ACIT, Central Circle-5, Hyderabad V. Smt. R Venkataramani, Hyderabad

ITA 101/HYD/2014

• Counselvise Citation: 10122514 RSA 2014
• Duration Of Justice: 1 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 27-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMAKRISHNA BANDI
• Assessee Lawyers: K C DEVDASA SRINIVAS
• Keywords: Capital asset; Cost of acquisition; Competent authority
• Section: 2(14)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER SL.NO. ITA NO. AY ASSESSEE RESPONDENT 1 100/H/14 2008-09 ASST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 5, HYD. SMT. N. SAROJINI, HYDERABAD. PAN ALCPN0953C 2 101/H/14 2008-09 -DO- SMT. R. VENKATARAMANI, HYDERABAD PAN AJKPR 7456E REVENUE BY SHRI RAMAKRISHNA BANDI ASSESSEE BY S/SHRI K.C. DEVDAS/A. SRINIVAS DATE OF HEARING 24-02-2015 & 25/02/2015 DATE OF PRONOUNCEMENT 26-02-2015 O R D E R PER ASHA VIJAYARAGHAVAN, J.M.: THESE APPEALS BY THE REVENUE, IN RESPECT OF TWO ASS ESSEES, ARE DIRECTED AGAINST SEPARATE ORDERS OF LD. CIT(A)-VII, HYDERABAD, BOTH, DATED 29/11/2013 FOR AY 2008-09. ITA NO. 100/HYD/2014 IN CASE OF SMT. N. SAROJINI 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLO WING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE CIT(A) ERRED IN HOLDING THAT CAPITAL GAINS ON ACCOU NT OF DEVELOPMENT AGREEMENT ENTERED INTO BY THE ASSESSEE WITH M/S AMSRI DEVELOPERS PVT. LTD. ON 04/05/2007 DID NOT AR ISE IN AY 2008-09. 2 ITA NO. 100 & 101/HYD/2014 SMT. N. SAROJINI& SMT. R. VENKATARAMANI 2. THE ASSESSEE PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE AO BE RES TORED. 3. BRIEFLY THE FACTS OF THE CASE ARE, IN COURSE OF THE SEARCH PROCEEDINGS IN THE CASE OF SRI VENIGALLA ANAND PRAS AD, BHAVYA CEMENTS, BHAVYA CONSTRUCTIONS AND OTHER RELATED PAR TIES ON 07/10/2009, CERTAIN DOCUMENTS/PAPERS RELATING TO SM T. N. SAROJINI, THE ASSESSEE WERE FOUND. A NOTICE DATED 30/08/2010 U/S 153C OF THE IT ACT WAS ISSUED AND ASSESSEE FILED RETURN IN RESPONS E TO THIS NOTICE ON 12/11/2010. IN THE RETURN FILED IN RESPONSE TO THE NOTICE U/S 1 53C, THE INCOME RETURNED WAS RS 6,17,630/-, WHICH INCLUD ED ITEMS ADMITTED IN COURSE OF SEARCH PROCEEDINGS TO THE TUN E OF RS.3,61,861/- (PENSION OF 1,06,642/- UNDER THE HEAD 'SALARIES' & INTEREST INCOME OF RS.2,55,219/- UNDER THE HEAD 'IN COME FROM OTHER SOURCES') APART FROM THE INCOME FROM HOUSE PR OPERTY TO THE TUNE OF RS 2,55,766/- IN THE COMPUTATION STATEMENT THE ASSESSEE HAD NOT DISCLOSED ANY INCOME TOWARDS CAPITAL GAINS ON ACCOUNT OF THE DEVELOPMENT AGREEMENT SHE HAD ENTERED INTO. 4. THE RELEVANT FACTS AS NOTED BY THE ASSESSING OFF ICER IN HIS ORDER, WHICH ARE SUMMARIZED BY THE CIT(A) IN HIS OR DER ARE AS UNDER: I) THE ASSESSEE HAD PURCHASED 9 ACRES 8 GUNTAS IN SURVEY NO.673/1 (AC 1.20 GTS), SURVEY NO.665 (4 AC 28 GTS), SURVEY NO.668 (2 AC.11 GTS) AND SURVEY NO.669 (0.29 GTS) SITUATED AT DUNDIGAL, RR DIST, FOR AN AMOUNT OF RS. 9,88,800/- THROUGH REGISTERED SALE DEED DATED 20.12.2004, IN D OCUMENT NO.16953/2004. II) ASSESSEE SOLD 1 ACRE 8 GUNTAS OUT OF THE ABOVE 9 AC RES 8 GUNTAS TO M/S VARUN CONSTRUCTIONS THROUGH THE SALE CUM GPA DATED 12.03.2007 IN DOCUMENT NO. 4963/2007, FOR AN AMOUNT OF RS. 1,20,00,000 . THE BALANCE 8 ACRES WERE GIVEN TO M/S AMSRI 3 ITA NO. 100 & 101/HYD/2014 SMT. N. SAROJINI& SMT. R. VENKATARAMANI DEVELOPERS THROUGH A DEVELOPMENT AGREEMENT ALONG WI TH 3 OTHERS. III) THE ASSESSEE HAD PURCHASED AND TRANSACTED IN THE LA ND WHICH WAS CONTIGUOUS TO THE LAND PURCHASED AND SIMILARLY TRANSACTED BY M/S BHAVYA CONSTRUCTIONS PVT LTD (BCPL), SRI V ANAN DA PRASAD (MD OF BCPL), AND OTHER INDIVIDUALS, WHO ALL, LIKE THE ASSESSEE- ASSESSEE, WERE THE INVESTORS IN MLS BHAVYA CEMENTS PVT LTD, A COMPANY SET UP BY SRI V ANANDA PRASAD. ALL THESE PE RSONS (34 PERSONS INCLUDING THE ASSESSEE) HAD HAD JOINTLY ENT ERED INTO A DEVELOPMENT AGREEMENT WITH M/S AMSRI DEVELOPERS FOR THE DEVELOPMENT OF THEIR LANDS TOTALING 123 ACRES AND 0 5 GUNTAS. IV) THE DEVELOPMENT AGREEMENT CUM GPA IN DOC. NO 7110 A ND DATED 04/05/2007 WAS SIGNED BY THE 34 PEOPLE. M/S A MSRI DEVELOPERS HAD GIVEN AN AMOUNT OF RS 13 LAKHS PER A CRE AS REFUNDABLE SECURITY DEPOSIT IN FURTHERANCE OF THE D EVELOPMENT AGREEMENT. AS PER THE REGISTERED DOCUMENT, THE MARK ET VALUE OF THE ENTIRE PROJECT REFERRED WAS RS 720 CRORES AND W ITH THE SHARING RATIO OF 35% TO THE LAND OWNERS ON THE BUILT UP ARE A AND UNDIVIDED LAND. V) IN THE ASSESSMENT ORDER, THE AO DEALT WITH THE STAT EMENT RECORDED FROM SRI ANANDA PRASAD, THE MD OF M/S BHAV YA CONSTRUCTIONS PVT LTD AND PROCEEDED TO ANALYZE THE PROVISIONS OF SECTION 2C 47)(V) R. W SECTION 45 . IN THE EXTRACT OF SUBMISSIONS OF ASSESSEE GIVEN ON PAGE 2, IT IS ALSO SEEN THAT THE ASSESSEE SUBMITTED THAT THE ASSESSEE AND OTHERS ARE CONTEMPL ATING FILING OF A SUIT FOR CANCELLATION OF DEVELOPMENT AGREEMENT AS THERE WAS NO PROGRESS WHATSOEVER EVEN AFTER 4.5 YEARS. 