Development agreements require legal possession or effective enjoyment for capital gains transfer; permissive possession and deferred consideration de...
Permissive possession granted to a developer under a joint development agreement, solely for development and construction while ownership remains with the co-owners, does not constitute possession in part performance under section 53A of the Transfer of Property Act. Accordingly, section 2(47)(v) of the Income-tax Act is not attracted, and the agreement does not effect a transfer of the capital asset in the relevant previous year. The text notes that where the developer holds possession only as the owners' representative, no capital gains arise merely upon execution of the agreement.
Permissive possession granted to a developer under a joint development agreement, solely for development and construction while ownership remains with the co-owners, does not constitute possession in part performance under section 53A of the Transfer of Property Act. Accordingly, section 2(47)(v) of the Income-tax Act is not attracted, and the agreement does not effect a transfer of the capital asset in the relevant previous year. The text notes that where the developer holds possession only as the owners' representative, no capital gains arise merely upon execution of the agreement.
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