Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (7) TMI 162 - AT - Income TaxTransfer of capital asset to the developer in terms of section 2(47)(v) read with section 53A - Whether capital gain will not arise in the impugned assessment year there being no transfer of capital asset? - willingness of the developer to perform his part of the contract questioned - Held that:- The developer not only took immediate steps to implement the project by preparing building plan/lay out, but, as per assessee’s own admission, made an application before the competent authority in 2008 seeking building permission. However, the delay in obtaining building permission was firstly because the land was under the growth corridor which required specific clearance from the authorities concerned and secondly, because it was found from the Government order issued on 06.06.2005 that part of the land is treated as Government land. Due to these exigencies necessary permission could not be obtained for starting the development activity. The delay in development of project is not due to either any unwillingness or default on the part of the developer to undertake the development activity but because of extraneous circumstances beyond his control which resulted in delay in obtaining the approval from the competent authority. In fact, the assessee has not brought a single piece of evidence on record to demonstrate that at any point of time the developer has expressed his unwillingness to perform his part of the contract of undertaking the development activity. The Hon’ble A.P. High Court in the case of Potla Nageswara Rao vs. DCIT (2014 (8) TMI 636 - ANDHRA PRADESH HIGH COURT) while interpreting the provisions of section 2(47) of the I.T. Act as well as section 53A of the Transfer of Property Act held that transfer in terms with section 2(47)(v) read with section 53A of the Transfer of Property Act takes place in the assessment year in which the development agreement is entered into and possession is delivered. Therefore, there is nothing on record to prove that the developer was unwilling to perform his part of the contract as provided under section 53A of the Transfer of Property Act, we are of the view that there is a transfer of capital asset in the impugned assessment year as envisaged under section 2(47)(v) of the Act resulting in capital gain. Keeping that in view we direct, while computing capital gain the A.O. should look into the observations made by the Ld. CIT(A) with regard to adoption of fair market value and indexed cost of acquisition. He should also decide the issue relating to deduction under section 54 or 54F in accordance with law. - Decided in favour of revenue for statistical purposes.
|