9911796707
TMI Blog2017 (11) TMI 1811X X X X Extracts X X X X X X X X Extracts X X X X ..... 5,11,49,600/- 2. The CIT (A) ought to have recognized that it is a case of capital contribution by the assessee in the form of land and the developer would contribute the capital in the shape of cost of construction (Residential Apartment) and thus, it would be business income in the hands of the assessee. 3. The CIT(A) ought to have recognized that the transfer of stock in trade of the assessee to the developer is a commercial transaction for a commercial project for which the assessee given right to the developer which directly gives rise to business income on accrual basis as the assessee is following mercantile system of accounting. 4. The CIT(A) did not consider the fact that the assessee can no longer exercise any rights on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agreement clearly show that the assessee has transferred the stock-in-trade for development in lieu of 30.36% of total saleable built up area constructed by the developer. The A.O valued the assessee's share of built up area by adopting the Municipal valuation of construction and directed the assessee to show cause as to why the business income of Rs. 15,11,92,800/- should not be brought to tax for A.Y 2013-14 on accrual basis. In response to the same, the assessee, vide letter dated 24-03-2015, submitted that she has entered into the development agreement by putting her stock-in-trade property as her share and that there is no transfer u/s 2(47) of the IT Act, and particularly since the developer has not obtained the permission nor car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o a development agreement only by contributing the land as her share of capital, while the developer was to invest in construction of the villas. The income would arise to the assessee only when the assessee sells her stock-in-trade but not when she contributes her stock-in-trade as her share of capital. Therefore, as rightly pointed out by the CIT(A), no gains have arisen to the assessee during the year by entering into the JDA dated 10-05-2012 with M/s. Ramky Estates & Farms Ltd., much less on accrual basis. Therefore, we see no reason to interfere with the order of the CIT(A) which is in consonance with the legal provisions on the issue. Accordingly, the grounds of the Revenue are dismissed. 5. In the result, the appeal filed by the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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