TaxTMI 
TaxTMI 
2022 (12) TMI 166
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.... agreement and the detailed submission filed along with other relevant details in course of the reassessment proceeding and the Ld. A.O. had taken a plausible and judicious view, which did not suffer from lack of independent and adequate enquiry. 2. That, the Ld. Pr. C.I.T erred in holding the assessment order u/s.143(3)/147 of the Act erroneous and prejudicial to the interest of the revenue in spite of the fact that the impugned reassessment was not a case of no enquiry and after thorough examination of the related documents, the Ld. A.O. took a judicious view in the matter that as per the Development Agreement entered into on 17/09/2013 there is only part performance of such agreement by the owner i.e. assessee by giving possession of the property for the limited purpose of development which would not amount to a "transfer" so as to attract the provisions of section 43CA of the Income Tax Act, 1961. 3. That, on the facts and in the circumstances of the case, the Ld. Pr. C.I.T. erred in law in assuming jurisdiction u/s.263 of the Act and setting aside the reassessment order u/s.143(3)/147 of the Act for fresh assessment, totally ignoring the fact that even if the....
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....the assessee/owner and 45% to the developer. The Assessing Officer was of the view that this execution of joint development agreement amounts to transfer of the capital asset and therefore, the assessee was liable to pay capital gains tax which is escaped assessment. The Assessing Officer recorded the following reasons in this respect: "M/s. Emporis Properties Pvt. Ltd. (Pratik Choraria), being an owner made a Development Agreement with M/s P.S. Group Reality Ltd. being a developer As per agreement between the owners and developer, the owner grants permission to the developer of the purpose of carrying out construction of the housing complex at the premises. The housing complex shall belong to the owner and the developer in the proportion of 55% to the owner and 45% to the developer. With the signing of the development agreement after obtaining a part consideration and handing over of possession to the developer, all the owners are liable to pay capital gain. Since the development agreement as well as general power of attorney was made on 17.09.2013 i.e. during the F.Y. 2013-14, M/s. Emporis Properties Pvt. Ltd. (Pratik Choraria) is liable to pay capital gains for AY 2014-....
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.... 5) That our income-tax assessment for the assessment year 2014-15 has been made by you under scrutiny vide Order u/s 143(3) dated 16-10-2017. During the course of such scrutiny assessment, the above mentioned facts and the relevant provisions of the Income-tax Act were duly explained by us and have already been considered and examined by you. Accordingly, the reopening of such assessment by you is on account of a subsequent change of opinion, which is not permissible under the provisions contained in section 147 of the Income-tax Act. 6) That for re-opening of any assessment completed under scrutiny, there must be some fresh information in the possession of the assessing officer leading him to conclude that income has escaped assessment. The reason recorded by you for re-opening our assessment u/s.147 does not indicate any such fresh information. As there is no case of any chargeable long term capital gains escaping assessment in our hands during the assessment year 2014-15, as has been wrongly stated in the reason recoded by you for initiating re-assessment proceedings, we request you to kindly drop these proceedings. 5. During the assessment proceedin....
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....mp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer : Provided..........." • Special provision for full value of consideration for transfer of assets other than capital assets in certain cases. "43CA. (1) Where the consideration received or accruing as a result of the transfer by an assessee of an asset (other than a capital asset), being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of computing profits and gains from transfer of such asset, be deemed to be the full value of the consideration received or accruing as a result of such transfer. Provided..........." 9. The term 'transfer' in relation to a capital asset has been defined as per the provisions of section 2(47) of the Act as under: (47) ["transfer", in relation to a capital asset, includ....
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....6 sq.ft. and morefully described in the second schedule hereunder written shall always be the property of the owner and any benefit deriving out of the same shall belong exclusively to the owner and the developer shall have no right title interest therein. Provided however this shall not prelude the owner to enter into an arrangement with the developer for developing the said vested land on the terms and conditions as may be mutually agreed upon provided the owner is permitted by the Government of West Bengal to develop the said vested land. APPOINTMENT 1. The owner herein hereby appoints the Developer as the builder and/or developer for carrying out the development at the "said premises" as per the sanctioned plan or plan subject to the terms and conditions recorded therein. ...................................... ........................ SPACE ALLOCATION 1. In consideration of the development of the Housing Complex at the said premises by the Developer at its own costs and expenses which includes Owner's Allocation and in consideration of the said premises provided by the owner as envisaged herein it is agreed by and between the Owner ....
