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2017 (5) TMI 1668 - ITAT CHENNAIExemption under Section 54 - assessee handed over the physical possession of the property to the developer for joint development - proof of transfer within the meaning of Section 2(47)(v) - revised return filed to claim exemption under Section 54 - assessee is entitled for 70% of the constructed area and remaining 30% will go to the share of the developer - Since the project was not completed within a period of three years after entering into joint development agreement AO brought the entire capital gain for taxation - HELD THAT:- This Tribunal is of the considered opinion that when the assessee handed over the entire land on the basis of arrangement that the developer could retain 30% of land in proportionate to constructed area, there was transfer of property in the assessment year 2013-14. The cost of 30% of undivided share of land would be the cost of 70% of constructed area at the rate of ₹ 9500/- per sq.ft. Since the assessee has not received any money from the developer, the entire fund has to be treated as investment in the construction by the developer. This Tribunal is of the considered opinion that it has to be construed that the assessee invested cost of 30% of undivided share of land for the construction. The cost of 30% of undivided share of land would be deemed to be invested and deposited with developer on transfer of 30% of undivided share of land to the developer, for the assessment year 2013-14. Since the cost of 30% share of undivided land was deemed to be invested with the developer for construction, this Tribunal is of the considered opinion that the assessee is eligible for exemption under Section 54 of the Act. - Decided against revenue
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