Manohar Reddy Cheruku Vs DCIT (ITAT Hyderabad)
ITAT Hyderabad — No Transfer Under JDA in Absence of Consideration & Possession u/s 53A
The assessee executed a Joint Development Agreement on 19.01.2016 but had not received any consideration whatsoever during the year. The possession, if any, was given only for the limited purpose of facilitating the developer to undertake construction, and not in the nature of possession contemplated under section 2(47)(v) read with section 53A of the Transfer of Property Act. The Ld. AO invoked section 45(1) and made an addition of Rs. 3,65,904/- towards long-term capital gain, which was upheld by the Ld. CIT(A). The Tribunal relied on paras 17 & 18 of the Hon’ble Telangana High Court decision in Smt. Shantha Vidyasagar Annam, which holds that where consideration has not been paid and possession has not been handed over under section 53A, no transfer can be said to have occurred. As the Revenue brought no material on record to show consideration or possession beyond development purposes, the very foundation of invoking section 45 fails. Accordingly, the ITAT deleted the addition and allowed the appeal.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
This appeal is filed by Shri Manohar Reddy Cheruku (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals)-12, Hyderabad (“Ld. CIT(A)”) dated 24.09.2025 for the A.Y.2016-17.
