Dilip Anand Vazirani Vs ITO (ITAT Mumbai)
Material Facts
The assessee appealed against the order of the CIT(A) for AY 2001-02 challenging the assessment of capital gains in that year and the computation thereof. The property in question originated from compensation proceedings under the Displaced Persons (Claim and Rehabilitation) Act, 1954 relating to property left in Pakistan after Partition. Following prolonged litigation before the Bombay High Court and the Supreme Court, the Settlement Commission finally allotted the property to the legal heirs on 24.04.2000 and possession was handed over on 15.05.2000.
The assessee had entered into various memoranda of understanding with developers from 1994 onwards. A development agreement with Murli Realtors was executed on 25.09.2000. The assessee subsequently purchased tenancy rights from occupants between 2000 and 2005, received substantial consideration in 2005, handed over possession during that period according to his case, and ultimately executed the sale deed on 19.05.2007. The assessee offered the capital gains in AY 2005-06.
Procedural History
Following a survey in the case of Murli Realtors, the Assessing Officer reopened the assessment under Section 148. The AO held that execution of the development agreement dated 25.09.2000 constituted transfer under Sections 2(47)(v) and 2(47)(vi) and assessed short-term capital gain of ₹4,60,71,721 in AY 2001-02. The CIT(A) upheld the assessment by holding that the development agreement, quantified consideration, part receipt of consideration and handing over of possession amounted to transfer under Section 2(47) read with Section 53A of the Transfer of Property Act. The assessee appealed before the ITAT.
Legal Issues
The Tribunal considered:
