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2022 (10) TMI 373 - AT - Income TaxCorrect head of income - surplus arising from Joint Development Agreement (JDA) - business profit or Long Term Capital Gains - assessee is holding this ancestral land and sold by her and in return got new flats in 4 Nos. for a consideration and monetary consideration - HELD THAT:- GPA’s supplementary agreement and construction agreement entered into between the assessee and the developer company, it shows only the intent of the assessee and purpose of the assessee in all the above to get the new residential house in lieu of old without any outflow of money. According to us, as per records assessee neither had any knowledge or capability about the business or property development nor had any intention to do so as the assessee gave a general power of attorney in favour of the builder accordingly. All the activities were done by builder through GPA whereby builder was authorized to do all such things as is necessary to enable construction of flats and also to sell the same. GPA was restricted to the extent of builder’s right at 73.33% of the land and that portion allotted as builder’s share and the balance 26.67% was retained by the assessee. In our view, the entire above transaction is purely sale of plot to the builder and in turn received monetary consideration and balance 4 Flats valued - Hence, according to us, this is a transaction of capital gains and assessee’s transaction is that of Long Term Capital Gain. Hence, we direct the A.O to treat the transaction as LTCG and assess the same accordingly. Whether the assessee is entitled to claim of deduction u/s. 54 or 54F? - Because the assessee has been allotted 4 residential Flats against the sale of her ancestral land or in lieu of development of her ancestral land. We noted that this issue has been considered by the Hon’ble Madras High Court in the case of Tilokchand & Sons [2019 (4) TMI 713 - MADRAS HIGH COURT] wherein a residential house as occurring in s. 54(1) of the Act can include more than one or plural residential house. The Hon’ble High court has considered even the amendment which is effective from 01.04.2015 and applicable far and from assessment year 2015-16 and the relevant assessment year before us 2014-15. Hence, the amendment will not apply in this case. We direct the A.O to allow the claim of deduction u/s. 54 and allow the claim of the assessee.
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