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TMI Blog2017 (4) TMI 1550X X X X Extracts X X X X X X X X Extracts X X X X ..... e previous year relevant to assessment year 2007-08, the assessee along with 7 co-owners entered into a development agreement-cum-general power of attorney with M/s. Lakshmi Enterprises, Vijayawada for construction of apartments on a piece of land measuring 3386 sq.yds. and agreed to share constructed apartments. As per the said development agreement, the assessee has got 3 constructed flats to her share, which were identified as plot nos.203, 307 & 407. The assessing officer held that handing over of possession under the development agreement executed on 31.7.2006 amounts to transfer u/s 2(47)(v) of the Act, and thus profit arising out of such transfer was chargeable to tax under the head "capital gains" as per the provisions of section 45 of the Act, accordingly, issued a notice u/s 148 of the Act, requiring the assessee to file return of income for the assessment year 2007-08. In response to notice u/s 148 of the Act, the assessee has filed a letter and requested to treat the return filed originally on 25.7.2007 as return filed in response to notice issued u/s 148 of the Act. 3. Subsequently, the case has been selected for scrutiny and accordingly, notice u/s 143(2) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons by adopting Rs. 12,500/- per sq.yds. on land transferred and computed long term capital gain of Rs. 76,44,645/- after allowing indexed cost of acquisition of Rs. 4,92,855/-. 5. Aggrieved by the assessment order, the assessee preferred an appeal before the CIT(A). Before the CIT(A), the assessee reiterated the submissions made before the A.O. The assessee further contended that the A.O. was erred in adopting guidance value of the land for the purpose of determination of consideration for transfer of land in pursuance of joint development agreement. The assessee further submitted that what was received in pursuance of joint development agreement is constructed apartments and the value of the constructed apartments has to be considered for determination of consideration for transfer of land, but not guidance value of land as per the provisions of section 50C of the Act. The assessee also raised an additional ground of appeal and requested to allow exemption towards capital gain u/s 54F of the Act for re-investing sale consideration received in pursuance of transfer of land in another residential house property. The assessee further submitted that she had re-invested sale consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith these observations, CIT(A) directed the A.O. to bring short term capital gains towards 2 flats transferred in the assessment year 2009-10. Aggrieved by the CIT(A) order, the revenue is in appeal before us. 7. The Ld. D.R. submitted that the Ld. CIT(A) erred in allowing exemption u/s 54F of the Act, which was never claimed before the A.O., ignoring the decision of apex court, in the case of Goetz (India) Limited Vs. CIT, 284 ITR 323. The D.R. further submitted that the CIT(A) erred in allowing exemption u/s 54F of the Act for 3 flats under development agreement ignoring the statute, wherein the statute provides for exemption towards one residential house. The D.R. further submitted that the CIT(A) erred in coming to the conclusion that the assessee has made investment in new residential house in respect of 3 flats on that very date on which development agreement was executed, ignoring the fact that out of 3 flats, only 2 flats were handed over to the assessee within the stipulated time limit. The D.R. further submitted that the CIT(A) erred in adopting the cost of construction of flats for the purpose of determination of sale consideration, instead of the value determined by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble on record and gone through the orders of the authorities below. The factual matrix which leads to the dispute is that the assessee along with other 12 co-owners entered into a development agreement with Shri Sai Venkata Ramana Constructions for development of a piece of land admeasuring 1.68 acres at S.No.93. As per the said joint development agreement, the assessee and 12 other family members have agreed to share the constructed flats in the ratio of 17:23. The assessee has claimed exemption u/s 54F of the Act on total flats received in pursuance of joint development agreement. According to the assessee, exemption u/s 54F of the Act is allowable even if the flats/apartments are situated in different blocks or towers. The A.O. has disallowed exemption claimed u/s 54F of the Act, on the ground that the assessee has let out the apartment to educational institution for the purpose of commercial use. The A.O. further observed that exemption u/s 54F of the Act is available to one residential house, but not for all residential flats received in pursuance of joint development agreement. 12. The only issue to be decided is whether on the facts and in the circumstances of the case, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption u/s 54F of the Act in respect of all the flats received in pursuance of joint development agreement. The revenue has failed to bring on record any contrary decision against the law laid down by the Hon'ble A.P. High Court, in the case of CIT Vs. Syed Ali Adil (supra). Considering the facts and circumstances of the case and also respectfully following the decision of Hon'ble A.P. High Court, in the case of CIT Vs. Syed Ali Adil (supra), we are of the view that the assessee is eligible for exemption u/s 54F of the Act, towards all the flats received in pursuance to development agreement." 10. In this view of the matter and also respectfully following the decision of coordinate bench, in the case of ITO Vs. Ravuri Kishore & Others in ITA Nos.498, 499 & 500/Vizag/2013 dated 28.3.2017, we are of the view that the assesse is eligible for exemption u/s 54F of the Act, in respect of 3 flats received in pursuance of development agreement. The CIT(A) after considering relevant facts has rightly held that the assessee is eligible for exemption u/s 54F of the Act for 3 flats. The CIT(A) further observed that, since, the legal heirs has sold two flats within 3 years from the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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