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  • Section 143 (1) Section 143 (2) Section 143 (3) : Small Large Larger

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    The assessee entered into a joint development agreement with developers to develop land owned by the assessee. Under the agreement, the assessee transferred 55% of the land to the developers in exchange for 12 flats and 12 parking spots to be constructed. The tax authorities held that this constituted a transfer under tax law and the gains were taxable in the year the agreement was signed. The assessee appealed arguing the gains were not taxable, but the appeal was dismissed. The assessee has now appealed further to the tribunal.

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    The assessee entered into a joint development agreement with developers to develop land owned by the assessee. Under the agreement, the assessee transferred 55% of the land to the developers in exchange for 12 flats and 12 parking spots to be constructed. The tax authorities held that this constituted a transfer under tax law and the gains were taxable in the year the agreement was signed. The assessee appealed arguing the gains were not taxable, but the appeal was dismissed. The assessee has now appealed further to the tribunal.

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    11 tayangan2 halaman

    Section 143 (1) Section 143 (2) Section 143 (3) : Small Large Larger

    Diunggah oleh

    CacptCoaching
    The assessee entered into a joint development agreement with developers to develop land owned by the assessee. Under the agreement, the assessee transferred 55% of the land to the developers in exchange for 12 flats and 12 parking spots to be constructed. The tax authorities held that this constituted a transfer under tax law and the gains were taxable in the year the agreement was signed. The assessee appealed arguing the gains were not taxable, but the appeal was dismissed. The assessee has now appealed further to the tribunal.

    Hak Cipta:

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    Sri.V.Pushparaj,BangalorevsAssesseeon5June,2012
    Showingthecontextsinwhichjointdevelopmentagreementappearsinthedocument
    Changecontextsize Small Current Large Larger

    This appeal by the assessee is directed against the order of the Commissioner of Income Tax
    (Appeals)I,Bangaloredated15.2.2011forAssessmentYear200708.
    2.Thefactsofthecase,inbrief,areasunder:
    2.1TheassesseefiledhisreturnofincomeforAssessmentYear200708on22.6.2007admitting
    total income of Rs. 2,66,127. The return of income was processed under section 143(1) of the
    IncomeTaxAct,1961(hereinafterreferredas'theAct')andthecasewastakenupforscrutinyby
    issue of notice under section 143(2) on 25.8.2008. The Assessing Officer completed the
    assessmentbyanorderundersection143(3)oftheActon30.12.2009determiningtheincomeof
    the assessee at Rs. 20,94,883. This was ITA No.686/Bang/11 inclusive of Short Term Capital
    Gains (STCG) attributable to the share of the assessee, being 50% arising out of the Joint
    DevelopmentAgreement(JDA)dt.2.6.2006enteredintobyandbetweentheassesseeandthe
    Developers M/s. S.V. Developers in respect of land bearing Survey No.115/2, B. Narayana Pura
    Village, K.R. Hobli, Bangalore East Taluk measuring 10 guntas, equivalent to 10,890 sq. ft.
    AccordingtothetermsoftheJDA,theassesseewasentitledto12flatswithcorresponding12car
    parkingslots,being45%ofthebuiltupareainlieuoftransferof55%oftheundividedportionof
    thevacantlandinfavourofthedevelopersforconstructionof16flatswithanequalnumberof
    parkingslots.Thusthetotalnumberofflatsagreedtobeconstructedwere28outofwhichthe
    assessee was entitled to get 12 flats with equal number of parking slots and the developer was
    entitled to the remaining 16 flats with equal number of parking slots. The assessee received a
    nonrefundabledepositofRs.15lakhs.Apartfromthisdeposit,theassesseehadnotreceivedany
    otherconsiderationintherelevantperiod.TheAssessingOfficerheldthatthetransferof55%of
    thelandinfavourofthedeveloperwasadeemedtransferundersection53A of the Transfer of
    PropertyAct,1882rws2(47)(v)oftheActandthesamewasexigibletolevyofCapitalGainsTax
    intheyearinwhichtheJDAwasenteredinto.AccordingtotheAssessingOfficer,astheJDAwas
    entered into on 2.6.2006, accordingly the assessee was liable for levy of Capital Gains in the
    period relevant to Assessment Year 200708. In support of his finding, the Assessing Officer
    placedrelianceonthedecisionoftheHon'bleHighCourtofBombayinthecaseofChaturbhuj
    Dwaraka Das Kapadia V. CIT (2003) 260 ITR 491. In order to quantify the amount of
    considerationforthepurposeofCapitalGains,theAssessingOfficerreliedontheguidancevalue
    prescribed by the State Government authorities as communicated by the SubRegistrar in
    responsetoinformationcalledforbytheAssessingOfficerundersection133(6)oftheActandon
    the basis of the value of Rs. 400 per sq. ft. communicated by the Sub Registrar valued the
    deemedconsiderationoftheundividedportionoflandatRs.23,96,000aspersection50Cofthe
    Act.

