Sri S. Ranjith vs DCIT (ITAT) DOJ: 7th June 2013 Whether there is a transfer of property within the meaning of section 2(47) in the light of the joint development agreement? ITAT bench observed and held that ,the Agreement did not contemplate an exchange of properties and therefore the agreement does not by itself constitute a "Transfer" within the meaning of Section 2(47) of the I.T. Act, 1961. No sale was effected on the date of agreement. No consideration has been passed between the parties on signing the agreement. Further from the date of signing of development agreement dated 28.2.2006 to 31.3.2006 no progress has taken place in the said landed property which is subject matter of development agreement, nothing has been brought on record. Further, there was no consideration in the form of money passed between the parties. There was no construction, whatsoever, taken place during the period 28.2.2006 to 31.3.2006. Even otherwise there was no General Power of Attorney given by the assessee to the developer. In such a situation, it is only the actual performance of transferees obligation which can give rise to the situation envisaged in section 53A of the TP Act. On these facts, it is not possible to hold that the developer has performed its obligation during the period 28.2.2006 to 31.3.2006 in which the capital is sought to be taxed by the Revenue authorities. In our opinion, the condition laid down u/s. 53A of TP Act was not satisfied during the period from 28.2.2006 to 31.3.2006. Once we come to the conclusion that the developer has not performed the stipulation as required by the development agreement during the period under consideration and within the meaning assigned to the expression in section 53A of TP Act, its contractual obligation in the previous year relevant to the present A.Y. 2006-07, and it cannot be said that there was a transfer u/s. 2(47)(v) of the Act so as to levy capital gain tax. The judgement in the case of Chaturbhuj Dwarkadas Kapadia by the Bombay High Court undoubtedly lays down a proposition which, more often than not, favours the Revenue but on the facts of this case the said judgement supports the case of the assessee as "willingness to perform" has been specifically recognised as one of the essential ingredients to cover a transaction by the scope of section 53A of TP Act. The Revenue does not get any assistance from this judicial precedent. Held, there cannot be any capital gain earned by the assessee on account of the impugned development agreement. -- “Knowledge is power, Information is liberating, Education is the premise of progress, in every society, in every family.” Round the clock updates on tax law through email Disclaimer: The contents of this document are solely for informational and for knowledge purpose and for non commercial use. Reader shall check contents with original government publication and notification. Neither have I accepted any liabilities for any loss or damage of any kind arising out of any inaccurate or incomplete information in this document nor for any actions taken in reliance thereon. Rupesh Srivastava E.mail: ropsrivastava@gmail, rupesh@thetaxcorp PH: 08028616041, 09986028041
Posted on: Fri, 14 Jun 2013 17:44:45 +0000
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