5. FINALLY, THE AO RELYING UPON FEW CASE LAWS, CAM E TO THE CONCLUSION THAT CAPITAL GAINS ACCRUED TO THE ASSESS EE AND OTHER 33 PERSONS AND, HENCE, PROCEEDED TO TAX THE CAPITA L GAINS ON ACCOUNT OF THE DEVELOPMENT AGREEMENT. ACCORDINGLY, THE RESULTANT 4 ITA NO. 100 & 101/HYD/2014 SMT. N. SAROJINI& SMT. R. VENKATARAMANI CAPITAL GAINS COMPUTED IN THE HANDS OF ASSESSEE AT RS. 18,96,08,900. AGGRIEVED BY THE ORDER OF ASSESSING O FFICER, ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE CIT(A). 6. BEFORE THE CIT(A), IT WAS STATED THAT THERE WAS NO DEVELOPMENT ACTIVITY ON BEHALF OF THE DEVELOPER AND HENCE THE ASSESSEE AND OTHERS HAD FILED A CASE FOR CANCELLATI ON OF THE DEVELOPMENT AGREEMENT. DETAILS OF COURT CASES WERE ALSO CALLED FOR AND THE COPY OF THE PETITION FILED IN THE COURT WAS SUBMITTED. THE ASSESSEE / COUNSEL ALSO FILED TWO DETAILED PAPE R BOOKS IN COURSE OF THE HEARING ENCLOSING WRITTEN ARGUMENTS A ND APPLICABLE CASE LAWS WHICH WERE REFERRED BY THE COUNSEL IN THE SUBMISSIONS MADE. RELYING ON VARIOUS CASE LAWS, IT WAS SUBMITTE D THAT THE DEVELOPMENT AGREEMENT ITSELF CANNOT BE CONSIDERED U /S 2(47), AND THAT CAPITAL GAINS CANNOT BE LEVIED WHEN THE COMPUT ATION MECHANISM FAILS. FOR THIS PROPOSITION, AR OF ASSESS EE RELIED ON THE DECISION OF COORDINATE BENCH OF HYDERABAD IN CA SE OF SMT. RADHIKA AND OTHERS, 47 SOT 180 TO CLAIM THAT CAPITA L GAINS DO NOT ARISE ON THE DATE OF TRANSFER ON 04/05/2007. IT W AS ALSO STATED THAT THE ASSESSING OFFICERS PREMISE THAT THERE WAS POSTPONEMENT OF TAX LIABILITY IS INCORRECT AS NO INCOME ACTUALLY AROSE TO THE ASSESSEE DURING THE YEAR. THE AR OF THE ASSESSEE VI DE SUBMISSIONS FILED ON 10/09/13 ALSO ENCLOSED COPY OF THE ORDER OF THE CIT(A)-V, DATED 03/10/12 IN THE CASE OF BHAVYA CONSTRUCTIONS PVT. LTD. WHEREIN IT WAS HELD THAT THE TRANSFER TA KES PLACE ONLY WHEN THE CONSTRUCTED AREA IS GIVEN TO THE OWNERS. 7. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) DISCUSSED THE ISSUE IN DISPUTE ELABORATELY W ITH VARIOUS CASE LAWS VIDE PARA NOS. 15 TO 23 AND FINALLY HELD AS UNDER: 24. ON FURTHER CLICKING THE PROJECT ON THIS WEBSITE , , THE ONLY DESCRIPTION AVAILABLE IS:-' THE PROJECT IS BEING IM PLEMENTED AT BOWRAMPET, HYDERABAD, ADJACENT TO OUTER RING ROA D AS AN INTEGRATED TOWNSHIP SPREAD OVER AN AREA OF 260 ACRE S. THIS 5 ITA NO. 100 & 101/HYD/2014 SMT. N. SAROJINI& SMT. R. VENKATARAMANI IS PROPOSED AS A MODERN TOWNSHIP COMPLETE WITH RESI DENTIAL, COMMERCIAL, RETAIL, ENTERTAINMENT AND SCHOOLING FAC ILITIES FOR THE RESIDENTS.' THE COPIES OF WEBSITE PAGES (2 NOS. ) ARE OVERLEAF. THE BUILT UP AREA DETAILS ARE MENTIONED AS : - 'TO BE ANNOUNCED' THE APPROXIMATE SFT PRICE IS ALSO GIVEN AS 'TO BE ANNOUNCED'. 25. THE ABOVE LENDS CREDIBILITY TO THE STAND OF ASSESSE E THAT THERE WAS NO WILLINGNESS OR PART-PERFORMANCE ON PAR T OF THE DEVELOPER DURING THE RELEVANT PREVIOUS YEAR OR EVEN FOR NEXT 4 YEARS FINALLY LEADING TO COLLAPSE OF THE AGREEMEN T WHEN A SUIT SEEKING ITS CANCELLATION IS FILED AND IS PRESE NTLY IN COURT. 