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Facts
The assessee filed a belated appeal against the CIT(A)'s order upholding the AO's addition of long-term capital gains. The assessee entered into a Joint Development Agreement (JDA) for their land, receiving a share in the constructed area as consideration. The AO reopened the case and computed capital gains based on the value of the constructed area.
Held
The Tribunal held that capital gains are taxable upon the transfer of development rights, even if the property is under construction. The consideration includes the share of the constructed area, not just monetary payment. The date of JDA execution is considered the transfer date. However, the indexed cost of acquisition was not properly allowed by the AO.
Key Issues
Whether capital gains arising from a Joint Development Agreement are taxable in the year of execution and whether the indexed cost of acquisition should be allowed.
Sections Cited
2(14), 2(47)(v), 45(5A), 133(6), 144, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PATNA ‘DB’ BENCH, KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
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 ‘the Ld. CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2016-17 dated 19.02.2024. 1. 1. The Registry has informed that the appeal is barred by limitation by 342 days. The assessee has filed a petition for condonation of delay explaining the reasons. After perusing the same, we are satisfied that the assessee had a 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. ITA No.: 168/PAT/2025 Assessment Year: 2016-17 Sunil Kumar.
The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. For that the grounds of appeal hereto are without prejudice to each other. 2 For that in the facts and circumstances of the case the learned CIT(A) has erred in calculation of assessed income without considering the facts of case.
For that the assessee has neither concealed the particulars of income nor furnished inaccurate particulars thereof.
For that Assessee Don't get any possession of Property and neither Sold Any Property.
For that there is no guilt alleged to have been committed.
For that the income of Rs. 478870/- is disclosed in the return of income. At no stretch of imagination the amount of Rs. 6289418/- can constitute the concealed income.
For that in cash or Bank mode No Consideration has been received by the assessee.
That in view of the above it is respectfully submitted that the assessed amount as sustained by the learned CIT(A) is arbitrary, unjustified, void ab- initio and bad in law.
For that the appellant reserves his right to file detailed submission at the time of hearing.
For that the appellant craves leave to urge, add or alter any other ground or grounds at the time of hearing.”
Brief facts of the case are that the assessee is an individual and had filed the return of income for the A.Y. 2016-17 belatedly disclosing only Income from House Property at Rs.3,67,610/-. The case was reopened on the basis of information available with the Revenue, which was received from the office of the