DCIT Vs Minal Urmil Shah (ITAT Ahmedabad)
ITAT Ahmedabad held that the development rights in the land were not the land itself and, therefore, the provision of section 50C of the Income Tax Act was not applicable on transfer of development rights in the land.
Facts- The case of the assessee was reopened u/s.147 of the Act on the basis of information received by the AO that the assessee had not disclosed capital gain to the extent of Rs.3,89,25,000/-.
It transpired that a land was purchased by the assessee along with Smt. Hemlataben N Parmar for a consideration of Rs.1,45,75,000/-. Later on, the assessee and other co-owner Smt. Hemlataben N Parmar had given the rights of development of the said land to M/s. Sumangal Reality Creators, the partnership firm. M/s. Sumangal Reality Creators had undertaken a project named Shashwat Green and the project was started in the year 2011 and completed in 2014.
As per the agreement dated 23.11.2011 between M/s. Sumangal Reality Creators as first part and Smt. Minal U Shah & Smt. Hemalaben Parmar (land owners) as second part, the right in land was released in favour of M/s. Sumangal Reality Creators for development purpose for which Smt. Hemalataben Parmar was paid Rs.50,00,000/- and also allotted four flats namely B/103, B/202, B/303 and A/501, the consideration of which was Rs.93,40,000/-. Thus, the total consideration paid to Smt. Hemlataben N Parmar was Rs.1,43,40,000/-. AO determined the consideration and the balance amount of Rs.3,16,37,500/- was considered as short term capital gain in the hands of the assessee. Accordingly, the assessment was completed u/s 143(3) of the Act r.w.s 147 on 30.12.2019 at total income of Rs.3,22,47,110/-.
