AVADHNARAYAN L. SINGH, MUMBAI V. DCIT 24(3), MUMBAI

ITA 3337/MUM/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3190 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 07-01-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 30-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SATHYA MOORTHYDR
• Keywords: Capital asset; Revised return
• Section: 147; 148

Judgement Text

3337+3AVADHNARAYAN L SINGH 1 , INCOME-TAX APPELLATE TRIBUNAL -EBENCH MUMBAI , . . , BEFORE S/SHRI RAJENDRA,ACCOUNTANT MEMBER AND C.N. P RASAD,JUDICIAL MEMBER ./ITA/3337/MUM/2013, /ASSESSMENT YEARS: 2008-09 ./ITA/3338/MUM/2013, /ASSESSMENT YEARS: 2009-10 SHRI AVADHNARAYAN L. SINGH B-5/102, AVADH HOUSE THAKUR LAXMI SINGH ESTATE S.V. ROAD, GOREGAON (W) MUMBAI-400 062. PAN:AAGPS 0470 C VS. DCIT-24(3) MUMBAI. ( /APPELLANT ) ( / RESPONDENT) ./ITA/3411/MUM/2013, /ASSESSMENT YEARS: 2008-09 ./ITA/3412/MUM/2013, /ASSESSMENT YEARS: 2009-10 DCIT-24(3) MUMBAI. VS. SHRI AVADHNARAYAN L. SINGH B-5/102, AVADH HOUSE THAKUR LAXMI SINGH ESTATE S.V. ROAD, GOREGAON (W) MUMBAI-400 062. PAN:AAGPS 0470 C ( /APPELLANT ) ( / RESPONDENT) REVENUE BY: SHRI N. SATHYA MOORTHY-DR ASSESS EE BY: SHRI VIMAL PUNAMIYA / DATE OF HEARING: 12.07.2016 / DATE OF PRONOUNCEMENT: 24.08.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DATED 28/02/2013 OF THE CIT ( A)-34,MUMBAI THE ASSESSING OFFICERS(AO.S)AND THE ASSESSEE HAVE FILED THE CROSS -APPEALS FOR THE ABOVE MENTION -ED TWO AY.S(AY.S.).ASSESSEE IS AN INDIVIDUAL AND D ERIVES INCOME FROM RESTAURANT- BUSINESS,CAPITAL GAINS AND OTHER SOURCES.DETAILS OF FILING OF ORIGINAL RETURNS OF INCOME,DATES OF ORDERS U/S.143.R.W.S.147 OF THE ACT ,ASSESSED INCOME AS PER SUCH ORDERS ETC. CAN BE SUMMARISED AS UNDER: 3337+3AVADHNARAYAN L SINGH 2 AY. REVISED RETURN FILED ON INCOME OFFERED ORDER DT. ASSESSED INCOME U/S.143 R.W. 147 2008 - 0 9 31.03.2011 RS. 2.68 CRORES 29.12.11 RS. 6.51 CRORES 2009 - 10 NO RETURN FILED - 29.12.11 RS.89.06 LAKHS ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER, FOR THE SAKE OF CONVENIENCE. ITA.S./3337&3411/MUM/2013-(BY ASSESSEE )AY.2008-09: BASED ON THE FINDING RECORDED,DURING THE ASSESSMENT PROCEEDINGS FOR THE AY.2007- 08,THE AO ISSUED A NOTICE U/S.148 OF THE ACT FOR TH E YEAR UNDER APPEAL,HOLDING THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT BY REASON OF OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND T RULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THE YEAR UNDER CONSIDERATION.THE ASSESSEE OBJECTED TO THE REOPENING OF THE ASSESSMENT.HOWEVER, THE AO HELD TH AT A VALID NOTICE WAS ISSUED UNDER SECTION 148 OF THE ACT AND ASSESSED THE INCOM E OF THE ASSESSEE FOR THE YEAR UNDER APPEAL,AS STATED IN THE TABLE. 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREF ERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA).AFTER CONSIDERING T HE SUBMISSION OF THE ASSESSEE AND THE ASSESSMENT ORDER, HE UPHELD THE REOPENING A ND PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE.THEREFORE, THE AO AS WELL AS THE ASSESSEE HAVE FILED CROSS APPEALS. 5. DURING THE COURSE OF HEARING BEFORE US,IT WAS BROUG HT OVER NOTICE BY THE REPRESEN -TATIVES OF BOTH THE SIDES THAT IDENTICAL ISSUE HAS BEEN DELIBERATED UPON BY THE TRIBUNAL AND DECIDED,WHILE ADJUDICATING THE APPEAL FOR THE AY. 2007-08. WE FIND THAT THE TRIBUNAL HAD DEALT THE ISSUE WHILE DECIDING THE APPEALS FILED BY THE ASSESSEE,HIS BROTHER SATYAPRAKASH SINGH AND THE AOS (ITA/ 7363/ MUM/2010, 3337+3AVADHNARAYAN L SINGH 3 ITA/7982/MUM/2010,ITA.S./7517&7518/MUM/2010-AY. 200 7-08, DATED 02/03/2016.),THAT IT HAD CONSIDERED THE FACTS OF TH E CASE AT LENGTH AND HAD DECIDED THE ISSUE IN FOLLOWING MANNER: 2.EVEN THOUGH BOTH THE PARTIES HAVE URGED GROUNDS RELATING TO COMPUTATION OF CAPITAL GAINS IN THE ORIGINAL GROUNDS OF APPEAL, THEY HAVE FILED AN ADDITIONAL GROUND CONTESTING THEREIN THE CAPITAL GAINS IS NOT ASSESSABLE IN AY 2 007-08, SINCE THE TRANSFER HAS TAKEN PLACE IN THE YEAR RELEVANT TO THE AY. 2003-04 IN TE RMS OF SEC. 2(47) OF THE ACT. SINCE THIS ADDITIONAL GROUND GOES TO THE ROOT OF THE MATTER, W E ADMIT THE SAME AND PROCEED TO DISPOSE OF THE SAME. 3. THE FACTS RELATING TO THE CASE ARE DISCUSSED IN BRIEF. BOTH THE ASSESSEES HAVE INHERITED A LAND FROM THEIR FATHER NAMED SHRI LAXMI SINGH UDI T SINGH. AFTER THE DEATH OF SHRI LAXMI SINGH UDIT SINGH IN THE YEAR 1986, THE LAND W AS INHERITED BY HIS FIVE SONS. THE DAUGHTERS OF SHRI LAXMI SINGH UDIT SINGH RELINQUISH ED THEIR RESPECTIVE RIGHTS IN FAVOUR OF THEIR BROTHERS. THUS EACH SON INHERITED 1/5TH SHARE IN THE LAND. THEY ENTERED INTO AN AGREEMENT ON 10-10-2002 WITH M/S BRICKWORKS TRADING PVT. LTD. FOR DEVELOPMENT OF THE LAND AND ACCORDINGLY EXECUTED A POWER OF ATTORNEY O N 10-10-2002. ACCORDING TO THE ASSESSEES THE POSSESSION OF THE LAND WAS HANDED OVE R TO THE DEVELOPERS AT THAT POINT OF TIME ITSELF. 4. THE ASSESSEES HEREIN HAD DECLARED LONG TERM CAPI TAL GAIN IN THE RETURN OF INCOME FILED FOR AY. 2007-08. THE DEPARTMENT NOTICED DURING THE COURSE OF ASSESSMENT PROCEEDINGS OF SHRI HARINARYAN L SINGH (ONE OF THE CO-OWNERS) THAT THE ASSESSEES HEREIN ALONG WITH OTHER CO-OWNERS HAVE EXECUTED A DEVELOPMENT AGREEME NT ON 09-10-2002 WITH M/S BRICKSWORK TRADING PVT. LTD. (DEVELOPER). AS PER TH E DEVELOPMENT AGREEMENT, THE DEVELOPER SHALL GET 60% SHARE AND THE CO-OWNERS SHA LL GET 40%. IT WAS NOTICED THAT M/S BRICKWORK TRADING PVT. LTD. HAS DISTRIBUTED THE PRO FIT TO ALL THE CO-OWNERS DURING THE F.Y 2006-07 RELEVANT TO THE AY. 2007-08. HENCE THE ASSE SSING OFFICER REOPENED THE ASSESSMENT OF THE ASSESSEES HEREIN FOR AY 2007-08 T O ASSESS THE CAPITAL GAIN ARISING THEREFROM. IN THE REOPENED ASSESSMENT, HE VARIED TH E CAPITAL GAINS DECLARED BY THESE ASSESSEES. IN THE APPEALS FILED BY THEM BEFORE LD C IT(A), THEY GOT PARTIAL RELIEF. HENCE THE REVENUE AS WELL AS ASSESSEES ARE IN APPEAL BEFO RE US ASSAILING THE DECISION RENDERED BY LD CIT(A) AGAINST EACH OF THEM. 5. THE MAIN CONTENTION URGED IN THE ADDITIONAL GROU ND FILED BY THESE ASSESSEES IS THAT THE 'TRANSFER' OF PROPERTY TOOK PLACE IN THE YEAR RELEV ANT TO THE AY. 2003-04 AND HENCE THE CAPITAL GAINS ASSESSED IN AY 2007-08 WAS NOT IN ACC ORDANCE WITH THE LAW. IT WAS FURTHER SUBMITTED THAT THERE IS NO ESTOPPEL AGAINST THE LAW AND HENCE, EVEN IF THE ASSESSEE HAS ERRONEOUSLY OFFERED THE CAPITAL GAINS IN AY 2007-08 , THE SAME CANNOT BE ASSESSED IN THAT YEAR. 6. ON THE CONTRARY, THE LD D.R PLACED STRONG RELIAN CE ON THE ORDERS PASSED BY TAX AUTHORITIES. HE FURTHER SUBMITTED THAT THE ASSESSEE S HAVE GOT THEIR RESPECTIVE SHARE ONLY IN THE YEAR RELEVANT TO THE AY 2007-08 AND THEY HAV E ALSO DECLARED THE SAME IN THEIR RESPECTIVE RETURNS OF INCOME. ACCORDINGLY HE SUBMIT TED THAT THE ASSESSEES ARE PRECLUDED FROM TAKING A DIFFERENT STAND AT THIS POINT OF TIME . 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IT IS A WELL SETTLED PROPOSITION OF LAW THAT THERE IS NO ESTOPPEL AGAINS T LAW AND HENCE WE ARE OF THE VIEW THAT 3337+3AVADHNARAYAN L SINGH 4 THE ASSESSEES HEREIN ARE ENTITLED TO CONTEND THAT T HE INCOME OFFERED BY THEM IS NOT LIABLE TO TAX DURING THE YEAR UNDER CONSIDERATION, IF THE SAID INCOME IS NOT LIABLE TO TAX AT ALL IN THAT YEAR. IN THE INSTANT CASES, THE UNDISPUTED FAC T REMAINS THAT THE ASSESSEES HAVE ENTERED INTO A DEVELOPMENT AGREEMENT WITH M/S BRICK WORK TRADING PVT. LTD. ON 09-10- 2002. THE VERY FACT THAT THE DEVELOPMENT PROJECT WA S COMPLETED IN THE FY 2006-07 ITSELF SHOWS THAT THE AGREEMENT SHOULD HAVE BEEN ENTERED M UCH EARLIER. THE POWER OF ATTORNEY EXECUTED IN FAVOUR OF THE DEVELOPER HAS BEEN REGIST ERED IN OCT., 2002. HENCE THERE IS MERIT IN THE SUBMISSIONS OF THE ASSESSEES THAT THE POSSESSION WAS HANDED OVER TO THE DEVELOPER AT THAT POINT OF TIME ITSELF. 8. IN THIS REGARD, WE MAY REFER TO THE PROVISIONS O F SEC. 2(47), WHICH DEFINES THE WORD 'TRANSFER'. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE PROVISIONS OF CLAUSE (V) AND (VI) OF SEC. 2(47) OF THE ACT:- '2(47) 'TRANSFER', IN RELATION TO A CAPITAL ASSET, INCLUDES, ...... (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE P OSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTR ACT OF THE NATURE REFERRED TO IN SEC. 53A OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 188 2); OR (VI) ANY TRANSACTION (WHETHER BY WAY OF BECOMING A MEMBER OF, OR ACQUIRING SHARES IN A CO-OPERATIVE SOCIETY, COMPANY OR OTHER ASSOCIATION OF PERSONS OR BY WAY OF AGREEMENT OR ANY ARRANGEMENT OR IN ANY OTHER MANNER WHATSOEVER) WHICH HAS THE EFFECT OF TRANSFERRING, OR ENABLING THE ENJOYMENT OF, ANY