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TMI Blog2015 (7) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.O. initiated action under section 147 of the I.T. Act, 1961 by issuing a notice under section 148 of the Act on 06.03.2012. In response to the said notice, assessee on 17.05.2012 submitted its return of income declaring total income of Rs. 97,280 including agricultural income of Rs. 63,000. During the course of assessment proceedings, it was noticed by the A.O. that assessee was the owner of agricultural land admeasuring ac.8.28 gts. in survey No.185, Narsingpalli (v) of Rajendranagar (M) of Ranga Reddy District. It was further noticed that assessee had executed an unregistered development agreement -cum- General Power of Attorney on 28.04.2005 in favour of M/s. Sri Sai Venkateswara Estates, for developing the said piece of land owned by him. Subsequently, this unregistered development agreement was cancelled and assessee entered into a registered development agreement -cum- General Power of Attorney with M/s. Sri Sai Venkateswara Estates on 30.08.2006 for developing the said piece of land into a residential colony after obtaining necessary permission from the authorities. As per the terms of the said development agreement, assessee is to receive 43% of constructed area along w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty Act has been fulfilled, there is a transfer of capital asset during the year under consideration giving rise to capital gain. Accordingly, he proceeded to compute the capital gain which was determined at Rs. 4,59,92,944. 5. Being aggrieved of the action of the A.O. in charging capital gain, assessee preferred appeal before the Ld. CIT(A). In course of hearing of appeal, the assessee reiterating what was stated before the A.O. submitted that since the developer failed to even obtain the sanction till 2013, it cannot be said that there is a transfer of asset within the meaning of section 2(47)(v). In support of its contention, assessee relied upon few decisions of the ITAT. The Ld. CIT(A) after considering the submissions of the assessee in the light of decisions cited before him, concluded that since till 2013 no development activity has started, it indicates unwillingness on the part of the developer to perform his part of the contract. He was of the view that though the development agreement was entered into and possession of land was given in the year 2006, but the willingness of the developer to carry on development in terms of development agreement has not been taken-up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, it was submitted that assessee is contemplating to show the capital gain in A.Y. 2014-2015 and keeping that in view, has paid first installment of advance tax. Thus, in sum and substance, it was submitted by the assessee that since there was unwillingness on the part of the developer to perform his part of the contract during the impugned assessment year and as no development activity has taken place, neither there is any transfer of capital asset during the year under consideration nor capital gain will accrue. For such proposition, he relied upon the following decisions. (1) M/s. Binjusaria Properties P. Ltd., Hyderabad vs. ACIT, Hyderabad ITA.No.157/Hyd/2011 dt.04.04.2014. (2) ACIT vs. Mr. R. Srinivasa Rao & others, Hyderabad ITA.No.1786/Hyd/2012 dated 28.08.2014 (3) ITO, Hyderabad vs. Mr. Sham Kumar, Hyderabad ITA.No.1604/Hyd/2014 dated 20.03.2015. 8. We have considered the submissions of the parties, perused the orders of the revenue authorities as well as other materials on record. We have also carefully applied our mind to the decisions relied upon by the parties. The issue to be decided in the present appeal, precisely is, whether there is transfer of land by ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject by preparing building plan/lay out, but, as per assessee's own admission, made an application before the competent authority in 2008 seeking building permission. However, the delay in obtaining building permission was firstly because the land was under the growth corridor which required specific clearance from the authorities concerned and secondly, because it was found from the Government order issued on 06.06.2005 that part of the land is treated as Government land. Due to these exigencies necessary permission could not be obtained for starting the development activity. From the aforesaid facts, it is very much clear that the delay in development of project is not due to either any unwillingness or default on the part of the developer to undertake the development activity but because of extraneous circumstances beyond his control which resulted in delay in obtaining the approval from the competent authority. In fact, the assessee has not brought a single piece of evidence on record to demonstrate that at any point of time the developer has expressed his unwillingness to perform his part of the contract of undertaking the development activity. 8.2. As can be seen, as per cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of agreement of sale is not required, it may be deferred for future date. The element of factual possession and agreement are contemplated as transfer within the meaning of the aforesaid section. When the transfer is complete, automatically, consideration mentioned in the agreement for sale has to be taken into consideration for the purpose of assessment of income for the assessment year when the agreement was entered into and possession was given. Here, factually it was found that both the aforesaid aspects took place in the previous year relevant to the assessment year 2003-04. Hence, the learned Tribunal has rightly held that the appellant is liable to pay tax on the capital gain for the assessment year. Accordingly, we do not find any element of law to admit this appeal." 8.3. Therefore, applying the principle laid down by the jurisdictional High Court as aforesaid and also keeping in view the fact that there is nothing on record to prove that the developer was unwilling to perform his part of the contract as provided under section 53A of the Transfer of Property Act, we are of the view that there is a transfer of capital asset in the impugned assessment year as envisaged ..... X X X X Extracts X X X X X X X X Extracts X X X X
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