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2014 (4) TMI 351 - AT - Income TaxAssessability of capital gain on property - transfer - Whether it is assessable in the year in which the development agreement was entered into or in the relevant subsequent year in which the area duly developed and constructed coming to the share of the assessee-owner has been handed over to the assessee – Held that:- As on date there was no developmental activity on the land which is subject matter of development agreement - The process of construction has not been even initiated and no approval for the construction of the building is obtained - Thus, the sale consideration in the form of developed area has not been received - Mere receipt of refundable deposit cannot be termed as receipt of consideration - the AO calculated the capital gain on the entire land, even though the assessee has retained 38% share to itself. There is no accrual of income in favour of the assessee as per section 48 of the Act - Due to lapse on the part of the transferee, the construction has not taken place in the year under consideration, and it has not commenced even now - the assessee has fulfilled its part of the obligation under the development agreement, the developer has not done anything to discharge the obligations cast on it under the develop agreement, the capital gains cannot be brought to tax in the year under appeal, merely on the basis of signing of the development agreement during this year – Relying upon M/s. Fibars Infratech Pvt. Ltd. Versus The ITO, Ward-1(2), Hyderabad [2014 (1) TMI 344 - ITAT HYDERABAD] - the capital gains on the property cannot be brought to tax – Decided in favour of Assessee.
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