TMI Blog2013 (9) TMI 1215X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee did not press the ground no. 2 relating to taxability of sale proceeds of development rights as capital gain. This ground is therefore dismissed as not pressed. We are, therefore, left with only two ground i.e. year of taxability and allowability of exemption u/s 54 of the Income Tax Act. 3. Briefly stated, facts of the case are that the assessee along with four other co-owners owned the property named as Favourite situated at Salsette Catholic CHSL. They had entered into a development agreement dated 16.2.2006 with M/s Calvin Corporation. As per the agreement, the owners had granted the development rights to the developer. The assessee in terms of the agreement was to receive monetary consideration of ₹ 8,00,000/- and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Bombay in case of Chaturbhuj Dwarkadas Kapadia Vs. CIT (260 ITR 491) in which it was held that in case in the guise of agreement for sale, a development agreement had been contemplated, the AO was entitled to take the date of the contract as date of transfer. He, therefore, held that the transfer had taken place during the assessment year 2006-07 and the assessee was liable for capital gain. As regards the allowability of exemption u/s 54 of the Income Tax Act, the AO observed that the flat received by the assessee as part of the consideration cannot be treated as investment and, therefore, the assessee was not entitled for exemption u/s 54 of the Income Tax Act as the assessee had not made investment either by way of purchase or constr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital gain in assessment year 2007-08 in order passed u/s 143(3) of the Income Tax Act. It was, therefore, urged that the addition made in this year should be deleted. The learned DR on the other hand supported the orders of authorities below and placed reliance on the findings given in respective orders. 5. We have perused the records and considered the matter carefully. The dispute is regarding taxability of capital gain arising on the basis of development agreement. The assessee along with other four co-owners was owner of the tenanted building named as Favourite which had been given for development to the developer M/s Calvin Corporation as per the development agreement dated 16.2.2006. In terms of the agreement, the assessee was to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 2006-07 and, therefore, no capital gain can be taxed in this year. Moreover, in case of a co-owner as pointed out by the assessee, the capital gain has already been accepted in assessment year 2007-08. Therefore, the order of CIT(A) upholding the taxation of capital gain in assessment year 2006-07 cannot be upheld. As capital gain held not to be taxable in this year we do not consider it necessary to go into the alternative claim of the assessee that the capital gain even if taxable in this year, was exempt u/s 54 of the Income Tax Act. Therefore, the ground raised regarding the claim of exemption u/s 54 of the Income Tax Act is dismissed as having become infructuous. 6. In the result appeal of the assessee is partly allowed. Or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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