26. IT IS ALSO SEEN THAT APART FROM THE RS 13 LAKH PER ACRE THAT THE ASSESSEES AND OTHERS RECEIVED AS REFUNDABLE SEC URITY DEPOSIT, THERE WAS NO FURTHER PAYMENT. SINCE 2007 M AY, THERE WAS NO FURTHER MOVEMENT AND NO WILLINGNESS OF THE DEVELOPER TO DO HIS PART OF THE DEAL COULD BE SEEN. I AM THEREFORE CONSTRAINED TO HOLD THAT NO CAPITAL GAINS ARISE TO THE ASSESSEE IN THE YEAR 2008-09 BASED ON THIS DEVELOPMENT AGREEMENT WHICH TURNED OUT TO BE A NON- STARTER. CONSEQUENTLY, THERE IS NO INCOME TO BE TAX ED AS CAPITAL GAINS ON ACCOUNT OF THE DEVELOPMENT AGREEME NT. AGGRIEVED, BY THE ORDER OF CIT(A), THE REVENUE IS I N APPEAL BEFORE US. 8. THE LEARNED DR RELYING ON THE ORDER OF ASSESSIN G OFFICER SUBMITTED THAT AS THE ASSESSEE HAS HANDED OVER POSSESSION OF THE PROPERTY ON THE DATE OF ENTERING INTO DEVELOPMENT A GREEMENT THERE WAS TRANSFER WITHIN THE MEANING OF SECTION 2(47)(V) OF THE ACT. 9. THE LEARNED AR ON THE OTHER HAND STRONGLY SUPPORTIN G THE ORDER OF THE CIT(A) SUBMITTED THAT THOUGH THE ASSESSEE HA D ENTERED INTO THE DEVELOPMENT AGREEMENT IN THE PREVIOUS YEAR RELATING TO THE AY UNDER DISPUTE, BUT, AS THE DEVELOPER HAS NEITHER PERFORME D NOR IS WILLING TO PERFORM HIS PART OF THE CONTRACT, THE DEVELOPMENT A GREEMENT FAILS. THE LEARNED AR REITERATING THE SUBMISSIONS MADE BEFORE THE CIT(A) 6 ITA NO. 100 & 101/HYD/2014 SMT. N. SAROJINI& SMT. R. VENKATARAMANI CONTENDED THAT EVEN AS ON DATE THERE IS NO DEVELOPM ENT ACTIVITY BY THE DEVELOPER. THE CONVERSION OF THE LAND FROM AGRI CULTURAL TO NON- AGRICULTURAL HAS ALSO NOT TAKEN PLACE. IT WAS SUBM ITTED THAT FOR THIS VERY REASON THE ASSESSEE ALONG WITH LAND OWNERS HAV E FILED A SUIT IN THE CITY CIVIL COURT FOR CANCELLATION OF THE DEVELO PMENT AGREEMENT, WHICH IS PENDING. IN THESE CIRCUMSTANCES, IT CANNO T BE SAID THAT THERE IS TRANSFER OF PROPERTY GIVING RISE TO CAPITAL GAIN . THE LEARNED AR SUBMITTED THAT AS DEVELOPER IS TOTALLY UNWILLING TO PERFORM HIS PART OF CONTRACT, THE CONDITIONS OF SECTION 2(47)(V) READ W ITH SECTION 53A OF THE TP ACT, IS NOT FULFILLED. IN SUPPORT OF SUCH CO NTENTION THE LEARNED AR RELIED UPON A DECISION OF THE ITAT, HYDERABAD IN CASE OF SMT. K. RADHIKA AND OTHERS V. DCIT (SUPRA) AND A RECENT DEC ISION OF ITAT, HYDERABAD B BENCH IN CASE OF BINJUSARIA PROPERTIE S LTD VS. ACIT, DATED 04/04/2014. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIALS ON RECORD ALONG WITH THE ORDERS PASSE D BY THE REVENUE AUTHORITIES. SIMILAR ISSUE CAME UP FOR CONSIDERATI ON BEFORE US IN CASE OF M/S BHAVYA CONSTRUCTIONS PVT. LTD., AND OTHERS W HO ARE JOINTLY ENTERED INTO A DEVELOPMENT AGREEMENT WITH M/S AMSRI DEVELOPERS FOR THE DEVELOPMENT OF THE LANDS ALONG W ITH ASSESSEE, IN ITA NOS. 1788/HY/12 AND OTHERS VIDE ORDER DATED 28/08/2014 WHEREIN THE COORDINATE BENCH HELD AS UNDER: 11. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIALS ON RECORD ALONG WITH THE ORDE RS PASSED BY THE REVENUE AUTHORITIES WE HAVE ALSO CAREFULLY A PPLIED OUR MIND TO THE DECISIONS PLACED BEFORE US. IT IS CLEAR FROM THE ASSESSMENT ORDER THAT THE AO HAS COMPUTED CAPITAL G AIN IN THE IMPUGNED ASSESSMENT YEAR SOLELY ON THE BASIS OF THE FACT THAT ASSESSEE HAS ENTERED INTO THE DEVELOPMENT AGREEMENT WITH THE DEVELOPER 04/05/2007 AND HANDED OVER POSSESSION OF THE PROPERTY. HE HAS ALSO PUT STRESS ON THE FACT THAT T HE ASSESSEE HAS RECEIVED REFUNDABLE SECURITY DEPOSIT FROM THE D EVELOPER @ RS. 13 LAKHS PER ACRE. HOWEVER, AS RIGHTLY HELD BY THE LEARNED CIT(A) NEITHER ENTERING INTO THE DEVELOPMENT AGREEM ENT OR HANDING OVER OF THE POSSESSION OF PROPERTY ARE THE SOLE AND 7 ITA NO. 100 & 101/HYD/2014 SMT. N. SAROJINI& SMT. R. VENKATARAMANI EXCLUSIVE CRITERIA TO CONSTRUE TRANSFER OF CAPITAL ASSET AS ENVISAGED U/S 2(47)(V) OF THE ACT. ON PLAIN READING OF SECTION 2(47)(V) WOULD MAKE IT CLEAR THAT IT REFERS TO HAND ING OVER POSSESSION OF THE PROPERTY UNDER A DEVELOPMENT AGRE EMENT TOWARDS PART PERFORMANCE OF CONTRACT AS ENVISAGED U /S 53A OF THE TP ACT. HOWEVER, THE HANDING OVER OF POSSESSION BY THE ASSESSEE TOWARDS PART PERFORMANCE OF CONTRACT WILL NOT AMOUNT TO TRANSFER UNLESS THE TRANSFEREE IS ALSO WILLING A ND READY TO PERFORM HIS PART OF THE CONTRACT UNDER THE DEVELOPM ENT AGREEMENT. AS CAN BE SEEN FROM THE FACTS AND MATERI ALS ON RECORD, THE DEVELOPER APART FROM MAKING PAYMENT OF THE REFUNDABLE SECURITY DEPOSIT OF RS. 13 LAKHS PER ACR E HAS NOT TAKEN ANY STEP TOWARDS DEVELOPMENT OF THE PROPERTY. IN FACT THE MOST IMPORTANT ACT OF CONVERTING THE NATURE OF LAND FROM AGRICULTURE TO NON AGRICULTURE HAS NOT BEEN PUT INT O MOTION. THE NATURE AND CHARACTER OF LAND REMAINS AS IT IS EVEN TODAY. THE DEVELOPER HAS NOT TAKEN ANY STEPS TO GET SANCTION/A PPROVAL OF PLAN, BUILDING CONSTRUCTION, ETC. FROM THE COMPETEN T AUTHORITIES. EVEN NOT A SINGLE DEVELOPMENT ACTIVITY LIKE LEVELIN G OF LAND, SALES