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2021 (5) TMI 336 - AT - Income TaxSort term capital gains - transfer of property through Sale cum development agreement-cum-GPA - addition invoking the provisions of deemed transfer u/s 2(47)(v) of the IT Act - CIT(A) dismissed the appeal of the assessee observing that there was exchange of property, which amounted to transfer within the meaning of section 2(47(v) and the gain resulting from such transfer required to be taxed in the year in which the agreement was entered into coupled with by giving possession of the property to the developer - HELD THAT:- Assessee has entered into development agreement for construction of duplex houses and assessee was to receive the constructed area of 5000 sq.ft by virtue of development agreement. After entering into agreement, the developer has vanished and no real development took place till date as verified and confirmed by the AO through the Departmental Inspector. It appears that neither development has taken place nor developed area was received by the assessee. This fact was confirmed by the AO himself. There was no real income except notional income as per the development agreement, which has never been received by the assessee. In the light of the above facts, the question whether the possession is lying with the developer or taken over by the assessee is the issue, which decides the taxability of capital gains. It appears that till date development agreement was not cancelled and no public notice was issued by the assessee for cancellation of development agreement as stated by the Ld. AR during the course of appeal proceedings. Therefore, we are of the considered opinion that the issue is required to be remitted back to the file of the AO with a direction to decide the capital gains after verifying whether the possession is taken back by the assessee or not and the assessee cancelled the development agreement or not - Appeal of the assessee is allowed for statistical purposes.
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