MITA AICH,BARASAT, NORTH TWENTY FOUR PARGANAS vs. I.T.O., WARD-50(1),, KOLKATA

PER RAKESH MISHRA, ACCOUNTANT MEMBER:

This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2015-16 dated 12.08.2025. 1.1 The Registry has informed that the appeal is barred by limitation by 39 days. The assessee has filed a petition along with an affidavit for condonation of delay explaining the reasons that the assessment order and the subsequent notices were sent to the registered email address but the assessee was not made aware of the same by her accountant who had access to that email. The assessee came to know about the order only when a physical notice from the Income Tax Department was received by the assessee. The assessee requested the Bench to condone the delay since the delay caused was neither intentional nor deliberate. After perusing the same, we are satisfied that the assessee had a ITA No(s). 3008/KOL/2025 Assessment Year(s) 2015-16 reasonable and sufficient cause and was prevented from filing the instant appeal within the statutory time limit. We, therefore, condone the delay and admit the appeal for adjudication.

“1. The entire case has been reopened totally on the false premise that the assessee has sold immovable property which is absolutely wrong and this has been confirmed by NFAC, Delhi.

“7. DECISION: I have carefully considered the facts of the case, the assessment order, written submission of the appellant and materials on records. Also, the judgements and decisions of High Courts, tribunals and various judicial authorities relied on by the appellant have been carefully gone through. The facts of the case as perused from the order is that the case was reopened on the basis that the appellant had sold/transferred immovable property during the relevant financial year valued at Rs.54,68,250/-, but had not filed any return of income for the said assessment year. The AO observed that as per a registered Development Agreement dated 15.12.2014, the appellant along with four other co-owners had entered into a Joint Development Agreement (JDA) with M/s M.K. Construction. The market value of the property as per the agreement was Rs.1,36,70,625/-, and the appellant's share was computed at 1/5th, i.e., Rs.27,34,125/-, After allowing indexed cost of acquisition of Rs.2,79,961/-, Long-Term Capital Gain (LTCG) of Rs.24,54,164/- was computed and added to the appellant's income. I have carefully considered the assessment order, the statement of facts, and the submissions made in the grounds of appeal. a) It is undisputed that the appellant was a co-owner of the property and a signatory to the registered Development Agreement dated 15.12.2014. As per the law, a registered development agreement coupled with possession transfer to the developer amounts to a "transfer" within the meaning of ITA No(s). 3008/KOL/2025 Assessment Year(s) 2015-16 section 2(47)(v) read with section 53A of the Transfer of Property Act. Thus, capital gains are attracted in the year of such transfer. b) The appellant has admitted that she received a flat, shop, and godown space as consideration. The fact that she has not sold them subsequently is immaterial for computing capital gains under a development agreement. The capital gains are computed with reference to the value of the rights transferred at the time of agreement, not upon future sale of the constructed units. c) The AO has taken the value of the appellant's share as per the market value in the agreement and computed LTCG after allowing indexed cost of acquisition. In the absence of any contrary evidence, alternate valuation, or proof of lower consideration, the computation by the AO stands justified. d) The appellant failed to produce any evidence either during assessment or appellate proceedings to rebut the AO's findings or substantiate her claim of no taxable gain. Mere assertion that the JDA is not a sale deed cannot override the settled legal position. e) Judicial precedents:

Conclusion:-

In view of the above discussion, I find no merit in the appeal. The AO's action in assessing LTCG of Rs.24,54,164/- is confirmed.

The appeal is, therefore, dismissed. All Grounds of Appeal disposed off accordingly.”

Copy of the order forwarded to: