9911796707
TMI Blog2024 (2) TMI 1403X X X X Extracts X X X X X X X X Extracts X X X X ..... l transfer the same to any third party. Therefore, the argument, DR is not acceptable that the license and permission is a right itself gives rise transfer of property u/s. 2(47)(v) - clause 3 of the said agreement establishes that the developer shall construct a portion of building for the owners in proportion of 42.5% out of total built up area of the proposed building which supports the case of the assessee no capital gain arose in the year under consideration, but it could be in the year in which possession of share of assessee in the proposed building is given. Clause 7 reads that the owners including the assessee given a registered power of attorney to the developer, in order to obtain the sanction of layout, building plan and to appear before various authorities for mutation on behalf of the owners and to do all general acts, deeds and things in the name of owners to commence and complete the development of the said property as per the terms and conditions mentioned in the said agreement. Therefore, as per the said agreement, the owners has permitted the said developer to develop the property belonging to the owners only as a licensee which did not have the effect of transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized for property at Mouza Somalwada CTS No. 504, Nagpur was seized. In pursuance of the same a notice u/s. 153A r.w.s. 153C of the Act was issued requesting the assessee to file return of income within 30 days from the date of receipt of such notice. The assessee filed a letter on 18-11-2017 enclosing return of income which was filed on 31-03-2013 stating it to be treat the same as in response to the notice u/s. 153A r.w.s. 153C of the Act. The AO opined regarding the agreement of joint development agreement that the assessee has given possession of the land to the developer and all the conditions of sub-clause (v) of section 2(47) of the Act are satisfied, by inferring so, such possession constitutes transfer u/s. 2(47) of the Act, determined Long Term Capital Gain in the hands of the assessee by determining total income of the assessee at Rs.3,19,26,123/- vide its order dated 14-12- 2017 passed u/s. 143(3) r.w.s. 153C of the Act. Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A). 6. A contention was raised that no transfer of land affected during the year under consideration as per the Joint Development Agreement and no consideration was also recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has been subjected to tax. He vehemently argued that the appellant-revenue cannot agitate the capital gain should be assessed in the year under consideration as the Joint Development Agreement entered therein, if so, it will amount to double taxation of income already subjected to tax in A.Y. 2018-19. The ld. AR drew our attention to written submissions and reiterated the same. He supported the order of CIT(A) and prayed to dismiss the grounds raised by the appellant-revenue. 9. Heard both the parties and perused the material available on record. The short point arises is as to whether any transfer of property effected, if so, in which year the Long Term Capital Gain is to be assessed, whether it is in the A.Y. 2012-13 being the year in which the modified Joint Development Agreement executed or in the year where the assessee received his share in the form of constructed area which was offered to tax in A.Y. 2018-19. On perusal of the modified Joint Development Agreement as placed on record by the ld. DR, clause 3 reads that in consideration of the owner transferring development right and authority to the developer to deal with the said property, the developer shall construct a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Transfer of Property Act, 1882. He submits that, in order to come to such conclusion by the Hon ble High Court of Bombay, placed reliance on the decision of Hon ble Supreme Court in the case of Seshasayee Steels (P.) Ltd. reported in (2020) 115 taxmann.com 5 (SC). For better understanding the relevant portion of the decision of Hon ble High Court of Bombay is reproduced as under : 7. The Apex Court in Seshasayee Steels (P.) Ltd. (supra), held that Section 53A of the Transfer of Property Act, 1882 would not be attracted in a case where a license was given to another for purposes of development of the flats and selling the same and that granting such a license could not be said to be granting possession within the meaning of Section 53A. It was held: 11. In order that the provisions of Section 53A of the T.P. Act be attracted, first and foremost, the transferee must, in part performance of the contract, have taken possession of the property or any part thereof. Secondly, the transferee must have performed or be willing to perform his part of the agreement. It is only if these two important conditions, among others, are satisfied that the provisions of Section 53A can be said to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income chargeable to tax had escaped assessment and the action of the assessing officer, therefore, would be without jurisdiction. 11. On careful reading of the above, we note that the Court held that section 53A of the Transfer of Property Act, 1882 would not be attracted in a case where a license was given to another for the purpose of development of flats and selling the same and granting such license could not be said to be granting possession within the meaning of section 53A of the Transfer of Property Act, 1882. In the present case also, as discussed above, clause 6 of the modified agreement of Joint Development, Construction and Sale clearly shows that the owners which includes the assessee confirmed the license and permission given to the developer by the previous owner to enter into upon the said property. The said license to the developer is personal and under no circumstances the developer shall transfer the same to any third party. Therefore, the argument of ld. DR is not acceptable that the license and permission is a right itself gives rise transfer of property u/s. 2(47)(v) of the Act. Further, clause 3 of the said agreement establishes that the developer shall con ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
