Sathi Guha Vs ITO (ITAT Kolkata)
The assessee appealed against the order of the Commissioner of Income Tax (Appeals), NFAC, dated 17.01.2025, challenging the addition of ₹7,08,198 as Long Term Capital Gain (LTCG) arising from a Joint Development Agreement (JDA) relating to co-owned land and the addition of ₹1,23,750 under the head “Income from Other Sources.”
The assessment was reopened under Sections 147/148 on the basis of information received from the Directorate of I & CI, Kolkata that the assessee and other co-owners had entered into a registered Joint Development Agreement with M/s Balaji Inc. and had allegedly handed over possession of the land to the developer on 14.08.2013 with 50% allocation to the developer. According to the Assessing Officer, the co-owners had relinquished rights in 50% of the land, giving rise to LTCG in Assessment Year 2014-15. Based on the District Sub-Registrar’s valuation, the Assessing Officer determined that the assessee’s 13.05% share of the property corresponded to ₹7,08,198, which was brought to tax as long-term capital gain. The relocation amount of ₹1,23,750 received by the assessee was assessed as income from other sources, resulting in a total assessed income of ₹8,31,948.
During the assessment proceedings, the assessee contended that Section 2(47)(v) of the Income-tax Act read with Section 53A of the Transfer of Property Act, 1882, was not attracted because there was no transfer of possession in the legal sense. According to the assessee, the developer was merely authorised to construct a residential building on the land and to undertake activities necessary for obtaining approvals. It was also submitted that there was no transfer of ownership through a registered conveyance and that the amount actually received represented reimbursement for relocation expenses. Reliance was placed on judicial decisions, including those of the Supreme Court, to contend that no transfer had taken place.
