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TMI Blog2021 (5) TMI 336X X X X Extracts X X X X X X X X Extracts X X X X ..... d assessee was to receive the constructed area of 5000 sq.ft by virtue of development agreement. After entering into agreement, the developer has vanished and no real development took place till date as verified and confirmed by the AO through the Departmental Inspector. It appears that neither development has taken place nor developed area was received by the assessee. This fact was confirmed by the AO himself. There was no real income except notional income as per the development agreement, which has never been received by the assessee. In the light of the above facts, the question whether the possession is lying with the developer or taken over by the assessee is the issue, which decides the taxability of capital gains. It appears tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8on 29/03/2014 and in response to which, the assessee filed the return of income on 23/02/2015 admitting the total income of ₹ 74,380/- from other sources and agricultural income of ₹ 1,65,340/-. The case was taken up for scrutiny and details were called for. As per the information received by the AO, the assessee had entered into development agreement-cum-GPA with M/s 21st Century Investments Properties Ltd., vide document No. 5126/2007, dated 26/03/2007 and transferred the land admeasuring 0.15 guntas at survey No. 343 located at Nizampet Village, RR Dist. The developer has to complete the development within 24 months and the assessee has to receive 5000 square feet bult-up area. The assessee before the AO submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .yds. 16,42,310/- Less: Value of land admeausring500 sq.yds. retained by the assessee as per development agreement cum GPA 4,52,427 Value of land admeasuring 1315 sq.yds transferred to the developer 11,89,883/- The short term capital gains is worked out as under: Sale consideration ₹ 16,27,912/- Less: Cost of land sold. ₹ 11,89,883/- STCG ₹ 4,38,029/- 3.1. Against the order of the AO, the assessee preferred an appeal before the CIT(A) and the Ld. CIT(A) dismissed the appeal of the assessee o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the assessee has entered into development agreement and given possession of the land to the developer, the capital gains gets attracted, as decided by the Hon ble Jurisdictional High Court in the case of Potla Nageswara Rao Vs. DCIT,( ITTA No. 245 OF 2014 Dated 09-04-2014) capital gains required to be brought to tax. 6. We have heard both the parties and perused the material on record. In the instant case, the assessee has entered into development agreement for construction of duplex houses and assessee was to receive the constructed area of 5000 sq.ft by virtue of development agreement. However, after entering into agreement, the developer has vanished and no real development took place till date as verified and confirmed by the AO th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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