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2017 (12) TMI 1261 - AT - Income TaxCapital gains consequent to the development agreement - year of assessment - Held that:- As perused the development agreement-cum-GPA it shows that the builders and developers have to bear all the expenditure for preparation of the said plan, obtaining licenses, permissions as well as execution of work and thereafter the parties / land owners are entitled to 50% of the built up area; This shows that the assessees are merely entitled to a specified constructed space and not 50% of the land. The builders have taken over the possession of the entire land and in lieu thereof assessee was entitled to get only 2845.15 sft. It is also not in dispute that as per the developer, vide letter dated 06.01.2015, cost of construction was ₹ 1,450/- per sft but as per the registered document, for the purpose of allotting the constructed place, the cost of construction is mentioned at ₹ 1,083/- per sft (1,108/- in the case of Smt. Usha Rani) and therefore, A.O. as well as Ld. CIT(A) have taken that figure as the value obtained by the assessee in lieu of transfer of the land. A transfer can be said to have taken place in the year when the possession was handed over by the assessee. Thus, capital gains tax, if any, is attracted in the year of agreement and not in the later years. Since the developer has agreed to pay the assessee at the rate of ₹ 1,083/- per sft it is not appropriate to claim that only SRO value has to be adopted. If the assessee, purchased a land and the purchase consideration is not provided clearly, SRO value as per the Act as on specified date could have been taken into consideration whereas in the instant case the rate is specified by both the parties. Moreover we are not concerned with purchase cost. Under these circumstances, the concurrent findings of the A.O. as well as the Ld. CIT(A) do not call for any interference. - Decided against assessee.
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