Signing of development agreement couldn’t trigger capital gains tax unless developer discharged his obligations

Section 2(47) of the Income-tax Act, 1961 - Capital gains - Transfer (Land development agreement) - Assessment year 2006-07 - During relevant year, assessee entered into a development agreement of land with a developer in terms of which developer had to develop property according to approved plan and deliver 38 per cent of constructed area to assessee - Assessing Officer opined that since transfer had taken place in terms of development agreement-cum-GPA, assessee was liable to pay capital gain tax in assessment year in question - Whether in view of fact that developer had not done anything to discharge obligations cast on it, capital gains could not be brought to tax in year under appeal merely on basis of signing of development agreement - Held, yes - Whether, therefore, impugned addition deserved to be deleted - Held, yes [Para 12] [In favour of assessee]

Refer:[2014] 45 taxmann.com 115 (Hyderabad - Trib.)
IN THE ITAT HYDERABAD BENCH 'B'
Binjusaria Properties (P.) Ltd.