MALTI DEVI,PATNA vs. INCOME TAX OFFICER, ARA

ITA 230/PAT/2026Status: DisposedITAT Patna19 August 2026AY 2016-1714 pages
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What did the Tribunal hold?

The Tribunal held that the mere execution of a registered JDA does not constitute a 'transfer' under Section 2(47) of the Income Tax Act, 1961, if possession and construction are not completed. Therefore, capital gains are not taxable in the year of JDA execution.

What were the facts?

The assessee entered into a Joint Development Agreement (JDA) for land development. The Revenue treated the execution of the JDA as a 'transfer' and computed capital gains for the assessment year 2016-17, despite no construction or possession handover occurring in that year. The assessee received possession of their share much later.

What were the issues?

Whether the execution of a Joint Development Agreement without possession or construction constitutes a 'transfer' for capital gains tax purposes in the year of agreement. Whether capital gains are taxable in the year of JDA execution or in the year of actual possession/completion.

Which sections of the Income-tax Act were involved?

Section 2(47),Section 147,Section 150,Section 54F

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Income Tax Appellate Tribunal, PATNA BENCH, PATNA

For Appellant: Shri Sudeep Sinha, Advocate
For Respondent: Shri Ravi Kant Chowdhary, Sr. DR
Hearing: 30.06.2026Pronounced: 19.08.2026

PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER

This is an appeal filed by the assessee against the order passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “the Ld. CIT(A)] dated 24.09.2025, DIN & order No. ITBA/NFAC/S/250/2025-26/1081121351(1) on the following grounds of appeal:

2 “1. For that the order passed by the Ld. CIT(A) is bad in law and on facts and is liable to be set aside.

2.

For that the Ld. CIT(A) has erred in holding that execution of Joint Development Agreement dated 03.09.2015 constitutes a "transfer" under section 2(4

The order continues below.

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