TaxTMI 
TaxTMI 
2015 (1) TMI 740
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....is property in Pakistan. In 1954, he applied for compensation and allotment of any evacuee's property under the "The Displaced Persons (Claim and Rehabilitation) Act, 1954. The said application was not processed till 1989 and hence he wrote two letters to Settlement Commission. Thereafter, he filed a writ petition before Hon'ble High Court of Bombay and the High Court, vide its order dated 22.11.1989, directed the Settlement Commission to allot property at 21 Bund Garden Road, Pune to set off the value payable to Mr. Anand Vzirani. On 30-5-1990, the Central Government also directed the Maharashtra Government to allot property. Pending allotment, Shri Anand Vazirani passed away on 30-03-1992. There after, the assessee herein pursued the matter by making several applications, petition etc to the Settlement Commission and the Government of Maharashtra. On 08-9-994 & 01.7.1995, the Settlement Commission passed orders against the assessee on the reasoning that the land value was higher than the compensation amount. Upon the writ petition filed by the assessee, Hon'ble High Court quashed the order of the Settlement Commission on 24.4.1996. Again, the Settlement Commission dismissed the c....
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....d his sister executed release deed in favour of the assessee. Accordingly the assessee herein became the full owner of the property. 5. The department carried out a survey operation in the hands of M/s Murli Realtors, wherein they noticed the development agreement dated 25-09-2000 entered between the assessee herein and M/s Murli Realtors. In that agreement, the consideration was shown at Rs. 8,60,00,000/-. Upon receipt of the said information, the assessing officer of the assessee reopened the assessment relating to the assessment year 2001-02, i.e., the year under consideration, by issuing notice u/s 148 of the Act. The assessing officer noticed that the Settlement Commission had given the letter of possession to the assessee on 15.5.2000 and the development agreement was entered into between the assessee and M/s Murli Realtor on 25.9.2000. The assessing officer took the view that the assessee has transferred the property within the meaning of sec. 2(47)(v) and 2(47)(vi) of the Act on 25.9.2000 and accordingly held that the capital gain arising on such transfer is assessable as Short term Capital gain in the assessment year 2001-02. The assessee submitted that he had offered the....
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....ital gain in assessment year 2001-02 is against the peculiar facts prevailing in the instant case and they have reached such a conclusion without properly appreciating the facts. He submitted that the tax authorities are under the impression that the possession of the property was given to the developer on the date of execution of development agreement and further the developer has also immediately started the activities. However, the fact remains that the assessee had given only the licence to the developer to enter the property. He further submitted that the advance received from the developer was fully used to pay the differential price to the Settlement commission, to purchase tenancy rights from the tenants, to relieve from the earlier MOU entered with M/s Radiant Builders etc. Further, the developer also did not start the development work in terms of the Development agreement. Further, there was delay in getting approval from municipal authorities and there was further delay, since the claims of the tenants need to settled. Accordingly, the Ld A.R submitted that the developer could not start the work in the year relevant to the assessment year 2001-02. Once all the hurdles we....
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....he impugned property was occupied by many tenants and they held tenancy rights. The payments made by the assessee to the tenants to purchase the said tenancy right were allowed as deduction by the assessing officer himself while computing the Short term Capital gain. The assessee has placed copies of agreements entered with various tenants for vacating the property at pages 177 to 220 of the paper book filed by him. A perusal of the said agreements shows that the assessee has started entering into the agreements with the tenants from 2002 onwards. We notice that the assessee has purchased tenancy rights in January, 2005 also. These facts show that the tenants were occupying the property till that date. In the mean time, the developer was approaching the Pune Municipal Corporation for the joint development of the impugned property. It is stated that the building permission was given vide commencement certificate bearing no.4679 dated 19.9.2001, but it was revised, vide revision certificate No.0131 dated 3.10.2003 and there were subsequent revisions also. It is further stated that the developer obtained plinth completion from Pune Municipal Corporation on 26.3.2002 and part completio....
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....at the legal possession (complete control over the property) was not given to the developer and he was given only the licence to carry out the work. 11. The Ld A.R also placed reliance on few case laws to support his contention that the capital gain need not be assessed in the year in which the development agreement was entered, i.e., the year of assessment should be decided on the basis of facts prevailing in each case. We shall briefly discuss about those case laws:- (a) ACIT Vs.Mrs. Geetadevi Pasari (2007)(14 SOT 63)(Mum)(URO) In this case, the assessee executed an agreement of sale cum development with a builder on 29.3.1994 to develop the property. The developer, after obtaining the commencement certificaate from the municipal corporation, paid the balance consideration. The assessee handed over the possession of the premises to the developer on 10.4.1998. On analysis of the facts prevailing in this case, the Tribunal came to the conclusion that the possession was given only on 10.4.1998. Accordingly, the Tribunal held as under:- "... In these circumstances, when only a small portion of sale consideration was rec....
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....(2013)(35 taxmann.com 415)(Hyd) - In this case, the assessee had given licence to the developer to carry on development activities. However, the developer did not commence construction activities. The Tribunal held that the 'willingness to perform' contemplated in sec. 53A of the Act is something more than a statement of intent; it is the unqualified and unconditional willingness on the part of the vendee to perform its obligations. Unless the party has performed or is willing to perform its obligations under the contract, and in the same sequence in which these are to be performed, it cannot be said that the provisions of Section 53A of the Transfer of Property Act will come into play on the facts of tht case. Since the developer did not commence the construction activities, the Tribunal held that there was no transfer of property on the date of execution of development agreement. Identical views have been expressed in the following cases also by the Hyderabad bench of Tribunal:- (i) Smt. P Prathima Reddy Vs. ITO (25 taxmann.com 264)(Hyd) (ii) Fibars Infratech (P) Ltd Vs. ITO (46 taxmann.com 313)(Hyd) (iii) Suresh Kumar D....