Case Law Details
Sri Suresh C. Vs Dy. CIT (ITAT Bangalore)
Perusal of the records shows that assessee entered into a JDA on 20-01-2013 and a supplementary agreement dt. 23-02-2004 with the developer. The share of 27 flats which were to be allotted to assessee was identified and it is shown as Item No. 2 in Schedule-B of the supplementary agreement. The admitted factual position is that the sum of Rs. 1,46,15,100/- was received as consideration of 14 flats by the assessee for giving up his rights in favour of the developer. The said sum was received within a period of three years from the date of JDA. In such circumstances, the 14 flats on which rights were given up in favour of the developer by the assessee were held by assessee for a period of less than 36 months and therefore, those flats assume the character of ‘Short Term Capital Asset’. The act of giving of rights over those 14 flats would amount to a transfer and since such transfer is of a Short Term Capital Asset, the gain on such transfer was rightly assessed by the Revenue authorities as STCG.
FULL TEXT OF THE ITAT JUDGEMENT
This is an appeal by the assessee against the order dated 29-07-2013 of the Commissioner of Income Tax (Appeals)-LTU, Bangalore, relating to Assessment Year 2006-07.
2. The assessee is an individual. He owned property in Bangalore in S.No.151/2A, Vibbhutipura Village, K.R.Puram, Bangalore being land measuring 1 Acre and 6 Guntas (hereinafter referred to as ‘the property’). He entered into a Joint Development Agreement (JDA) dated 20-01-2003 with M/s. Ittina Properties Pvt.Ltd. for carrying out development over the land owned by her by constructing flats. As per the JDA, the assessee was to get 27 flats as his share of built up area in consideration for transferring 70% undivided share of property. Out of the 27 flats, the Assessee retained for himself 13 flats and sold the remaining 14 flats to the Developer for a consideration of Rs1,46,15,100/-. The sale of 14 flats to the developer by the Assessee admittedly gave raise to Short term Capital Gain (STCG). On acquiring 13 flats under JDA the gain was admittedly Long Term Capital Gain (LTCG). The dispute raised in the various grounds of appeal before the Tribunal is with regard to computation of STCG and LTCG.
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