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TMI Blog2017 (4) TMI 1098X X X X Extracts X X X X X X X X Extracts X X X X ..... , Ward 1(3), Pune about the transfer of land by assessee on 03.10.2005 and the sale consideration receipts on sale of land resulting into the Capital Gains. AO thereafter issued summons u/s 131 of the Act on 18.10.2010 and served on the assessee on 19.01.2011. AO noted that assessee did not respond to the summons. Thereafter notices u/Sec.148 / 142(1) of the Act were issued but the same also remained un-complied by the assessee. AO thereafter passed assessment order u/sec 144 r.w.s 147 of the Act on 16.12.2011 and determined the Long Term Capital Gains at Rs. 66,77,250/- and agricultural income at Rs. 2,00,000/-. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A) who vide order dt.23.01.2014 allowed the appeal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was applicable and proposed to tax Long Term Capital gains on the market value of land of Rs. 1,15,23,000/-. In the absence of any information from the assessee, AO worked out the Long Term Capital Gains at Rs. 66,77,250/- and made its addition. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who deleted the addition by holding as under : "2.12 I have carefully considered the facts of the case. I find that the Appellant did not appear before the learned AO hence, the learned AO has passed the assessment Order u/s 144. Accordingly, the Appellant's entire submission filed before me should constitute additional evidence. However, I find that the learned AO had obtained a copy of the Development Agreement dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefore by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e judgment of the honourable Bombay High court in the case of Chaturbuj Dwakaradas Kapadia vs CIT 2003 260 ITR 491 (Bom). The honourable Court has held that capital gain cannot be levied in the case of Development Agreement, if the possession of the property is not handed over to the purchaser. 2.17 Further, ITAT Hyderabad in the case of Fibras Infratech Pvt Ltd v ITO ITA no 477/Hyd/2013 dated 03.01.2013 has held that willingness of the developer to perform its part of the contract is also necessary to constitute part-performance. In this case, the developer was not willing to perform its part unless the Appellant hands over possession to him and performs his part of the contract. The perusal of the relevant part of this decision show th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd reiterated the submissions made before Ld.CIT(A) and supported the order of Ld.CIT(A). 5. We have heard rival submissions and perused the material on record. The issue in the present case is with respect to computation of capital gains and its taxability. We find that Ld.CIT(A) while deciding the issue and after perusing the Development Agreement entered by the assessee with City Corporation Limited, Pune has upheld the contention of the assessee that there was no transfer because assessee did not have the possession of land and therefore could not have handedover the possession. He has further given a finding that since the agreement was a Development Agreement, there was no transfer of property by way of sale and even the ingredients ..... X X X X Extracts X X X X X X X X Extracts X X X X
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