Case Law Details
Smt. Vani Shree Vs ITO (ITAT Bangalore)
Conclusion: Assessee had given permissive possession and not ‘legal possession’, as contemplated within the meaning of section 53A of the Transfer of Property Act. Therefore, the provisions of section 53A of the Transfer of Property Act, were not applicable to the impugned Joint Development Agreement and the conditions laid down in section 2(47)(v), could not be invoked, so as to bring the capital gains into tax in the assessment year 2012-2013.
Held: During the assessment proceedings, assessee contended that the long term capital gains of Rs.2,16,39,500/- was to be assessed in A.Y. 2012-13 as the JDA was entered into on 05/12/2011. AO held that the assessee had changed her stand that the capital gains was assessable in A.Y. 2015-16 with the intention to escape the restrictive provisions of the amended section 54F since she was due to receive more than one residential apartment from the developer. Accordingly, AO rejected the assessee’s contention seeking to withdraw/delete/remove the long term capital gains from the income declared in the return filed for A.Y. 2015-16. He then added back the exemption claimed u/s 54F amounting to Rs.1,99,07,549/- to the assessee’s returned income. Aggrieved by the order of AO, assessee preferred appeal before CIT(A). Assessee primarily alleged that permission might be granted to assessee to withdraw the offer of capital gain in the year 2015 which was made by assessee in its return of income and the capital gains may be taxed for A.Y. 2012-13. Assessee also alleged against denying the claim of exemption on the ground that assessee had not taken the possession of any residential apartment during the year under consideration. It was held that provisions of section 53A of the Transfer of property Act would show that, the transferee should have taken possession in part performance of the contract and had done some act in furtherance of the contract. In the instant case, development agreement clearly specified that the possession of the property was not given, and what was given was only license to enter the property. In the instant case assessee had given permissive possession and not ‘legal possession’, as contemplated within the meaning of section 53A of the Transfer of Property Act. Hence, it is held that, the provisions of section 53A of the Transfer of Property Act, were not applicable to the impugned Joint Development Agreement. Therefore, the conditions laid down in section 2(47)(v), could not be invoked, so as to bring the capital gains into tax in the assessment year 2012-2013.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
Present appeal is filed by the assessee against order dated 05.12.2018 passed by the Ld.CIT(A)-6, Bangalore for A.Y. 2015-16 on following grounds of appeal:
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