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TMI Blog2019 (2) TMI 1436X X X X Extracts X X X X X X X X Extracts X X X X ..... at the instance of the either party. The assessee did hand over the possession of the land to the buyer and the contrary contention put forth on her behalf is devoid of merit. The present situation is covered within the definition of “transfer” as given in section 2(47)(v) as: `any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to section 53A of the Transfer of Property Act, 1882’. Not only the assessee transferred the possession of the land to the Developer pursuant to the Agreement, but also received a sum of ₹ 20.00 lakh by cheque in part performance. As such, it is held that the assessee transferred the land u/s.2(47) of the Act and resultantly the provisions of section 45 are attracted. On going through the prescription of section 48, it transpires that what is contemplated as the full value of consideration is the amount which is “received or accruing as a result of the transfer of capital asset”. Not only the amount actually received but also the amount accruing to the assessee is liable to be included in the same. As the assessee in the instant case a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 sq ft, that is, 371.74 sq.mtr area of land situated at village Yerawada, Sangamwadi, Pune, the assessee submitted that she entered into a Development Agreement with SCTPL for transfer of this property, but its possession was not handed over as the land was in Green Zone which was to be converted into Yellow Zone and thereafter becoming eligible for conversion into Non-Agricultural land. The sum and substance of the argument was that it was a mere Development Agreement with SCTPL without transfer of any possession and hence, the same could not be considered as transfer of actual possession, so as to call for chargeability under the head Capital gains . The AO, after noting different clauses of the Development Agreement with SCTPL, came to hold that possession of the property was handed over to SCTPL. Not only that, a sum of ₹ 20.00 lakh was also received as monetary consideration and further the assessee also acquired non-monetary consideration, being, a right in the property to be developed on the land transferred, which was valued by the parties themselves at ₹ 23.70 lakh in the Agreement dated 29-07-2011. Since the said property was purchased by the assessee for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sanctioned development plan of Pune city, but taking into account the position, contours and other relevant consideration, the said property may be converted into Residential Zone . Clause 27 of the Agreement deals with `Execution of Power of Attorney/Declaration . It provides that : `Along with executing these presents, the Owners (i.e. assessee) have today executed General Power of Attorney in favour of the Developer (i.e. SCTPL) authorising and empowering them to do one or more activities for due and effective execution of the development of the said property, and such Power of Attorney shall remain in force till the completion of the said Scheme, which not only includes construction, possession and infrastructure development but also the conveyances of the said property and all other lands comprised in the Scheme .. . It is apparent from the above clause of the Agreement that the assessee executed PoA on the same date in favour of the Developer for the development of the said property, and such PoA was to remain in force till the construction, possession and completion of the Scheme under which the residential units were effectively sold. Thus, it is vivid that no construc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esidential units. In the light of this argument, she canvassed a view that primarily, it is not a case of transfer and secondly, even if it is considered as a transfer, then the consideration to be received in kind, that is value of constructed area of 2000 sq.ft., to be allotted within eight years at a cost of ₹ 23.00 lakh, should be ignored for the purpose of computing capital gain. She invoked Real income theory to bolster her proposition. In support of her contention, she relied on the judgment of Hon ble Bombay High Court in CIT Vs. Chemosyn Ltd. (2015) 371 ITR 427 (Bom.) . 11. In my humble opinion, this contention of the ld. AR is also bereft of any force. Section 45(1) of the Act provides that : `Any profits or gains arising from the transfer of a capital asset effected in the previous year shall, save or otherwise provided in sections . be chargeable to income-tax under the head Capital gains and shall be deemed to be the income of the previous year in which the transfer took place . It is manifest from the prescription of section 45(1) of the Act that capital gain is to be computed in the year in which the transfer takes place. Computation of capital gai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cided the issue in assessee s favour. In appeal by the Revenue, the Hon ble High Court observed that the agreement entered into with M/s. Dipti Builders on 16-06-2006 stood rescinded and substituted with a new Tripartite agreement on 05-07-2007. The assessee offered consideration of ₹ 16.11 received from M/s. Dipti Builders pursuant to the first agreement in its return of income for the A.Y. 2007-08 and the remaining amount of ₹ 13.00 crore (Rs.29.11 received vide Tripartite Agreement as reduced by ₹ 16.11 crore received from M/s. Dipti Builders pursuant to the first agreement and already declared for taxation in earlier year) was offered for taxation for the A.Y. 2008-09. Once the original agreement with M/s. Dipti Builders stood cancelled and substituted with a new Tripartite agreement, the Hon ble High Court held that there was no case of income accruing or arising in the form of 18000 sq.ft. constructed area pursuant to the first contract. 13. It is obvious that the facts and circumstances of that case are no match to the facts under consideration. In that case, the original agreement, under which 18000 sq.ft. of constructed area was to be allotted to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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