TaxTMI 
TaxTMI 
2012 (12) TMI 520
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....ion of the 15% land sold away by the assessee vide second sale deed. 2. The CIT (A) failed to distinguish both the transactions made vide development agreement dated 31-1-2001, which was not considered as capital asset, and the sale deed dated 20-4-2006 through which rights on 15% of the developed land were relinquished, as separate and not related to each other for the purpose of capital gains. 3. Any other ground that may be urged at the time of hearing." 3. Briefly, the facts are a search and seizure operation was conducted in the case of M/s Ambience Properties Limited and its sister concerns on 9-10-2007. In course of search and seizure operation, the IT Authorities found and seized a development agreement entered by the assessee family with M/s Fortune Constructions Pvt. Ltd., with respect to agricultural land of Ac.50.39 guntas situated in Gundlapochampally village, Medchal Mandal, RR District. In pursuance to the development agreement cum GPA dated 31-1-2001, the assessee along with his family members gave possession of the land to the developer M/s Fortune Constructions Pvt. Ltd., on the consideration to receive 15% of the total developed areas. The assessee along....
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....gains since the nature of assets transferred is not agricultural land. The Assessing Officer on the basis of above finding computed long term capital gains based on share of land holding falling in respect of the assessee and other family members. So far as the assessee is concerned, the capital gains was computed at Rs.36,30,315/-. The assessee being aggrieved of the assessment filed an appeal before the CIT (A). 5. In course of hearing before the CIT (A), the assessee again reiterating its stand taken before the Assessing Officer contended that the land being agricultural one, situated beyond 8KM of Municipal limits, the sale consideration is not subject to capital gains. The CIT (A) after considering the facts, accepted the contention of the assessee so far as transfer of land to the developer M/s. Fortune Constructions Pvt. Ltd., under the development agreement under GPA to be outside purview of capital gains as it involved transfer of agricultural land. However, so far as sale of 15% right in developed land to M/s. Koncept Nirman Pvt. Limited is concerned, the CIT (A) came to hold that second transaction is distinct and separate from the first one and, the asset transferred....
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.... in connection with transfer as a group has been deducted. Page No. 30 & 31 of Paper Book may be referred to in this context. b) The Appellants have acquired properties as per list given which are entitled for exemption u/s 54B & 54F. c) The spirit of the C.I.T. Appeals order has not been reflected in the consequential orders. 5) We observed that a mistake in the C.I.T. Appeals order wherein they have narrated that the stamp duty paid was Rs. 5,41,675 which is not correct but the exact amount is Rs. 6,37,250(5,41,675+95575). B) CROSS OBJECTIONS: The agricultural land measuring to Acres 50-39 gts. has been transferred in the assessment year 2001-02 and there is no income tax liability. The transfer is completed since the possession has been handed over. As per Sec. 247(v), the transaction is completed and capital gain arises in the year in. which the transfer took place Le.; in the assessment year 2001-02 and there is no tax liability as evident from the assessment order since this is not a capital asset for 2 reasons: 1) The land is situated away any municipal limits and the population in the village is less than 10,000. 2) The taxation was unde....
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....sidential project to be developed. (A)(2) Yes. As per the first development agreement, there was no capital gain, because the asset transferred was agricultural land. The sale of Right (extinguishment of Right) of 15% of the constructed residential property on 20-4-2006 attracts capital gains which is chargeable to tax u/s 45(1) r.w.s. 2(14), 2(47) & 48 of the I T Act. (A)(3)- Not relevant. When the asset acquired on 30.01.2001 was the Right in the asset to be developed in future and not the land, the shape of the land has no relevance. (A)(4)- The department is agitating against this observation of the CIT (A). (A)(4)(a)-The expenditure of Rs.98 lakhs said to have been incurred by the assessees in question has no relevance when Right of 15% in Developed Residential construction was acquired on 30.01.2001. As per the Development Agreement, there was no such liability as on 30.01.2001 nor was there any future liability mentioned in the agreement. Any liability or expenditure spent by the assessee subsequent to the date of Development Agreement i.e. 30.01.2001 is outside the purview of the entire transaction. When the Right was acquired towards sale consideration, the ass....
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....Right of 15% attracts capital gain tax which is not correct. Here the records clearly state that agricultural land was transferred and pass books have been handed over. (A)(3) Capital gains occurs on a specific value of consideration and it should not be imaginary. (A)(4)(a) -The Right of 15% as not been acquired as evident from the sale deed. The land was in the same shape starting from 2000- 01 to 2007-2008. The expenditure relates to litigation and other matters. (A)(4)(b). We have asked a detailed hearing and the consequential order was passed without giving an opportunity. (A)(4)(c). We are questioning the very concept of Assessment. Assume for a while that the Assessing Officer has done indexation correctly, he should give weightage for Sec.247(5) which states the capital gain takes place in the year of transfer. The Appellants are strictly going by Statute Book. Capital gain is chargeable as income of the previous year in which the transfer took place. The transfer took place in the assessment year 2001-02 and the return has been filed to this effect. The Right of 15% of developed property in future has to be evaluated and that becomes the consideration. S....
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....ntas of agricultural land through a development agreement/GPA by which the assessee acquired a capital asset of 15% right over the developed land. Under the second agreement entered with M/s Koncept Nirman Pvt. Limited. In April 2006, the assessee and his family members transferred 15% interest in the developed land for a consideration of Rs.8.50 crores. Under the development agreement/GPA, the assessee and his family members have acquired right and interest on 15% of the developed land towards transfer of Ac.50.39 guntas of land. Therefore, the 15% interest in developed land is a new asset acquired on transferring Ac.50.39 guntas of land. What the assessee and his family members have transferred or sold in April, 2006 is this 15% interest in developed land for a consideration of Rs.8.50 crores. 11. When the Assessing Officer himself has treated two agreements entered into by the assessee as two distinct and separate transactions, he was not correct in taking the indexed cost of acquisition, the purchase value of the land in 1980 and 1989. While computing capital gains arising out of transfer of 15% interest in developed land to M/s Koncept Nirman Pvt. Limited in April, 2006.....
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.... transactions. The learned AR for the assessee contended that the nature and character of the land transferred at the time of entering into the development agreement remain the same when 15% right and interest in the developed land was transferred to M/s. Koncept Nirman Pvt. Limited in the second agreement entered in April, 2006. The learned AR contended that the land transferred under the development agreement under the sale deed remained the same as no development activity has been carried out. The contention of the learned AR for the assessee is not acceptable due to the following reasons. So far as transfer of land to the developer under development agreement/GPA in 2001 is concerned, it is a transfer for the purpose of capital gains within the meaning of section 2(47) of the Act. However, the revenue has accepted the fact that the land transferred was an agricultural land and therefore is not a capital asset. As per the development agreement cum GPA, it has been mentioned in the preamble that the assessee and his family members being owners of the land have approached the developer with an intention of developing a colony and as per the terms of the development agreement, t....