TaxTMI 
TaxTMI 
TaxTMI 
2005 (9) TMI 252
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....erred in holding that the long-term capital gains arising out of a transfer of undivided share of land to the developer is not assessable for the assessment year 2001-02. (ii) The ld. Commissioner of Income-tax has failed to appreciate the fact that the assessee has not received any consideration during the previous year relevant to assessment year 1998-99 or 1999-2000 to hold that capital gains is assessable during the assessment year 1998-99 or 1999-2000, and, therefore, erred in holding that the long term capital gains is not assessable in the assessment year 2001-02. (iii) The ld. Commissioner of Income-tax (Appeals) failed to appreciate the fact that the handing over of the possession as per the development agreement is only a license to the developer to enter into the property for the development purposes and it do not amount to transfer as envisaged under section 2(47) of Income-tax Act read with section 53A of Transfer of Property Act and, therefore, erred in holding that the long-term capital gains is not assessable in the assessment year 2001-02. (iv) The ld. Commissioner of Income-tax (Appeals) failed to appreciate the fact that section 2(47) of Income-tax Act read....
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....ding i.e., 3,000 sq. ft. and also till the entire amount payable to No.2 of the party of the first parris fully paid. (v) If the party of the second part fails to deliver possession of 3,000 sq. ft. to the appellant within 18 months from the date of delivery of possession of the impugned property, the second party shall pay a monthly compensation of Rs. 15,000 till the time the default continues. (vi) A power of attorney is to be made out in the name of Sri S. Ramakrishna, authorized signatory of the party of the second part for taking all actions required for the construction to be done in the property and the same will be registered. (vii) Party of the first part authorizes the party of the second part to sell all the remaining built-up area other than 3,000 sq.ft. together with relatable land common area etc. as mentioned in clause (v) above. (viii) The party of the second part had the right to enter into negotiation with prospective buyers and appropriate all advances and considerations for the same. The party of the first part to do everything that is required to be done for development of the property. (ix) The agreement is not revocable. 3.1 The above agreement wa....
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....ement dated 22-8-1997 read with the supplemental agreement took place only in this year and capital gains is enviable in this year only. 5. Learned Departmental Representative on the other hand submitted as under:- (i) Transfer as defined in the Act does not require that there should be a sale. (ii) consideration has been fixed in the agreement at Rs. 119 lakhs and the other co-owner has received Rs. 2 lakhs on 4-7-1997 and Rs. 10 lakhs on 22-8-1997. As regards the appellant, the consideration in the shape of constructed property as per the agreement has been valued in the agreement itself at Rs. 60 lakhs. Appropriate Authority has bifurcated the amount as under:- (a) Cost of construction - Rs. 33 lakhs, (b) Cost of relatable land - Rs. 27 lakhs. Therefore, this is the full value of consideration bargained for by the parties to the transaction. (iii) Recital in the agreement clearly shows that the developer has acquired right by virtue of the agreement. Therefore, the possession given is absolute and not purposive as claimed by the appellant. Possession is required to be given within 15 days from the date of the agreement as mentioned in clause-3 of the agreement, whic....
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....eration for the transfer has been mentioned in the original agreement as Rs. 119 lakhs, Rs. 60 lakhs for the appellant and Rs. 59 lakhs for the other co-owner. In the supplemental agreement dated 15-10-1997 the same has been reduced to Rs. 92 lakhs by excluding the value of undivided share of land relating to 3,000 sq. ft. of built-up area, possession of which is required to be handed over to the appellant by the developer within 18 months from the date of handing over of possession of the impugned property to the developer as per the terms of the agreement. Rs. 12 lakhs has been paid to the other co-owner in financial year 1997-98. Possession of the property has been handed over to the developer earlier to the previous year relevant to assessment year under consideration. There is a provision of giving registered irrevocable power of attorney to the M.D. and authorised signatory of the developer in the agreement itself. The developer has all right to dispose of the developed property and also to utilise advance and sale consideration from the same other than 3,000 sq. ft. of built-up area and relatable land. The appellant in no way is concerned with the development and sale of suc....
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....nsferor and the transferee; (iii) It should pertain to transfer of immovable property; (iv) Possession of the property should be given to the transferee; (v) The transferee should be ready and willing to perform his part of the contract. In the present case, all these conditions are fulfilled much before 1-4-2000. There is no right left to the transferor other than the right to receive the consideration for the transfer in the manner laid down in the contract and to get certain compensation in the form of rent reimbursements etc. Thus, the transaction entered into by the parties through the agreement is a transaction as envisaged under section 53A of the Transfer of Property Act. 7.3 Now we will consider section 2(47) of the Act. The section reads as under:- "Transfer in relation to a capital asset includes,- (i) the sale, exchange or relinquishment of the asset; (ii) the extinguishment of any rights therein; or (iii) & (iv)** (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 Transfer of Property Act, 1882 (4 of 1882); or ....