT A.Y ARE THAT PURSUANT TO THE DEVELOPMENT A GREEMENT CUM GPA ENTERED INTO DURING THE FINANCIAL YEAR 2005-06 RELEVANT TO THE A.Y 2006-07 THE ASSESSEE HAS OFFERED CAPITAL GAINS TO TAX IN THE A.Y 2011-12 ON THE GROUND THAT SHE HAS RECEIVED ACT UAL POSSESSION OF THE BUILT UP AREA IN THE FIRST INSTAL MENT. THE AO OBSERVED THAT FOR THE A.Y 2006-07 THE AO HAS ALREA DY HELD THAT THE CAPITAL GAIN IS TO BE TAXED IN THE YEAR OF EXEC UTION OF THE AGREEMENT OF SALE. HOWEVER SINCE THE ASSESSEE ITSE LF HAS OFFERED THE LONG TERM CAPITAL GAIN IN THE A.Y 2011-12 THE AO HAS BROUGHT IT TO TAX ALONG WITH THE CAPITAL GAINS ON SALE OF T HE FLATS. WHILE COMPUTING THE LONG TERM CAPITAL GAINS ON SALE OF LA ND AND ON SALE ITA NO 51 OF 2016 AND OTHERS. PAGE 22 OF 25 OF THE FLATS THE AO DISALLOWED THE CLAIM OF EXPEND ITURE ON BROKERAGE. AGGRIEVED THE ASSESSEE PREFERRED AN APP EAL BEFORE THE CIT (A) WHO CONFIRMED THE ORDER OF THE AO. AGGRIEVE D THE ASSESSEE IS IN SECOND APPEAL BEFORE US AGAINST THE TAXING TH E CAPITAL GAIN AND ALSO THE DISALLOWANCE OF THE CLAIM OF EXPENDITU RE OF RS.80.00 LAKHS BEING THE BROKERAGE PAID BY THE ASSESSEE. 30. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CAPITAL GAIN HAS BEEN BROUGHT TO TAX IN BOTH TH E A.Y 2006-07 AS WELL AS A.Y 2011-12 FOR THE VERY SAME PROPERTY. HE SUBMITTED THAT THE ASSESSEE HAD OFFERED THE CAPITAL GAIN TO T AX IN THE A.Y 2011-12 WHILE THE AO HAS BROUGHT IT TO TAX IN THE A .Y 2006-07 AND THEREFORE HE OUGHT NOT TO HAVE BROUGHT THE SAM E TO TAX AGAIN IN THE A.Y 2011-12. WE FIND THAT MERELY BECAUSE THE ASSESSEE HAS OFFERED THE LONG TERM CAPITAL GAIN ON SALE OF LAND AS WELL AS THE FLAT IN THE A.Y 2011-12 THE AO NEED NOT BRING THE CAPIT AL GAIN ON SALE OF LAND TO TAX FOR THE A.Y 2011-12 PARTICULARLY AF TER BRINGING IT TO TAX IN THE A.Y 2006-07. THEREFORE THE CAPITAL GAIN S BROUGHT TO TAX ON TRANSFER OF LAND ALONE FOR THE A.Y 2011-12 IS DE LETED. THE AO IS DIRECTED TO COMPUTE ONLY THE CAPITAL GAIN ARISING O UT OF THE SALE OF THE FLAT ALONG WITH THE UNDIVIDED SHARE OF LAND OF THE SAID FLAT. 31. AS REGARDS THE DISALLOWANCE OF THE CLAIM OF EXP ENDITURE ON BROKERAGE WE HAVE CONSIDERED THE ALLOWABILITY O F THE SAME FOR THE A.Y 2007-08 AND WE HAVE REMITTED IT TO THE FILE OF THE AO. THEREFORE THE GROUNDS OF APPEAL RAISED BY THE ASSE SSEE FOR THE A.Y 2011-12 ARE ALL REJECTED EXCEPT TO THE EXTENT O F THE DIRECTIONS ITA NO 51 OF 2016 AND OTHERS. PAGE 23 OF 25 GIVEN TO THE AO TO BRING TO TAX ONLY THE CAPITAL GA INS ON THE SALE OF THE FLAT. ITA NO.579/HYD/2016 A.Y 2006-07 32. THIS IS ASSESSEES APPEAL FOR THE A.Y 2006-07 A GAINST THE LEVY OF PENALTY U/S 271(1) (C) OF THE ACT. THE AO HAS INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT FO R THE A.Y 2006- 07 ON THE GROUND THAT THE ASSESSEE HAS ENTERED INTO A DEVELOPMENT AGREEMENT CUM GPA BUT HAS NOT OFFERED T HE LONG TERM CAPITAL GAIN TO TAX IN HER RETURN OF INCOME. 33. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS OFFERED THE INCOME TO TAX FOR THE A.Y 2011-12 I.E. ON RECEIPT OF THE POSSESSION OF THE PROPERTY AND TH EREFORE THERE WAS NO CONCEALMENT AND FURNISHING OF INACCURATE PAR TICULARS OF INCOME. HE SUBMITTED THAT THE ISSUE OF THE YEAR OF TAXABILITY IN CASE OF JOINT DEVELOPMENT AGREEMENT WAS A DEBATABLE ISSUE AT THE RELEVANT POINT OF TIME AND THE ASSESSEE UNDER A BO NAFIDE BELIEF HAS OFFERED THE CAPITAL GAIN TO TAX ONLY IN THE YEA R OF RECEIPT OF POSSESSION OF THE DEVELOPED AREA. THEREFORE ACCORD ING TO HIM THERE IS NO CASE FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. 34. THE LEARNED DR ON THE OTHER HAND SUBMITTED TH AT THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CA SE OF CHATURBHUJ DWARAKADAS KAPADIA WAS VERY MUCH AVAILA BLE FOR THE RELEVANT PERIOD AND THE ASSESSEE OUGHT TO HAVE OFFERED THE CAPITAL GAINS TO TAX IN THE A.Y 2006-07. ITA NO 51 OF 2016 AND OTHERS. PAGE 24 OF 25 35. THE LEARNED COUNSEL FOR THE ASSESSEE IN REBUTT AL SUBMITTED THAT THE DECISION OF THE HON'BLE JURISDIC TIONAL HIGH COURT IN THE CASE OF POTLA NAGESWARA RAO WAS DELIVE RED MUCH LATER AND THEREFORE THE ISSUE WAS A DEBATABLE ONE TILL SUCH TIME THE JURISDICTIONAL HIGH COURT HAS DELIVERED THE JUD GMENT. 36. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD WE FIND THAT THE RETURN OF INCOME FOR T HE A.Y 2006-07 WAS FILED ON 29.09.2006 WHILE THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF POTLA NAGE SWARA RAO WAS DELIVERED IN 2014. TILL SUCH TIME THERE WERE DECIS IONS OF THE TRIBUNAL BOTH IN FAVOUR OF AND AGAINST THE ASSESSEE . THEREFORE IT WAS A DEBATABLE ISSUE. IT IS NOT THE CASE OF THE AS SESSEE NOT OFFERING THE CAPITAL GAINS TO TAX AT ALL BUT IT IS THE CASE WHERE SHE HAS OFFERED IT IN THE YEAR OF RECEIPT OF POSSESSION OF THE PROPERTY. THEREFORE IT CANNOT BE SAID THAT THE ASSESSEE HAD NOT OFFERED THE CAPITAL GAINS TO TAX WITH AN INTENTION TO EVADE THE TAX. THEREFORE WE ARE OF THE OPINION THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C). 37. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. 38. TO SUM UP ASSESSEES APPEALS AGAINST THE ASSESSMENTS MADE FOR THE A.YS 2006-07 & 2007-08 AND 2011-12 ARE PARTLY ALLOWED AND THE ASSESSEES APPEAL AGAINS T PENALTY U/S 271(1)(C) OF THE ACT FOR THE A.Y 2006-07 IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER 2017. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD DATED 30 TH NOVEMBER 2017. ITA NO 51 OF 2016 AND OTHERS. PAGE 25 OF 25 VINODAN/SPS COPY TO: 1 A.V.RAGHURAM ADVOCATE 610 BABUKHAN ESTATE BASH EERBAGH HYDERABAD - 1 2 ITO WARD 11(3) IT TOWERS AC GUARDS HYDERABAD 50 0004 3 CIT (A) - 5 HYDERABAD 4 PR. CIT 5 HYDERABAD 5 THE DR ITAT HYDERABAD 6 GUARD FILE BY ORDER