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2016 (5) TMI 932 - ITAT CHENNAICapital gain - transfer - CIT(A) held Joint Venture Agreement did not result in transfer of capital asset in the year under consideration and hence no capital gain had arisen - Held that:- In the present case, vide JDA dated 20.10.2007, the developer will get 60 to 65% of the constructed area and the assessee will get 30 to 35% of the constructed area. The assessee has also received ₹ 2.50 crores as interest free refundable security deposit and the developer agreed to develop the property after getting necessary plan from the CMDA. Further, it is also mentioned that the assessee has to hand over all original title deeds pertaining to the property for the purpose of getting plan sanction for construction. The assessee has also executed Power of Attorney in favour of Shri Suresh Jain, Managing Director of the developer company and the developer has the right to sell all flats and also to complete the assessee’s share of construction of flats within 36 months from the date of obtaining of plan sanctions. If there is a failure on the part of the developer to hand over the vacant possession of the property within the grace period of 12 months, there is a penalty clause that ₹ 20 lakhs per month shall be payable to the assessee. Further, by December, 2011, the developer almost constructed 9 towers each having 9 floors, which is mentioned in para 3.2 of this order. All these show that the JDA entered on 20.10.2007 actually acted upon. Subsequent agreements executed by the parties took only paper documents so as to postpone tax incidence. If one party is performed his part of duty i.e. developer shows that the other party also performed its part of obligation. Thus, the transaction entered into by the parties herein, which have the effect of transferring or enabling the enjoyment of any immovable property, then capital gains would be taxable in the year in which the transactions were entered into even if the transfer of the immovable property was not effective or complete under the general law. In our opinion, all the ingredients of sec.2(47)(v) of the Act are satisfied and it has to be inferred that a “transfer” took place within the meaning of sec.2(47)(v) of the Act. The completion of “transfer” of an immovable property under the general law was not required for the applicability of the provisions of sec.2(47)(v) of the Act, as held by various High Courts as discussed in earlier para. Accordingly, in the present case, there is a transfer u/s.2(47)(v) of the Act in the asst. year 2008-09. Accordingly, we reverse the order of the CIT(Appeals) and restore that of the AO. - Decided against assessee
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