C. Aryama Sundaram Vs CIT (Madras High Court)
Madras High Court held that JDA executed in 1994, however, sale/ transfer of capital asset was taken place only in March 1999 when the sale deed was executed. Accordingly, capital gain was rightly offered for AYs 1999-2000 and hence exemption u/s. 54 rightly claimed.
Facts- The appellant had returned capital gains for both years arising out of the sale of a residential property. The appellant had been a confirming party in a Joint Development Agreement (JDA) dated 15.12.1994. The agreement provided for sale of 2.5% undivided share of the property to certain third parties, 47.5% of undivided share to the developers and 50% of the total super built-up area to the owners. While so, the property had, admittedly, been demolished in 1995 pursuant to the execution of the JDA.
In the financial years relevant to AY 1999-2000 and 2000-01, there had been sales of 13,949.180 and 1073.024 sqft. by the appellant and his mother. We are, in the present appeals, concerned with the computation of capital gains.
The return of income filed by the appellant too, had been accepted initially. Thereafter, proceedings for re-assessment had been initiated. The appellant had sought relief u/s. 54 of the Act on the ground that he had re-invested in a residential property in New Delhi on 30.01.2001. Overriding the objections, orders of re-assessment had been framed on 27.02.2003 (AY 1999-2000) and 29.03.2004 (AY 2001-02) on the ground that there was no proof placed before the officer with regard to re-investment. Hence, the entire amount had been brought to tax as Long Term Capital Gains.
