Kondibai Kacharya Navadekar Vs ITO (ITAT Pune)
The Pune ITAT allowed the assessee’s appeal after holding that no transfer of the land took place during AY 2012-13 under Sections 2(47)(v) or 2(47)(vi) of the Income-tax Act. The Tribunal found that under the development agreement dated 12.07.2011, the assessee did not receive any consideration during the relevant year, retained rights in the land, and was entitled to receive 50% of the constructed area only after completion of construction, which occurred in 2015. It observed that the developer had not taken possession of the land as contemplated under Section 53A of the Transfer of Property Act and that no evidence established a transfer under Section 2(47)(vi). Relying on judicial precedents, the Tribunal concluded that no capital gains were taxable in AY 2012-13 and directed deletion of the addition. Having held that there was no transfer during the relevant year, the Tribunal treated the assessee’s claim for deduction under Section 54F as academic and did not adjudicate it.
Development agreement granting only permissive possession without receipt of consideration or accrual of real income does not constitute a “transfer” under sections 2(47)(v) or 2(47)(vi), and therefore no capital gains arise in the year of execution.
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