TaxTMI 
TaxTMI 
2025 (11) TMI 1305
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....justice. 2. Your Appellant submits that the execution of Joint Development Agreement cannot be equated as a Transfer of Property according to the provisions of section 58A of the Transfer of Property Act, 1882 and so also to attract the provisions of section 2(47)(v) / (vi) of the Income Tax Act, 1961, when no control over the possession of the Land was not given to the Developer by your appellant. Hence, it is prayed to delete the arbitrary addition of Rs. 4,51,15,564/- with the declared income of your appellant. [Relief claimed Rs. 4,51,15,564/-]. 3. That your appellant craves leave to urge, to add, to alter, to amend, to rescind or to adduce further Grounds of Appeal on or before the date of appeal hearing." 3. Brief facts of the case are that the assessee is a company engaged in the business of construction and the original return of income was filed showing 'NIL' income. Subsequently, information was received from the DDIT (Inv.) that the assessee, along with other co-owners, had entered into a joint development agreement for transfer of land on 24.05.2013 with M/s. Vedic Reality Pvt. Ltd. as per which the assessee agreed to give possession of his portion ....
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....ruction of the said proposed project in terms hereof. 10. The possession of the said land shall always be and/or be deemed to be jointly held by the land owners with the symbolic possession of the Developer for the purposes of the agreement recorded herein and without however disturbing or obstructing or interfering with the right of the Developer to continue with the development and construction of the said project in terms of the agreement recorded herein. 11. The land owners or either of them shall not be entitled to cancel this agreement or to withdraw the said land or any portion thereof from the said project at any time hereafter under any circumstances whatsoever. 12. The land owners or either of them shall not interfere with the day to day control, management and look after of the affairs of the said project which shall remain and be under the absolute control supervision and management of the Developer. 13. The Developer shall be entitled to receive payment of all monies payable by and from the buyer(s) directly and in its own name and it shall regularly pay, meet and discharge all third party liabilities, creditors, repayment of the fin....
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....uired to be registered, has not been registered, or' in section 53A of the 1882 Act have been omitted. Simultaneously, sections 17 and 49 of the 1908 Act have been amended, clarifying that unless the document containing the contract to transfer for consideration any immovable property (for the purpose of section 53A of 1882 Act) is registered, it shall not have any effect in law, other than being received as evidence of a contract in a suit for specific performance or as evidence of any collateral transaction not required to be effected by a registered instrument." Thus, as held by the hon'ble Supreme Court, in the instant case, agreement was registered and possession of the land was transferred to the developer, therefore, it clearly amounts to transfer of property in the current year, thus, capital gains charged by the AO is as per law, therefore, the assessee is clearly liable for taxation of long term capital gains in the current year, therefore, the addition made by the AO is hereby confirmed and the same is hereby upheld. Accordingly, the assessee's grounds are hereby dismissed. In the result, the assessee's appeal is hereby dismissed." 4. Aggriev....
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....mpany, 10% of the land cost is taken as purchase cost to assessee and the LTCG on transfer of land consequent to entering the joint development comes to Rs. 4,51,15,564/-. Hence Rs. 4,51,15,564/- is added to the income of the assessee under the head long term capital gains." 6. It was submitted that the entire property was valued at Rs. 63,05,45,958/- and the share of the deemed sale value to the assessee was worked out at Rs. 5,01,28,404/- and accordingly long-term capital gain of Rs. 4,51,15,564/- Crore was charged. It was submitted that the purchase deeds were filed before the Ld. AO. However, the Ld. AO has taken the original cost of the land to the assessee company as only 10% of the land cost at Rs. 4,51,15,564/-. Our attention was drawn to Paper Book 1 filed on 30.06.2025, specifically pages 55 to 116 thereof. It is stated that the assessee is a dealer in land and the land was shown as an inventory and when the sales take place, the inventory is reduced and the sale consideration is shown. The plot was developed into a resort and bungalows and the bungalows are sold. The assessee is entitled to 10% of the total net saleable area/sale receipts while the developer is entitl....