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2014 (12) TMI 471 - AT - Income TaxAssessment of LTCG – Claim of exemption u/s 54F – Held that:- Assessee along with E. Govinda Reddy has entered into the development agreement with M/s BPR Infrastructure Ltd. on 04/05/06 - developer in terms with the development agreement has started the development work by not only obtaining permission from concerned authorities and has also started construction activities and the construction is almost complete - assessee’s contention that possession was not handed over to developer cannot be accepted - without being handled over possession over land, the developer would have started the development activity - facts available on record indicate that developer was handed over possession of land for starting development activity on execution of development agreement on 04/05/06, transfer in terms of section 2(47)(v) read with section 53A of TP Act for all intent and purpose has taken place in the AY – relying upon Potla Nageswara Rao Vs. CIT [2014 (8) TMI 636 - ANDHRA PRADESH HIGH COURT] - So far as adoption of sale consideration at ₹ 3,72,74,900, assessee rightly contended that sale consideration cannot be taken on the basis of cost of construction to the developer - the sale consideration deemed to have been received by assessee has to be arrived at on the basis of FMV as on the date of development agreement i.e. on 04/05/06. Assessee’s share in the deemed sale consideration has to be worked out - during the assessment proceeding as well as before the first appellate authority, assessee has brought it on record that by virtue of a registered partition deed dated 23/06/1995, assessee is not absolute owner of the property, but, he owns 1/4th share along with his three sons - though, in the development agreement assessee along with E. Govinda Reddy have executed with developer by projecting them as absolute owners of land, but, on the basis of registered partition deed a ratification deed was executed on 23/04/07, wherein the other co-owners have also been made party to the development agreement - assessee’s claim for apportioning the taxable capital gain amongst all the co-owners has to be considered keeping in view the registered partition deed dated 23/06/95 and ratification deed dated 23/04/07 - as neither AO nor CIT(A) has properly appreciated assessee’s contention by keeping in view the aforesaid documentary evidences brought on record, we are of the view that the entire issue of computation of capital gain needs to be examined afresh by taking into account all the facts and materials brought on record – thus, the matter is remitted back to the AO for fresh consideration - AO is also directed to consider assessee’s claim of exemption u/s 54F in terms with the statutory provision – Decided in favour of assessee.
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