9911796707
TMI Blog2019 (7) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... .5% of undivided share in 18675 sq.ft., the extent of built-up area which was agreed to be transferred measure 6500 sq.ft. The apparent sale consideration for the land and building was 98,99,100/- which was approved by the Appropriate Authority. So far as the second development agreement dated 24.05.1995 is concerned, the extent of land agreed to be transferred was 3997 sq.ft, i.e., 45% of undivided share in 8882 sq.ft. However, in the said agreement, there was no building. These agreements were considered by the Appropriate Authority and noting there is an agreement to transfer property with reasonable certainty and on being satisfied about the apparent sale consideration, no objection was granted. Therefore, it would be incorrect to state that the development agreement do not contemplate transfer of immovable property, but we may say that there is a clear certainty in the extent to be transferred. Therefore, in our considered view, the transaction would continue to qualify under the definition of transfer as defined under Section 2(47)(v) of Act. Value of cost of construction - appellate authority reckoned the delay in completing the project, obtained information from the develop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement dated 24.05.1995 is concerned, we find there is no building thereon and in fact, a readjustment of schedule A of the property has been mentioned in the agreement which in fact, is the schedule property in the development agreement dated 27.03.1994. Thus the assessee is entitled to exemption under Section 54 of the Act. - Decided in favour of the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly, another agreement was entered into with the developer on 24.05.1995 which pertains to a small piece of land adjoining to the property subject matter of development in the agreement dated 27.03.1994 and in the said second development agreement, the assessee and the other co-owners agreed to transfer 45% undivided share in the land, in return, the developer agreed to build and hand over 55% built-up area to the owners. This document was once again submitted before the Appropriate Authority, who by order dated 24.08.1995, granted No Objection Certificate for transfer of the property. In both the approvals granted by the Appropriate Authority, the apparent sale consideration which was agreed to was accepted, namely ₹ 98,99,100/- and ₹ 67,17,150/- respectively. 8.During the assessment year 2000-2001, the developer handed over the built-up area to the assessee and other co-owners and on account of a delay in handing over, the assessee and co-owners were paid damages, as agreed to in the development agreements. 9.In the assessment year 2001-2002, the developer nominated buyers for purchase of undivided share in the land in respect of nine flats which fall to the share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erpreting the terms and conditions of the development agreement, referred to clause no. 21 of the agreement and proceeded to hold that the developer was allowed to enter into the property as the licensee of the owner only for the purpose of carrying out the development of the said property by providing alternate accommodation to the assessee and the assessee has not given absolute possession to the developer and the developer had no absolute and complete control over the property. Further, it held that the developer is only a licensee of the assessee to carry out the construction activities and to get permission from various authorities for construction and the transfer of possession took place only when the assessee got registered the undivided share of land to the extent of 6175 sq.ft., to the nominee of the developer and this falls in the assessment year 2001-02, the year in which the assessee has given possession of the property to the nominee of the developer. Thus, the Tribunal held that the development agreement is not relevant to decide the transfer of property. 13.To test the correctness of the finding, we may straightaway refer to the definition of "transfer" as defined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to transfer for consideration any immovable property in writing, from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, then it would qualify for part performance of a contract. 16.The Tribunal was of the view that the assessee was only a licensee. We do not agree with the said finding on account of a crucial fact which cannot be disputed by the Revenue, viz., the No Objection Certificate issued by the Appropriate Authority under Section 269-UL of the Act. The approval clearly states the extent of land which has been agreed to be transferred. 17.So far as the development agreement dated 27.03.1994 is concerned, the extent of land agreed to be transferred is 47.5% of undivided share in 18675 sq.ft., the extent of built-up area which was agreed to be transferred measure 6500 sq.ft. The apparent sale consideration for the land and building was ₹ 98,99,100/- which was approved by the Appropriate Authority. 18.So far as the second development agreement dated 24.05.1995 is concerned, the extent of land agreed to be transferred was 3997 sq.ft, i.e., 45% of undivided share in 8882 sq.ft. However, in the said agreement, there was no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l was right in holding that the entire damages, deposit and rent free accommodation should be assessed as capital gain. The development agreement makes it abundantly clear and the first of the covenants states that the developer shall provide free of rent for the owners alternate residential accommodation. Admittedly, rents were paid by the developer, rental deposit was paid by the developer and the agreement does not provide for any adjustment of these payments as against the consideration payable under the development agreement. Therefore, the Tribunal committed an error in including the same to be assesseed as capital gains. Accordingly, this finding is set aside and the substantial question of law is answered in favour of the assessee. 23.This leaves us with the last substantial question of law as to whether the assessee is entitled to exemption under Section 54 of the Act. 24.The Tribunal rejected the claim of the assessee on the ground that the transfer as per the development agreement dated 27.03.1994 was only land and not building and therefore, the claim under Section 54 of the Act is not sustainable. To be entitled to the relief under Section 54 of the Act, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
