2017 (5) TMI 1668

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....and claimed exemption under Section 54 of the Income-tax Act, 1961 (in short 'the Act'). Referring to the joint development agreement, copy of which is available at page 141 of the paper-book, the Ld. D.R. submitted that the assessee handed over the physical possession of the property to the developer for joint development. As per this agreement, the assessee is entitled for 70% of the constructed area and remaining 30% will go to the share of the developer. If the assessee gets anything more than 70%, the assessee shall pay for the excess constructed area at the rate of `9500/- per sq.ft. In the agreement, it is specifically stated as 'C' Schedule that it belongs to the assessee and other coowners. Similarly, in the 'D' Schedule, 3....

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....ken the guideline value at Rs. 16,000/- per ground as on 01.04.1981 and thereafter computed the long term capital gains at Rs. 8,39,08,948/-. According to the Ld. counsel, when the assessee entered into an agreement and handed over the physical possession of property to the developer for developing, there was transfer within the meaning of Section 2(47)(v) of the Act. Since the construction could not be completed within a period of three years, according to the Ld. D.R., the assessee is not eligible for exemption under Section 54F of the Act, therefore, the CIT(Appeals) is not justified in allowing the claim of the assessee. 4. On the contrary, Shri Y. Sridhar, the Ld. representative for the assessee, submitted that the assessee entered ....

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....rity, the assessee handed over the physical possession of the property for the purpose of construction. Therefore, according to the Ld. representative, the contention of the Ld. D.R. that constructive possession was given to the developer on 26.08.2010 on the date of agreement is not correct. The assessee gave licence to the developer only for the purpose of getting approval from the competent authorities and the coastal zone regulation authority to develop. But, the developer was not able to get the approval and it was ultimately approved on 31.03.2012. This fact is not in dispute. Therefore, according to the Ld. representative, the assessee by way of revised return claimed the exemption under Section 54 of the Act by offering the capital ....

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....n. As per the agreement, the assessee would continue the physical possession of property till the developer get approval from Chennai Metropolitan Development Authority. After the approval, the physical possession of the property was handed over, which ultimately falls in assessment year 2013-14. Therefore, the assessee filed a revised return to claim exemption under Section 54 of the Act. This Tribunal is of the considered opinion that when the assessee handed over the entire land on the basis of arrangement that the developer could retain 30% of land in proportionate to constructed area, there was transfer of property in the assessment year 2013-14. 8. The cost of 30% of undivided share of land would be the cost of 70% of constructed a....