TaxTMI 
TaxTMI 
2025 (1) TMI 1343
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....mlataben N Parmar for a consideration of Rs. 1,45,75,000/- from Shri Rajendra D Patanwadia and others which was registered on 07.12.2011. Later on, the assessee and other co-owner Smt. Hemlataben N Parmar had given the rights of development of the said land to M/s. Sumangal Reality Creators, the partnership firm, vide notarized Banakhat dated 23.12.2011. M/s. Sumangal Reality Creators had undertaken a project named Shashwat Green and the project was started in the year 2011 and completed in 2014. As per the agreement dated 23.11.2011 between M/s. Sumangal Reality Creators as first part and Smt. Minal U Shah & Smt. Hemalaben Parmar (land owners) as second part, the right in land was released in favour of M/s. Sumangal Reality Creators for development purpose for which Smt. Hemalataben Parmar was paid Rs. 50,00,000/- and also allotted four flats namely B/103, B/202, B/303 and A/501, the consideration of which was Rs. 93,40,000/-. Thus, the total consideration paid to Smt. Hemlataben N Parmar was Rs. 1,43,40,000/-. The AO determined the consideration rate for land transferred to M/s. Sumangal Reality Creators by applying the prevailing jantri rate @ 2650 per square meter at Rs. 5,32,6....
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....f the Assessing Officer be restored. 5. Shri A P Singh, Ld. CIT.DR appearing for the Revenue has meticulously taken us through assessment order as well as the order of the Ld. CIT(A) and explained the facts of the case. He submitted that the land in question was purchased by the assessee along with another co-owner Shri Hemlataben N Parmar. According to the Ld. CIT.DR, the land was purchased by the assessee in her individual capacity and not as a partner of the partnership firm. He submitted that on transfer of development rights in favour of partnership firm the other co-owner Smt. Hemlataben N Parmar was paid Rs. 50,00,000/- and also allocated four flats in the project which was worth Rs. 93,40,000/-; whereas no payment was received by the assessee. According to the Ld. CIT-DR when the assessee had acquired the land in her individual capacity, she must be compensated for relinquishment of her rights in the land in favour of the partnership firm for development of the project thereon. Therefore, the balance sale consideration of Rs. 3,89,25,000/- was rightly considered by the AO as belonging to the assessee. The Ld. CITDR submitted that if the entire payment for purchase of lan....
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....he provision of section 50C of the Act was not applicable in the case of assignment of development rights. In this regard, he relied upon the decision of Co-ordinate Bench of ITAT Bangalore in the case of Sowmya Sathyan Vs. ITO 124 taxmann.com 74 (Bangalore-Trib.). 8. We have carefully considered the rival submissions. There is no dispute to the fact that the entire payment for purchase of land in the name of the assessee and the other co-owner was made by the partnership firm. As explained, the land was registered in the name of assessee and Smt. Hemlataben N Parmar, the two ladies, to derive the benefit of reduced stamp duty. One has to pay reduced stamp duty if the sale deed was registered in the name of ladies. As regards including the name of other co-owner Smt. Hemlataben N Parmar, this aspect was examined by the AO in the course of assessment proceeding. It is found from the assessment order that the statement of the land owner Shri Rajendra D Patanwadia was recorded on 16.02.2016 who had stated that the land was initially sold to Shri Narendrasingh Parmar, husband of Shri Hemlataben N Parmar for consideration of Rs. 71,00,000/-. It was further submitted that payment of R....
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....wner had to be adequately compensated for the investment made by her family in the said land and the initial payment made to the land-owners. Therefore, the development agreement was entered into by the partnership firm and Smt. Hemlataben N Parmar was paid Rs. 50,00,000/- and also allotted four flats. There was no question of compensating the assessee as no investment was made by her in her individual capacity. She was only a name-lender on behalf of the partnership firm and all the investments in the land were made by the firm and not by the assessee. Therefore, there was no question of making any payment to the assessee for assigning the rights in the property to the partnership firm for development of land. 10. The AO had applied the provision of section 50C of the Act on the transfer of development rights by the assessee and the other co-owner to the partnership firm. As already discussed earlier the investment in the land was made by the partnership firm only and the assessee was only a name-lender. Thus, there was actually no transfer of any development rights as the land belonged to the partnership firm only. Further, the provision of section 50C of the Act is not found ....