Case Law Details
Pankaj Enterprises Vs JCIT (ITAT Mumbai)
Held that as per the agreement there was only permissible possession given to the developer and the same cannot be treated as transferred under section 2(47)(4).
Facts-
The assessee is a partnership firm and during relevant years shown income under various heads including “income from house property” and “income from other sources”. The assessee disclosed LTCG of ₹21,08,973/- on the sale of development rights of a plot of land. The assessee treated total sale consideration on transfer of interest in Development Agreement (DA) based on the cost of constructed area at 42% of ₹5,46,27,440/- including ₹4,28,96,000/- for allowing loading of TDR, which was claimed as exempt.
AO held that taxability of the capital gain arises in AY 2009-10 as possession of the land was given to the developer in previous year corresponding to AY 2009-10. He rejected the computation of LTCG and assessed the same on protective basis. The assessment for AY 2009-10 was reopened. AO assessed capital gain at ₹9,37,03,413/- on substantive basis.
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