TaxTMI 
TaxTMI 
2018 (10) TMI 738
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.... other commercial units etc., vide 'Agreement for Development-cum-GPA' that was got registered vide document No. 40/2000 dated 10/01/2000. 2.1 As per the above agreement cum GPA it was agreed that the developer would bear all the expenses including construction and other costs that may arise from time to time. It was agreed that after completion of the said construction the land lords would get 45% of the built-up area, as earmarked in the sanctioned plan, free of cost in lieu of utilisation of the land owned by landlord. The Developer would retain the remaining 55% of the built-up area. As per the terms and conditions of the Agreement for Development-cum-GPA and subsequent Supplementary Agreement dated 17/01/2000 and other oral settlements the landlords were supposed to receive the constructed area of their share in the financial year 2009-10 relevant to the A.Y. 2010-11. Though the original agreement had been entered into on 10/01/2000 and token amounts of advances was received as per clause-30(a) to (e) of the Agreement, the Developer was to get the land vacated from the occupants like residential portions, part of petrol pump etc. and if necessary the developer was to ....
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.... the Development Agreement was entered into on 10/01/2000 and that the constructed area as specified in such Development Agreement has to be handed over to the owners. (g) It was submitted before the Assessing Officer that in view of the directions of the Arbital Tribunal, the sale document executed by the Developer as a General Power of Attorney is not a valid document. In view of this the transfer either takes place on 10.01.2000 or on the date of completion and handling over the constructed area." 2.3 The AO did not find the reply of the assessee to be acceptable. According to him, in the final award, it was mentioned that though the construction was not in accordance with the terms and conditions of the Development agreement, the developer was ready to handover the possession on the said date as intimated by it in its letter dated 22/12/2009. Since the builder was ready to handover the said construction and the construction work was completed in the F.Y. 2009-10 and was ready to be taken possession of by the land lord, capital gains arising if any, in the hands of the landlords were assessable to tax only in the assessment year 2010-11. According to the Assessing Officer, ....
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....he Act as well as upheld the computation of long term capital gains done by the AO. 5. Aggrieved by the order of the CIT(A), the assessee is in appeal before us raising the following grounds, which are common in all the appeals under consideration: "1) The order of the learned Commissioner of Income-tax (Appeals) is erroneous both on facts and in law. 2) The learned Commissioner of Income-tax (Appeals) erred in deciding the appeal without providing proper opportunity; particularly when the appeals of the other co-owners were also pending before the learned Commissioner of Income tax (Appeals). 3) The learned Commissioner of Income-tax (Appeals) erred in holding that there was any transfer of property during the year by the appellant in favour of Saptagiri Constructions without considering the fact that no transfer was effected during the year. 4) The learned Commissioner of Income-tax (Appeals) ought to have seen that the sale deed executed by Saptagiri Constructions was a sale of the property by the said concern as General Power of Attorney on its own and not on behalf of the appellant. 5) The learned Commissioner of Income Tax (Appeals) erred in confirming determin....
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....ings are ready for occupation as per the Joint Development Agreement (JDA). It was also brought to the notice in the initial state itself that the building constructed by the developer are not as per the norms agreed and subsequently subject to litigation. The final order of the Arbitral award was also submitted before the AO. It clearly shows that the building constructed by the developer is not as per approval and the same was not accepted by the assessee nor possession was taken. 8.1 Before us, the question raised is, in the case of 'JDA" transaction, at what point of time, capital gain arises. It is settled law that in the year in which the possession of the property is passed on to the developer is the year in which the provision of capital gains get attracted. In the case of Potla Nageswara Rao (supra) the Hon'ble AP High Court held as under: "The element of factual possession and agreement are contemplated as transfer within the meaning of the aforesaid section. When the transfer is complete, automatically, consideration mentioned in the agreement for sale has to be taken into consideration for the purpose of assessment of income for the assessment year when the agreem....