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TMI Blog2019 (2) TMI 1436X X X X Extracts X X X X X X X X Extracts X X X X ..... sale consideration of Rs. 43,70,000/-, comprising of Rs. 20.00 lakh as monetary consideration and Rs. 23.70 lakh as non-monetary consideration in the shape of allotment of 2000 sq.ft. saleable area flat to be constructed by the Developer. Since the assessee had not filed her return of income, the AO issued notice u/s.148. A return was filed in response to notice u/s.148 declaring total income of Rs. 25,600/-, being, interest on savings bank account. On being called upon to explain as to why no capital gain was declared on the transfer of 4000 sq ft, that is, 371.74 sq.mtr area of land situated at village Yerawada, Sangamwadi, Pune, the assessee submitted that she entered into a Development Agreement with SCTPL for transfer of this property, but its possession was not handed over as the land was in Green Zone which was to be converted into Yellow Zone and thereafter becoming eligible for conversion into Non-Agricultural land. The sum and substance of the argument was that it was a mere Development Agreement with SCTPL without transfer of any possession and hence, the same could not be considered as transfer of actual possession, so as to call for chargeability under the head "Capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne if actual possession of the land was given over to SCTPL. In this regard, I need to delve into the Development Agreement dated 29.7.2011 between the assessee and SCTPL, whose copy has been placed on page 25 onwards of the paper book. Preamble of the Agreement states that the assessee purchased rights, title, ownership of the said land on 07-05-2011 and was placed in actual possession as an owner. It further provides that presently the said property is situated in Agricultural Zone as per the sanctioned development plan of Pune city, but "taking into account the position, contours and other relevant consideration, the said property may be converted into Residential Zone". Clause 27 of the Agreement deals with `Execution of Power of Attorney/Declaration'. It provides that : `Along with executing these presents, the Owners (i.e. assessee) have today executed General Power of Attorney in favour of the Developer (i.e. SCTPL) authorising and empowering them to do one or more activities for due and effective execution of the development of the said property, and such Power of Attorney shall remain in force till the completion of the said Scheme, which not only includes construction, po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the possession of the land to the Developer pursuant to the Agreement, but also received a sum of Rs. 20.00 lakh by cheque in part performance. As such, it is held that the assessee transferred the land u/s.2(47) of the Act and resultantly the provisions of section 45 are attracted. 10. The ld. AR contended that the land transferred by the assessee is an Agricultural land in the Green Zone and the same has still not been transferred to Yellow Zone for construction of residential units. In the light of this argument, she canvassed a view that primarily, it is not a case of transfer and secondly, even if it is considered as a transfer, then the consideration to be received in kind, that is value of constructed area of 2000 sq.ft., to be allotted within eight years at a cost of Rs. 23.00 lakh, should be ignored for the purpose of computing capital gain. She invoked "Real income theory" to bolster her proposition. In support of her contention, she relied on the judgment of Hon'ble Bombay High Court in CIT Vs. Chemosyn Ltd. (2015) 371 ITR 427 (Bom.). 11. In my humble opinion, this contention of the ld. AR is also bereft of any force. Section 45(1) of the Act provides that : `Any profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipartite Agreement was entered into amongst M/s. Dipti Builders, a new buyer and the assessee, under which both the plots were transferred to the new buyer at a total consideration of Rs. 29.11 crore. In the return of income filed for the A.Y. 2007-08, the assessee reflected consideration only of Rs. 16.11 crore for the purpose of capital gain tax. The AO held that the value of 18000 sq.ft. of built up area was also required to be included. The Tribunal decided the issue in assessee's favour. In appeal by the Revenue, the Hon'ble High Court observed that the agreement entered into with M/s. Dipti Builders on 16-06-2006 stood rescinded and substituted with a new Tripartite agreement on 05-07-2007. The assessee offered consideration of Rs. 16.11 received from M/s. Dipti Builders pursuant to the first agreement in its return of income for the A.Y. 2007-08 and the remaining amount of Rs. 13.00 crore (Rs.29.11 received vide Tripartite Agreement as reduced by Rs. 16.11 crore received from M/s. Dipti Builders pursuant to the first agreement and already declared for taxation in earlier year) was offered for taxation for the A.Y. 2008-09. Once the original agreement with M/s. 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