Case Law Details
ITO Vs State Bank of India Staff Vaibhav Co-op. HSG. Ltd. (ITAT Mumbai)
Conclusion: Since possession of land was not handed over to the Developer by assessee-society, therefore, there could not be any transfer within the meaning of section 2(47)(v) read with section 53A of Transfer of Property Act, 1882, even based on part performance of the contract. Accordingly. there was no liability of capital gain tax under section 50C.
Held: Assessee-cooperative society entered into a redevelopment agreement with Developers, whereby society authorized Developer to demolish the said Bungalows and reconstruct the new proposed building after utilizing the entire Floor Space Index (FSI) of the said property as well as maximum permissible Transferable Development Rights (TDR) FSI in respect of the said property. The payment of Rs 40 lakhs to the member was revised to Rs 52 lakhs besides a flat with 1300 sq.ft to each member along with two car parking areas vide Supplemental Development Agreement. Developer also agreed to pay each of the member rent for temporary alternate accommodation and refundable deposit and also agreed to provide Bank Guarantee of Rs 50 Crores and also provide Solvency Certificate for a sum of Rs 50 Crores. AO held that society entered into a redevelopment agreement for transferring of property being land of the society and the stamp duty valuation of the property was Rs. 34, 69, 55, 000/-therefore, assessee-society was liable for capital gain on the said transaction under the provisions of 50C. It was held that possession of land was not handed over to the Developer by assessee society. In fact developer had filed a suit for specific performance in 2014 which was still pending before High Court. Hence there could not be any transfer within the meaning of section 2(47)(v) read with section 53A of Transfer of Property Act, 1882, even based on part performance of the contract. Accordingly, there could not be any incidence of capital gains.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal in ITA No.5324/Mum/2016 and Cross Objection in CO No.8/Mum/2018 for A.Y.2011-12 arise out of the order by the ld. Commissioner of Income Tax (Appeals)-44, Mumbai in appeal No.CIT(A)44/ITO32(3)(3)/ITA.371/15-16 dated 16/06/2016 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 27/03/2015 by the ld. Pr. Commissioner of Income Tax-32, Mumbai (hereinafter referred to as ld. AO).
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