PROMOTION, HAS BEEN INITIATED BY THE DEVELOP ER. THESE FACTS, WHICH HAVE NOT BEEN CONTROVERTED BY THE DEPA RTMENT, CLEARLY DEMONSTRATE UNWILLINGNESS ON THE PART OF TH E DEVELOPER TO PERFORM HIS PART OF THE CONTRACT. IT IS ALSO A M ATTER REQUIRING CONSIDERATION THAT THE ASSESSEE ALONG WITH OTHER LA ND OWNERS HAVE FILED A CIVIL SUIT FOR CANCELLATION OF THE DEV ELOPMENT AGREEMENT, WHICH CLEARLY BRINGS OUT THE DISPUTE BET WEEN THE LAND OWNERS AND DEVELOPER AND ALSO THE FACT THAT DE VELOPER HAS NOT ONLY FAILED TO PERFORM BUT IS ALSO UNWILLING TO PERFORM HIS PART OF THE CONTRACT. THEREFORE, WHEN THE DEVELOPER HAS NOT PERFORMED OR THERE IS UNWILLINGNESS TO PERFORM HIS PART OF THE CONTRACT, IT CANNOT BE CONCLUDED THAT THERE IS TRAN SFER OF CAPITAL ASSET IN TERMS WITH SECTION 2(47(V) READ WITH SECTI ON 53A OF THE TP ACT ONLY BECAUSE THE ASSESSEE HAS ENTERED INTO A DEVELOPMENT AGREEMENT OR EVEN HANDED OVER POSSESSIO N OF THE LAND TO THE DEVELOPER DURING THE PREVIOUS YEAR RELE VANT TO AY UNDER DISPUTE. AS RIGHTLY HELD BY THE LD. CIT(A), HANDING OVER POSSESSION OF THE PROPERTY IS NOT THE SOLE CRITERIA BUT ONE OF THE CRITERIA TO CONSTRUE TRANSFER U/S 53A OF THE T.P. ACT. THE ITAT HYDERABAD BENCH IN CASE OF SMT. K. RADHIKA VS. DCIT (SUPRA) HAS HELD AS UNDER: 48. WE ARE IN CONSIDERED AGREEMENT WITH THE VIEWS SO EXPRESSED IN THIS COMMENTARY ON THE PROVISIONS OF T HE TRANSFER OF PROPERTY ACT. IT IS THUS CLEAR THAT 'WI LLINGNESS TO PERFORM' FOR THE PURPOSES OF SECTION 53A IS SOME THING MORE THAN A STATEMENT OF INTENT; IT IS THE UNQUALIF IED AND UNCONDITIONAL WILLINGNESS ON THE PART OF THE VENDEE TO PERFORM ITS OBLIGATIONS. UNLESS THE PARTY HAS PERFO RMED OR IS WILLING TO PERFORM ITS OBLIGATIONS UNDER THE CON TRACT, AND IN THE SAME SEQUENCE IN WHICH THESE ARE TO BE PERFO RMED, 8 ITA NO. 100 & 101/HYD/2014 SMT. N. SAROJINI& SMT. R. VENKATARAMANI IT CANNOT BE SAID THAT THE PROVISIONS OF SECTION 53 A OF THE TRANSFER OF PROPERTY ACT WILL COME INTO PLAY ON THE FACTS OF THAT CASE. IT IS ONLY ELEMENTARY THAT, UNLESS PROVI SIONS OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT ARE SAT ISFIED ON THE FACTS OF A CASE, THE TRANSACTION IN QUESTION CANNOT FALL WITHIN THE SCOPE OF DEEMED TRANSFER UNDER SECT ION 2(47)(V) OF THE IT ACT. LET US THEREFORE CONSIDER W HETHER THE TRANSFEREE, ON THE FACTS OF THE PRESENT CASE, C AN BE SAID TO HAVE 'PERFORMED OR IS WILLING TO PERFORM' I TS OBLIGATIONS UNDER THE AGREEMENT. 49. EVEN A CURSORY LOOK AT THE ADMITTED FACTS OF TH E CASE WOULD SHOW THAT THE TRANSFEREE HAD NEITHER PERFORME D NOR WAS IT WILLING TO PERFORM ITS OBLIGATION UNDER THE AGREEMENT IN THE ASSESSMENT YEAR UNDER CONSIDERATIO N. THE AGREEMENT BASED ON WHICH CAPITAL GAINS ARE SOUG HT TO BE TAXED IN THE PRESENT CASE IS AGREEMENT DATED 11.05.2005 BUT THIS AGREEMENT WAS NOT ADHERED TO BY THE TRANSFEREE. THE TRANSFEREE ORIGINALLY MADE A PAYMEN T OF RS.10 LAKHS ON 11.5.2005 AND ANOTHER PAYMENT OF RS. 90 LAKHS ON THE SAME DAY AS REFUNDABLE SECURITY DEPOSI T. HOWEVER, OUT OF THIS A SUM OF RS.50 LAKHS WAS SAID TO BE REFUNDED BY THE LANDLORD TO THE DEVELOPER ON 5.3.20 09. AS SUCH, THE ASSESSEE HAS RECEIVED ONLY A MEAGER AMOUN T AS REFUNDABLE SECURITY DEPOSIT WHICH CANNOT BE CONS TRUED AS RECEIPT OF PART OF SALE CONSIDERATION. ADMITTEDL Y, THERE IS NO PROGRESS IN THE DEVELOPMENT AGREEMENT IN THE ASSESSMENT YEAR UNDER CONSIDERATION. THE MUNICIPAL SANCTION FOR DEVELOPMENT WAS OBTAINED NOT IN THIS ASSESSMENT YEAR AND IT WAS OBTAINED ONLY ON 17.09.2 006 FROM THE HYDERABAD URBAN DEVELOPMENT AUTHORITY. THE SANCTION OF THE BUILDING PLAN IS UTMOST IMPORTANT F OR THE IMPLEMENTATION OF THE AGREEMENT ENTERED BETWEEN THE PARTIES. WITHOUT SANCTION OF THE BUILDING PLAN, THE VERY GENESIS OF THE AGREEMENT FAILS. TO ENABLE THE EXECU TION OF THE AGREEMENT, FIRSTLY, PLAN IS TO BE APPROVED BY T HE COMPETENT AUTHORITY. IN FACT, THE BUILDING PLAN WAS NOT GOT APPROVED BY THE BUILDER IN THE ASSESSMENT YEAR UNDE R CONSIDERATION. UNTIL PERMISSION IS GRANTED, A DEVEL OPER CANNOT UNDERTAKE CONSTRUCTION. AS A RESULT OF THIS LAPSE BY THE TRANSFEREE, THE CONSTRUCTION WAS NOT TAKEN PLAC E IN THE ASSESSMENT YEAR UNDER CONSIDERATION. THERE IS A BRE ACH AND BREAK DOWN OF DEVELOPMENT AGREEMENT IN