AI Drafter 
TaxTMI 
TaxTMI 
2016 (4) TMI 1129
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....es of the case, ld.CIT(A) has erred in not appreciating the fact that as can be seen on the date of JDA, the portion of the constructed apartments that are to be assigned to the assessee has already been decided and crystallized and considering this scenario, it is only logical that the value of these apartments be considered as State Consideration. 2. Based on the facts and circumstances, ld.CIT(A) ought to have appreciated the fact that the assesee should only treat the cost of construction as the sale consideration and not the market value of the asset because the assessee is not selling the apartments and is only receiving them. Hence, the true value of the asset is the cost of construction which is the actual money spent in br....
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....lf was not completed. 4. The Assessee aggrieved by the order of the Ld AO, challenged the Order before Ld CIT(A), who after considering various judgments allowed the appeal. 5. Learned ld.CIT(A) passed order on the mentioned below reasons which are as under; "5.3 I have considered the rival contentions carefully. In the case law relied on by the AO i.e. CIT vs. Dr. T. K. Dayalu 60 DTP 403 (Kar) the facts of that case are as follows: (i) That assessee entered into ]DA which provides that a sum of Rs. 45,00,0001- to be paid to that assessee as a non refundable advance besides total built-up area of 5,500 sq ft to be constructed by the developer which will be made available to that assessee free of cost. (ii) A....
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....a of constructed building in lieu of transfer of portion of land, the estimated value of likely investment into the built-up area is the consideration for the purpose of capital gains. 5.7 The crux of the argument of the appellant is that it is a pure estimation. JDA: is a kind of contract agreement wherein, the appellant would get his share of constructed property after completion of the project and the uncertainty of developer not completing the project or not honoring his commitment are always there till the project is completed. The possibility of termination of contract itself for any reason cannot be ruled out. That being the case, estimating the value of property even before it is received by the appellant, is not realistic.....
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....e the character of cost of acquisition for the builtup area to be handed over by the developer as and when it is handed Dyer or the value of right to receive that area in between and as and when either this right to receive the property or the property when received is sold, the appellant would be gaining further income which needs to be taxed in the respective years. Hence, I find that as on the date of entering of JDA even on deemed status of transfer the capital gains can only be worked out on the deemed market value of the property as per municipal records which has some basis as admitted by the appellant. Hence, even if the appellant's second revised return is ignored by the AO the calculation has to be based on this logic....
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....ceiving them hence, the true value of asset is the cost of construction which is actually money spent in bringing the assets to life. The learned DR further relied on the judgment of the Coordinate Bench of the ITAT at Hyderabad in case of Smt Prathima Reddy Vs ITO, Ward-6(4) (2012) 25 Taxmann.com 264(Hyd.) and emphasized that similar issue was decided by the said Bench, as the said Bench determined the cost of construction while transferring the assets. On the other hand, learned AR relied on the orders of CIT(A) and submitted that the learned CIT(A) was agreed on the submissions of the assessee that for the deemed transfer of JDA the logical deemed consideration has to be guidance value of property and even otherwise it was observed by....