AI Drafter 
TaxTMI 
TaxTMI 
2018 (9) TMI 600
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....cumstances of the case, the LD CIT(A) has erred on facts and in law in deleting the addition of Rs. 1.60 crores being capital gain on the assessee's share of built up area in the project executed under JDA dated 15.03.2016. 3. Whether on the facts and in the circumstances of the case, the LD CIT(A) has erred on facts and in law is not appreciating the fact that AO has rightly adopted the cost of the construction @ Rs. 1600/- per sq. ft for the 10,000 sq.ft. of land as per JDA to compute the capital gain as here the issue in question was not a choice between considering the sale consideration as Rs. 37,60,000/- or Rs. 1,60,00,000/-. The learned CIT(A) has failed to consider that the assessee had received 10,000 sq ft. of constru....
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....S. Mythili Vs. ITO and Shri. Reddy, HUF Vs. DCIT. Pursuant to the directions of the Tribunal, the CIT(A) has afforded opportunity to the ITO as well as the assessee. The submissions filed by them were also confronted to each other. Before the CIT(A), the learned Counsel for the assessee has placed a reliance upon the latest judgments of the Apex Court in the case of CIT Vs. Balbir Singh Maini (Civil Appeal No. 15619 of 2017) order dated 04.10.2017 wherein the Hon'ble Apex Court has held that the income should be brought to tax only in the year in which the assessee has right to receive the income under JDA. 3. The CIT(A) re-examined the rival submissions in the light of aforesaid judgments and came to the conclusion that appellant transf....
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.... of the land and limited right was given to the builder for the development of the land. He has also invited our attention to various clauses in order to demonstrate that possession remains with the assessee. He has also placed a reliance upon judgment of the jurisdictional High Court in the case of CIT Vs. Ved Prakash Rakhra (supra) in support of his contention that the exchange value of the property as specified in project development agreement, represented market value on date of entering into agreement should be taken as basis for computation of capital gain. The learned Counsel for the assessee further contended that fair market value as per the sub registrar's valuation has to be taken as consideration. He has also invited our attenti....
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....of Karnataka in the case of CIT Vs. Ved Prakash Rakhra (376 ITR 762). In the said case, the issue before the Hon'ble High Court was whether the Tribunal was right in holding that estimated cost of construction of Rs. 66,00,000/- shown in the Joint Development Agreement (JDA) for development of property should be taken into account and not the 50% of Rs. 2,86,00,000/- actually spent by the builder for the purpose of section 45 of the Act. On the said issue, the finding of the Hon'ble High Court is as under: "9. Insofar as the property situated at Aga Abba Ali road is concerned, as per the Development agreement of the year 1994, the Developer was put in possession of the property on 6-3-1995 for construction of the Apartment ....
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.... project development agreement can be taken as the basis for computation of the construction in j2int development. The cost incurred by the developer need not necessarily represent only a cost of construction. The detailed particulars are not given. The transaction of Joint development is one of exchange. The consideration specified in the said document represent the market value on the date of entering into the agreement. The assessment made by assessing authority is contrary to law. Hence, we hold issue No. 2 against the Revenue." 1.8. From the above finding, it is clear that the Hon'ble High Court has held that the fair market value as per the sub- registrar valuation has to be taken as consideration. In that case, the AO ha....
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..../-. Now, the issue for adjudication is whether the sale consideration should be Rs. 37,60,000/- or Rs. 1,60,00,000/-. As per the decision of Hon'ble Karnataka High Court in the case of CIT Vs Ved Prakash Rakhra (supra), the sale consideration should be Rs. 37,60,000/- and not Rs. 1,60,00,000/- (in the said case sale consideration was taken at Rs. 66,00,000/- as against cost of construction of Rs. 2,86,00,000/-). Further, the AR of the appellant has also submitted that the profits from sale of constructed area received as consideration in kind totaling to Rs. 3,24,85,000/- has been offered to tax by the appellant in A.Y. 2014-15 to 2016-17. 1.10 In view of the above, the AO is directed to take the sale consideration for JDA at R....