TaxTMI 
TaxTMI 
2017 (1) TMI 259
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....is justified in deleting the levy of capital gains in the year under appeal in the facts and circumstances of the case. 4. The brief facts of this case is that the assessee along with her daughter in law Smt Indrani Sanyal purchased the lease rights of an immovable property bearing No. A-79, Nizamuddin East, New Delhi on 13.9.93 for the consideration of Rs. 9,20,000/-. Later the status of the said property was changed to a freehold one by paying an amount of Rs. 77,548/- to the authority. On 16.7.1997, they entered into a Colloboration agreement with Mr Ikbal Singh for the development and construction of the premises. The total construction would comprise the basement , ground floor, 1st floor and 2^nd floor. It was agreed upon that the total expenses for the construction was to be borne by the developer and an additional payment of Rs. 1,00,000/- was to be made by him to the assessee and her co-owner. In lieu, it was decided vide this agreement, that on completion of the construction, the assessee and her co-owner would take the rights for the 1st and 2nd floor and the developer would be the owner of the basement and ground floor of the said construction. Along with this agreem....
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....eveloper and handing over of the possession of the property to the developer and hence the capital gains, if any, arose in the said assessment year and not in Asst year 2007-08. The assessee also placed reliance on the decision of the Hon'ble Jurisdictional High Court in the case of DIT (IT) vs Bidhan Chandra Banerjee in ITA No. 786 of 2008 dated 20.11.2008 wherein it was held that the transfer takes place in the year in which the possession was given to the developer for construction of the property. The assessee also placed reliance on the decision of the Hon'ble Bombay High Court in the case of Chaturbhuj Dwarkadas Kapadia vs CIT reported in (2003) 260 ITR 491 (Bom) . 6. The ld CITA by placing reliance on these decisions held that no capital gain can be taxed in the assessment year under appeal as the transfer took place in the year 1997 itself. The ld CITA also observed that even on merits, the assessee was able to demonstrate with reference to the registered valuer's report, the contents of which were not controverted by the ld AO that the market value of the property as on the date of receipt of the possession thereof and indexed cost thereof was more than the consideratio....
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....n the facts and circumstances of the case, the Ld.CIT(A) erred in giving reference of a remand report of AO in para 3.6(i) of the appellate order, while no any remand report was called for during appellate proceedings. 4) That the appellant craves leave to add, alter, modify, delete or include any of the grounds of appeal. Smt. Indrani Sanyal "That in the facts and circumstances of the case the Ld. CIT(A) has erred in holding that no capital gain is taxable in the A.Yrs.2003-04 & 2007-08. It is a fact on the record that the basement, ground floor and 1st floor was transferred by the assessee in the financial year 2002-03 and 2nd floor during the financial year 2006-07. Therefore, capital gain would be arisen in the A.Yrs.2003-04 & 2007-08." 7. The ld DR reiterated the findings of the ld AO and relied on the decision of Mumbai Tribunal in the case of ACIT vs Jawaharlal Agicha in ITA NO. 1844/Mum/2012 dated 28.9.2016 wherein it was held that the handing over of possession of the land to a developer for the limited purpose of developing the land will not give rise to capital gains tax under the provisions of the Income Tax Act, 1961. 8. The ld AR reite....
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....has got power to sign and execute the proper sale deeds in respect of the said portions in favour of the purchaser, to submit the same for registration with the Sub-Registrar, New Delhi concerned, to admit the execution thereof, and to get the same registered. Again Vide Clause 14 of the said registered Power of Attorney, the POA holder has got power to apply and obtain the necessary permissions / clearances from concerned / appropriate authorities /departments for the sale/ transfer of the said portions as mentioned hereinabove. These clauses conclusively prove that the assessee and her co-owner of the property intended to transfer the subject mentioned property in favour of the developer pursuant to the Development Agreement and Registered Power of Attorney. This act was further culminated by handing over of the possession of the property by the assessee and her co-owner in favour of the developer. These facts are not disputed by the revenue before us. The main argument of the revenue is that the sale deeds in the year under appeal and accordingly the transfer had happened during the year under appeal. We find that the reliance placed by the ld AR on the decision of the Hon'ble S....
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....substantial question of law is involved to admit this appeal. Hence the appeal is dismissed. 9.2. Now let us come to the decision of the Mumbai Tribunal dated 28.9.2016 supra relied upon by the ld DR. We find that the said decision is factually distinguishable from the facts of the case before us. Let us now address the distinguishing facts of that case :- (a) In that case, Clause 3, Clause 6 and Clause 14 of the development agreement clearly laid down that the possession shall be given to the developer only upon fulfillment of certain conditions i.e sanctioning of scheme by Slum Rehabilitation Authority (SRA) and obtaining the 'letter of intent' and other requisite permissions from the competent authorities. It has also been clarified in Clause 14 that owner (assessee) shall always be deemed to be in physical and exclusive possession of the said property until the issuance of Annexure II by SRA. It is an admitted fact on record that even till date no permission or scheme has been granted by the SRA in respect of the impugned land. Thus it was held that there could not have been any question of parting with the physical possession by the assessee with the developer. ....
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.... Section 2(47) of the Income-Tax Act, 1961 - Capital gains - Transfer (Lands and Building) - Assessee entered into development agreement with builder and developer for transfer of development rights in respect of land - Developer took possession of that land and started development work - Whether said transaction was to be treated as transfer of right in property covered under section 2(47)(v) - Held , Yes [Para 4] { in favour of revenue }. 9.4. We find that the ld DR had finally stated that the dispute before us is not in the year of taxability of capital gains but only on the computation of capital gains. We find that the assessee had placed the registered valuer's report , the contents of which were not controverted by the ld AO that the market value of the property as on the date of receipt of the possession thereof and indexed cost thereof was more than the consideration received on sale of the property during the assessment year in question. We find that the assessee had placed the computation of capital gains based on this valuation report wherein the net result only resulted in a capital loss of Rs. 84,622/- as elaborated in the ld CITA order. The ld CITA observe....