    2.3ThelearnedCIT(A)didnotacceptthecontentionsoftheassesseeandheldthattheCapital
    GainsarisingoutoftheJointDevelopmentAgreementarechargeabletotaxinview of the
    decisionoftheHon'bleHighCourtofBombayinthecaseofChaturbhujDwarakaDasKapadia
    (supra). The learned CIT(A) also held that the nonrefundable deposit of Rs. 15 lakhs is
    chargeabletotaxforthereasonthatthecostof12flatsand12parkingslotsconstructedon45%

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    ofthelandbythedeveloperisnotcommensuratewith16flatsand16parkingslotsconstructed
    on55%ofthelandoftheJointDeveloperandthatitmaythereforeindirectlybesaidthatRs.15
    lakhs represented the cost of sale of 4 flats with 4 parking slots by the assessee to the
    developer/builder.Theassessee'sappealwasdisposedoffallowingtheassesseemarginalreliefof
    Rs.5,21,433onaccountofrecomputationofcapitalgainsbytakingthecostofacquisitionofthe
    propertyatRs.

    ITANo.686/Bang/1113,62,800 as per the purchase deed in place of Rs. 4,33,614 estimated by


    theAssessingOfficer.
    3.1AggrievedbytheorderofthelearnedCIT(A),theassesseeisbeforeus.Thegroundsofappeal
    raisedareasunder:
    "1.Theappellateorderdt.15.2.2011isopposedtolawandfactsofthecaseinsofaras
    itisopposedtotheinterestoftheappellant.
    2.ThelearnedCommissionerofIncomeTax(Appeals)I,Bangaloreoughttohavenot
    heldthattheShortCapitalGainsarechargeabletotaxfortheAssessmentYear2007
    08 within the ambit of section 45(1) of the Act in respect of the deemed transfer of
    55% of the land in favour of the Developer in the Scheme of Joint Development
    Agreement,dated2.6.2006.

    5.ThelearnedCommissionerofIncomeTax(Appeals)I,Bangaloreoughttohavenot
    heldthatthecasefortheAssessmentYear200708wasselectedforscrutinymerely
    on the submission of the Assessing Officer without any corresponding evidence on
    record to justify the selection for scrutiny within the parameters of the scrutiny
    guidelines.
    6.Theappellantcravesleavetoadd,alter,amendanddeleteanyofthegroundsatthe
    timeofhearing.
    Fortheseandothergroundsthatmaybeurgedatthetimeofhearing,itisrespectfully
    prayedthatyourHon'bleAuthoritybepleasedtopassordersdirectingtheAssessing
    Officertodeletetheadditionsmadeintheassessmentorderandtorestoretheincome
    declaredbytheappellantandfurtherbepleasedtopassordersthattheappellantwas
    liableforShortTermCapitalGainsTaxonthestrengthoftheJointDevelopment
    Agreement and further be pleased to pass such other orders granting such other
    reliefthatyourHon'bleAuthoritymaydeemfitintheinterestofequityandjustice."

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