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2022 (2) TMI 1025 - AT - Income TaxChargeability of capital gains - Year of assessment - Transfer of capital asset u/s 2(47) - CIT-A deleting the impugned long term capital gain addition made on "protective" basis - HELD THAT:- The assessee had entered into a development agreement cum GPA dt. 04.03.2009 (duly registered document) wherein the possession was irrevocably handedover to the developer party M/s. AMSRI Builders. There is further no dispute that this followed the latter supplementary agreement dt. 25.09.2014 between assessee, M/s. AMSRI Builders and M/s. Rajaram Constructions which is in continuity with the first main development agreement only. That being the case, we express our due agreement with the Revenue's arguments that the assessee had indeed transferred the relevant capital asset by way of a registered development agreement cum GPA on 04.03.2009 relevant to A.Y. 2009-10. We further make it clear that such a part performance has indeed been treated as "transfer" u/s. 2(47)(v) as per the hon'ble jurisdiction high court in case of Potla Nageswara Rao[2014 (8) TMI 636 - ANDHRA PRADESH HIGH COURT]. We further find no merit in assessee's vehement contentions that once the developer had not performed the agreement hereinabove, the same stands annulled by the efflux of time. This is for the reason that the assessee has failed to pinpoint any of the specified conditions in the original agreement that "time was essence of the contract" in light of section 55 of the Indian Contract Act, 1872 The assessee never cancelled the said former development agreement even unilaterally as it has entered into the latter supplementary agreement on 25.09.2014 in continuity with the earlier one only. The question as to whether mere non-payment of the corresponding consideration; if any, would keep the impugned long term capital gains in abeyance has already been decided in Revenue's favour in the case of CIT Vs. Balbir Singh Maini [2017 (10) TMI 323 - SUPREME COURT]. Their lordships make it clear that mere "accrual" of income; when it becomes due, in such an instance gives rise to a corresponding liability of the other party. No merit in assessee's arguments placing reliance on Seshasayee Steels Pvt. Ltd.[2019 (12) TMI 70 2 - SUPREME COURT] at the same time since the assessee had executed an irrevocable transfer of possession as against a mere licence therein. The same stands distinguished therefore. AO herein had made a "protective" addition of long term capital gains in light of the clinching fact that it had been substantively assessed in the latter A.Y. 2015-16.Case law Banyan and Berry Vs. CIT [1995 (12) TMI 12 - GUJARAT HIGH COURT] holds that a "protective" assessment is very much at par with the "substantive" one. We thus are of the opinion that the mere fact of the impugned addition having been made on protective basis would hardly provide any relief to the assessee in light of the overwhelming factual possession supporting the Revenue's case in preceding paras. - Decided in favor of revenue.
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