THE ASSESSMENT YEAR UNDER CONSIDERATION. NOTHING IS BRO UGHT ON RECORD BY AUTHORITIES TO SHOW THAT THERE WAS DEVELOPMENT ACTIVITY IN THE PROJECT DURING THE ASSE SSMENT YEAR UNDER CONSIDERATION AND COST OF CONSTRUCTION W AS INCURRED BY THE BUILDER/DEVELOPER. HENCE IT IS TO B E INFERRED THAT NO AMOUNT OF INVESTMENT BY THE DEVELO PER IN 9 ITA NO. 100 & 101/HYD/2014 SMT. N. SAROJINI& SMT. R. VENKATARAMANI THE CONSTRUCTION ACTIVITY DURING THE ASSESSMENT YEA R IN THIS PROJECT AND IT WOULD AMOUNT TO NON-INCURRING O F REQUIRED COST OF ACQUISITION BY THE DEVELOPER. IN T HE ASSESSMENT YEAR UNDER CONSIDERATION, IT IS NOT POSS IBLE TO SAY WHETHER THE DEVELOPER PREPARED TO CARRY OUT THO SE PARTS OF THE AGREEMENT TO THEIR LOGICAL END. THE DE VELOPER IN THIS ASSESSMENT YEAR HAD NOT SHOWN ITS READINESS OR HAVING MADE PREPARATION FOR THE COMPLIANCE OF THE AGREEMENT. THE DEVELOPER HAS NOT TAKEN STEPS TO MAK E IT ELIGIBLE TO UNDERTAKE THE PERFORMANCE OF THE AGREEM ENT WHICH ARE THE PRIMARY INGREDIENT THAT MAKE A PERSON ELIGIBLE AND ENTITLED TO MAKE THE CONSTRUCTION. THE ACT AND CONDUCT OF THE DEVELOPER IN THIS ASSESSMENT YEAR SH OWS THAT IT HAD VIOLATED ESSENTIAL TERMS OF THE AGREEME NT WHICH TEND TO SUBVERT THE RELATIONSHIP ESTABLISHED BY THE DEVELOPMENT AGREEMENT. BEING SO, IT WAS CLEAR THAT IN THE YEAR UNDER CONSIDERATION, THERE WAS NO TRANSFER OF NOT ONLY THE FLATS AS SUPERSTRUCTURE BUT ALSO THE PROPO RTIONATE LAND BY THE ASSESSEE UNDER THE JOINT DEVELOPMENT AGREEMENT. AS PER CLAUSE NO. 12.11 AND 19.1 OF DEVELOPMENT AGREEMENT-CUM POWER OF ATTORNEY, TIME I S THE ESSENCE OF THE CONTRACT AND AS PER CLAUSE NO.12 .11 THE SAID PROPERTY IS TO BE DEVELOPED AND HAND OVER THE POSSESSION OF THE OWNERS ALLOCATION TO THE OWNERS AND OR THEIR NOMINEES WITHIN 24 MONTHS FROM THE DATE OF RECEIVING THE SANCTION OF THE PLAN FROM HUDA AND MUNICIPALITY/GRAM PANCHAYAT WITH A FURTHER GRACE PE RIOD OF 3 MONTHS. BUT THE FACT REMAINS THAT THE TRANSFER EE WAS NOT ONLY FAILED TO PERFORM ITS OBLIGATIONS UNDER TH E AGREEMENT, BUT ALSO UNWILLING TO PERFORM ITS OBLIGA TIONS IN THE ASSESSMENT YEAR UNDER CONSIDERATION. EVEN OTHERWISE, THE ASSESSING AUTHORITIES HAS NOT BROUGH T ON RECORD THE ACTUAL POSITION OF THE PROJECT EVEN AS O N THE DATE OF ASSESSMENT OR HE HAS NOT RECORDED THE FINDI NGS WHETHER THE DEVELOPER STARTED THE CONSTRUCTION WORK AT ANY TIME DURING THE ASSESSMENT YEAR UNDER CONSIDERA TION OR ANY DEVELOPMENT HAS TAKEN PLACE IN THE PROJECT I N THE RELEVANT PERIOD. HE WENT ON TO PROCEED ON THE SOLE ISSUE WITH REGARD TO HANDING OVER THE POSSESSION OF THE PROPERTY TO THE DEVELOPER IN PART PERFORMANCE OF TH E DEVELOPMENT AGREEMENT-CUM-GENERAL POWER OF ATTORNEY . IN OUR OPINION, THE HANDING OVER OF THE POSSESSION OF THE PROPERTY IS ONLY ONE OF THE CONDITION U/S 53A OF TH E TRANSFER OF PROPERTY ACT BUT IT IS NOT THE SOLE AND ISOLATED CONDITION. IT IS NECESSARY TO GO INTO WHETHER OR NO T THE TRANSFEREE WAS 'WILLING TO PERFORM' ITS OBLIGATION UNDER THESE CONSENT TERMS. WHEN TRANSFEREE, BY ITS CONDUC T AND BY ITS DEEDS, DEMONSTRATES THAT IT IS UNWILLING TO PERFORM ITS OBLIGATIONS UNDER THE AGREEMENT IN THIS ASSESSM ENT 10 ITA NO. 100 & 101/HYD/2014 SMT. N. SAROJINI& SMT. R. VENKATARAMANI YEAR, THE DATE OF AGREEMENT CEASES TO BE RELEVANT. IN SUCH A SITUATION, IT IS ONLY THE ACTUAL PERFORMANCE OF TRANSFEREE'S OBLIGATIONS WHICH CAN GIVE RISE TO THE SITUATION ENVISAGED IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT. ON THESE FACTS, IT IS NOT POSSIBLE TO HOLD THAT THE TRANSFEREE WAS WILLING TO PERFORM ITS OBLIGATIO NS IN THE FINANCIAL YEAR IN WHICH THE CAPITAL GAINS ARE SOUGH T TO BE TAXED BY THE REVENUE. WE HOLD THAT THIS CONDITION L AID DOWN UNDER SECTION 53A OF THE TRANSFER OF PROPERTY ACT WAS NOT SATISFIED IN THIS ASSESSMENT YEAR. ONCE WE COME TO THE CONCLUSION THAT THE TRANSFEREE WAS NOT 'WILL ING TO PERFORM', AS STIPULATED BY AND WITHIN MEANINGS ASSI GNED TO THIS EXPRESSION UNDER SECTION 53A OF THE TRANSFE R OF PROPERTY ACT, ITS CONTRACTUAL OBLIGATIONS IN THIS P REVIOUS YEAR RELEVANT TO THE PRESENT ASSESSMENT YEAR, IT IS ONLY A COROLLARY TO THIS FINDING THAT THE DEVELOPMENT AGRE EMENT DT. 11.5.2005 BASED ON WHICH THE IMPUGNED TAXABILIT Y OF CAPITAL GAIN IS IMPOSED BY