9911796707
TMI Blog2022 (2) TMI 480X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Respondent : Shri M.K. Biju, D.R. ORDER PER B.R. BASKARAN, ACCOUNTANT MEMBER: The assessee has filed this appeal challenging the order dated 24.1.2018 passed by Ld. CIT(A)-3, Bengaluru and it relates to the assessment year 2009-10. The assessee is challenging the decision of Ld. CIT(A) in assessing the long term capital gain of ₹ 65.77 lakhs. 2. The facts relating to the case are stated in brief. The assessee filed its return of income for the year under consideration on 29.7.2009 declaring a total income of ₹ 4,60,56,090/-. During the course of assessment proceedings, the A.O. noticed that the assessee along with other co-owners has entered into Joint Development Agreement (JDA) on 30.3.2009 with M/s. Arun Shelters Pvt. Ltd for development of land belonging to them. All the co-owners are entitled to 26% of the super-built up area, which worked out to ₹ 67,297 sq.ft. The assessee s share in that was 12.5%. The A.O. took the view that the assessee is liable to capital gain tax as per the decision rendered by Hon ble Karnataka High Court in the case of CIT Vs. T.K. Dayalu (2011) 202 Taxmann 531. Accordingly, he computed long t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to enter upon the schedule property under clause 1.1, the developer may remain on the schedule property for the execution of the project including housing workmen and security personnel and storage of material,. the developer shall remove its men and material and vacate the schedule property on the completion of the project or on termination or rescission of this agreement for any reason whatsoever; notwithstanding the use of the schedule property by the developer for the project, the possession of the schedule property shall always be with the owners and the developer shall not claim any right in this regard. 7. The Ld. CIT(A) even though considered the above said clauses of the agreement took the view that the above said clauses contradict with the various clauses of general power of attorney given to M/s. Arun Shelters Pvt. Ltd. However, a careful perusal of the above said clauses would show that the assessee has retained the possession of the scheduled property and it is clearly stated so in clause 11.1 extracted above. It is further stated that the developer shall not claim any right in this regard. In clause 1.1 extracted above also, it is clearly stated that the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he II Party or Developers except to the nominees of the II Party or Developers or the buyers located by them. We notice that the AO has also extracted the above cited clause in the assessment order, but conveniently omitted the a portion of the paragraph highlighted above. 10. A careful perusal of the above said paragraph of the agreement would show that the developer is granted irrevocable permission and license to enter the scheduled property for the purpose of construction of residential apartments as per the plan to be obtained. It is specifically been mentioned that the license so granted shall not be considered as possession delivered in part performance of the contract u/s 53(sic. 53A) of Transfer of property Act nor any property right shall be deemed in favour of developer. 11. We notice that the AO has invoked the provisions of sec.2(47)(v) of the Act, which reads as under:- 2(47) transfer in relation to a capital asset includes .. (v) 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 in Section 53A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorize the Promoter for the purpose of development, to enter upon the Schedule Property and develop the same, however the authority so granted does not in any manner be construed as delivery of possession by the Owner in part performance of this agreement under Section 53-A of the Transfer of Property Act or under Section 2(47)(iv) of the Income Tax Act, 1961. 1.2) The Owner hereby agrees not to interfere or interrupt in the course of construction and development of the Schedule Property and/or commit any act or omission having the effect of delaying or stopping the work that has to be done under this Agreement. However, the Owner shall always be entitled to inspect the progress of the work and type of work which is being done on the Schedule Property. .. 9. I have carefully considered the rival submissions. Sec.45 of the Act lays down that profits and gains arising out of transfer of capital asset effected in the previous year shall 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 thus clear that there should be transfer during the previous year to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltogether or if such execution of registered sale-deed is postponed, the capital gains tax would also be postponed. In several cases it suited the parties to complete such transactions without execution of registered deed and thereby evade payment of tax on capital gains. It is in order to plug this loophole that cl. (v) was inserted in section 2(47) to lay down that transfer would include any transaction involving allowing of possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of Transfer of Property Act. Thus, the Provisions of Sec.53A of the Transfer of Property Act, 1882 stand incorporated into the provisions of the Income Tax Act, 1961. If that be so then the Tax authorities for coming to a conclusion that provisions of Sec.53A of the Transfer of Property Act, 1882 are attracted to a particular transaction have to come to a conclusion the transaction/agreement in question is such that the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee, has, in part performance of the contract, taken possession of the property or any part thereof, or t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
