9911796707
TMI Blog2025 (4) TMI 797X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to Rs. 1,22,50,000/- was sold during the year under consideration. Accordingly, notice u/s 148 was issued and in response to the same the assessee furnished his return of income. In reply to notice issued u/s 143(2), the assessee submitted that he has not sold any property but has entered into a development agreement on 05-05-2011 with the builder and the same was registered on 18.05.2011. Subsequently, supplementary development agreement was also entered into on 23-07-2012. According to the development agreements, the assessee was going to receive certain portion of constructed property in shape of flats in subsequent year and, therefore, the income in this year was not shown. However, the assessee submitted that in subsequent assessment year i.e. during assessment year 2013-14, the assessee has received number of flats which were sold and the capital gain on sale of flats was disclosed in subsequent assessment year. The Assessing Officer was of the view that since the development agreement was signed during the period under consideration, the property is said to be transferred during this period only & accordingly not satisfied with the above reply of the assessee and complete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... struction Pvt. Ltd. with regard to a piece of land owned by the assessee. According to the agreement, the assessee was to receive 22 flats in consideration. Initially, development agreement was entered into on 05.05.2011 i.e. in assessment year 2012-13 the period under consideration and subsequently a supplementary development agreement was also entered on 23.07.2012 i.e. during the assessment year 2013-14 i.e. the subsequent assessment year. The value of piece of land subjected to development agreement was Rs. 1,22,50,000/- and the value of constructed area which the assessee was supposed to receive was valued at Rs. 2,23,26,000/-. Accordingly, the capital gains of Rs. 1,00,76,000/- (Rs.2,23,26,000/- minus Rs. 1,22,50,000/-) was calculated by the Assessing Officer. Ld. AR further submitted before the Bench that as per the development agreement, the assessee was to receive 22 flats of the value of Rs. 2,23,26,000/- and admittedly these flats were handed over to the assessee in subsequent financial year i.e. in assessment year 2013-14 and those flats were sold by the assessee in this subsequent period only and not during the period under consideration. Accordingly, the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the developer, namely, Sai Ashray Developers Pvt Ltd., which had permitted the said developer to develop the property belonging to the owners only as a 'licensee'. Reliance in this regard was placed upon the clause 10(i) of the development agreement, which reads as under : "10. DEVELOPERS' RIGHTS, ENTITLEMENTS, DECLARATIONS AND OBLIGATIONS On and from execution hereof and subject to the fulfllment of all the terms and conditions to be performed and complied with by them under this Agreement, the Developers shall have rights and be entitled to do the following, at its own costs and expenses :- (i) To enter into the said properties as an exclusive licensee for the purpose of development of the said Properties thereon with their own sources and cost as per the permission/NOC that may be given by the Local Authorities and the Applicable law;" 9. Applying the principle as crystallized by the Apex Court reproduced herein above, to the facts of the present case, it can be seen that the development agreement permitted construction on the land in question only as a licensee which did not have the effect of transmitting possession in favour of the licensee within the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment year 2013-14 and not during the period under consideration. We also find that these flats were sold by the assessee in assessment year 2013-14 and the respective capital gains was also shown in the income tax return of assessment year 2013-14. However, deduction u/s 54F was claimed by the assessee against the said capital gain arising on sale of flats in subsequent assessment year & there is no information on record that the department has rejected the deduction claimed by the assessee in subsequent assessment year. The sole grievance of the assessee in this appeal is that although the development agreement was first entered during the period under consideration i.e. assessment year 2012-13 but subsequently a supplementary development was again entered & also registered in the subsequent assessment year & even the consideration i.e. flats were also received in subsequent assessment year i.e. in assessment year 2013-14 and the Assessing Officer erred in calculating capital gains during the period under consideration whereas according to the assessee the said capital gain was arising in subsequent assessment year i.e. in assessment year 2013-14. In this regard, we also find th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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