IMM OVABLE PROPERTY. IN THE INSTANT CASE, BY VIRTUE OF DEVELOPMENT AGREE MENT, THE ASSESSEE HAS HANDED OVER THE POSSESSION OF THE IMPUGNED LAND DURING THE FY 2002- 03. HENCE, IN TERMS OF SEC.2(47)(V) AND 2(47)(VI) OF THE ACT, THE TAXABILITY OF CAPITAL GAIN HAS TO BE CONSIDERED IN AY 2003- 04. OUR VIEW GETS SUPPORT FROM THE DECISION RENDERE D BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF CHATURBHU DWARKADAS KAPADIA VS. CIT ( 2 60 ITR 491). 9 THE LEGAL POSITION OF DEVELOPMENT AGREEMENT VIS- -VIS SECTION 2(47(V) OF THE ACT WAS CONSIDERED BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CHATURBHUJ DWARKADAS KAPADIA, CITED SUPRA. THE RELEVANT OBSERVATIONS OF THE HIGH COURT, IN THAT CASE, ARE EXTRACTED BELOW: 'IT WAS ARGUED ON BEHALF OF THE ASSESSEE THAT THERE WAS NO EFFECTIVE TRANSFER TILL GRANT OF IRREVOCABLE LICENCE. IN THIS CONNECTION, THE JUDGME NTS OF THE SUPREME COURT WERE CITED ON BEHALF OF THE ASSESSEE, BUT ALL THOSE JUDGMENTS WER E PRIOR TO INTRODUCTION OF THE CONCEPT OF DEEMED TRANSFER UNDER SECTION 2(47)(V). IN THIS MATTER, THE AGREEMENT IN QUESTION IS A DEVELOPMENT AGREEMENT. SUCH DEVELOPMENT AGREEMENTS DO NOT CONSTITUTE TRANSFER IN GENERAL LAW. THEY ARE SPREAD OVER A PERIOD OF TIME. THEY CONTEMPLATE VARIOUS STAGES. THE BOMBAY HIGH COURT IN VARIOUS JUDGMENTS HAS TAKEN TH E VIEW IN SEVERAL MATTERS THAT THE OBJECT OF ENTERING INTO A DEVELOPMENT AGREEMENT IS TO ENABLE A PROFESSIONAL BUILDER/CONTRACTOR TO MAKE PROFITS BY COMPLETING TH E BUILDING AND SELLING THE FLATS AT A PROFIT. THAT THE AIM OF THESE PROFESSIONAL CONTRACT ORS WAS ONLY TO MAKE PROFITS BY COMPLETING THE BUILDING AND, THEREFORE, NO INTEREST IN THE LAND STANDS CREATED IN THEIR FAVOUR UNDER SUCH AGREEMENTS, THAT SUCH AGREEMENTS ARE ONLY A MODE OF REMUNERATING THE BUILDER FOR HIS SERVICES OF CONSTRUCTING THE BU ILDING (SEE GURUDEV DEVELOPERS V KURLA KONKAN NIWAS CO-OPERATIVE HOUSING SOCIETY (2000) 3 MAH LJ 131). IT IS PRECISELY FOR THIS REASON THAT THE LEGISLATURE HAS INTRODUCED SEC TION 2(47(V) READ WITH SECTION 45 WHICH INDICATES THAT CAPITAL GAINS IS TAXABLE IN THE YEAR IN WHICH SUCH TRANSACTIONS ARE ENTERED INTO EVEN IF THE TRANSFER OF IMMOVABLE PROPERTY IS NOT EFFECTIVE OR COMPLETE UNDER THE 3337+3AVADHNARAYAN L SINGH 5 GENERAL LAW. IN THIS CASE THAT TEST HAS NOT BEEN AP PLIED BY THE DEPARTMENT. NO REASON HAS BEEN GIVEN WHY THAT TEST HAS NOT BEEN APPLIED, PART ICULARLY WHEN THE AGREEMENT IN QUESTION, READ AS A WHOLE, SHOWS THAT IT IS A DEVEL OPMENT AGREEMENT. THERE IS A DIFFERENCE BETWEEN THE CONTRACT ON ONE HAND AND THE PERFORMANC E ON THE OTHER HAND. IN THIS CASE, THE TRIBUNAL AS WELL AS THE DEPARTMENT HAVE COME TO THE CONCLUSION THAT THE TRANSFER TOOK PLACE DURING THE ACCOUNTING YEAR ENDING 31.3.1996, AS SUBSTANTIAL PAYMENTS WERE EFFECTED DURING THAT YEAR AND SUBSTANTIAL PERMISSIO NS WERE OBTAINED. IN SUCH CASES OF DEVELOPMENT AGREEMENT, ONE CANNOT GO BY SUBSTANTIAL PERFORMANCE OF A CONTRACT. IN SUCH CASES, THE YEAR OF CHARGEABILITY IS THE YEAR IN WHI CH THE CONTRACT IS EXECUTED. THIS IS IN VIEW OF SECTION 2(47(V) OF THE ACT. ...... ........ IN THIS CASE, THE AGREEMENT IS A DEVELOPME NT AGREEMENT AND IN OUR VIEW, THE TEST TO BE APPLIED TO DECIDE THE YEAR OF CHARGEABILITY IS T HE YEAR IN WHICH THE TRANSACTION WAS ENTERED INTO. WE HAVE TAKEN THIS VIEW FOR THE REASO N THAT THE DEVELOPMENT AGREEMENT DOES NOT TRANSFER THE INTEREST IN THE PROPERTY TO THE DE VELOPER IN GENERAL LAW AND, THEREFORE, SECTION 2(47)(V) HAS BEEN ENACTED AND IN SUCH CASES, EVEN ENTERING INTO SUCH A CONTRACT COULD AMOUNT TO TRANSFER FROM THE DATE OF AGREEMENT ITSELF. .... THEREFORE, IF ON A BARE READING OF A CONTRACT IN ITS ENTIRETY AN ASSES SING OFFICER COMES TO THE CONCLUSION THAT IN THE GUISE OF AGREEMENT FOR SALE, A DEVELOPMENT A GREEMENT IS CONTEMPLATED, UNDER WHICH THE DEVELOPER APPLIES FOR PERMISSIONS FROM VA RIOUS AUTHORITIES, EITHER UNDER POWER OF ATTORNEY OR OTHERWISE AND IN THE NAME OF THE ASS ESSEE, THEN THE ASSESSING OFFICER IS ENTITLED TO TAKE THE DATE OF CONTRACT AS THE DATE O F TRANSFER IN VIEW OF SECTION 2(47(V)..... WE DO NOT FIND MERIT IN THE ARGUMENT OF THE ASSESSE E THAT THE COURT SHOULD GO ONLY BY THE DATE OF ACTUAL POSSESSION AND THAT IN THIS PARTICUL AR CASE, THE COURT SHOULD GO BY THE DATE ON WHICH IRREVOCABLE LICENCE WAS GIVEN.' 10. WE FEEL IT NECESSARY TO DISCUSS ABOUT THE FACTS OF THE CASE OF CHARUBHUJ DWARKADAS KAPADIA, REFERRED SUPRA, IN ORDER TO UNDERSTAND THE LEGAL PROPOSITION LAID DOWN BY THE HON'BLE BOMBAY HIGH COURT. IN THAT CASE, THE ASSESS EE ENTERED INTO AN AGREEMENT ON 18.8.1994 TO SELL THE PROPERTY TO A BUILDER FOR A C ONSIDERATION OF RS.1.85 CRORES WITH A RIGHT TO THE BUILDER TO DEVELOP THE PROPERTY IN ACC ORDANCE WITH THE RELEVANT RULES. THE ASSESSEE SHALL GRANT AN IRREVOCABLE LICENSE TO ENTE R UPON THE ASSESSEE'S SHARE OF THE PROPERTY UPON RECEIPT OF NECESSARY PERMISSIONS AND APPROVALS AND ALSO THE NOC UNDER CHAPTER XXC OF THE INCOME TAX ACT. BY 31.3.1996, TH E BUILDER OBTAINED MOST OF THE APPROVALS AND ALSO PAID MAJOR PORTION OF THE CONSID ERATION. THE POWER OF ATTORNEY WAS EXECUTED IN FAVOUR OF THE BUILDER ON 12.3.1999. THE ASSESSEE OFFERED THE CAPITAL GAINS IN THE AY. 1999-2000, SINCE THE LICENCE AND POWER OF A TTORNEY WERE GIVEN IN THE FINANCIAL YEAR 1998-99. THE AO AND ITAT HELD THAT THE CAPITAL GAINS IS ASSESSABLE IN THE AY. 1996- 97 SINCE SUBSTANTIAL COMPLIANCE OF TERMS OF AGREEME NT HAS TAKEN PLACE BEFORE 31.3.1996. HOWEVER THE HIGH COURT HELD THAT THE IMPUGNED SALE AGREEMENT IS ONLY A 'DEVELOPMENT AGREEMENT' AND HENCE THE CAPITAL GAIN IS ASSESSABLE IN THE YEAR IN WHICH THE SAID AGREEMENT WAS ENTERED INTO. THUS THE CONTENTIONS OF BOTH THE ASSESSEE AS WELL AS THAT OF THE REVENUE WITH REGARD TO THE YEAR OF CHARGEABILIT Y WERE REJECTED. 