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2013 (6) TMI 424 - AT - Income TaxRe opening of assessment - Building development agreement with land owner - Transfer u/s. 2(47)(v) r.w.s. 53A of Transfer of Property Act - Whether the transferee can be said to have 'performed or is willing to perform' its obligations under the agreement? - Held that:- In the reassessment order AO has stated that originally the return was processed. He has not referred to any tangible material before him, in terms of the judgment of CIT vs. Kelvinator of India Ltd. (2010 (1) TMI 11 - SUPREME COURT OF INDIA), on the basis of which he entertained the prima facie belief that income chargeable to tax has escaped assessment. As per this development agreement dated 28.2.2006 land owner gets his share of plots on construction and consideration is quantified in terms of money. Also the handing over of possession in the development agreement is missing. Both the developer and the assessee having the landed property. They pooled together the landed property along with some other parties who are owners of some other landed property and all parties together given licence to the builder to enter the premises and construct houses. No sale was effected on the date of agreement. No consideration has been passed between the parties on signing the agreement. Further from the date of signing of development agreement dated 28.2.2006 to 31.3.2006 no progress has taken place in the said landed property which is subject matter of development agreement, nothing has been brought on record. Further, there was no consideration in the form of money passed between the parties. There was no construction, whatsoever, taken place during the period 28.2.2006 to 31.3.2006. Even otherwise there was no General Power of Attorney given by the assessee to the developer. In such a situation, it is only the actual performance of transferees obligation which can give rise to the situation envisaged in section 53A of the TP Act. On these facts, it is not possible to hold that the developer has performed its obligation during the period 28.2.2006 to 31.3.2006 in which the capital is sought to be taxed by the Revenue authorities. The condition laid down u/s. 53A of TP Act was not satisfied during the period from 28.2.2006 to 31.3.2006 thus it cannot be said that there was a transfer u/s. 2(47)(v) so as to levy capital gain tax. The judgement in the case of Chaturbhuj Dwarkadas Kapadia [ 2003 (2) TMI 62 - BOMBAY High Court] undoubtedly lays down a proposition which supports the case of the assessee as "willingness to perform" has been specifically recognised as one of the essential ingredients to cover a transaction by the scope of section 53A of TP Act. In favour of assessee.
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