TaxTMI 
TaxTMI 
2021 (5) TMI 585
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....capital gain arising from such transfer of lands was declared by the assessee. On being called upon to explain the position, the assessee submitted that the land in question was subject to Urban Land (Ceiling & Regulation) Act, 1976 (hereinafter called the ULC Act), and an area of 22596.80 sq.mtrs. was declared as surplus land out of the total land as per the above two agreements. Pursuant to such order under the ULC Act, the land was transferred in the name of Government of Maharashtra. Thereafter, the assessee approached the Hon'ble Bombay High Court for deletion of the Government's name from 7/12 extract. That is how, the assessee submitted that neither the land in question was transferred to M/s. Samrat Builders and Developers pursuant to the agreements nor any possession of such land was given. The AO rejected the assessee's claim by observing that the Development Agreements made by the assessee were duly registered with the Addl. Registrar, MABL, which indicated that the assessee had transferred the rights in the land to M/s. Samrat Builders and Developers within the meaning of section 2(47)(v) of the Income tax Act, 1961 (hereinafter also called 'the Act'). Taking the cogniz....
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....of the Agreement clearly states that the vendor and the co-owner Dhabhade families had filed returns u/s 6(1) of ULC Act and vide an order passed by the Competent Authority, the vendor and co owner have been declared as holders of excess land 22596.80 sq.mtrs. It has also been mentioned that an appeal has been filed against such order, which is pending adjudication. As per this Agreement, total consideration under clause 3 has been stated to be Rs. 2.80 crore. It is further mentioned that a sum of Rs. 11 lakhs, Rs. 20 lakhs and Rs. 1 crore was paid to the assessee vide cheques dated 13.12.2007, 14.01.2008 and 25.01.2008 respectively. The balance amount was agreed to be paid within stipulated period. Thus, it is clear from the Agreement that the Developer was allowed to enter into the property as a licensee and not as an owner and further a part of such piece of land stood declared as excess land under the ULC Act at the material time. 5. The second Agreement dated 29.02.2008 was entered into between M/s. Samrat Builders and Developers on one hand and the members of Dabhade family on the other with the assessee as a Consenting party for development of 2H 41R land for a total cons....
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....erences cropped up between M/s. Samrat Builders and Developers on one hand and the assessee and Dabhade family on the other. When the dispute was going on between the assessee and M/s. Samrat Builders and Developers, the assessee transferred 80R land, out of the land which was subject matter of the earlier Agreement with M/s Samrat Builders, to Akash Erectors Pvt. Ltd., in June, 2010 for Rs. 1.00 crore by means of a registered sale deed. A sum of Rs. 40.50 lakhs was paid to the assessee through two cheques and the remaining amount was agreed to be paid in due course. Eventually on 20.04.2013, both the agreements dated 25.01.2008 and 29.02.2008 were cancelled and two separate Registered cancellation deeds were executed. Simultaneous with the Cancellation deeds, a new registered sale deed was also executed transferring total area of 4H 1R land collectively by the assessee, Dabhade family members and M/s Akash Erectors Pvt. Ltd. to the `eventual buyers': Sh. Rajendra Bhosale and Sh. Vikas Shinde for a total consideration of Rs. 4.15 crore with registration entry 1985/2013. Through a Purchase deed dated 20.04.2013, preceding the registered sale deed of the same date, the eventual buyer....
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.... in which the assessees were members of Punjabi Cooperative Housing Building Society Ltd. A joint development agreement was entered into between owner, under which, it was agreed that the developers would undertake to develop land owned and registered in name of society. The AO held that since physical and vacant possession had been handed over under the JDA and hence it amounted "transfer" within meaning of Sections 2(47)(ii), (v) and (vi) of the Act. The Tribunal upheld order of the AO and the Hon'ble High Court held that transactions envisaged as "transfer" exigible to tax by reference to Section 2(47)(v) of the Act read with Section 53-A of the Transfer of Property Act. When the matter came up before the Hon'ble Apex Court, it, inter alia, held that reading of JDA would show that owner continued to be the owner throughout agreement, and had at no stage purported to transfer rights akin to ownership to developer. It further went on to hold that income from capital gain on a transaction which never materialized was, at best, hypothetical income. As the entire transaction of development envisaged in the JDA fell through for want of permissions, it was held that no profits or gains....
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....e by the AO. However, we find that 80R land was transferred by the assessee to Akash Erectors Pvt. Ltd. in the month of June, 2010, when ULC Act was repealed and the name of the Government of Maharashtra was removed from 7/12 extract between 2009 and 2010. When the assessee transferred 80R land to Akash Erectors Pvt. Ltd., by means of a registered sale deed, it became chargeable to tax pro tanto in the previous year relevant to the A.Y. 2011-12 as it fell within the definition of the term `transfer'. The ld. AR candidly accepted that no capital gain was offered for such assessment year. In view of the `transfer' taking place in such year to that extent, it is held that the resultant capital gain arising on the transfer of 80R land to Akash Erectors Pvt. Ltd. in the year 2010 should be charged to tax on substantive basis in the assessment for the A.Y. 2011-12 subject to the provisions of Chapter IV-E. 14. As regards the balance transfer taking place in the A.Y. 2014-15 as per the assessee's own version, when he transferred the remaining property (after excluding 80R land transferred to Akash Erectors Pvt. Ltd.) to the eventual buyers, namely, Sh. Rajendra Bhosale and Sh. Vikas Sh....