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TMI Blog2021 (10) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... sment. In the instant case, the assessee along with 4 others (co- owners)transferred the land admeasuring 10,648 sq.yards for development on 50:50 basis and the assessee is having 1/5th share in the said land. Since the co-owners have transferred the land in lieu of receipt of 50% of constructed area and retained the 50% of land towards their share, for the purpose of computation of capital gains, only 50% of the land transferred to the developers share required to be considered but not the entire land. This Tribunal in the case of Vijaya Medical Center [ 2018 (4) TMI 1517 - ITAT VISAKHAPATNAM] on similar facts viewed that capital gains has to be computed on 50% of the land transferred to the developer when the land was given for developme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee filed the return of income declaring total income of ₹ 2,16,55,690/- and the return was taken up for limited scrutiny for verification of large long term capital gains . During the course of assessment proceedings, the Assessing Officer (AO) called for the details and the assessee has furnished the details with regard to long term capital gains. After verification of details filed by the assessee, the assessment was completed accepting the income returned by an order dated 15.06.2017 u/s 143(3) of the Income Tax Act, 1961 (in short Act ). Subsequently, the Pr.CIT, Visakhapatnam has taken up the case for revision u/s 263 and found that as per the Development Agreement cum Power of Attorney, the assessee along with other co-o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... area and the 50% of undivided share of land therefore submitted that the assessee has rightly offered 50% of the land admeasuring 5324 sq.yds @ of ₹ 20,000/- per sq.yd the which worked out to ₹ 10,64,80,000/-. The assessee further submitted that the AO has accepted the computation of capital gains after due verification of details furnished by the assessee Therefore, there is no error in the assessment order passed by the AO which is prejudicial to the interest of the revenue, hence, requested to drop the proceedings. However, not being convinced with the explanation of the assessee, the Ld.Pr.CIT held that the assessee, having transferred the entire land of 10,648 sq.yds, in lieu of super built up area, the sale consideration o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... % share of land in lieu of receipt of 50% of the constructed area. As on the date of transfer, there was no super built up area. Since the assessee retained, 50% of the land, either the value of 50% of the land or 50% of constructed area required to be taxed as capital gains, but not the land as well as the super built up area, since, the developer has not constructed the space nor parking space is available to the assessee. Therefore, Ld.AR argued that the assessee has rightly admitted 50% of the sale value of land of 5324 sq yards @20,000 per sq.yd. which worked out to ₹ 10.64 crores for capital gains, thus, argued that on merits also the assessment order passed by the AO is neither erroneous nor prejudicial to the interest of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ked to furnish the details of ownership of the land and sales deed of the same with the firm. The AR furnished the required information from time to time and the same was duly verified. Regarding the Tax Credit mismatch, AR was asked to furnish the reconciliation statement of 26AS with ITR. The required document was furnished and the same was duly verified. After verification of the information / documents called for and discussion with the assessee, the assessment is completed by accepting income returned by the assessee. From the assessment order, it is clear that the issue with regard to correctness of capital gains was verified by the AO before completing the assessment. In the instant case, the assessee along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eveloped land and the developer has given physical possession of the developed plots as per the development agreement dated 28.06.2010, the fact remains that the assessee had retained 50% of the land and only 50% of the land was transferred to the developer, therefore, we are of the considered view that the capital gains has to be computed on 50% of the land transferred to the developer, but not on the entire developed land as contended by the Ld.Pr.CIT. partly. Similarly, This Tribunal in the case of Ganta Srinivasa Rao in I.T.A. No.423/Viz/2019 and 424/Viz/2019 dated 17.09.2021 also viewed that if, the assessee transfers 50% of land and retained 50% of land in development agreement, for the purpose of computation of capital gains, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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