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2015 (7) TMI 832 - AT - Income TaxExemption u/s 54F - Capital gain - joint development agreement - Since the assessees are having multiple flats as their shares from the builder, the Assessing Officer disallowed the claim under Section 54F - whether gain arises for assessment on transfer of the land by all the assessees along with three others - Held that:- The assessees entered into an agreement and handing over the physical possession of the property to builder allowing it to enjoy 60% of the land in lieu of 40% of the constructed area. The transaction between the assessees and the builder is by way of arrangement or agreement which has the effect of transferring the landed property for enjoyment of the builder. In other words, the assessees transferred 60% of the land area to the builder for its enjoyment. Therefore, this Tribunal is of the considered opinion that there was a transfer on 8.12.2006 within the meaning of Section 2(47)(i) and 2(47)(vi) of the Act. Therefore, the relevant transaction took place in the financial year 2006-07 which falls in the assessment year 2007-08. Hence capital gain, if any, is assessable only in the assessment year 2007-08 and certainly not in the year 2009-10. - Accordingly, we hold that no capital gain arises for assessment in the year under consideration. - Decided in favour of assessee. Entitlement to exemption under Section 54F - when the assessees received eight flats/residential units from the builder in lieu of cost of the land transferred to the builder, whether the assessees are entitled for exemption under Section 54F of the Act? - Held that:- The assessee entrusted the construction of the building to the builder in lieu of 60% of the landed area transferred to the builder. Therefore, the assessees, from the date on which the transfer was made by entering into agreement for joint development, are in the process of constructing the residential house. Therefore, this Tribunal is of the considered opinion that the assessees are entitled for exemption under Section 54F of the Act. We have gone through the judgment of Madras High Court in V.R. Karpagam (2014 (8) TMI 899 - MADRAS HIGH COURT) wherein the assessee obtained five independent flats in a multi-storied construction and claimed exemption as independent unit under Section 54F of the Act. The Madras High Court, after referring to the amendment made with effect from 1.4.2015, found that the assessee is eligible for exemption under Section 54F of the Act. In view of the judgment of the Madras High Court, this Tribunal is of the considered opinion that the assessee are eligible for exemption even though multiple flats were allotted to them in lieu of cost of 60% of the land allotted to the builder. - Decided in favour of assessee.
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