11. THUS, AS PER THE LEGAL PROPOSITION LAID DOWN BY THE HON'BLE BOMBAY HIGH COURT IN THE ABOVE CITED CASE, THE FACTORS SUCH AS 'DATE OF POSSESSION, SUBSTANTIAL COMPLIANCE OF THE CONTRACT ETC.' ARE NOT RELEVANT IN THE CASE OF DEVELOPMENT AGREEMENTS. THE HIGH COURT HAS OBSERVED THAT THE AIM OF THE BUILDER UNDE R THE DEVELOPMENT AGREEMENT WAS TO MAKE PROFITS BY COMPLETING THE BUILDING AND THEREFO RE, NO INTEREST IN THE LAND STANDS 3337+3AVADHNARAYAN L SINGH 6 CREATED IN THEIR FAVOUR UNDER SUCH AGREEMENTS. THUS THE SAID AGREEMENTS ARE ONLY A MODE OF REMUNERATING THE BUILDER FOR HIS SERVICES OF CON STRUCTING THE BUILDING. THE HIGH COURT HAS NOTICED THAT THE ASSESSEES WERE ENTERING INTO D EVELOPMENT AGREEMENTS WITH THE BUILDERS BY CONFERRING PRIVILEGES OF OWNERSHIP TO T HEM AND WERE CLAIMING THAT THE CAPITAL GAINS WOULD ARISE ONLY AFTER REGISTERING THE CONVEY ANCE DEED. ACCORDINGLY THE HIGH COURT HELD THAT THE SECTION 2(47)(V) WAS BROUGHT IN TO THE STATUTE TO PLUG THIS KIND OF LOOP HOLE. THUS BY CONSIDERING THE OBJECT OF THE DEVELOP MENT AGREEMENTS AND ALSO THE PURPOSE OF INTRODUCTION OF SECTION 2(47)(V) OF THE ACT, THE HON'BLE HIGH COURT HAS FINALLY HELD THAT THE YEAR OF CHARGEABILITY IN THE CASE OF DEVELOPMENT AGREEMENTS IS THE YEAR IN WHICH THE CONTRACT WAS EXECUTED. 12. IN VIEW OF THE FOREGOING DISCUSSIONS, WE ARE OF THE VIEW THAT THE ASSESSEES HEREIN SUCCEED IN THE ADDITIONAL GROUND URGED BY THEM.ACCO RDINGLY WE HOLD THAT THE CAPITAL GAIN ARISING ON ENTERING OF DEVELOPMENT AGREEMENT IS NOT TAXABLE IN THE AY. 2007-08, BUT TAXABLE IN AY 2003-04. 13. IN VIEW OF THE ABOVE, WE SET ASIDE THE ASSESSME NT OF CAPITAL GAINS MADE IN AY 2007-08 AND HENCE ALL THE GROUNDS URGED BY BOTH THE PARTIES BEFORE US BECOME INFRUCTUOUS. 14. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE ES ARE TREATED AS ALLOWED AND THE APPEALS OF THE REVENUE ARE DISMISSED. RESPECTFULLY, FOLLOWING THE ORDERS OF THE TRIBUNAL FOR THE EARLIER AY.,WE ALLOW THE APPEAL FILED BY THE ASSESSEE AND HOLD THAT INCOME I N QUESTION HAS TO BE ASSESSED IN THE AY. 2003-04.APPEAL FILED BY THE AO IS DISMISSED . ITA.S.3338&3412/MUM/2013-AY.2009-10: FOLLOWING OUR ORDER FOR THE AY. 2008-09,APPEALS FIL ED BY THE ASSESSEE AND THE AO ARE ALLOWED AND DISMISSED RESPECTIVELY. AS A RESULT,APPEALS FILED BY THE ASSESSEE STAND ALL OWED AND THE APPEALS OF THE AO ARE DISMISSED. ORDER PRONOUNCED I N THE OPEN COURT ON 24 TH AUGUST,2016. 24 , 2016 SD/- S D/- ( . . / C.N. PRASAD ) ( / RAJENDRA ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER MUMBAI; DATED :24.08.2016. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3337+3AVADHNARAYAN L SINGH 7 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR E BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.