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....onstruction of the said Housing Complex and value of the costs of construction shall be certified by the structural engineer and architects. 12. A perusal of the above reproduced relevant terms and conditions of the JDA would reveal that the owner (assessee) had continued to be the owner of the property throughout the development of the property and had at no stretch of time transferred his right similar to ownership to the developer. The possession of the property was given to the developer for the purpose of development of the property and in case the developer fails to develop the property within the stipulated period of four years together with grace period of one year as provided under the Agreement, the agreement would stand determined and cancelled and the developer shall cease to have any right title or interest under the Agreement in respect the said premises. The developer, in that event, shall be entitled to the refund of the entire interest free security deposits and cost of construction from the owner. A reading of the entire JDA in whole, would show that there is no transfer/sale of the asset (land) under the JDA. Rather, under the Agreement the developer would dev....
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.... as compared to the term 'transfer in relation to a stock-in-trade'. However, even though we apply the above definition of transfer in relation to a capital asset to stock-in-trade also yet, as held by the Hon'ble Supreme Court in the case of "Balbir Singh Maini"(supra) , the aforesaid JDA entered into by the assessee with the developer as per the terms of JDA does not amount to be a transfer, therefore , the provisions of section 43CA will not have any applicability to the case of the assessee. 13. Now a particular question that arises at this stage for examination is as to whether the stamp duty authorities has taken the aforesaid JDA as 'transfer/conveyance deed' for the purpose of levying of stamp duty on the market value of the property. Paper-book page 14 is the copy of certificate of registration of the aforesaid JDA, which for the sake of ready reference is reproduced as under: "Government of West Bengal Office Of the D.S.R. III SOUTH 24-PARGANAS District:-South 24-Parganas ___________________________________________________________________ Endorsement For Deed Number: I-08324 of 2013 (Serial No. 08758 of 2013) (Duplicate Deed of the Original Deed No....
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....nstruments in West Bengal,speaks as under: Description of Instruments Proper Stamp-duty 4. AFFIDAVIT, including an affirmation or declaration in the case of persons by law allowed to affirm or declare instead of swearing. Exemptions Affidavit or declaration in writing when made - (a) as a condition of enlistment under the Army Act, 1950 (46 of 1950); (b) for the immediate purpose of being filed or used in any court or before the officer of any Court; or (c) for the sole purpose of enabling any person to receive any pension or charitable allowance. Rupees ten. 5. (f) if relating to an agreement giving authority to a promoter or developer, by whatever name called, for construction on, or sale of, or transfer (in any manner whatsoever) of, any immovable property - (i) where the market value of the property does not exceed rupees thirty lakh; Rupees five thousand. (ii) where the market value of the property exceeds rupees thirty lakh but does not exceed rupees sixty lakh; Rupees seven thousand. (iii) where the market value of the property exceeds rupees sixty lakh but does not exceed rupees one crore; Rupees ten thousand. (iv....
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.... clause (a). (c) Five per centum of the market value, in case the market value of the property does not exceed rupees one crore, and six per centum of the market value, in case the market value of the property exceeds rupees one crore, when the property is situated in the areas other than those included in clause (a) or clause (b). Provided that in any case when an agreement relating to sale is executed and registered with the ad valorem stamp-duty required under the proviso to article 5(d) and in furtherance of such agreement - (a) if the final conveyance is made within four years from the date of agreement or within two years from the date of completion/occupancy certificate issued by appropriate authority or from the date of procurement of electric connection, whichever is earlier, in favour of the original purchaser or in favour of the member(s) of his/her family, the market value of the property as assessed at the time of registration of such agreement shall be treated as the market value of the property for the purpose of determination of chargeability at the time of registration of the final conveyance and the stamp-duty to be paid on such conveyance shall be the di....