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2017 (5) TMI 425 - ITAT CHENNAINon-chargeability of capital gains in respect of the land - Held that:- The capital gain would be taxable in the year in which such transactions are entered into even if the transfer of the immovable property is not effective or complete under the general law. The assessee entered into an agreement with the builder/developer for development of the impugned land and construction of flats thereon. Further, the assessee acted on the impugned agreement by accepting from the builder/developer payments in the financial year 2006-07. In view of the facts and circumstances discussed above, all the conditions of sub-clause (v) of section 2(47) are satisfied in this case and therefore, it has to be inferred that a "transfer" did take place within the meaning of section 2(47)(v). The argument that the deeds in respect of the sale of flats were not registered/executed is not a relevant consideration so far as provisions of sub-clause (v) of section 2(47) are concerned. The completion of "transfer" of an immovable property as per the general law is not a requirement for the applicability of the provisions of sub-clause (v) of section 2(47). Thus, this ground is dismissed. CIT(Appeals) observed that the value of share of consideration of 27% of saleable or super-built area including parking places of the project allotted to the assessee on transfer of undivided share of 73% of land surrendered in favour of developer to be valued on the basis of guideline value of said undivided share of land allotted to the developer. In our considered opinion, this is also not appropriate method to determine the consideration receivable by the assessee on account of JVA dated 10.09.2006. In our considered opinion, cost of construction of built-up area of 27% of saleable or super-built area including parking places of the project allotted to the assessee to be ascertained by the Assessing Officer after examining the relevant record of cost of construction incurred or to be incurred by the developer. Accordingly, this said cost of construction would constitute as sale consideration received by the assessee in kind and that should be brought to tax in the assessment year 2007-08. If necessary, he could take assistance of DVO or any experts so as to arrive the cost of construction of 27% of constructed area, which would be transferred to the assessee. Thus, the issue is remitted to the Assessing Officer for the limited purpose of determining the sale consideration and to compute the capital gains accordingly after giving opportunity of hearing to the assessee. The issue relating to the computation of capital gains in both the appeals is remitted to the Assessing Officer for fresh consideration. Addition u/s.37(1) - TNCA sponsorship - Held that:- The above expenditure incurred by the assessee cannot be considered as incurred wholly and exclusively incurred for the purpose of assessee’s business. This expenditure is nothing but charity or donation, which cannot be allowed as a deduction while computing the income of the assessee. We do not find any infirmity in the order of the CIT(Appeals) and the same is confirmed. The ground raised by the assessee is dismissed.
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