TMI Blog2022 (2) TMI 1025X X X X Extracts X X X X X X X X Extracts X X X X ..... n high court in case of Potla Nageswara Rao[ 2014 (8) TMI 636 - ANDHRA PRADESH HIGH COURT] . We further find no merit in assessee's vehement contentions that once the developer had not performed the agreement hereinabove, the same stands annulled by the efflux of time. This is for the reason that the assessee has failed to pinpoint any of the specified conditions in the original agreement that time was essence of the contract in light of section 55 of the Indian Contract Act, 1872 The assessee never cancelled the said former development agreement even unilaterally as it has entered into the latter supplementary agreement on 25.09.2014 in continuity with the earlier one only. The question as to whether mere non-payment of the corresponding consideration; if any, would keep the impugned long term capital gains in abeyance has already been decided in Revenue's favour in the case of CIT Vs. Balbir Singh Maini [ 2017 (10) TMI 323 - SUPREME COURT] . Their lordships make it clear that mere accrual of income; when it becomes due, in such an instance gives rise to a corresponding liability of the other party. No merit in assessee's arguments placing reliance on Sesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital gains would arise in the Asst. Year 2009-10 and not in Asst. Year 2015-16 as the development agreement dated 05-03-2009 was never cancelled. 3. The Learned CITCA) ought to have appreciated the facts and circumstances of the case and erred in not considering the fact that as per the agreement dated 05-03-2009, the possession of the property was given to the developer and as per Sec. 53A of the Transfer of Property Act, 1882 the transfer was complete in the Asst. Year 2009-10 only. 4. The Ld. CIT(A) ought to have appreciated the facts of the case as the newly introduced provisions of Sec. 45(5A) were not applicable to the case on hand as the said provisions are applicable only for and from the Asst. Year 2018-19. Even the newly introduced provisions are applicable only to Individual and HUF, as such the said provisions are not applicable to this case being a Corporate Entity. 4. Both the learned representatives next invited our attention to CIT(A)'s detailed finding deleting long term capital gain in issue of ₹ 11,94,23,521/- made by the Assessing Officer in his assessment order dt. 30.12.2016. Lower appellate discussion this effect reads as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issue i.e. addition of ₹ 11,94,23,521/- as Long term capital gains. 5. The AO during the assessment proceedings has asked the appellant as to why the capital gains should not be assessed to tax on signing of the joint development agreement dt. 05.03.2009. The appellant filed a detailed reply inter-alia stating that the developer could not commence the development work as per the development agreement entered into. There was a long delay even in obtaining plan approval from the municipality. The director of the company was also examined by the AO after examining the factual as well as legal position the AO concluded as under: After considering ell facts and circumstances, it is observed that even though the initial development agreement was entered in the year 2009, it has undergone several amendments on several times. The developer also has not made any efforts to commence the development of the project after entering into the 1st development agreement. As verified from the submissions, GHMC gave approval (which is fundamental requisite) on 24.06.2014 and the final development agreement was entered on 26.09.2014. However, as the initial development agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant and the material placed before me. It is seen that the developer could not start developmental activity as per the agreement entered on dt. 05.03.2009. Thereafter the agreement was modified by way of supplementary development agreement dt. 04.02.2013. Still there was no development as planned and finally the appellant has entered into a fresh supplementary development agreement dt. 26.09.2014 which included a new builder also as third party after the plan was approved by GHMC. The appellant has offered the resultant capital gains for the A.Y 2015-16 and the same has been assessed by the AO. In view of the factual position as above and also the fact that the AO himself has assessed the capital gains on protective basis only for this year, the addition made is liable to be deleted. Accordingly, the addition made by the AO is deleted. 5. Learned CIT DR vehemently contended during the course of hearing that the CIT(A) has erred in law and on facts in deleting the impugned long term capital gain addition made in the course of above stated re-assessment. He has filed a detailed paper book running into 165 pages comprising of the assessee's original development agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt only amounts to transfer u/s. 2(47)(v) of the Act. 8. We have given our thoughtful consideration to rival contentions and find no reason to express our concurrence with the CIT(A)'s detailed discussion supported at the assessee's behest. Suffice to say, the assessee had entered into a development agreement cum GPA dt. 04.03.2009 (duly registered document) wherein the possession was irrevocably handedover to the developer party M/s. AMSRI Builders. There is further no dispute that this followed the latter supplementary agreement dt. 25.09.2014 between assessee, M/s. AMSRI Builders and M/s. Rajaram Constructions which is in continuity with the first main development agreement only. That being the case, we express our due agreement with the Revenue's arguments that the assessee had indeed transferred the relevant capital asset by way of a registered development agreement cum GPA on 04.03.2009 relevant to A.Y. 2009-10. We further make it clear that such a part performance has indeed been treated as transfer u/s. 2(47)(v) as per the hon'ble jurisdiction high court in case of Potla Nageswara Rao (supra). 9. We further find no merit in assessee's vehement co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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