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2022 (9) TMI 767 - Income Tax
Capital gain computation - year in which the transfer of property has taken place - section 50C applicability - transfer development rights in the plot of land to the builder - whether section 50C of the Act is applicable to the facts of the present case for computation of long term capital gains? - whether rights transferred on the date of letter dated 04/10/2000, or on the date of agreement dated 18/02/2010 ? - HELD THAT:- All the essentials of a contract i.e. offer, acceptance and consideration are fulfilled in the present case. In any case, by non fulfilment of any condition of the contract, same becomes only voidable at the option of the parties and it does not render the contract to be void. We find that despite the delay in payment of the advance money, the vendor i.e., the assessee society honoured the initial terms of offer letter and ultimately executed agreement dated 20/05/2009, with the builder. Thus, we do not agree with the view of the learned CIT(A) that the letter of offer was not acted upon between the parties.
As on one hand the Revenue did not dispute the fact that the impugned property was purchased by the society in the year 1969 and accordingly computed the long term capital gain, despite the fact that conveyance deed in respect of that transaction was also delayed and was ultimately executed in the year under consideration, while, on the other hand, in respect of the transaction of transfer of development right to the builder, the Revenue is considering the date of registration of the agreement, i.e. 18/02/2010, as the date of transfer for the purpose of computation of capital gains tax. Thus, in view of the aforesaid factual and legal position, we are of the considered view that development rights in the plot of land were transferred to the builder in the financial year 2000–01. Further, since provisions of section 50C of the Act were inserted in the Act w.e.f. 01/04/2003, the same are not applicable in the present case. Accordingly, grounds raised by the assessee are allowed.