Smt. Shantha Vidyasagar Annam Vs ITO (Telangana High Court)
In the recent ruling HC of Telangana have held that assessee is eligible to claim capital gain after observing that the possession of the immovable property has not been handed over to the developer as contemplated u/s 53A of the Transfer of the Property Act, 1882.
Assessee is NRI who filed return at nil in response to notice u/s 148. Assessee stated that she had entered into a development agreement with a builder for construction of residential flats on sharing basis. As possession of the land was handed over to the builder only for the purpose of construction hence the same was not a transfer within the meaning of Section 2 (47) (V) read with Section 53 of the Transfer of Property Act, 1882. Also, consideration was also not received. Hence, according to assessee, she is not liable to for any capital gain. AO issued SCN after determination of the long term capital gain arising out of transaction at Rs. l3,78,900/-. Assessee submitted that built up area was received from builder from the year 1999 onwards and also assessee received 6560 square feet of residential build up area on surrender of her land measuring 570 square yards. Hence, assessee is eligible claim exemption under Section 54F as consideration can be said to have been re-invested in residential house property. AO held that development agreement is a transfer within the meaning of Section 2 (27) hence assessee is not entitled to benefit of section 54. AO determined taxable capital gain at Rs. 13,78,900/-. CIT (A) Affirmed order passed by AO. On further appeal ITAT dismissed appeal too.