THE AO AND UPHELD BY THE CIT(A), CANNOT BE SAID TO BE A 'CONTRACT OF THE NAT URE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPE RTY ACT' AND, ACCORDINGLY, PROVISIONS OF SECTION 2(47)(V) CA NNOT BE INVOKED ON THE FACTS OF THIS CASE CHATURBHUJ DWARKA DAS KAPADIA V. CIT'S CASE (SUPRA) UNDOUBTEDLY LAYS DOWN A PROPOSITION WHICH, MORE OFTEN THAN NOT, FAVOURS THE REVENUE, BUT, ON THE FACTS OF THIS CASE, THE SAID J UDGMENT SUPPORTS THE CASE OF THE ASSESSEE INASMUCH AS 'WILLINGNESS TO PERFORM' HAS BEEN SPECIFICALLY RECO GNIZED AS ONE OF THE ESSENTIAL INGREDIENTS TO COVER A TRAN SACTION BY THE SCOPE OF SECTION 53A OF THE TRANSFER OF PROP ERTY ACT. REVENUE DOES NOT GET ANY ASSISTANCE FROM THIS JUDICIAL PRECEDENT. THE VERY FOUNDATION OF REVENUE' S CASE IS THUS DEVOID OF LEGALLY SUSTAINABLE BASIS. 50. THAT IS CLEARLY AN ERRONEOUS ASSUMPTION, AND AN THE PROVISIONS OF DEEMED TRANSFER UNDER SECTION 2(47)(V ) COULD NOT HAVE BEEN INVOKED ON THE FACTS OF THE PRE SENT CASE AND FOR THE ASSESSMENT YEAR IN DISPUTE BEFORE US. IN THE PRESENT CASE, THE SITUATION IS THAT THE ASSESSE E HAS RECEIVED ONLY A MEAGER AMOUNT' OUT OF TOTAL CONSIDERATION, THE TRANSFEREE IS AVOIDING ADHERING TO THE AGREEMENT AND THERE IS NO EVIDENCE BROUGHT ON RECOR D BY THE REVENUE AUTHORITIES TO SHOW THAT THERE WAS ACTU AL CONSTRUCTION HAS BEEN TAKEN PLACE AT THE IMPUGNED PROPERTY IN THE ASSESSMENT YEAR UNDER CONSIDERATION AND ALSO THERE IS NO EVIDENCE TO SHOW THAT THE RIGHT TO RECEIVE THE SALE CONSIDERATION WAS ACTUALLY ACCRUED TO THE ASSESSEE. WITHOUT ACCRUAL OF THE CONSIDERATION TO T HE ASSESSEE, THE ASSESSEE IS NOT EXPECTED TO PAY CAPIT AL GAINS ON THE ENTIRE AGREED SALES CONSIDERATION. WHE N 11 ITA NO. 100 & 101/HYD/2014 SMT. N. SAROJINI& SMT. R. VENKATARAMANI TIME IS ESSENCE OF THE CONTRACT, AND THE TIME SCHED ULE IS NOT ADHERED TO, IT CANNOT BE SAID THAT SUCH A CONTR ACT CONFERS ANY RIGHTS ON THE VENDOR/LANDLORD TO SEEK REDRESSAL UNDER SECTION 53A OF THE TRANSFER OF PROP ERTY ACT. THIS AGREEMENT CANNOT, THEREFORE, BE SAID TO B E IN THE NATURE OF A CONTRACT REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT. IT CANNOT, THEREFORE, BE SAID THAT THE PROVISIONS OF SECTION 2(47)(V) WILL APPLY IN TH E SITUATION BEFORE US. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AS DISCUSSED ABOV E, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE DES ERVES TO SUCCEED ON REASON THAT THE CAPITAL GAINS COULD N OT HAVE BEEN TAXED IN THE IN THIS ASSESSMENT YEAR IN A PPEAL BEFORE US. THE OTHER GROUNDS RAISED BY THE ASSESSEE S IN THEIR APPEALS HAVE BECOME IRRELEVANT AT THIS POINT OF TIME AS WE HAVE HELD THAT PROVISIONS OF SECTION 2(47)(V) WILL NOT APPLY TO THE ASSESSEES IN THE ASSESSMENT YEAR U NDER CONSIDERATION. . 12. THE COORDINATE BENCH AGAIN IN CASE OF M/S BINJU SARIA PROPERTIES (SUPRA) FOLLOWING ANOTHER DECISION OF SA ME COORDINATE BENCH HELD AS UNDER: 12. IT IS AN UNDISPUTED FACT THAT AS ON DATE, T HERE WAS NO DEVELOPMENTAL ACTIVITY ON THE LAND WHICH IS SUBJECT MATTER OF DEVELOPMENT AGREEMENT. THE PROCESS OF CONSTRUCTION HAS NOT BEEN EVEN INITIATED AND NO APPROVAL FOR THE CONSTRUCTION OF THE BUILDING IS OBTAINED. THUS, THE SALE CONSIDERATION IN THE FORM OF DEVELOPED AREA HAS NOT BEEN RECEIVED. MERE RECEIPT OF REFUND ABLE DEPOSIT CANNOT BE TERMED AS RECEIPT OF CONSIDERATION. FURTH ER, AS SUBMITTED , THE ASSESSING OFFICER CALCULATED THE CAPITAL GAIN ON THE ENTIRE LAND, EVEN THOUGH THE ASSESSEE HAS RETAINED 38% SHA RE TO ITSELF. THE VALUATION WAS ALSO DISPUTED. THERE IS, THEREFO RE, NO ACCRUAL OF INCOME IN FAVOUR OF THE ASSESSEE AS PER S.48 OF THE ACT. DUE TO LAPSE ON THE PART OF THE TRANSFEREE, THE CONSTRUCTI ON HAS NOT TAKEN PLACE IN THE YEAR UNDER CONSIDERATION, AND IT HAS N OT COMMENCED EVEN NOW. IN THE FACTS AND CIRCUMSTANCES OF THE P RESENT CASE, WHEREIN WHILE THE ASSESSEE HAS FULFILLED ITS PART O F THE OBLIGATION UNDER THE DEVELOPMENT AGREEMENT, THE DEVELOPER HAS NOT DONE ANYTHING TO DISCHARGE THE OBLIGATIONS CAST ON IT UN DER THE DEVELOP AGREEMENT, THE CAPITAL GAINS CANNOT BE BROUGHT TO T AX IN THE YEAR UNDER APPEAL, MERELY ON THE BASIS OF SIGNING OF THE DEVELOPMENT AGREEMENT DURING THIS YEAR. WE ARE SUPPORTED IN TH IS BEHALF BY THE DECISION OF THE TRIBUNAL