TaxTMI 
TaxTMI 
2016 (7) TMI 1632
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....t justified in upholding that there was a transfer of the undivided interest in land in favour of the Builder on the execution of the joint development agreement on 12/05/2004 giving rise to liability to Capital Gains tax for the year under appeal under appeal under the facts and in the circumstances of the appellant's case. [4] Without prejudice to the above, the learned CIT[A] is not justified in directing 'the learned A.O. to compute the long term capital gains on the joint development by adopting the fair market value of the project as on the date of the joint development agreement under the facts and in the circumstances of the appellant's case. [5] Without prejudice to the right to seek waiver with the Hon'ble CCITIDG, the appellant denies himself liable to be charged to interest u/s.234A, 234B and 234C of the Act, which under the facts and in the circumstances of the appellant's case deserves to be cancelled. [6] For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the r....
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....come assessable to tax has escaped assessment. The learned Authorised Representative has pointed out that the assessee has offered the capital gain on sale of the undivided interest in the land in the name of developer during the years 2007- 08 and 2008-09. The learned Authorised Representative has submitted that the developer did not get any right or ownership over the land by virtue of JDA but he was allowed to construct the building and after construction of the building the assessee was required to execute the sale document to the developer or its nominee or to third party identified by the developer. It was only a grant of license or permission to enter upon the property in question and construct residential apartments. He has referred to the various clauses of the development agreement including clauses 3 & 4, wherein it is specifically mentioned that possession shall not be considered as possession handed over to the developer under Section 53A of the Transfer of Property Act. Thus the learned Authorised Representative has submitted that in the absence of any material to show that income assessable to tax has escaped and reopening is not valid. 6. On the other hand, the lea....
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....ea in the said Development. The Developer has obtained necessary Govt. approvals and constructed Residential Apartment Complex SJR Spencer. Thus in view of provision of section 2(47)(v) the transfer of land has taken place as possession of immovable property has been taken by the Developer in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882. Hon'ble Karnakaka High Court in the case of CIT Vs. Dr. T.K. Dayalu in ITA No.3165 of 2005 has held that in a development agreement the relevant date for attracting capital gains is the date on which possession is handed over to the developer. Similar view has been taken by the Bombay High Court in Chaturbhuj Dwarkadas Kapadia Vs. CIT 260 ITR 491,wherein it has been held that if a contract read as a whole indicates passing of or transferring of control of the property in favour of Developer then the date of contract would be relevant to decide the year of taxability. In the instant case the assessee has not offered capital gains in the year of entering of JDA. The prima facie capital gain escaping assessment appears to be approximately 3 Crores." Therefore, I have reason to b....
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....levant materials fully and completely. It was on the ground that the information which came to the notice of the AO subsequently led to the belief that there had been escapement of income to tax. That information was the decision of the Madhya Pradesh High Court. There is no dispute about the fact that the reopening was done within the time allowed by law. The reopening of the assessment, in the circumstances, was justified, it was not a case of mere pretence of having received the information even when the reality was one of change of opinion." In view of the facts and circumstances of the case, when the assessee did not offer the income arising from transfer of land in question under JDA and there was no original assessment then the reopening based on the decision of Hon'ble jurisdictional High Court as well as facts came to the knowledge of the Assessing Officer that the assessee had entered into JDA is valid and justified. 8. Ground Nos.3 & 4 are regarding addition on account of capital gains. 9. On merits, the learned Authorised Representative of the assessee has submitted that the Assessing Officer has reopened the assessment for assessing the capital gains arising from J....
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....s part of the contract. That even arrangements confirming privileges of ownership without transfer of title could fall under s. 2(47)(v). Sec. 2(47)(v) was introduced in the Act from the asst. yr. 1988-89 because prior thereto, in most cases, it was argued on behalf of the assessee that no transfer took place till execution of the conveyance. Consequently, the assessees used to enter into agreements for developing properties with the builders and under the agreement with the builders, they used to confer privileges of ownership without executing conveyance and to plug that loophole, s. 2(47)(v) came to be introduced in the Act." The Hon'ble Supreme Court (sic) has referred to the contention of the assessee and the earlier judgments of the Supreme Court cited by him and held that those judgments were prior to introduction of the concept of deemed transfer under s. 2(47)(v) if the Act and if the contract, read as a whole, indicates passing of or transferring of complete control over the property in favour of the developer, then the date of the contract would be relevant to decide the year of chargeability. Therefore, in these appeals, we hold that capital gain is to be taxed in th....