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TMI Blog2018 (8) TMI 1249X X X X Extracts X X X X X X X X Extracts X X X X ..... R Per Saktijit Dey, JM This is an appeal by assessee against the order dated 14.11.2017 passed by the CIT(A)-3, Thane for A.Y. 2014-15. 2. There is a delay of 11 days in filing the appeal by the assessee. After hearing the submissions of the assessee we find that there is reasonable cause for the delay in filing the appeal. Therefore, the delay in filing the appeal is condoned and appeal is taken up for hearing. 3. The only effective ground raised by the assessee is as under: - [ 1] The learned CIT(A) has erred in law and on facts in sustaining the order of the Assessing Officer determining capital gain. Subsequently, vide letter dated 16th April, 2018, the assessee has raised the following additional grounds: - 1. The Learned CIT(A) erred in confirming that the estimated full value of consideration for the purpose of computation of Capital gains which was in the womb of the future ignoring the position of law that full value of consideration cannot be estimated under Sec. 48 of the Income tax Act, 1961 2. The Learned CIT(A) erred in confirming that the transaction under Development agreement with S/Shri. Milind Madhukar Kamble and Papar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of development agreement did not provide for any monetary consideration to be paid to the assessee by the developer. Thus, it was submitted by the assessee that since the assessee, as per the development agreement, will receive 35% of the built up residential area on completion of the project and there is no monetary consideration, no capital gain arises in the impugned assessment year. A copy of the development agreement was also submitted before the AO. The AO did not agree with the contentions of the assessee. He observed that the assessee has purchased a land on 06.11.2008 for a consideration of ₹ 4,75,000/- along with stamp duty, whereas, as per the development agreement the value of the land for stamp duty purpose has been determined at ₹ 83,16,000/-. Considering the said value as sale consideration at the hands of the assessee the AO determined the long term capital gain at ₹ 75,11,316/-. Though, the assessee challenged the addition made on account of long term capital gain before the CIT(A), however, the CIT(A) also sustained the addition made by the AO holding that on entering into the development agreement the assessee has transferred the immovable prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat as per the terms of the development agreement the assessee would not be paid any monetary consideration but would receive 35% of the built up residential area on completion of the housing project. Thus, it is a fact on record that at the time of entering into the development agreement the assessee has not received any monetary consideration from the developers. It is also evident from the orders of the department authorities that the assessee, in the course of proceedings, has specifically submitted that though in terms of the development agreement the housing project was supposed to be completed within 18 months, however, the developer did not stick to the time schedule, therefore, the assessee had to initiate legal proceedings against the developer. The aforesaid facts clearly reveal that the consideration to be received by the assessee in terms of development agreement on transfer of the land was 35% of the built up residential area. Therefore, until the project is complete and the assessee receives 35% of the built up residential area as per the terms of the development agreement, it cannot be said that the assessee has received consideration towards transfer of immovable p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omplete. In this context it will be profitable to look into the observations of the Hon'ble Jurisdictional High Court as extracted below: - 7. Grievance of the revenue is that the decision of this Court in Chaturbhuj Dwarkadas Kapadia (supra) should apply to the present facts. As pointed out by the Tribunal, the issue before the Court in the above case was to determine the year in which the property was transferred for the purpose of capital gains. In this case the issue is what is the consideration received for the transfer of an asset. Thus, reliance upon Chaturbhuj Dwarkadas Kapadia (supra) does not assist the revenue. We specifically asked the revenue whether the decision of the Tribunal in Kalpataru Construction Overseas (P) Ltd has been appealed to this Court and to which the answer was we do not know . 8. We find that on facts the impugned order of Tribunal has held that no income has been accrued or received of the value of 18000 sq.feet of constructed area under the development agreement dated 16.6.2006. This on account of the fact that the agreement dated 16.6.2006 was not acted upon as it came to be superseded/modified by the Tripartite agreement dated 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the impugned assessment year as at the time of entering into the development agreement the housing project has not been conceived or implemented. So, until the project comes into existence it cannot be said that the consideration, which the assessee is to receive in terms of the development agreement exists. That being the case, in the absence of any consideration received by the assessee in the impugned assessment year the assessee cannot be subjected to long term capital gain on execution of development agreement. In this context we rely upon the decision of the ITAT Hyderabad Bench in the case of Fibars Infratech Pvt. Ltd. (supra). Thus, on overall consideration of facts and materials on record in the light of the ratio laid down in the decisions referred to above, we are of the view that the assessee cannot be charged to long term capital gain in the impugned assessment year. Hence, the addition made on account of long term capital gain is deleted. 10. Since we have held that the assessee is not chargeable to long term capital gain in the impugned assessment year, the other ancillary incidental grounds raised by the assessee on computational aspect of long term capital ..... X X X X Extracts X X X X X X X X Extracts X X X X
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