Case Law Details
Gajanan Parshuram Khismatrao Vs ITO (ITAT Mumbai)
ITAT Mumbai held that land was transferred to the builder/ developer at the time of execution of Development Agreement i.e. 18/01/2008 and accordingly, the same cannot be taxed in the year of agreement of sale i.e. A.Y. 2010-2011.
Facts- During the proceedings u/s. 147 of the Act, it was noticed that the immovable property has been sold for Rs.34,56,000, as against the market price of Rs.5,11,93,000, and the assessee has not offered any income under the head capital gains for taxation, since it did not file any return of income for the year under consideration.
Accordingly, the assessee was asked to show cause as to why Rs.5,11,93,000, should not be treated as capital gain shown by the assessee during the year under consideration. Assessee submitted that the land was sold on 18/01/2008, and therefore no addition can be made in the year under consideration.
AO vide order dated 30/11/2017, passed u/s. 143(3) read with section 147 of the Act did not agree with the submissions of the assessee and held that although the assessee entered into a Development Agreement on 18/01/2008, however, the actual sale deed was executed on 30/03/2010, that is during the relevant previous year. AO, by applying the provisions of section 50C of the Act, adopted the amount of Rs.5,11,93,000, as the full value of the consideration received by 18 co-owners for the sale of immovable property vide registration agreement dated 30/03/2010. As a result, the AO made an addition of Rs.28,44,056/-.
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