TaxTMI 
TaxTMI 
2020 (11) TMI 444
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....ed to the same fact they are taken up for hearing together and disposed off by this common order. 2. The revenue has raised 6 identical grounds in both these appeals; however, the crux of the issue is that the Ld. CIT (A) has erred in deleting the addition made in the hands of each the assessees under the head capital gains amounting to Rs. 3,94,24,000/-. 3. Brief facts of the case are that, both the assessees Shri P. Janarthan Reddy and Shri P. Rama Chandra Reddy are ordinary resident individuals. Shri P. Janarthan Reddy originally filed his return of income for the relevant AY on 05/08/2013 admitting income of Rs. 1,40,000/-, however Shri P. Rama Chandra Reddy had not filed his return of income. A search and seizure operation U/s. 132 o....
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....ue of the agreement both the assessees had transferred their immovable property as per the provisions of section 2(47)(v) of the Act r.w.s 53A of Transfer of Property Act. Both the assessees had explained before the Ld. AO that though they had handed over possession of the property the developer was not willing to perform their obligation. It was also pointed out that there was no progress in the development work during the relevant AY. It was also submitted that the Developer had also not invested in the development or construction activity. It was also stated that the Developer had only paid Rs. 50 Lakhs as interest free refundable security deposit to both the assessees and it was not part of sale consideration. It was further argued that....
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....reement is valid for a period of 42 months and such action can be taken only after the expiry of the period mentioned in the development agreement. (5) In the event the developer does not execute his part of the obligation then both the assessees are only entitled for damages and not for specific performance of the development agreement. (6) In the case of both the assessees actual possession of the land was not handed over to the developer but only license was granted for developing the land and construction of residential houses. Therefore, the essential component of section 53A of the TP Act has not been complied with. (7) The ITAT Benches of the Tribunal in the case of Sudha Giri vs. ITO in ITA No. 1578/Hyd/2014 vide its order dat....
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....onsideration to the assessee. We are also fortified by the decision of the coordinate Bench in the case of Bhavya Construction Ltd & other (ITA No.1788/Hyd/2012). The ratio of the decision is that unless there is willingness on the part of the Developer to perform his part of the contract, there cannot be a transfer of capital assets as envisaged U/s. 2(47)(v) r.w.s 53A of the Transfer of the Property Act. The ratio laid down as above squarely applies to the facts of the present case as the Department has failed to controvert the findings of the Ld. CIT (A) by bringing material on record to show that the developer has taken steps toward developmental activities. Hence, the capital gains cannot be brought to tax in the year under appeal." ....
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....the Developer. In this situation, we are of the considered view that the decision of the ld. CIT (A) in the case of both the assessees are appropriate. Hence, we do not find it necessary to interfere with the decision of the ld. CIT (A) in the case of both the assessees. Therefore, the appeals of the Revenue are devoid of merits. 7. Needless to mention that in the case of Joint Development agreement it should be construed that the land owner had entered into business venture by introducing his landed property into the business, accordingly the provisions of Section 45(2) will come into operation and the LTCG shall be chargeable to income tax as his income of the previous year in which the land is transferred, and for the purpose of section....