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2016 (9) TMI 452 - ITAT HYDERABADTransfer of land under section 2(47) - Held that:- The physical possession was never handedover to the developer in which event it cannot be said that there is a transfer of property within the meaning of section 2(47) of the I.T. Act. ITAT, in the first round of litigation, recorded a finding based on the terms of development agreement but proceeded, on a cautious assumption, that the finding is on account of the fact that the said development agreement was not cancelled. The basis for assumption is disturbed by virtue of a decree of Arbitral Tribunal whereby the development agreement was cancelled. Even going by the order of the ITAT dated 16.12.2011 had the development agreement been cancelled at a later date the Tribunal was willing to accept the proposition that there is no ‘transfer’. Consent decree passed in 2014 thus supports the ultimate reasoning of the ITAT while setting the matter for consideration afresh. Under the Income Tax Act what is taxable is the real income and mere hypothetical income should not be taxed. In the wake of the findings and conclusions of the Arbitral Tribunal, we are of the firm view that no transfer took place with regard to the land which was hitherto given for development since physical possession was continuously enjoyed by the assessee and his family members and thus even under the Income Tax Act the transfer cannot be said to have taken place in the year under consideration. We hold accordingly. - Decided in favour of assessee
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