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2014 (6) TMI 732 - AT - Income TaxAccrual of capital gain - additions during remand proceedings - property given for development of a multi-storied under the development agreement - Receipt from sale of floor space – under valuation - applicability of section 50C - Held that:- Following Mekins Agro Product(P) Ltd. Versus Income-tax Officer [2014 (6) TMI 495 - ITAT HYDERABAD] - in case of development agreement which were executed the capital gains cannot be postponed - the profits/ capital gains arising from development of the land cannot be brought to tax this year, except to the extent the assessee himself has offered for tax in his return - Only the profits accrued on the sale of the built up area during the year shall be subject to tax – the Tribunal has issued a clear direction to the AO to compute the profit/capital gains arising from sale of built-up area together with an undivided interest in land, if any made during the year. The assessee has also not produced any material to show the actual date of sale of the constructed area in Mayank Plaza or for that matter the actual built up area sold during the AY - the CIT (A) has not at all dealt with the issue of addition of Rs.18,55,000/- made on account of understated sale consideration and an amount of Rs.9,28,951/- u/s 50C being the difference between the valuation made by the registering authority for stamp duty purposes and sale consideration mentioned in the sale deed - thus, the matter is required to be remitted back to the AO for fresh adjudication – any advance received by the assessee towards sale of built up area should not be considered for capital gain - Decided in favour of Revenue.
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