Naveen Kumar Musinipally Vs ADIT (ITAT Hyderabad)
Assessee is a non-resident Indian who entered into a Joint Development Agreement (JDA) cum GPA on 30.12.2015 with M/s Giridhari Homes Pvt. Ltd. for development of land, agreeing to share built-up area in the ratio 47:53. AO invoked section 153C based on seized material from search on a third party & computed long term capital gains of ₹5.73 crore in AY 2016-17, treating JDA as “transfer” u/s 2(47)(v) r.w.s. 53A. AO adopted SRO value & denied exemption u/s 54F. CIT(A) upheld jurisdiction & capital gains for AY 2016-17 but allowed 54F deduction for one flat & adopted SRO value of ₹5,000 per sq. yard instead of ₹7,000 claimed by Assessee.
On appeal, Assessee raised (i) legal ground-assessment void for lack of transfer order u/s 127, as original notice was by ACIT Intl. Tax New Delhi, & (ii) factual ground—no transfer took place in AY 2016-17 as only limited permission for development was given without handing over legal possession or receiving consideration. Assessee also argued capital gains had already been offered in AY 2019-20 when construction completed & possession of flats was actually received, hence taxing again in AY 2016-17 leads to double taxation.
