TaxTMI 
TaxTMI 
2015 (7) TMI 832
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....nths. However, the builder M/s Shanmuga Construction Services could not complete the construction within 18 months as projected in the agreement dated 8.12.2006. Therefore, all the assessees and three others entered into another agreement to extend the period of joint venture agreement for a period of twenty four months, on 1.7.2008. In the statement filed along with return of income, the assessees claimed that the sale consideration of the property was only to the extent of Rs. 59,02,664/-. 3. The Ld. D.R. further submitted that as per the joint development agreement, the assessees are entitled for 40% of the constructed area and the builder is entitled for 60% of the constructed area. In lieu of the 40% constructed area, the assessees have to transfer proportionate area to the extent of 60% of the land to the builder towards cost of construction of 40% of the constructed area. According to the Ld. D.R., since a revised agreement was entered between the assessees and the builder extending the period of joint venture on 1.7.2008, the capital gain arose to the assessees only during the financial year 2008-09, which is relevant to the assessment year 2009-10. Accordingly, the Assess....
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....uilder, Shanmuga Construction Services. Therefore, according to the Ld. representative, the transfer took place on 8.12.2006. The subsequent agreement is only to extend the period of construction as agreed on 8.12.2006. 6. Referring to the copy of the development agreement dated 8.12.2006, the Ld. representative submitted that as per clause (6) of the agreement, the vacant possession of the property was handed over to the builder. Referring to the copy of the Power of Attorney said to be executed in favour of the builder, Shanmuga Construction Services, the Ld. representative submitted that the builder was authorized to execute sale deeds in favour of prospective purchasers in respect of the constructed area of the land which was given to it and apply for local authorities like Corporation, Chennai Metropolitan Development Authority, etc. for planning permission. This Power of Attorney was executed on 14.12.2006. Referring to the agreement executed on 1.7.2008 for extension of period of joint venture agreement, the Ld. representative submitted that this is only an extension of period of agreement for 24 months and the terms and conditions agreed on 8.12.2006 were not changed at al....
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....ement clearly says that the first party, namely, the assessees and three others shall hand over the possession of the property to the builder, namely, Shanmuga Construction Services. The period provided in the agreement is 18 months for completion of the construction. The agreement has provided for execution of the Power of Attorney in favour of the builder to enable him to deal with property for getting approval of concerned Government authorities and sale of the same to the prospective purchasers. Since the construction could not be completed within 18 months as provided, the parties entered into another agreement for extension of the time providing for 24 months for completion of the construction. The agreement dated 1.7.2008 clearly says that the construction has already commenced and it is in progress. Therefore, it is obvious that all the assessees handed over the vacant physical possession of the property on 8.12.2006. The agreement dated 1.7.2008 is only for extension of the time for completing the construction. Hence, this Tribunal is of the considered opinion that the vacant possession was given to the builder on 8.12.2006 in pursuance to the joint venture agreement enter....
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....sfer" within the meaning of Section 2(47) of the Act. Section 2(47)(vi) shows that any transaction by way of an agreement or arrangement in any manner which has the effect of transferring or enabling the enjoyment of immovable property also treats as transfer. In this case, the assessees in exchange of 40% of the constructed area, transferred 60% of the land to the builder and handed over the physical possession. Therefore, it is an exchange of property between the parties. In other words, the assessees exchanged 60% of the landed area for 40% of the constructed area. Therefore, there is a transfer within the meaning of Section 2(47) (i) of the Act on the date on which the agreement dated 8.12.2006 was executed. Even otherwise, the joint venture agreement has the effect of transferring 60% of the landed area to the builder. The assessee cannot take back 60% landed area on which the builder has commenced construction. At the best, the assessees would get only 40% of the constructed area and 40% landed area proportionate to the constructed area. Therefore, the transaction between the assessees and the builder is by way of arrangement or agreement which has the effect of transferring ....