2012 (7) TMI 1156 - AT - Income Tax

Summary

Issues Involved:
1. Whether there was a 'transfer' within the meaning of section 2(47)(v) of the Income-tax Act in respect of the Development Agreement.
2. Whether the assessee was liable for long-term capital gain in the year under appeal.
3. Whether the market value should have been determined based on records of the Registrar of Assurance.

Summary:

Issue 1: Transfer u/s 2(47)(v) of the Income-tax Act
The CIT(A) held that there was a 'transfer' within the meaning of section 2(47)(v) of the Income-tax Act in respect of the Development Agreement executed by the assessee. The assessee contended that the Developer had not taken possession of the land, as confirmed by a letter dated 14.10.2009, and thus section 2(47)(v) was not applicable. The Tribunal examined the provisions of S.2(47)(v) and S.53A of the Transfer of Property Act, noting that the term "transfer" includes allowing possession in part performance of a contract. The Tribunal concluded that the developer had acquired bundle of rights and possession, thus constituting a transfer under section 2(47)(v).

Issue 2: Liability for Long-Term Capital Gain
The Assessing Officer computed a long-term capital gain of Rs. 14,32,38,499, which was apportioned among the assessees. The Tribunal upheld the CIT(A)'s decision, confirming that the transaction was liable for capital gain as the conditions laid down in section 2(47)(v) were met. The Tribunal emphasized that the gain should be deemed income of the year in which the transfer took place, irrespective of when the consideration was received.

Issue 3: Determination of Market Value
The assessee argued that the market value should have been determined based on the records of the Registrar of Assurance. The Tribunal noted that this ground did not emanate from the order of the CIT(A) and declined to entertain it.

Conclusion:
The Tribunal dismissed all the appeals of the assessees, confirming the orders of the lower authorities and holding that the transaction was liable for capital gain under section 2(47)(v) of the Income-tax Act. The Tribunal also declined to entertain the ground regarding the determination of market value based on the records of the Registrar of Assurance.