Rakesh Motilal Sharma Vs ACIT (ITAT Pune)
Joint Development Agreement (JDA) Addition Set Aside for Fresh Factual Examination: ITAT Pune
The Pune ITAT considered the assessee’s appeal against the order of the National Faceless Appeal Centre for Assessment Year 2018-19 concerning the addition of ₹14,33,25,000 arising from a Joint Development Agreement (JDA). During scrutiny, the Assessing Officer noticed a transaction of ₹14,33,25,000 appearing in Form 26AS relating to immovable property. The assessee explained that the land at Survey Nos. 519 and 580, Bibwewadi, Pune, was subject to a JDA with M/s. Ajmera Percept Realty under which the developer would construct the project and the assessee would receive specified shares of the commercial and residential built-up area. The assessee contended that no development had commenced, no consideration had been received except an interest-free refundable security deposit of ₹10 crore, and therefore no income had accrued during the year. The Assessing Officer, however, treated the amount reflected in Form 26AS as taxable for the relevant assessment year and made an addition of ₹14,33,25,000.
The CIT(A) sustained the addition, observing that the assessee had alienated rights in the property by entering into the JDA, had received part consideration, and had given possession of the land for development. At the same time, the CIT(A) directed the Assessing Officer to allow the benefit of the purchase cost of the plots while computing the addition.
