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2016 (2) TMI 32 - ITAT MUMBAI

2016 (2) TMI 32 - ITAT MUMBAI - TMI - Addition of long term capital gain - CIT(A) deleted the addition held that no transfer involved within the meaning of section 2(47) r.w.s. 53(a) of the transfer of the property Act, as the assessee was in the possession of the property and the possession was to be given to the developer only upon the last payment and till then the assessee had a right to revoke the agreement, therefore, it was held that no capital gain arose to the assessee - Held that:- it .....

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d. vs DCIT (2006 (12) TMI 170 - ITAT BOMBAY-J) and Asian Distributors Ltd. (2000 (1) TMI 990 - ITAT MUMBAI) wherein, it was held that where the payment of balance consideration within stipulated time is essence of the agreement of sale and such payments are not made within time by the transferee, such contract/agreement does not confer any righty on the transferee as envisaged u/s 53A of the transfer of the Property Act along with the provisions of section 2(47)(v) of the Act. Since the possessi .....

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Rao ORDER Per Joginder Singh (Judicial Member) The Revenue is aggrieved by the impugned order dated 31/10/2012 of the ld. First Appellate Authority, Mumbai. The only ground raised by the Revenue pertains to deleting the addition of long term capital gain of ₹ 1,10,74,463/- holding that no capital gain arose to the assessee. 2. During hearing, the ld. DR, Shri Randhir Gupta, advanced arguments, which are identical to the ground raised by contending that for A.Y. 2002-03, on this very transa .....

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granted to the assessee. 2.2. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee declared loss of ₹ 65,672/- in her return filed on 20/07/2001 by claiming long term capital gain on sale of immovable property. The assessee entered into a development agreement with M/s Pepeyon Developers Pvt. Ltd. dated 25/11/2000. Statement of Shri Mahesh Sadarangani, of K. Raheja Universal pvt. Ltd. was recorded. The contention .....

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e Tax (Appeals), wherein, it was held that no transfer involved within the meaning of section 2(47) r.w.s. 53(a) of the transfer of the property Act, as the assessee was in the possession of the property and the possession was to be given to the developer only upon the last payment and till then the assessee had a right to revoke the agreement, therefore, it was held that no capital gain arose to the assessee. 2.4. The Revenue is aggrieved and is in appeal before this Tribunal. Before coming to .....

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eveloper either physically or in the records of the Municipal Corporation of Greater Mumbai. Further, the theory of 'part performance' as per the TP Act is also not applicable in the case of the appellant. Furthermore, the development agreement dated 25-11- 2000 has been terminated and the matter is under litigation before Hon'ble Mumbai High Court, the A.O. has presumed that the development agreement is still in-force and that is why he has started the computation of capital gains w .....

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sake, this sum is taxed as LTCG there would not be any tax liability as the indexed cost is higher than (Rs. 3,85,70,000/ -) the consideration. 3.10 In addition to the above, the Id. AR has relied upon the decision of Mumbai Tribunal in the case of General Glass Co. (P) Ltd. Vs. DCIT reported in (2007) 108 TIJ (Mum) 854 and DCIT Vs. Asian Distributors Ltd. reported in (2001) 70 TIJ (Mum) 88. In the case of General Glass Co., it is held that" Where payment of balance consideration within sti .....

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that Capital gains-Transfer-Property development agreement- Assessee owner of land entered into contract with developers- Under the: agreement, possession of property to be given to developers only upon payment of last installment and till then, assessee had a right to revoke the agreement in certain eventualities - Last installment due in May, 1988-Transaction is not transfer either under s. 2(47)(v) of the IT Act or s. 53A of the Transfer of Property Act, 1882, but is a mere licence to the dev .....

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llant had a right to revoke the agreement in certain eventualities such as in the instant case that of obtaining NOC from the flat owners and receipt of total consideration by the appellant. In view of this also, there is no transfer in terms of Section 2(47)(v) of the I.T. Act and hence, no capital gain arises to the appellant. Therefore, the A.O. is directed to recompute the income of the appellant accordingly. The ground of appeal is allowed. 2.5. If the observation made in the assessment ord .....

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ent Agreement specifies certain terms and conditions as to be complied by the appellant and Clause 9 specifies about the terms of payment to be made to the appellant by the Developer upon completion of certain terms and conditions. 2. The appellant was leqaloumer of the premises mentioned in Third Schedule to the Development Agreement admeasuring 595.13. Sq Mtrs. which is part of land mentioned in First Schedule. 3. The appellant agreed to transfer the premises admeasuring 595.13 Sq Mtrs. as mor .....

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g NOC I consent letter from the tenants of Jagir Apartments. 5. By virtue of this, conditions specified in Clause 8 were relaxed and the developer was obliged to make payment as mentioned in Clause 9 since the other conditions were fulfilled and the condition of obtaining No Objection I Consent from the flat owners of Jagir Apartment was relaxed in so far as the responsibility was accepted by the developer absolving the appellant from that task I compliance. 6. However, even after a year has pas .....

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ong stand of canceling the agreement by issuing public notices in August, 2005 copies of which are already placed on your records. 8. The developer was summoned by the Assessing Officer during the reopened assessment proceedings wherein the developer's representative admitted that the matter is not settled and is in litigation as on the date of hearing. 9. The public notice was issued and the physical possession of the premises was retained by the appellant and even today the physical posses .....

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ue of ₹ 500 lacs and a constructed flat of 2400 Sq Ft. area with certain cost attached to it, the appellant will be certainly liable for making good the payment even alongwith interest if the Court directs or if the parties come to consent terms. But certainly, the land will not be parted and will be with the appellant both tri terms of legal ownership and constructive possession. 2.6. If the totality of facts are analyzed, undisputedly, the assessee entered into a development agreement wi .....

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nce amount of ₹ 2,10,00,000/-, therefore, the assessee issued a legal notice as well as notice in the newspapers and terminated the agreement 23/08/2005. The assessee showed long term capital gain in A.Y. 2002-03 as nil as the possession of the property in question always remained with the assessee. However, the Assessing Officer in view of the development agreement dated 25/11/2000 held that the capital gain to the extent of ₹ 1,10,74,463/- accrued to the assessee during the year un .....

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