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TMI Blog2017 (5) TMI 1668X X X X Extracts X X X X X X X X Extracts X X X X ..... arrangement that the developer could retain 30% of land in proportionate to constructed area, there was transfer of property in the assessment year 2013-14. The cost of 30% of undivided share of land would be the cost of 70% of constructed area at the rate of ₹ 9500/- per sq.ft. Since the assessee has not received any money from the developer, the entire fund has to be treated as investment in the construction by the developer. This Tribunal is of the considered opinion that it has to be construed that the assessee invested cost of 30% of undivided share of land for the construction. The cost of 30% of undivided share of land would be deemed to be invested and deposited with developer on transfer of 30% of undivided share of land t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is specifically stated as C Schedule that it belongs to the assessee and other coowners. Similarly, in the D Schedule, 30% of the undivided share from and out of B Schedule of the property would go to the developer. The assessee is entitled for 70% of the constructed area proportionately. 3. The Ld. Departmental Representative further submitted that on this transaction, the assessee earned `8,46,12,019/- towards capital gain. The assessee claimed that the entire amount was exempted under Section 54 of the Act. The Assessing Officer worked out the sale consideration as per Section 50C of the Act at ₹ 9,52,77,020/-. Referring to the assessment order, more particularly para 5, the Ld. D.R. submitted that the assessee handed ove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim of the assessee. 4. On the contrary, Shri Y. Sridhar, the Ld. representative for the assessee, submitted that the assessee entered into a joint development agreement on 26.08.2010, a copy of which is available at page 141 of the paper-book. The Ld. representative submitted that the owner is entitled for 70% of the undivided share in the land and also 70% of super built up area in the form of residential apartment. The balance 30% of land and super built up area will go to the developer. The developer has to construct the building on his own after getting necessary approval from the Chennai Metropolitan Development Authority. Even though the developer initially intended to put up 57302.895 sq.ft. on the basis of Floor Space Index o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to the Ld. representative, the assessee by way of revised return claimed the exemption under Section 54 of the Act by offering the capital gain, hence, the CIT(Appeals) has rightly allowed the claim of the assessee. 6. We have considered the rival submissions on either side and perused the relevant material available on record. Admittedly, an agreement was entered into for joint development of property on 26.08.2010. As per the agreement, licence was given to the developer for measuring the land for preparing the plan, etc. before starting the actual construction. It is not in dispute that due to coastal zone regulation, the joint developer was not able to get the approval for the intended area of construction. The Floor Space Index wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansfer of property in the assessment year 2013-14. 8. The cost of 30% of undivided share of land would be the cost of 70% of constructed area at the rate of ₹ 9500/- per sq.ft. Since the assessee has not received any money from the developer, the entire fund has to be treated as investment in the construction by the developer. This Tribunal is of the considered opinion that it has to be construed that the assessee invested cost of 30% of undivided share of land for the construction. In other words, the cost of 30% of undivided share of land would be deemed to be invested and deposited with developer on transfer of 30% of undivided share of land to the developer, for the assessment year 2013-14. Since the cost of 30% share of undivi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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