Consistency in tax treatment barred capital gains addition on a joint development agreement where co-owners were treated alike.

Long-term capital gains claimed from a joint development agreement were held not taxable in the assessee's hands where the same agreement, involving other co-owners on identical facts, had already been accepted by the Revenue in other cases without transfer being recognised. The analysis applied the consistency principle that the Revenue should not adopt a different stand on the same transaction absent just cause. On that basis, the assessee's share in the development agreement was treated as not giving rise to taxable capital gains, and the related addition was deleted.

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Issues: Whether long-term capital gains arising from the joint development agreement were taxable in the assessee's hands, in view of the treatment accorded to the other co-owners who were parties to the same agreement.

Analysis: The addition arose from the assessee's share in the joint development agreement dated 10.07.2015. The same agreement involved the other co-owners, and on identical facts the Revenue had already accepted in two cases that no transfer had taken place and no addition was warranted, while in another case the appellate authority deleted the addition holding that no capital gains arose. The Court applied the principle that where the Revenue has accepted the position in the case of other assessees on identical facts, it cannot take a different stand without just cause. On that basis, the Court held that the assessee's share in the agreement could not be brought to tax as capital gains.

Conclusion: The addition towards long-term capital gains was not sustainable and was directed to be deleted.

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