ADDISON & COMPANY LTD.,CHENNAI vs. DCIT, CORP. CIRCLE-1(1), CHENNAI

ITA 2946/CHNY/2026Status: DisposedITAT Chennai08 October 2026AY 2021-2211 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the handing over of the 16 flats by the developer to the assessee did not constitute a fresh transfer giving rise to long-term capital gains in AY 2021-22. The Tribunal reasoned that these flats formed part of the 30% share of the built-up area to which the assessee was already entitled under the JDA. The supplementary agreement dated 20.08.2020 merely changed the mode of satisfaction of this existing entitlement, from remittance of sale proceeds to delivery of the flats. The AO himself noted that the supplementary agreement did not materially change the original transaction except the mode of consideration. The Tribunal found that the consideration for the land transferred in AY 2010-11 had already been taxed and settled under the DTVSV. Taxing the handing over of these flats would amount to taxing the same consideration twice. The Tribunal also noted that the capital gains offered in the original return were inadvertently made and corrected through the revised return. The reliance on TDS by the developer was considered a compliance by the payer and not determinative of income in the hands of the assessee. The Tribunal directed the AO to delete the addition of Rs. 2,41,57,554/-.

What were the facts?

The assessee, Addison & Company Ltd., filed its return for AY 2021-22 declaring income of Rs. 9,37,23,040/-. The assessee owned land and entered into a Joint Development Agreement (JDA) with Godrej Properties Ltd. in 2009. Under the JDA, the assessee conveyed 70% undivided interest in the land and was to receive 30% of the built-up area (4,80,000 sq. ft.). The developer was authorized to sell the assessee's share. For AY 2010-11, long-term capital gains (LTCG) on the transfer of land were assessed. The assessee settled this issue under the Direct Tax Vivad-se-Viswas Scheme, 2020 (DTVSV) by paying LTCG tax. In the revised return for AY 2021-22, the assessee did not offer capital gains, stating that the consideration was already taxed. The Assessing Officer (AO) made an addition of Rs. 2,41,57,554/- towards LTCG. The CIT(A) confirmed the addition. The assessee appealed to the ITAT.

What were the issues?

1. Whether the handing over of 16 flats, measuring 18,465 sq. ft., by the developer to the assessee constitutes a transfer giving rise to long-term capital gains in AY 2021-22, given that this area represents the assessee's share of the built-up area under the JDA? Assessee's Contention: The assessee argued that the 16 flats handed over by the developer were part of its 30% share of the built-up area, for which consideration was already offered to tax under the DTVSV scheme. The supplementary agreement only changed the mode of consideration, not the original transaction. The handing over of flats was not a fresh transfer, and taxing it would amount to double taxation. Revenue's Contention: The revenue, through the AO, contended that the handing over of possession of the land to the developer was a transfer in AY 2010-11. However, the acquisition of 16 flats in the current year was a consideration for the land transferred earlier. The AO also relied on TDS made by the developer under Section 194IA and the fact that the assessee initially offered capital gains in the original return. The AO viewed the receipt of flats as a fresh consideration.

Which sections of the Income-tax Act were involved?

Section 2(47),Section 45,Section 154,Section 143(3),Section 250,Section 194IA,Section 270A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI

Before: SHRI GEORGE GEORGE KAND MS. PADMAVATHY.S

For Respondent: Mr. Arjun Manic, Sr. A.R

PER PADMAVATHY.S, A.M: This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short "CIT(A)") passed u/s. 250 of the Income Tax Act, 1961 (in short "the Act") dated 19.03.2026 for Assessment Year (AY) 2021-22. 2. The assessee is a company and filed the return of income on 11.02.2022 for AY 2021-22 declaring income of Rs.9,37,23,040/-. The assessee owned land measuring 5,47,549 sq. ft. of which 4,35,382 sq

The order continues below.

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