2002 (7) TMI 84

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....property and thereafter, take 50 per cent. of the constructed area and adjust for the amount invested by the third respondent. While that be so, the ground over the constructed area also could be sold by the third respondent. This amounts to transfer of ownership with respect to 50 per cent. of the immovable property, as per Chapter XX-C of the Income-tax Act, 1961. Since the value of such property exceeds Rs.10 lakhs, accused Nos. 1 and 3 should have informed the appropriate authority constituted under the Income-tax Act, at least three months prior to such transfer, as per section 269UC and they should have submitted Form No. 37-I, within 15 days from the date of the agreement. Therefore, accused Nos. 1 and 3 and their managers, accused N....

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....he Madras High Court in Ashok Leyland Finance Ltd. v. Appropriate Authority [1998] 230 ITR 398, where this court has held that: "Notwithstanding the description of the document as a development agreement, the subject matter of the transfer being an undivided share in the land, and the consideration being partly in money and partly in a 'thing' which was not in existence, the thing being a flat which the transferee was required to construct, the provisions of Chapter XX-C of the Act were attracted." Therefore, counsel submitted that even though it is a transfer of future construction, even to such development agreement, the provisions of Chapter XX-C apply. He also relies upon the decision in Shantivan Corporation v. Sub-Registrar [199....

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....is only to share the profit, it is purely a business transaction and no transfer of interest in the immovable property is involved. A perusal of the agreement shows that the possession of the properties was given to the builder for putting up construction for a specified period. Therefore, it is not a permanent transfer so as to attract the provisions of Chapter XX-C. Further, the purpose for which these sections in Chapter XX-C were enacted was to prevent avoidance of stamp duty by undervaluing the property. Further, the purpose of submitting of Form No. 37-I is to enable the Income-tax Department to purchase the property on the same price as found in the agreement. Assuming that the Government wanted to use the right of pre-emptive pur....