DATED 3 RD JANUARY, 2014 IN THE CASE OF FIBARS INFRATECH PVT. LTD. (SUPRA), WHEREIN IT WAS HELD AS FOLLOWS- 59. ON THESE FACTS, IT IS NOT POSSIBLE TO HOLD THAT THE TRANSFEREE WAS WILLING TO PERFORM ITS OBLIGATIONS I N THE FINANCIAL YEAR IN WHICH THE CAPITAL GAINS ARE SOUGH T TO BE TAXED BY THE REVENUE. WE HOLD THAT THIS CONDITION L AID 12 ITA NO. 100 & 101/HYD/2014 SMT. N. SAROJINI& SMT. R. VENKATARAMANI DOWN UNDER SECTION 53A OF THE TRANSFER OF PROPERTY ACT WAS NOT SATISFIED IN THIS ASSESSMENT YEAR. ONCE WE COME TO THE CONCLUSION THAT THE TRANSFEREE'S 'WILLING TO PERFORM' THE CONTRACT IS ASCERTAINABLE IN THE ASSESSMENT YEA R, AS STIPULATED BY AND WITHIN THE MEANINGS ASSIGNED TO T HIS EXPRESSION UNDER SECTION 53A OF THE TRANSFER OF PRO PERTY ACT, ITS CONTRACTUAL OBLIGATIONS IN THIS PREVIOUS Y EAR RELEVANT TO THE PRESENT ASSESSMENT YEAR, IT IS ONLY A COROLLARY TO THIS FINDING THAT THE DEVELOPMENT AGRE EMENT DT. 15.12.2006, BASED ON WHICH THE IMPUGNED TAXABIL ITY OF CAPITAL GAIN IS IMPOSED BY THE AO AND UPHELD BY THE CIT(A), CANNOT BE SAID TO BE A 'CONTRACT OF THE NAT URE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPE RTY ACT' AND, ACCORDINGLY, PROVISIONS OF SECTION 2(47)(V) CA NNOT BE INVOKED ON THE FACTS OF THIS CASE. THE JUDGEMENT IN THE CASE OF CHATURBHUJ DWARKADAS KAPADIA V. CIT (SUPRA) UNDOUBTEDLY LAYS DOWN A PROPOSITION WHICH, MORE OFT EN THAT NOT, FAVOURS THE REVENUE, BUT, ON THE FACTS OF THIS CASE, THE SAID JUDGMENT SUPPORTS THE CASE OF THE ASSESSEE INASMUCH AS 'WILLINGNESS TO PERFORM' HAS B EEN SPECIFICALLY RECOGNIZED AS ONE OF THE ESSENTIAL ING REDIENTS TO COVER A TRANSACTION BY THE SCOPE OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT. THE REVENUE DOES NOT GET ANY ASSISTANCE FROM THIS JUDICIAL PRECEDENT. THE VERY FOUNDATION OF REVENUE'S CASE IS THUS DEVOID OF LEGA LLY SUSTAINABLE BASIS. 60. THAT IS CLEARLY AN ERRONEOUS ASSUMPTION, AS THE PROVISIONS OF DEEMED TRANSFER UNDER SECTION 2(47)(V ) COULD NOT HAVE BEEN INVOKED ON THE FACTS OF THE PRE SENT CASE AND FOR THE ASSESSMENT YEAR IN DISPUTE BEFORE US. IN THE PRESENT CASE, THE SITUATION IS THAT THE ASSESSE E HAS NOT RECEIVED ANY CONSIDERATION, AND THERE IS NO EVI DENCE BROUGHT ON RECORD BY THE REVENUE AUTHORITIES TO SHO W THAT THERE WAS ACTUAL CONSTRUCTION TAKEN PLACE AT THE IMPUGNED PROPERTY IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION AND ALSO THERE IS NO EVIDENCE TO SHOW THAT THE RIGHT TO RECEIVE THE SALE CONSIDERATION WAS ACTUALLY ACCRUED TO THE ASSESSEE. WITHOUT ACCRUAL OF THE CONSIDERATION TO THE ASSESSE E, THE ASSESSEE IS NOT EXPECTED TO PAY CAPITAL GAINS ON TH E ENTIRE AGREED SALES CONSIDERATION. WHEN TIME IS ESS ENCE OF THE CONTRACT, AND THE TIME SCHEDULE IS 30 MONTHS TO COMPLETE CONSTRUCTION WITH ADDITIONAL GRACE PERIOD OF 6 MONTHS, IT CANNOT BE SAID THAT SUCH A CONTRACT CONF ERS ANY RIGHTS ON THE VENDOR/LANDLORD TO SEEK REDRESSAL UND ER SECTION 53A OF THE TRANSFER OF PROPERTY ACT. THIS AGREEMENT CANNOT, THEREFORE, BE SAID TO BE IN THE N ATURE OF A CONTRACT REFERRED TO IN SECTION 53A OF THE TRA NSFER OF 13 ITA NO. 100 & 101/HYD/2014 SMT. N. SAROJINI& SMT. R. VENKATARAMANI PROPERTY ACT. IT CANNOT, THEREFORE, BE SAID THAT TH E PROVISIONS OF SECTION 2(47)(V) WILL APPLY IN THE SI TUATION BEFORE US. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AS DISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE DESERVES TO SUCCE ED ON THE REASON THAT THE CAPITAL GAINS COULD NOT HAVE BEEN TAXED IN THE IN THIS ASSESSMENT YEAR IN APPEAL BEFO RE US. 13. IN THE LIGHT OF THE FOREGOING DISCUSSION, WE SET ASIDE THE IMPUGNED ORDERS OF THE REVENUE AUTHORITIES AND HOLD THAT THE CAPITAL GAINS ON THE PROPERTY IN QUESTION CANNOT BE BROUGHT TO TAX IN THE YEAR UNDER APPEAL, AND CONSEQUENTLY DELETE THE ADDITION MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE CIT(A ). ASSESSEES GROUNDS ON THIS ISSUE ARE ALLOWED. 