Section 2(14) of the Income-tax Act, 1961 - Capital gain - Capital asset (Agricultural land) - Assessment year 2007-08 - Whether where assessee entered into a development agreement-cum-G.P.A with a company for development of its agricultural land into a housing project and said land was converted from agricultural purposes to non-agricultural purposes by taking approval of competent authority during year, said land no more remained agricultural land in terms of section 2(14)(iii) - Held, yes [Para 44] [In favour of revenue]
Section 2(47), read with section 45, of the Income-tax Act, 1961 and section 53A of the Transfer of Property Act, 1882 - Capital gains - Transfer (Land deals) - Assessment year 2007-08 - Whether when transferee, by its conduct and by its deeds, demonstrates that it is unwilling to perform its obligations under agreement during year, date of agreement ceases to be relevant and it is only actual performance of transferee's obligations that can give rise to situation envisaged in section 53A - Held, yes - Assessee entered into a development agreement with a builder for development of its agricultural land into housing project - Assessing Officer brought said transaction to tax under section 45 holding that land was capital asset - It was found that construction of building had not started as building approval was granted at end of relevant year - No consideration had been passed on between builder and assessee and, thus, required cost of acquisition by builder was not incurred - Further, builder had not taken any steps in performance of agreement and, thus, had not performed its obligation under agreement - Whether on these facts, said agreement could not be said to be a contract as referred to in section 53A and, accordingly, provisions of section 2(47)(v) could not be invoked and no capital gains could be charged during relevant year - Held, yes [Paras 58 & 59] [In favour of assessee]
Refer:[2014] 46 taxmann.com 313 (Hyderabad - Trib.)
IN THE ITAT HYDERABAD BENCH 'B'
Fibars Infratech (P.) Ltd.
v.
Income-tax Officer, Ward -1(2), Hyderabad
Section 2(47), read with section 45, of the Income-tax Act, 1961 and section 53A of the Transfer of Property Act, 1882 - Capital gains - Transfer (Land deals) - Assessment year 2007-08 - Whether when transferee, by its conduct and by its deeds, demonstrates that it is unwilling to perform its obligations under agreement during year, date of agreement ceases to be relevant and it is only actual performance of transferee's obligations that can give rise to situation envisaged in section 53A - Held, yes - Assessee entered into a development agreement with a builder for development of its agricultural land into housing project - Assessing Officer brought said transaction to tax under section 45 holding that land was capital asset - It was found that construction of building had not started as building approval was granted at end of relevant year - No consideration had been passed on between builder and assessee and, thus, required cost of acquisition by builder was not incurred - Further, builder had not taken any steps in performance of agreement and, thus, had not performed its obligation under agreement - Whether on these facts, said agreement could not be said to be a contract as referred to in section 53A and, accordingly, provisions of section 2(47)(v) could not be invoked and no capital gains could be charged during relevant year - Held, yes [Paras 58 & 59] [In favour of assessee]
Refer:[2014] 46 taxmann.com 313 (Hyderabad - Trib.)
IN THE ITAT HYDERABAD BENCH 'B'
Fibars Infratech (P.) Ltd.
v.
Income-tax Officer, Ward -1(2), Hyderabad
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