13. ON GOING THROUGH THE AFORESAID DECISIONS OF THE COORDINATE BENCH, THE RATIO WHICH EMERGES IS UNLESS THERE IS WILLINGNESS ON THE PART OF THE DEVELOPER TO PERFORM HIS PART OF THE CONTRACT, THERE CANNOT BE A TRANSFER OF CAPIT AL ASSET AS ENVISAGED U/S 2(47)(V) READ WITH SECTION 53A OF THE TP ACT. THE RATIO LAID DOWN AS ABOVE SQUARELY APPLIES TO THE FA CTS OF THE PRESENT CASE AS THE DEPARTMENT HAS FAILED TO CONTRO VERT THE FINDING OF THE LEARNED CIT(A) BY BRINGING MATERIAL ON RECORD TO SHOW THAT THE DEVELOPER HAS TAKEN ANY STEPS TOWARDS DEVELOPMENT ACTIVITY. FURTHER, WE MAY OBSERVE, THOU GH THE AO REFERRING TO THE DEVELOPMENT AGREEMENT HAS INFERRED THAT POSSESSION OF THE PROPERTY WAS HANDED OVER TO THE D EVELOPER, HOWEVER, ON GOING THROUGH THE PLEADINGS AND PRAYER OF THE PLAINTIFFS IN THE PLAINT FILED IN CIVIL COURT, A CO PY OF WHICH IS AT PAGE 51 OF ASSESSEES PAPER BOOK, IT APPEARS ASSESS EE ALONG WITH OTHERS ARE STILL HAVING PHYSICAL POSSESSION OV ER THE PROPERTY. BE THAT AS IT MAY, AFTER CAREFUL CONSIDER ATION OF FACTS AND MATERIALS ON RECORD, WE ARE OF THE VIEW, CIT(A )S ORDER BEING WELL FOUNDED AND WELL REASONED NEEDS TO BE UP HELD. ANOTHER CRUCIAL ASPECT WHICH NEEDS TO BE COMMENTED UPON IS THE CIT(A) HAS ALSO HELD THAT THE TRANSACTION WILL NOT ATTRACT CAPITAL GAIN AS THE ASSET TRANSFERRED BEING AN AGRI CULTURAL LAND IS NOT A CAPITAL ASSET AS DEFINED U/S 2(14) OF THE ACT. THIS FINDING OF THE LEARNED CIT(A) REMAINS UNCHALLENGED AND UNCONTROVERTED BY THE DEPARTMENT. FOR THIS REASON A LSO, SHORT TERM CAPITAL GAIN COMPUTED BY THE AO CANNOT BE SUST AINED. IN VIEW OF THE AFORESAID, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). 14. SO FAR AS THE GROUND RAISED BY THE DEPARTMENT C HALLENGING THE VIEW OF CIT(A) TO THE EFFECT THAT THERE CANNOT BE ANY CAPITAL GAIN IN ABSENCE OF VALUE OF CONSIDERATION RECEIVED OR ACCRUED, WE ARE OF THE VIEW, THE SAME IS NOT REQUIRED TO BE ADJUDICATED 14 ITA NO. 100 & 101/HYD/2014 SMT. N. SAROJINI& SMT. R. VENKATARAMANI AS IT IS OF MERE ACADEMIC INTEREST IN VIEW OF OUR F INDING THAT THERE IS NO TRANSFER OF CAPITAL ASSET BY THE ASSESS EE IN THE IMPUGNED ASSESSMENT YEAR. ACCORDINGLY, WE UPHOLD TH E ORDER OF THE CIT(A) BY DISMISSING THE GROUNDS RAISED. 15. BEFORE PARTING WE THOUGHT IT NECESSARY TO CLARI FY, THE ISSUE WHETHER THERE IS TRANSFER OF CAPITAL ASSET UN DER A DEVELOPMENT AGREEMENT, AS CONTEMPLATED U/S 2(47)(V) READ WITH SECTION 53A OF THE T.P. ACT, HAS TO BE DECIDED KEEP ING IN VIEW THE FACTS INVOLVED IN EACH CASE. RATIO LAID DOWN IN A PARTICULAR CASE CANNOT BE APPLIED UNIFORMLY TO ALL CASES WITHO UT CONSIDERING THE FACTUAL ASPECT. 11. AS THE ISSUE IN DISPUTE IS SIMILAR TO THAT OF T HE CASE DECIDED BY THE COORDINATE BENCH IN CASE OF BHAVYA CONSTRUCTION S PVT. LTD. AND OTHERS (SUPRA), RESPECTFULLY FOLLOWING THE DECISION THEREIN, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDING OF TH E CIT(A) THAT THERE IS NO INCOME TO BE TAXED AS CAPITAL GAINS ON ACCOUNT O F THE DEVELOPMENT AGREEMENT. ACCORDINGLY, WE UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THE GROUNDS RAISED BY THE REVENUE IN THIS R EGARD. 12. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISM ISSED. 13. AS THE FACTS AND GROUNDS ARE MATERIALLY IDENTIC AL IN ITA NO. 101/HYD/2014 IN CASE OF SMT. R. VENKATARAMANI TO TH AT OF ITA NO. 100/HYD/2014 IN CASE OF SMT. N. SAROJINI (SUPRA), F OLLOWING THE CONCLUSIONS DRAWN THEREIN, WE UPHOLD THE ORDER OF T HE CIT(A) ALSO IN THIS CASE AND DISMISS THE GROUNDS RAISED BY THE REV ENUE. 14. TO SUM UP BOTH THE APPEALS OF REVENUE ARE DISMI SSED. PRONOUNCED IN THE OPEN COURT ON 26 TH FEBRUARY, 2015 SD/- SD/- (P.M. JAGTAP) (ASHA VIJAYARAGH AVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 26 TH FEBRUARY , 2015 15 ITA NO. 100 & 101/HYD/2014 SMT. N. SAROJINI& SMT. R. VENKATARAMANI KV COPY TO:- . 1. ASST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 5, HYD, 8 TH FLOOR, AAYAKAR BHAVAN, L.B. STADIUM ROAD, BASHEERBAGH, HYDERABAD 500 004. 2. SMT. N. SAROJINI, PLOT NO. 32, MAITRI NAGAR, KUKATPALLY, HYDERABAD. 3. SMT. R. VENKATA RAMANI, PLOT NO. 50, BRINDAVAN COLONY, NIZAMPET ROAD, KUKATPALLY, HYD. 500 085 3. CIT(A)-VII, HYDERABAD 4. CIT (CENTRAL), HYDERABAD 5. THE DR, ITAT, HYDERABAD DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S. 2. DRAFT PLACED BEFORE AUTHOR SR.P.S 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER VP 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S. 6. KEPT FOR PRONOUNCEMENT ON SR.P S. 7. FILE SENT TO THE BENCH CLERK SR.P.S. 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER