PANKAJ ENTERPRISES, MUMBAI V. JT CIT RG 25(3), MUMBAI

ITA 3773/MUM/2017

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 9905 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 23-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Business expenditure; Loose papers; Cost of acquisition; Fair market value; Valuation report; Capital Gains
• Section: 2; 69C; 50C; 2(14); 133A; 48; 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI PAVAN KUMAR GADALE (JUDICIAL MEMBER) ITA No. 3773/MUM/2017 Assessment Year: 2012-13 Pankaj Enterprises, C/o Shankarlal Jain & Assoicates 12, Engineer Building, 265, Princess Street, Mumbai-400 002. Vs. JT. CIT Range-25(3), Pritashkar Bhavan, BKC, Bandra (E), Mumbai-400051. PAN No. AACFP 3044 K Appellant Respondent ITA No. 4875/MUM/2017 Assessment Year: 2009-10 & ITA No. 4876/MUM/2017 Assessment Year: 2012-13 Asst. Commissioner of Income Tax- 25(3), Room No. 601, C-10, 6 th floor, Pratyakshakar Bhavan, Bandra Kurla Complex, Bandra (East), Mumbai-400051. Vs. M/s Pankaj Enterprises, Plot No. 1, Behind ICE Factory, Saki Vihar Road, Chandivali, Mumbai-400072. PAN No. AACFP 3044 K Appellant Respondent CO No. 313/MUM/2018 (ITA No. 4875/MUM/2017) Assessment Year: 2009-10 & CO No. 312/MUM/2018 (ITA No. 4876/MUM/2017) Assessment Year: 2012-13 M/s Pankaj Enterprises, Plot No. 1, Behind ICE Factory, Saki Vihar Road, Chandivali, Mumbai-400072. PAN No. AACFP 3044 K Appellant Assessee by Revenue by Date of Hearing Date of pronouncement PER OM PRAKASH KANT These appeals by the objection by the assessee are directed against two separate orders passed by the Ld. CIT(A)’] for assessment year 2012 Since the issue in dispute involved is common in both the assessment years, therefore these appeals and cross objection ITA NO. 3773, 4875 & Plot No. 1, Behind ICE Factory, Saki Vs. Asst. Commissioner of Income Tax 25(3), Room No. 601, C- Pratyakshakar Bhavan, Bandra Kurla Complex, Bandra (East), Mumbai-400051. Respondent Assessee by : Mr. Shankarlal L. Jain, AR : Mr. Jasdeep Singh, CIT-DR Date of Hearing : 20/06/2022 pronouncement : 06/07/2022 ORDER PER OM PRAKASH KANT, AM These appeals by the Revenue and the assessee and the cross objection by the assessee are directed against two separate orders CIT(Appeals)-37, Mumbai [in short ] for assessment year 2012-13 and 2009-10 the issue in dispute involved is common in both the , therefore these appeals and cross objection Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 2 Asst. Commissioner of Income Tax- -10, 6 th floor, Pratyakshakar Bhavan, Bandra Kurla Complex, Bandra (East), 400051. Mr. Shankarlal L. Jain, AR DR and the assessee and the cross- objection by the assessee are directed against two separate orders 37, Mumbai [in short ‘the Ld. 10 respectively. the issue in dispute involved is common in both the , therefore these appeals and cross objections have been heard together and disposed off by way of this consolidated order for convenience. 2. In these appeals, rights in a plot of land as well as quantum of long thereon, have been disputed. The capital gain on transfer of development agreement according to the Assessing Officer previous year corresponding to assessment therefore he has assessed the long basis in assessment year 2009 assessment year 2012 has been assessed first and thereafter asses reopened. The Ld. CIT(A) has also decided the issue in assessment year 2012-13 and therefore facts have been elaborated in assessment year 2012 ITA NO. 3773, 4875 & been heard together and disposed off by way of this consolidated order for convenience. hese appeals, year of taxability on transfer of development rights in a plot of land as well as quantum of long-term capital gain been disputed. The assessee offered the long capital gain on transfer of part interest in plot of land under agreement in assessment year 2012 Assessing Officer the transfer took place in corresponding to assessment year 2009 assessed the long-term capital gain on substantive basis in assessment year 2009-10 and on protective basis in the 2012-13. We find that assessment year 2012 has been assessed first and thereafter assessment year 2009 reopened. The Ld. CIT(A) has also decided the issue in assessment 13 and therefore facts have been elaborated in assessment year 2012-13, accordingly firstly, we are taking Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 3 been heard together and disposed off by way of this consolidated year of taxability on transfer of development term capital gain assessee offered the long-term part interest in plot of land under in assessment year 2012-13, whereas fer took place in year 2009-10 and term capital gain on substantive 10 and on protective basis in the . We find that assessment year 2012-13 sment year 2009-10 has reopened. The Ld. CIT(A) has also decided the issue in assessment 13 and therefore facts have been elaborated in are taking up the appeal and cross objection for assessment y adjudication. The grounds of the appeal of the 4876/Mum/2017 are 1. On the facts and circumstances of the case and in law, the Ld. Commissioner of Income considering the Transfer of Property Act, 1882 clearly states that once ingress to the property is handed over to the transferee i.e. Vidhi Enterprises, the provisions of Sec 53A of Transfer of Property Act are attracted. In th clearly establish that the Developer had complete access to the property and that he was liable for the actions thereon. Therefore, transfer has been effected in AY 2009 2012-13. 2. On the facts and cir Commissioner of Income considering the fact the amount arrived at for calculating the consideration on registration of DA was based on the Stamp Duty paid which is a clear indication the Land Revenue Department of the State Government at of Rs.18,74,74,699/ question of TDR 3. On the facts and circumstances of the case and in law, the Ld. Commissioner of Income TDR /FSI and original plot bifurcation for the calculation of capital gains stating 50 C is not applicable on TR. However, the ITA NO. 3773, 4875 & and cross objection for assessment year 2012 adjudication. The grounds of the appeal of the Revenue are reproduced as under: On the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax(Appeals) has erred in not considering the fact that Sec. 2(47) (v) with Sec 53A of the Transfer of Property Act, 1882 clearly states that once ingress to the property is handed over to the transferee i.e. Vidhi Enterprises, the provisions of Sec 53A of Transfer of Property Act are attracted. In this case, clause 9B, 22(b) and 26 of the DA clearly establish that the Developer had complete access to the property and that he was liable for the actions thereon. Therefore, transfer has been effected in AY 2009- 13. On the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax(Appeals) has erred in not considering the fact the amount arrived at for calculating the consideration on registration of DA was based on the Stamp Duty paid which is a clear indication of the value attributed by the Land Revenue Department of the State Government at of Rs.18,74,74,699/- on transfer of the land and therefore the question of TDR On the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax(Appeals) has erred in dividing the TDR /FSI and original plot bifurcation for the calculation of capital gains stating 50 C is not applicable on TR. However, the Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 4 ear 2012-13 for Revenue in ITA No. On the facts and circumstances of the case and in law, the Ld. tax(Appeals) has erred in not fact that Sec. 2(47) (v) with Sec 53A of the Transfer of Property Act, 1882 clearly states that once ingress to the property is handed over to the transferee i.e. Vidhi Enterprises, the provisions of Sec 53A of Transfer of Property Act is case, clause 9B, 22(b) and 26 of the DA clearly establish that the Developer had complete access to the property and that he was liable for the actions thereon. -10 and not AY cumstances of the case and in law, the Ld. tax(Appeals) has erred in not considering the fact the amount arrived at for calculating the consideration on registration of DA was based on the Stamp of the value attributed by the Land Revenue Department of the State Government at of on transfer of the land and therefore the On the facts and circumstances of the case and in law, the Ld. als) has erred in dividing the TDR /FSI and original plot bifurcation for the calculation of capital gains stating 50 C is not applicable on TR. However, the amount arrived at for calculating the consideration on registration of DA was based on the Stamp D clear indication of the value attributed by the Land Revenue Department of the State Government at of Rs.18,74,74,699/ transfer of the land and therefore the question of TR does not arise. 3. The sole ground raised in No. 312/Mum/2018 in respect of the appeal of the been withdrawn vide dismissed as infructuous 3.1 The assessee has also filed appeal separately for assessment year 2012-13 whi 3773/Mum/2017 and as under: 1. Ld. CIT(A) erred in holding that cost of construction of 42% of the area exchanged for transfer of appellant's right under Development Agreement, being Rs.18,74,74,699/ considering the components of cost of construction as determined by District Valuation Officer in its valuation report. Such cost of construction is consisting of: ITA NO. 3773, 4875 & amount arrived at for calculating the consideration on registration of DA was based on the Stamp Duty paid which is a clear indication of the value attributed by the Land Revenue Department of the State Government at of Rs.18,74,74,699/ transfer of the land and therefore the question of TR does not sole ground raised in cross-objection by the assessee in CO No. 312/Mum/2018 in respect of the appeal of the vide letter dated 15/06/22, therefore, same is infructuous. assessee has also filed appeal separately for assessment 13 which has been registered as ITA No. and the grounds raised in which Ld. CIT(A) erred in holding that cost of construction of 42% of the area exchanged for transfer of appellant's right under Development Agreement, being computed at 42% of Rs.18,74,74,699/- i.e. Rs.7,87,73,911/-, without properly considering the components of cost of construction as determined by District Valuation Officer in its valuation report. Such cost of construction is consisting of: Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 5 amount arrived at for calculating the consideration on uty paid which is a clear indication of the value attributed by the Land Revenue Department of the State Government at of Rs.18,74,74,699/- on transfer of the land and therefore the question of TR does not on by the assessee in CO No. 312/Mum/2018 in respect of the appeal of the Revenue has , therefore, same is assessee has also filed appeal separately for assessment ch has been registered as ITA No. the grounds raised in which are reproduced Ld. CIT(A) erred in holding that cost of construction of 42% of the area exchanged for transfer of appellant's right under computed at 42% of , without properly considering the components of cost of construction as determined by District Valuation Officer in its valuation report. Such cost of i Cost of ii Incidental charges 10% of above iii Cost of TDR iv Cost of 8 open car parking to be provided under Development Agreement Ld. CIT(A) erred in not construction is only Development Agreement be computed with reference to said cost of construction being 42% there 2. Ld. CIT(A) erred in upholding disallowance of Rs.3,11,920/ interest paid by the appellant during the year on the plea that loan borrowed from ECL Finance Ltd is being utilised for improvement of house property to make it fit for earning rent in future, without properly appreciating the fact of the case and la applicable thereto. 3. Ld. CIT(A) erred in upholding the addition made by Ld. A.O. of Rs.1,30,000/ appreciating the fact that 3 payments amounting to Rs.1,30,000/ does not relate to the appellant, but to one Suresh Patel and the said amount is not to be considered while making the assessment of the appellant. 4. The appellant pray that correct cost be determined for arriving at the consideration under Development Agreement and other additions ITA NO. 3773, 4875 & Cost of construction : Incidental charges 10% of above : Cost of TDR : Cost of 8 open car parking to be provided under Development Agreement : Ld. CIT(A) erred in not considering the fact that cost of construction is only ₹88146948/- and hence consideration under Development Agreement be computed with reference to said cost of construction being 42% thereof. Ld. CIT(A) erred in upholding disallowance of Rs.3,11,920/ interest paid by the appellant during the year on the plea that loan borrowed from ECL Finance Ltd is being utilised for improvement of house property to make it fit for earning rent in future, without properly appreciating the fact of the case and la applicable thereto. Ld. CIT(A) erred in upholding the addition made by Ld. A.O. of Rs.1,30,000/- made u/s. 69C of the I.T. Act, without properly appreciating the fact that 3 payments amounting to Rs.1,30,000/ does not relate to the appellant, but to one of its partner Shri Suresh Patel and the said amount is not to be considered while making the assessment of the appellant. The appellant pray that correct cost be determined for arriving at the consideration under Development Agreement and other additions made be deleted. Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 6 ₹8,81,46,948/- ₹88,14,695/- ₹8,89,43,240/- ₹15,69,206/- ₹18,74,74,089/- considering the fact that cost of and hence consideration under Development Agreement be computed with reference to said cost Ld. CIT(A) erred in upholding disallowance of Rs.3,11,920/- out of interest paid by the appellant during the year on the plea that loan borrowed from ECL Finance Ltd is being utilised for improvement of house property to make it fit for earning rent in future, without properly appreciating the fact of the case and law Ld. CIT(A) erred in upholding the addition made by Ld. A.O. of made u/s. 69C of the I.T. Act, without properly appreciating the fact that 3 payments amounting to Rs.1,30,000/- of its partner Shri Suresh Patel and the said amount is not to be considered while The appellant pray that correct cost be determined for arriving at the consideration under Development Agreement and other 4. Briefly stated facts of the case are that the assessee is a partnership firm and during relevant year various heads including from other sources”. The assessee filed return of income for the year under consideration on 28/07/2012 declaring total income ₹8,21,584/- which was revised on 30/07/2012. The return of income was further revised on 23/03/2013 declaring total income at ₹ 29,30,557/-. The return of income filed by the assessee was selected for scrutiny and statutory notices under the Act, 1961 (in short ‘the the year, the assessee disclosed long ₹21,08,973/- on sale of development rights of a plot of land assessee treated total sale consideration on transfer of interest in Development Agreement ( 42% of ₹5,46,27,440/ ITA NO. 3773, 4875 & Briefly stated facts of the case are that the assessee is a partnership firm and during relevant year shown income various heads including “income from house property . The assessee filed return of income for the year under consideration on 28/07/2012 declaring total income which was revised on 30/07/2012. The return of income was further revised on 23/03/2013 declaring total income . The return of income filed by the assessee was selected for scrutiny and statutory notices under the the Act’) were issued and complied with. During the year, the assessee disclosed long-term capital gain on sale of development rights of a plot of land assessee treated total sale consideration on transfer of interest in Development Agreement (DA) based on cost of constructed area at 5,46,27,440/- including ₹4,28,96,000/- for allowing Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 7 Briefly stated facts of the case are that the assessee is a shown income under house property” and “income . The assessee filed return of income for the year under consideration on 28/07/2012 declaring total income at which was revised on 30/07/2012. The return of income was further revised on 23/03/2013 declaring total income . The return of income filed by the assessee was selected for scrutiny and statutory notices under the Income-Tax ) were issued and complied with. During term capital gain (LTCG) of on sale of development rights of a plot of land. The assessee treated total sale consideration on transfer of interest in based on cost of constructed area at for allowing loading of TDR, which was claimed as exempt. The computation of capital gain of the assessee is reproduced Particulars Total Land Areas held by the as on 01/04/1981 The Fair Market Value as on 01/04/1981 Land (FSI) available for out of the above areas) and its FMV as on 01.04.1981 TDR available (as per DCR 1991) Total Area available for development Out of Land FSI of 13966 A. Parted to Developers B. FMV as on 01/04/1981 Indexed Cost (3,64,516/100*551) Land FSI to Assessee – (42%) Out of TDR (FSI) of 51067 Parted to Developer – (58%) TDR FSI to Assessee – (42%) Consideration amount received/receivable by assessee being cost of areas received/receivable by the assessee on account of land cost of construction @ 2,000/- On account of TDR cost of construction @ ₹2,000/- per sq ft Less : Consideration on account of TDR FSI Less : Indexed cost of land developer Less : Cost of Basement Demolition 8460 sq ft @ 900/- per sq ft Long Term Capital Gain liable for taxation 4.1 However, in the scrutiny assessment completed under section 143(3) of the Act on 26/03/2015 taxability of the capital gain arises ITA NO. 3773, 4875 & of TDR, which was claimed as exempt. The computation of capital gain of the assessee is reproduced as under: Area (sq ft) Total Land Areas held by the as on 55,166 The Fair Market Value as on 01/04/1981 24,82,493/ out of the above areas) and its FMV as on 01.04.1981 13,966 6,28,476/ TDR available (as per DCR 1991) 51,067 NIL Total Area available for development 65,033 13,966 Parted to Developers (58%) 8,100 FMV as on 01/04/1981 3,64,516 Indexed Cost (3,64,516/100*551) 20,08,467 (42%) 5,866 51,067 (58%) 29,619 (42%) 21,448 Consideration amount received/receivable by assessee being cost of areas received/receivable by the assessee on account of land cost of construction @ 5,866 1,17,31,440 On account of TDR cost of construction @ 4,28,96,000 5,46,27,440 Less : Consideration on account of TDR FSI 4,28,96,000 Less : Indexed cost of land developer 20,08,467 Less : Cost of Basement Demolition 8460 76,14,000/- 5,25,18,467 Long Term Capital Gain liable for taxation 21,08,973 n the scrutiny assessment completed under section on 26/03/2015, the Assessing Officer taxability of the capital gain arises in the assessment year 2009 Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 8 of TDR, which was claimed as exempt. The computation of capital Amount (₹) 24,82,493/- 6,28,476/- 3,64,516 20,08,467 1,17,31,440 4,28,96,000 5,46,27,440 4,28,96,000 20,08,467 5,25,18,467 21,08,973 n the scrutiny assessment completed under section Assessing Officer held that in the assessment year 2009-10. According to him, under the registered develop possession of land was given to the developer in previous year corresponding to AY 2009 2(47) of the Act read with section 53A of the capital gain arises in computation of LTCG acquisition and computed the quantum of LTC based on stamp duty value of same on protective basis. AO for AY 2012-13 (on protective basis) 4.2 The Ld. AO also made addition of expenditure based on the documents found during the course of the ITA NO. 3773, 4875 & According to him, under the registered development agreement, possession of land was given to the developer in previous year corresponding to AY 2009-10 and therefore in terms of section Act read with section 53A of Transfer of Property Act the capital gain arises in AY 2009-10. He also rejected the computation of LTCG i.e. the sale consideration and cost of and computed the quantum of LTCG at ₹ ased on stamp duty value of ₹18,38,53,000/- and on protective basis. The computation of capital gain by the Ld 13 (on protective basis) is reproduced as under: . AO also made addition of ₹1,30,000/- expenditure based on the documents found during the course of the Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 9 ment agreement, possession of land was given to the developer in previous year 10 and therefore in terms of section of Property Act, He also rejected the i.e. the sale consideration and cost of ₹16,68,07,905/- and assessed the al gain by the Ld. is reproduced as under: for unexplained expenditure based on the documents found during the course of the survey carried on 21/11/2012 The ld. Assessing Officer loan amounting to ₹15,06, the business and interest was paid to family members. 4.3 The assessment for AY 2009 valuation of stamp value matter of valuation was Officer (DVO), who valued the intere ₹10,01,28,000/-. The AO accordingly, a ₹9,37,03,413/- on substantive basis by the AO in para 8.6 of the reproduced as under: Registered Agreement Value on 26.06.2008 Value of Development agreement in view of valuation report dated 29.01.2016 Indexed cost of land to Developer Cost of basement demolished (58%) Long Term Capital Gains ITA NO. 3773, 4875 & survey carried on 21/11/2012 at the premises of the assessee firm Assessing Officer also made disallowance of interest paid on 15,06,920/-as loans not used for the purpose of the business and interest was paid to family members. The assessment for AY 2009-10 was reopened. As the valuation of stamp value authorities was objected by the assessee, matter of valuation was referred by the AO to District Valuation Officer (DVO), who valued the interest of the assessee in DA at . The AO accordingly, assessed the capital gain at on substantive basis. The computation of c by the AO in para 8.6 of the assessment order for AY 2009 reproduced as under: Registered Agreement Value on 26.06.2008 ₹18,38,53,000 Development agreement in view of valuation report dated 29.01.2016 Indexed cost of land to Developer Cost of basement ₹20,08,467 ₹44,16,120 Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 10 premises of the assessee firm. allowance of interest paid on for the purpose of the business and interest was paid to family members. was reopened. As the was objected by the assessee, by the AO to District Valuation st of the assessee in DA at ssessed the capital gain at The computation of capital gain assessment order for AY 2009-10, is 10,01,28,000 ₹9,37,03,413/- 5. The Ld CIT(A) held that capital gai rather than in AY 2009 the cost of constructi ₹18,74,74,089/-, being 42% thereof consideration relatable to load gain. For AY 2009 substantiative basis in AY 2 required in AY 2009- 6. Aggrieved, both the assessee and us. During the course of the hearing both sides have filed paperbook and written submissions and made 7. The ground No. year of the taxability of the capital gain. In Revenue has submitted that the developer was given complete access to the property in the previous year corresponding to ITA NO. 3773, 4875 & The Ld CIT(A) held that capital gain is taxable in AY 2012 n in AY 2009-10. He held that capital gain is chargeable on the cost of construction as contained in the report of being 42% thereof ₹7,87,73,911/ consideration relatable to loading TDR will not be liable to capital gain. For AY 2009-10 held that capital gain substantiative basis in AY 2012-13, so no separate adjudication -10. , both the assessee and Revenue are in appeal before During the course of the hearing both sides have filed paperbook and written submissions and made oral arguments. The ground No. 1 of the appeal of the Revenue year of the taxability of the capital gain. In support of submitted that the developer was given complete access to the property in the previous year corresponding to Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 11 n is taxable in AY 2012-13 10. He held that capital gain is chargeable on contained in the report of the DVO at 7,87,73,911/- and will not be liable to capital 10 held that capital gain was taxed on 13, so no separate adjudication was are in appeal before During the course of the hearing both sides have filed paperbook Revenue relates to the support of the grounds submitted that the developer was given complete access to the property in the previous year corresponding to assessment year 2009 be taxed in the assessment year 7.1 The facts in relatio mentioned elaborately by the the issue, brief as how the property came into existence and then transferred to the developer (i) Mr. Jethabhai G Shah and style of M/s Pankaj enterprise owner of plot No. one of industrial subdivisi No. one and two ad enterprise was granted exemption in the year 1979 for industrial use of the said property. (ii) In the year 1980, Mr with M/s Maste ‘the Master clock Jethabhai agreed to bring said property as his capital ITA NO. 3773, 4875 & 2009-10 and therefore the capital gain was liable to be taxed in the assessment year 2009-10. The facts in relation to the issue in dispute have been mentioned elaborately by the Assessing Officer. For understanding the issue, brief as how the property came into existence and then transferred to the developer, are summarized as under: Jethabhai G Shah was carrying business in the name style of M/s Pankaj enterprise. He owner of plot No. one of industrial subdivisi No. one and two admeasuring 5127.36 m². enterprise was granted exemption in the year 1979 for industrial use of the said property. In the year 1980, Mr. Jethabhai entered into an agreement with M/s Master Clock and watch works P Ltd ( Master clock’) for forming a partnership Jethabhai agreed to bring said property as his capital Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 12 10 and therefore the capital gain was liable to n to the issue in dispute have been . For understanding the issue, brief as how the property came into existence and then ed as under: business in the name . He was absolute owner of plot No. one of industrial subdivision of survey measuring 5127.36 m². M/s Pankaj enterprise was granted exemption in the year 1979 for Jethabhai entered into an agreement r Clock and watch works P Ltd (in short for forming a partnership, wherein Mr. Jethabhai agreed to bring said property as his capital contribution and capital, which will be required for carrying on the partnership business of M/S Pankaj enterprises. On the execution of the agreement, asset and property of partnership firm M/s Pankaj enterprises. (iii) Subsequent to that by way of different deeds of partnership and deeds of retirement several changes made in the Constitution of the firm from time to time. Accordingly in terms of the last such deed of reconstitution of the partnership dated 03/04/2007, the present partners of the partnership firm are the clock, Mr. Patel. (iv) Out of the total plot area of 5127.05 m², 381.14 m² was under encroachment by illegal ITA NO. 3773, 4875 & contribution and the master clock to bring monetary capital, which will be required for carrying on the partnership business of M/S Pankaj enterprises. On the of the agreement, the said property became the asset and property of partnership firm M/s Pankaj enterprises. Subsequent to that by way of different deeds of partnership and deeds of retirement several changes made in the Constitution of the firm from time to time. ngly in terms of the last such deed of reconstitution of the partnership dated 03/04/2007, the present partners of the partnership firm are the Suresh Ishwarlal Patel and Mr Out of the total plot area of 5127.05 m², the land area of 381.14 m² was under encroachment by illegal Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 13 the master clock to bring monetary capital, which will be required for carrying on the partnership business of M/S Pankaj enterprises. On the the said property became the asset and property of partnership firm M/s Pankaj Subsequent to that by way of different deeds of partnership and deeds of retirement several changes made in the Constitution of the firm from time to time. ngly in terms of the last such deed of reconstitution of the partnership dated 03/04/2007, the present partners of the partnership firm are the Master Mr. Nirmal Suresh the land area of 381.14 m² was under encroachment by illegal occupants and 10% of the area (512.70 m² amenity space, and thus the net plot area available for construction of the said property was 4233.21 m². (v) The assessee firm des estate on the said property and after obtaining approval in the year 1995 commenced construction of industrial building on the said property divided into “Wing A” and Wing A was having net floor area of 8460.80 ft². This portion of Wing A which was under construction and not occupied assessed as land under construction under Municipal Ward. The Wing B was complete with ground and two upper floors and occupation 1999. ITA NO. 3773, 4875 & and 10% of the area (512.70 m²) was to be left open i.e. amenity space, and thus the net plot area available for construction of the said property was 4233.21 m². The assessee firm desired to construct an industrial estate on the said property and after obtaining approval in the year 1995 from the competent commenced construction of industrial building on the said property divided into “Wing A” and Wing A was built partially comprising of a basement having net floor area of 8460.80 ft². This portion of Wing A which was under construction and not occupied assessed as land under construction under Municipal Ward. The Wing B was complete with ground and two pper floors and occupation certificate was issued in Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 14 ) was to be left open i.e. amenity space, and thus the net plot area available for construction of the said property was 4233.21 m². to construct an industrial estate on the said property and after obtaining approval competent authorities, commenced construction of industrial building on the said property divided into “Wing A” and “Wing B”. The built partially comprising of a basement having net floor area of 8460.80 ft². This portion of Wing A which was under construction and not occupied, was assessed as land under construction under Municipal Ward. The Wing B was complete with ground and two certificate was issued in (vi) The partnership firm desire information technology park on Wing A area having FSI of 6044.1 m², which was worked out as under: Plot Area Total Plot Area Less: Area under encroachment Less: Amenity Space Net Plot Area Total Permissible FSI Less: FSI Consumed in Wing B which is retained by the Owners Balance Plot including FSI (vii) Thereafter, into an agreement With M/s V Developer, for development of the plot wherein they agreed to share the constructed property in the ratio of 42:58 i.e. the owners will get 42% share of the constructed property free of cost. This agreement was entered into in the financial year 2007 registered in the financial year 2008 ITA NO. 3773, 4875 & The partnership firm desired to construct and develop information technology park on Wing A admeasuring plot area having FSI of 6044.1 m², which was worked out as t Area Less: Area under encroachment Less: Amenity Space Net Plot Area Total Permissible FSI Less: FSI Consumed in Wing B which is retained by the Balance Plot including FSI Thereafter, the assessee i.e. owner of the land into an agreement With M/s Vidhi Enterprises i.e. , for development of the plot wherein they agreed to share the constructed property in the ratio of 42:58 i.e. the owners will get 42% share of the constructed property free of cost. This agreement was entered into in the financial year 2007 registered in the financial year 2008-09. Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 15 to construct and develop admeasuring plot area having FSI of 6044.1 m², which was worked out as Sq Mtr 5127.05 381.14 512.70 4233.21 8979.21 Less: FSI Consumed in Wing B which is retained by the 2935.00 6044.21 i.e. owner of the land, entered idhi Enterprises i.e. , for development of the plot wherein they agreed to share the constructed property in the ratio of 42:58 i.e. the owners will get 42% share of the constructed property free of cost. This agreement was entered into in the financial year 2007-08, but was (viii) the assessee obtain constructed property in the previous year corresponding to assessment year 2012 view of the possession of the property received in assessment year 2012 arose in the case of the assessee in assessment year 2012 13 and offered accordingly. 8. In background of the above facts, the that long-term capital gain on transfer of development rights should be charged on the basis of the registered entered into between the assessee i.e. the owner and M/s Vidhi enterprise i.e. developer assessment year 2009 Officer is reproduced as under: “Year of Chargeability ITA NO. 3773, 4875 & the assessee obtained possession of its share of constructed property in the previous year corresponding assessment year 2012-13. According to the assessee in view of the possession of the property received in assessment year 2012-13, the long-term capital gain arose in the case of the assessee in assessment year 2012 13 and offered accordingly. ound of the above facts, the Assessing Officer term capital gain on transfer of development rights should be charged on the basis of the registered development entered into between the assessee i.e. the owner and M/s Vidhi se i.e. developer, in the financial year 2008 assessment year 2009-10. The relevant finding of the is reproduced as under: Year of Chargeability Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 16 possession of its share of constructed property in the previous year corresponding 13. According to the assessee in view of the possession of the property received in term capital gain arose in the case of the assessee in assessment year 2012- Assessing Officer held term capital gain on transfer of development rights should development agreement entered into between the assessee i.e. the owner and M/s Vidhi , in the financial year 2008-09 i.e. the nding of the Ld. Assessing The assessee in the course of hearing has stated that agreement was executed in the FY 2007-08 and hence the chargeability year should be FY 2007 relevant to AY 2008-09. The contention of the assessee is not acceptable as provisions of section 53A of Transfer of Property Act was amended in the year 2001 by which additional condition of registration of the written agreement was introduced and in the instant case the agreement was registered in the FY 2008 chargeability should be FY Gain on transfer of development rights should be charged on the basis of registered agreement entered into between Pankaj Enterprises i.e. the Owner and M/s Vidhi Enterprises in the FY 2008 chargeability of income. Under Section 2(47) (v),any transaction involving allowing of possession to be taken over or retained in part performance of a contract of the nature referred to in Section 53A of the Transfer of Property Act woul Section 2(47)(v). That, in order to attract Section 53A,the following conditions needs to be fulfilled There should be a contract for consideration; it should be in writing; it should be signed by the transferor; it should pertai immovable property; the transferee should have taken the possession of the property lastly, the transferee should be ready and willing to perform his part of the contract. That even arrangements confirming privileges of ownership without transfer of title could fall under Section 2(47) (v).Section 2(47) (v) was introduced in the Act from the assessment year 1988 in most cases, it was argued on behalf of the assessee that no transfer took place till execution of the into agreements for developing properties with the builders and under the arrangement with the builders, they used to confer privileges of ownership ITA NO. 3773, 4875 & The assessee in the course of hearing has stated that agreement was executed 08 and hence the chargeability year should be FY 2007 09. The contention of the assessee is not acceptable as provisions of section 53A of ransfer of Property Act was amended in the year 2001 by which additional condition of registration of the written agreement was introduced and in the instant case the agreement was registered in the FY 2008-09 and therefore, the chargeability should be FY 2008-09 relevant to AY 2009-10. Long Gain on transfer of development rights should be charged on the basis of registered agreement entered into between Pankaj Enterprises i.e. the Owner and M/s Vidhi Enterprises in the FY 2008-09 i.e. AY 2009-10 as the year of chargeability of income. Under Section 2(47) (v),any transaction involving allowing of possession to be taken over or retained in part performance of a contract of the nature referred to in Section 53A of the Transfer of Property Act would core within the ambit of Section 2(47)(v). That, in order to attract Section 53A,the following conditions needs to be fulfilled There should be a contract for consideration; it should be in writing; it should be signed by the transferor; it should pertain to transfer of immovable property; the transferee should have taken the possession of the property lastly, the transferee should be ready and willing to perform his part of the contract. That even arrangements confirming privileges of ownership ransfer of title could fall under Section 2(47) (v).Section 2(47) (v) was introduced in the Act from the assessment year 1988-89 because prior thereto, in most cases, it was argued on behalf of the assessee that no transfer took place till execution of the conveyance. Consequently, the assessee used to enter into agreements for developing properties with the builders and under the arrangement with the builders, they used to confer privileges of ownership Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 17 The assessee in the course of hearing has stated that agreement was executed 08 and hence the chargeability year should be FY 2007-08 The contention of the assessee is not acceptable as provisions of section 53A of ransfer of Property Act was amended in the year 2001 by which additional condition of registration of the written agreement was introduced and in the 09 and therefore, the 10. Long-term Capital Gain on transfer of development rights should be charged on the basis of registered agreement entered into between Pankaj Enterprises i.e. the Owner 10 as the year of Under Section 2(47) (v),any transaction involving allowing of possession to be taken over or retained in part performance of a contract of the nature referred d core within the ambit of Section 2(47)(v). That, in order to attract Section 53A,the following conditions needs to be fulfilled There should be a contract for consideration; it should be in n to transfer of immovable property; the transferee should have taken the possession of the property lastly, the transferee should be ready and willing to perform his part of the contract. That even arrangements confirming privileges of ownership ransfer of title could fall under Section 2(47) (v).Section 2(47) (v) was 89 because prior thereto, in most cases, it was argued on behalf of the assessee that no transfer took conveyance. Consequently, the assessee used to enter into agreements for developing properties with the builders and under the arrangement with the builders, they used to confer privileges of ownership without executing conveyance and to plug that loophol came to be introduced in the Act. The scope of Section 2(47) (v) reads as under: "2(47)... (v)(With effect from April 1,1988) any transaction involving the allowing of the possession of any immovable property (as defined) to be taken o part performance of a contract of the nature referred to in Section 53A of the Transfer of Property Act, 1882. (vi) (With effect from April 1, 1988) any transaction (whether by way of becoming a memberof, or acquiring shares in, a co or other association of persons arrangement or in any other manner whatsoever; transferring or enabling the enjoyment of, any immovable defined)." The above two clauses were introduced with effect from April 1, 1988. They provide that "transfer" includes ()any transaction which allows possession to be taken/retained in part section 53A of the Transfer of into any manner which has the effect of of any immovable property. Therefore, in these two be taxable in the year in which such transactions are entered transfer of immovable property is not effective or complete under the law. ITA NO. 3773, 4875 & without executing conveyance and to plug that loophole, Section 2(47) (v) came to be introduced in the Act. The scope of Section 2(47) (v) reads as under: (v)(With effect from April 1,1988) any transaction involving the allowing of the possession of any immovable property (as defined) to be taken o part performance of a contract of the nature referred to in Section 53A of the Transfer of Property Act, 1882. (vi) (With effect from April 1, 1988) any transaction (whether by way of becoming a memberof, or acquiring shares in, a co-operative society ,company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever; which has the effect of transferring or enabling the enjoyment of, any immovable es were introduced with effect from April 1, 1988. They "transfer" includes ()any transaction which allows possession to be taken/retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, and(in)any transaction entered into any manner which has the effect of transferring or enabling the enjoyment of any immovable property. Therefore, in these two cases, capital gains would be taxable in the year in which such transactions are entered in transfer of immovable property is not effective or complete under the Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 18 e, Section 2(47) (v) (v)(With effect from April 1,1988) any transaction involving the allowing of the possession of any immovable property (as defined) to be taken or retained in part performance of a contract of the nature referred to in Section 53A of the (vi) (With effect from April 1, 1988) any transaction (whether by way of ve society ,company or by way of any agreement or any which has the effect of transferring or enabling the enjoyment of, any immovable property(as es were introduced with effect from April 1, 1988. They "transfer" includes ()any transaction which allows possession to performance of a contract of the nature referred to in ct, and(in)any transaction entered transferring or enabling the enjoyment cases, capital gains would into, even if the transfer of immovable property is not effective or complete under the general The assessee in its submission has stated that no rights are being transferred developers till such time entire building is constructed as per the terms o Development Agreement. The department would like to state that transfer of developmental rights had taken place and Sec 2(47) would be applicable and to further corroborate our point, the extracted portion of the agreement is placed below: Point No 9B of the Agreement states: remove, settle all legitimate defects, claims to the said property or any part thereof received from till the entire development project becoming known. Point No. 22 (b) of the agreement states: responsible for any contravention, violation, non regulations, terms of sanction/approvals of the said new building and the or be made a party to any such default even if the Developers commits any defaults/violation in respect thereof. The Developers shall in this the owners full and effectually indemnified. Point No. 26 of the agreement states: Owners Area is all inclusive consideration for grant of de the Developers in the manner and nothing further shall be due and Developers Area and/or the conveyance of the common organization to be formed of all the premises ITA NO. 3773, 4875 & The assessee in its submission has stated that no rights are being transferred developers till such time entire building is constructed as per the terms o Development Agreement. The department would like to state that transfer of developmental rights had place and Sec 2(47) would be applicable and to further corroborate our portion of the agreement is placed below: B of the Agreement states: The developers shall be liable to settle all legitimate defects, claims to the said property or any part any person lawfully claiming from the owners at any time till the entire development project is completed within a period of 30 days of it Point No. 22 (b) of the agreement states: The Developers shall be fully for any contravention, violation, non-compliance of any laws, rules, sanction/approvals and for all aspects of the development of the said new building and the Owners will in no way or manner be concerned or be made a party to any such contravention, violation/non- default even if the Developers commits any irregularities and/or defaults/violation in respect thereof. The Developers shall in this the owners full and effectually indemnified. Point No. 26 of the agreement states: The aforesaid consideration being all inclusive consideration for grant of development rights the Developers in the manner envisaged herein in respect of the said property er shall be due and payable by the Developers towards the Developers Area and/or the conveyance of the said property in favour of the organization to be formed of all the premises purchasers. Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 19 The assessee in its submission has stated that no rights are being transferred to developers till such time entire building is constructed as per the terms of the The department would like to state that transfer of developmental rights had place and Sec 2(47) would be applicable and to further corroborate our The developers shall be liable to settle all legitimate defects, claims to the said property or any part any person lawfully claiming from the owners at any time s completed within a period of 30 days of it The Developers shall be fully compliance of any laws, rules, and for all aspects of the development Owners will in no way or manner be concerned -compliance or irregularities and/or defaults/violation in respect thereof. The Developers shall in this respect keep The aforesaid consideration being velopment rights to envisaged herein in respect of the said property payable by the Developers towards the said property in favour of the purchasers.” 9. Before the Ld. CIT(A), the assessee contested the finding of the Ld. Assessing Officer 10, only permissive possession was given to the developer for carrying out acts and deeds, which w of the said property and no possession of the property was given. The construction of the property was completed only in year 2011-12 and therefore exchange/barter of the property happened only in the previous year corresponding to the assessment year 2012 taxable in the assessment year 2012 9.1 Ld. CIT(A) after considering vario development agreement , and power of attorney the assessee and the developer 26/06/2008, concluded that there is no transfer of property assessment year 2009 the Act and the assessee received 42% of the total constructed area ITA NO. 3773, 4875 & Before the Ld. CIT(A), the assessee contested the finding of the Assessing Officer on the ground that in assessment year 2009 only permissive possession was given to the developer for carrying out acts and deeds, which was necessary for development of the said property and no possession of the property was given. The construction of the property was completed only in 12 and therefore exchange/barter of the property happened only in the previous year corresponding to the assessment year 2012-13. Hence, the long-term capital gain was taxable in the assessment year 2012-13. Ld. CIT(A) after considering various clauses of the development agreement , and power of attorney executed the assessee and the developer, which was registered on 26/06/2008, concluded that there is no transfer of property assessment year 2009-10, within the meaning of secti and the assessee received 42% of the total constructed area Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 20 Before the Ld. CIT(A), the assessee contested the finding of the that in assessment year 2009- only permissive possession was given to the developer for necessary for development of the said property and no possession of the property was given. The construction of the property was completed only in financial 12 and therefore exchange/barter of the property happened only in the previous year corresponding to the term capital gain was us clauses of the executed between , which was registered on 26/06/2008, concluded that there is no transfer of property in the within the meaning of section 2(47) of and the assessee received 42% of the total constructed area in assessment year 2012 therefore capital gain 13. The relevant finding of the Ld. CIT(A) “5.16 I have gone through the development agreement and find that Clauses 14, 16, 24(c), 24(A), the provision of these clauses are reproduced here below: (i.) CI. 14 of the agreement provides "developer shall be deemed to have been allowed to enter upon the said property as developers for the purpose of construction of said new building thereon in accordance with plan to be sanction with amendment thereto if any, by the Municipal Corporation of Greater Mumbai". The developer is allo The developer is also permitted to put hoarding/sign boards (CH 14(iii). (ii) Cl. 16 provides for execution of power of authority infavour of developer. Clause 16 "'immediately upon execution of persons the owners have granted in favour of developer or their nominees, an irrevocable power of attorney to do all acts matters and things as necessary for development of said property and which power of attorney shall be registered with this development agreement" (iii) CI. 24 (c) provides "the developers shall be entitled to put the purchaser of the premises as and & when occupation ITA NO. 3773, 4875 & in assessment year 2012-13 i.e. in which the exchange took place gain has to be taxed in the assessment year 2012 nding of the Ld. CIT(A) is reproduced as under: I have gone through the development agreement and find that Clauses 14, 16, 24(c), 24(A), the provision of these clauses are reproduced here below:- CI. 14 of the agreement provides "developer shall be deemed allowed to enter upon the said property as developers for the purpose of construction of said new building thereon in accordance with plan to be sanction with amendment thereto if any, by the Municipal Corporation of Greater Mumbai". The developer is allowed 10 construct a temporary site-office (CI. 14(in). The developer is also permitted to put hoarding/sign boards (CH Cl. 16 provides for execution of power of authority infavour of developer. Clause 16 "'immediately upon execution of persons the owners have granted in favour of developer or their nominees, an irrevocable power of attorney to do all acts matters and things as necessary for development of said property power of attorney shall be registered simultaneously with this development agreement" CI. 24 (c) provides "the developers shall be entitled to put the of the developer's area, in possession of the respective s and & when occupation certificate in respect of the said Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 21 13 i.e. in which the exchange took place, has to be taxed in the assessment year 2012- is reproduced as under: I have gone through the development agreement and find that Clauses 14, 16, 24(c), 24(A), the provision of these clauses are CI. 14 of the agreement provides "developer shall be deemed allowed to enter upon the said property as developers for the purpose of construction of said new building thereon in accordance with plan to be sanction with amendment thereto if any, by the Municipal Corporation of Greater Mumbai". The office (CI. 14(in). The developer is also permitted to put hoarding/sign boards (CH Cl. 16 provides for execution of power of authority infavour of developer. Clause 16 "'immediately upon execution of presents persons the owners have granted in favour of developer or their nominees, an irrevocable power of attorney to do all acts deeds, matters and things as necessary for development of said property simultaneously CI. 24 (c) provides "the developers shall be entitled to put the ion of the respective certificate in respect of the said new building is obtained by developers, provided developer shall not handover possession of developer's area to anybody or allow or use the premises in the developers area on any basis whatsoever, unless and until the developers shall have offe to the owner, the owner's contemplated herein in writing and IS days have (iv) C1. 24(A) run as offered possession of the owner's irrevocable power of authority in favour of developers nominees to execute the vesting documents/declaration under Maharashtra Apartment Ownership act". 5.17 I have also gone through the details of the power of attorney executed by the appellant in favo registered on 26/06/08. of attorney authorizes the (a) To carry ou construction and completion of (b) To represent the appellant before all government/semi government revenue, local or other development of the said property (C1.6) (c) To file necessary application to Municipal Corporation of Bombay, Development Contr plan and any amendment thereto, to approach the engineer and to obtain IOD and CC, to appoint Architect to fuifill the condition of commencement certificate (cl.9). ITA NO. 3773, 4875 & ew building is obtained by developers, provided however, the developer shall not handover possession of developer's area to allow or use the premises in the developers area on any whatsoever, unless and until the developers shall have offe to the owner, the owner's area duly completed in all respect and contemplated herein in writing and IS days have elapsed. 24(A) run as "Immediately upon the owners being offered possession of the owner's area, owner shall execute an e power of authority in favour of developers and/or their nominees to execute the vesting documents/declaration under Apartment Ownership act". I have also gone through the details of the power of attorney by the appellant in favour of the builder and the same was 26/06/08. Broadly speaking, it turns out that power of attorney authorizes the builder to do the following:- (a) To carry out development work on the said property including construction and completion of building (C1.2) (b) To represent the appellant before all government/semi government revenue, local or other bodies in relation to development of the said property (C1.6) To file necessary application to Municipal Corporation of Bombay, Development Control Board and to prepare development plan and any amendment thereto, to approach the engineer and to obtain IOD and CC, to appoint Architect to fuifill the commencement certificate (cl.9). Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 22 however, the developer shall not handover possession of developer's area to allow or use the premises in the developers area on any whatsoever, unless and until the developers shall have offered area duly completed in all respect and "Immediately upon the owners being area, owner shall execute an and/or their nominees to execute the vesting documents/declaration under I have also gone through the details of the power of attorney ur of the builder and the same was Broadly speaking, it turns out that power development work on the said property including (b) To represent the appellant before all government/semi- bodies in relation to To file necessary application to Municipal Corporation of Board and to prepare development executive engineer and to obtain IOD and CC, to appoint Architect to fuifill the (d) To obtain the necessary FSI, right by way and utilise for the purpose (e) To represent before the Ministry of Commerce and other departments of Industrial Policy & (f) To apply to Municipality for water supply, city survey to obtain the required Environment Act, pollution Act, Aviation authority. (g) Under C1.31, the developer is allowed to sale on ownership basis or to grant lease on leave area, subject to conditions under the development 5.18 It is clear from above facts and judicial decisions that in case of development agreement, if the developer is merely allowed to enter the property deemed to be a possession for the 53A of Transfer of Property Act. The terms and development agreement between the appellant and M/s. Vidhi Enterprises clearly indicate that only a permissive construction work was handed over to the developer, the developer was never enjoying rights of from the fact that the developer is not portion of developed area. It can land was not handed over to the bu construction was completed in terms of develop only in F.Y.2011 appellant and the developer took 12. The sum and substance can be summarized in ITA NO. 3773, 4875 & (d) To obtain the necessary FSI, right by way. TDR of other property and utilise for the purpose of construction (cl. 12). ) To represent before the Ministry of Commerce and other departments of Industrial Policy & Promotion (Cl.13). ) To apply to Municipality for water supply, city survey officer and to obtain the required sanctions and confirmation under Environment Act, pollution Act, Aviation authority. (g) Under C1.31, the developer is allowed to sale on ownership basis or to grant lease on leave & license, out of his potion of construc area, subject to conditions under the development agreement It is clear from above facts and judicial decisions that in case development agreement, if the developer is merely allowed to enter the property for the construction of the building, it cannot be deemed to be a possession for the purposes of Section 2(47) r.w.s. 53A of Transfer of Property Act. The terms and conditions of the development agreement between the appellant and M/s. Vidhi Enterprises clearly indicate that only a permissive possession for the work was handed over to the developer, the developer was never enjoying rights of ownership over the land as is evident from the fact that the developer is not entitled to transfer/sale his portion of developed area. It can be safely held that possession of land was not handed over to the builder in F.Y. 2008 construction was completed in terms of development agreement only in F.Y.2011-12 and the exchange of property between the appellant and the developer took place in that financial year 2011 12. The sum and substance can be summarized in following words: Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 23 . TDR of other property ) To represent before the Ministry of Commerce and other officer and sanctions and confirmation under (g) Under C1.31, the developer is allowed to sale on ownership basis & license, out of his potion of construction agreement. It is clear from above facts and judicial decisions that in case development agreement, if the developer is merely allowed to it cannot be purposes of Section 2(47) r.w.s. conditions of the development agreement between the appellant and M/s. Vidhi possession for the work was handed over to the developer, the developer ownership over the land as is evident entitled to transfer/sale his possession of lder in F.Y. 2008-09. The ment agreement 12 and the exchange of property between the in that financial year 2011- following words:- (a) That the capital assets was converted into stock 01/04/07 (b) That the development agreement was entered into on 17/04/07 and development agreeme (c) That neither provi power of attorney has given right of possession to the developer. The builder is only construction. (d) The right to permissive possession. (e) The appellant's interest in plot of land is exchanged for constructed area in 5.19 After considering the totality of facts, rival submissions, the applicable law find force in the argument of the that no income accrues in A.Y. 2009 within the meaning of Section 2(47) of I.T been given in terms of Section 53A of Transfer of Property Act. The appellant received 42% of the total area constructed by builder in financial year relevant to exchange took place. Therefore, capital gains A.Y. 2009-10 and has to be taxed in A.Y. 2012 findings, Ground Nos. 1 to 3 are hereby allowed. ITA NO. 3773, 4875 & (a) That the capital assets was converted into stock-in (b) That the development agreement was entered into on 17/04/07 development agreement was registered on 26.06.08. (c) That neither provision of development agreement n attorney has given right of possession to the developer. The builder is only entitled to enter and do all the necessary (d) The right to enter for necessary construction only amount to possession. (e) The appellant's interest in plot of land is exchanged for constructed area in the AY 2012-13. After considering the totality of facts, rival submissions, the applicable law and on the basis of discussion mentioned above, I find force in the argument of the appellant. I am of the clear opinion that no income accrues in A.Y. 2009-10 as there is no transfer within the meaning of Section 2(47) of I.T Act as no possession ven in terms of Section 53A of Transfer of Property Act. The received 42% of the total area constructed by builder in financial year relevant to AY. 2012-13 i.e. the year in which exchange took place. Therefore, capital gains cannot be taxed in 10 and has to be taxed in A.Y. 2012-13. In terms of findings, Ground Nos. 1 to 3 are hereby allowed.” Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 24 in-trade on (b) That the development agreement was entered into on 17/04/07 sion of development agreement nor of the attorney has given right of possession to the developer. entitled to enter and do all the necessary enter for necessary construction only amount to (e) The appellant's interest in plot of land is exchanged for After considering the totality of facts, rival submissions, the on the basis of discussion mentioned above, I appellant. I am of the clear opinion there is no transfer Act as no possession has ven in terms of Section 53A of Transfer of Property Act. The received 42% of the total area constructed by builder in 13 i.e. the year in which cannot be taxed in 13. In terms of these 10. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The assessee has by way of registered deed of conveyanc into in FY 2008-09 (i.e. for developing its plot of land into an industrial estate as per the maps/floor approved by the competent authority. industrial estate got constructed in financial year corresponding to assessment year 2012 dispute between the parties is regarding the year of taxability of capital gain. According to the assessee it is li assessment year 2012 gain is liable to be taxed in assessment year 2009 the Assessing Officer section 2 (47) of the Act department relied upon clause No. 9B, 22(b) and clause no.26 of the development agreement. ITA NO. 3773, 4875 & have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The assessee way of registered deed of conveyance, which was (i.e. corresponding to assessment for developing its plot of land into an industrial estate as per the maps/floor approved by the competent authority. industrial estate got constructed in financial year corresponding to assessment year 2012-13 i.e. the year under consideration. The dispute between the parties is regarding the year of taxability of capital gain. According to the assessee it is liable to be taxed in assessment year 2012-13, but according to the Revenue gain is liable to be taxed in assessment year 2009-10. According to transfer of development right took place under Act on the date of development agreement department relied upon clause No. 9B, 22(b) and clause no.26 of the development agreement. The said clauses of the agreement have Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 25 have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The assessee which was entered corresponding to assessment year 2009-10), for developing its plot of land into an industrial estate as per the maps/floor approved by the competent authority. The said industrial estate got constructed in financial year corresponding to 13 i.e. the year under consideration. The dispute between the parties is regarding the year of taxability of able to be taxed in Revenue the capital 10. According to transfer of development right took place under date of development agreement. The department relied upon clause No. 9B, 22(b) and clause no.26 of the uses of the agreement have been reproduced by the AO in his order, which we have extracted above. It is the contention performance of the agreement, possession was handed over to the developer and therefore it amounted to tran 2(47)(4) of the Act. Before us, it is the contention of the of the assessee that carrying out construction and no ownership rights were transferred under the development agreement dated 02/04/2006, which was registered on 26/06/2008. The assessee relied on the clauses quoted by the Ld. CIT(A) in para 5.16 of the impugned order. It was further submitted that in terms of development agreement, a general power of attorney was on 26/06/2008 and relevant clauses which have been referred by the Ld. CIT(A) in para 5.17 of the impugned order extracted above. ITA NO. 3773, 4875 & been reproduced by the AO in his order, which we have extracted It is the contention of the revenue that while performance of the agreement, possession was handed over to the developer and therefore it amounted to transfer in terms of section Before us, it is the contention of the t only permissible ingress was provided for carrying out construction and no ownership rights were transferred under the development agreement dated 02/04/2006, which was registered on 26/06/2008. The assessee relied on the clauses by the Ld. CIT(A) in para 5.16 of the impugned order. It was further submitted that in terms of development agreement, a general power of attorney was executed which was also registered on 26/06/2008 and relevant clauses which have been referred by CIT(A) in para 5.17 of the impugned order, which we have Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 26 been reproduced by the AO in his order, which we have extracted that while part performance of the agreement, possession was handed over to the sfer in terms of section Before us, it is the contention of the Ld. Counsel only permissible ingress was provided for carrying out construction and no ownership rights were transferred under the development agreement dated 02/04/2006, which was registered on 26/06/2008. The assessee relied on the clauses by the Ld. CIT(A) in para 5.16 of the impugned order. It was further submitted that in terms of development agreement, a which was also registered on 26/06/2008 and relevant clauses which have been referred by , which we have 10.1 The Ld. counsel being allowed for carrying development on plot of land is not handing over possession Act, and hence, no transfer 1. CS Atwal Vs CIT 378 ITR 244 ( P &H) 2. Binjusari Properties P Ltd. Vs ACIT 164 TTJ 417 (Hyedearbad) 3. Dilip Anand Vazirani Vs ITO 167 TTJ 194(Bom) 4. Shri Sadia Shaikh Tax Appeal No. 11 Karnataka) 5. Balveer Singh Maini 398 ITR 531 (SC) 6. Faradin Khan 304 CTR 299 (Bom) 10.2 In the case of CS Atwal (supra) legislative intent behind incorporating clause (v) to section 2(47) of the Act. The relevant part of the observation of the Hon’ble High Court is reproduced as under: “The legislative intent behind incorporating clause (v) to 2(47) of the Act from assessment year 1988 CBDT circular is to embrace within its ambit those transactions of sale of property where assessee enters into agreements for developing properties with builders and the seller confers the rights and privileges of ownership to the buyer w ITA NO. 3773, 4875 & in support of the proposition that mere ingress being allowed for carrying development on plot of land is not possession within the meaning of section 2(47) of the no transfer, relied on following decisions: CS Atwal Vs CIT 378 ITR 244 ( P &H) Binjusari Properties P Ltd. Vs ACIT 164 TTJ 417 (Hyedearbad) Dilip Anand Vazirani Vs ITO 167 TTJ 194(Bom) Shri Sadia Shaikh Tax Appeal No. 11 of 2013 dated 02/12/13 ( Karnataka) Balveer Singh Maini 398 ITR 531 (SC) Faradin Khan 304 CTR 299 (Bom) CS Atwal (supra), Hon’ble High Court observed legislative intent behind incorporating clause (v) to section 2(47) of . The relevant part of the observation of the Hon’ble High reproduced as under: The legislative intent behind incorporating clause (v) to of the Act from assessment year 1988-89 as discernible from CBDT circular is to embrace within its ambit those transactions of sale of property where assessee enters into agreements for developing properties with builders and the seller confers the rights and privileges of ownership to the buyer w Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 27 in support of the proposition that mere ingress being allowed for carrying development on plot of land is not tion 2(47) of the relied on following decisions: Binjusari Properties P Ltd. Vs ACIT 164 TTJ 417 (Hyedearbad) Dilip Anand Vazirani Vs ITO 167 TTJ 194(Bom) of 2013 dated 02/12/13 ( , Hon’ble High Court observed legislative intent behind incorporating clause (v) to section 2(47) of . The relevant part of the observation of the Hon’ble High The legislative intent behind incorporating clause (v) to Section discernible from CBDT circular is to embrace within its ambit those transactions of sale of property where assessee enters into agreements for developing properties with builders and the seller confers the rights and privileges of ownership to the buyer without executing/registering a formal conveyance deed in order to avoid capital gains tax. In order to thwart such tendencies, transactions where the possession is given or allowed to be retained in part performance of contract of the nature referred to in 1882 Act is held to be "transfer" by fiction of law though under general law it would not be considered to be "transfer". In other words, by deeming fiction, "transfer" is assigned extended for taxation purposes by incorporating and including that where possession of any immovable property is taken or GURBAX SINGH 2015.07.23 15:30 I attest to the accuracy and integrity of this document High Court Chandigarh contract of the nature referred to in 10.3 The Tribunal in the case of Limited (supra), held as under: “In the present case, admittedly, what has been executed by the assessee is a ‘Development Agreement Attorney’. A reading of the said agreement indicates that what was handed over by the assessee to the developer is only a ‘permissive possession’. Clause 5 of the said agreement dated 2nd February, 2006, on page 3 thereof, specifically provides that ‘First party on signing of this agreement has permitted the developer to develop the scheduled land’ (emphasis added). As per Clause 9 of the agreement, consideration receivable by the assessee from the developer is ‘38% of the residential part of the developed area......’ (which was later reduced to 33%, by virtue of a supplementary agreement executed on 18.10.2007). That being so, it is only ITA NO. 3773, 4875 & executing/registering a formal conveyance deed in order to avoid capital gains tax. In order to thwart such tendencies, transactions where the possession is given or allowed to be retained in part performance of contract of the nature referred to in Section 53A 1882 Act is held to be "transfer" by fiction of law though under general law it would not be considered to be "transfer". In other words, by deeming fiction, "transfer" is assigned extended for taxation purposes by incorporating and including that where possession of any immovable property is taken or GURBAX SINGH 2015.07.23 15:30 I attest to the accuracy and integrity of this document High Court Chandigarh retained in part performan contract of the nature referred to in Section 53A of 1882 Act. in the case of Binusaria properties Private , held as under: In the present case, admittedly, what has been executed by the assessee is a ‘Development Agreement-cum-General Power of Attorney’. A reading of the said agreement indicates that what was handed over by the assessee to the developer is only a ‘permissive ossession’. Clause 5 of the said agreement dated 2nd February, 2006, on page 3 thereof, specifically provides that ‘First party on signing of this agreement has permitted the developer to develop the scheduled land’ (emphasis added). As per Clause 9 of the agreement, consideration receivable by the assessee from the developer is ‘38% of the residential part of the developed area......’ (which was later reduced to 33%, by virtue of a supplementary agreement executed on 18.10.2007). That being so, it is only Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 28 executing/registering a formal conveyance deed in order to avoid capital gains tax. In order to thwart such tendencies, transactions where the possession is given or allowed to be retained in part Section 53A of 1882 Act is held to be "transfer" by fiction of law though under general law it would not be considered to be "transfer". In other words, by deeming fiction, "transfer" is assigned extended meaning for taxation purposes by incorporating and including that where possession of any immovable property is taken or GURBAX SINGH 2015.07.23 15:30 I attest to the accuracy and integrity of this retained in part performance of a of 1882 Act.” Binusaria properties Private In the present case, admittedly, what has been executed by the General Power of Attorney’. A reading of the said agreement indicates that what was handed over by the assessee to the developer is only a ‘permissive ossession’. Clause 5 of the said agreement dated 2nd February, 2006, on page 3 thereof, specifically provides that ‘First party on signing of this agreement has permitted the developer to develop the scheduled land’ (emphasis added). As per Clause 9 of the said agreement, consideration receivable by the assessee from the developer is ‘38% of the residential part of the developed area......’ (which was later reduced to 33%, by virtue of a supplementary agreement executed on 18.10.2007). That being so, it is only upon receipt of such consideration in the form of developed area by the assessee in terms of the development agreement, the capital gains becomes assessable in the hands of the assessee. We are supported in this behalf by the decision of the Third Member Tribunal in the case of Vijaya Productions Pvt. Ltd. V/s. Addl. CIT (134 ITD 19).” 10.4 In the case of Dilip Anand Vazirani (supra) as under: "Thus, ITAT had noticed that the Assessee had received advance amounts much earlie probably on the strength of the MOU. The property was with tenancy rights of many persons and the release of tenancy right was completed only in January, 2005. Further, the approval from municipal cor were revised subsequent to AY 2000 circumstances development in the year relevant to AY development agreement, enter into the property, meaning thereby the possession was not given in the year relevant to facts narrated above, the Assessee had contended that the authorities was not corr took place in the year discussed above also support the view taken by TAT agreed with the contentions of the Assessee in this regard. ITA NO. 3773, 4875 & receipt of such consideration in the form of developed area by the assessee in terms of the development agreement, the capital gains becomes assessable in the hands of the assessee. We are supported in this behalf by the decision of the Third Member Bench of the Tribunal in the case of Vijaya Productions Pvt. Ltd. V/s. Addl. CIT .” Dilip Anand Vazirani (supra), the "Thus, ITAT had noticed that the Assessee had received advance amounts much earlier to the execution of development agreement, probably on the strength of the MOU. The property was encumbered with tenancy rights of many persons and the release of tenancy completed only in January, 2005. Further, the approval from municipal corporation was also got delayed and the plans were revised subsequent to AY 2000-01. The surrounding circumstances show that the developer does not started the work of development in the year relevant to AY 2001-02. As per the terms of development agreement, the Assessee had given only license to enter into the property, meaning thereby the possession was not given in the year relevant to AY 2001-02. In view of the peculiar facts narrated above, the Assessee had contended that the authorities was not correct in holding that the transfer of property took place in the year relevant to AY 2001-02. The various case laws discussed above also support the view taken by the Assessee. Hence, TAT agreed with the contentions of the Assessee in this regard. Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 29 receipt of such consideration in the form of developed area by the assessee in terms of the development agreement, the capital gains becomes assessable in the hands of the assessee. We are supported Bench of the Tribunal in the case of Vijaya Productions Pvt. Ltd. V/s. Addl. CIT , the Tribunal held "Thus, ITAT had noticed that the Assessee had received advance execution of development agreement, encumbered with tenancy rights of many persons and the release of tenancy completed only in January, 2005. Further, the approval delayed and the plans 01. The surrounding show that the developer does not started the work of 02. As per the terms of the Assessee had given only license to enter into the property, meaning thereby the possession was not 02. In view of the peculiar facts narrated above, the Assessee had contended that the tax ect in holding that the transfer of property 02. The various case laws the Assessee. Hence, TAT agreed with the contentions of the Assessee in this regard. Accordingly, ITAT hold that the transfer of property does not took place on the date of executionof development agreement". 10.5 In the case of Saida Sh observed as under: "'It can thus be seen that Commissioner of Income Tax well as the learned Tribunal placed before it and upon interpretation of the agreement between the assessee and the developer has found that the assessee was liable to pay there was no possession handed over to the 53A of the Transfer of Property Act in the assessment year 2003 04." 10.6 In the case of Fardin Khan (supra) Court has also consider assessee entered into development agreement with Godrej properties Ltd. on 20 and further to receive This agreement was not registered was given. The possession of property was given to developer for a specific purpose to develop the property. The Hon’ble High Court, ITA NO. 3773, 4875 & y, ITAT hold that the transfer of property does not took place on the date of executionof development agreement". Saida Shaikh (supra), the Hon’ble High court "'It can thus be seen that Commissioner of Income Tax (Appeals) as well as the learned Tribunal upon basis of the factual material placed before it and upon interpretation of the agreement between the assessee and the developer has found that the assessee was liable to pay capital gain in the year 2008-09, in as much as there was no possession handed over to the developer under Section 53A of the Transfer of Property Act in the assessment year 2003 Fardin Khan (supra), where the Hon’ble High Court has also considered Balveer Singh Maini (supra) assessee entered into development agreement with Godrej on 20 th April, 2007 and paid ₹13.75 crore as deposit, and further to receive ₹550,000,030 percent of the sale proceeds. This agreement was not registered and a general power of attorney possession of property was given to developer for a specific purpose to develop the property. The Hon’ble High Court, Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 30 y, ITAT hold that the transfer of property does not took place on the date of executionof development agreement". , the Hon’ble High court (Appeals) as upon basis of the factual material placed before it and upon interpretation of the agreement entered between the assessee and the developer has found that the assessee 09, in as much as developer under Section 53A of the Transfer of Property Act in the assessment year 2003- , where the Hon’ble High ngh Maini (supra), the assessee entered into development agreement with Godrej 13.75 crore as deposit, 550,000,030 percent of the sale proceeds. ral power of attorney possession of property was given to developer for a specific purpose to develop the property. The Hon’ble High Court, dismissing the appeal of the property was given to the dev develop the property. The Hon’ble High Court observed that the agreement makes it clear that Godrej properties Ltd and develop the property the assessee. Further nothing contained in the agreement shall be construed as grant of possession in part performance of the agreement under section 2 (47)(v) and 2(47)(vi) tax ability of the capital gain will be examine transfer of the land as a stock in trade has taken place. 10.7 Thus the dispute precipitated possession of plot of the meaning of section 53A of the ITA NO. 3773, 4875 & dismissing the appeal of the Revenue held that possession property was given to the developer for a specific purpose to develop the property. The amount received was shown as deposit. The Hon’ble High Court observed that the agreement makes it clear that Godrej properties Ltd. has been granted license to enter upon and develop the property and possession of the land continued with the assessee. Further, the development agreement provided that nothing contained in the agreement shall be construed as grant of possession in part performance of the agreement under section 2 (47)(v) and 2(47)(vi) of the Act. The Hon’ble High Court held that tax ability of the capital gain will be examined the year in which the transfer of the land as a stock in trade has taken place. Thus the dispute precipitated before us is of plot of land was handed over to the developer within the meaning of section 53A of the Transfer of Property Act, Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 31 possession of the eloper for a specific purpose to amount received was shown as deposit. The Hon’ble High Court observed that the agreement makes it clear has been granted license to enter upon and possession of the land continued with the development agreement provided that nothing contained in the agreement shall be construed as grant of possession in part performance of the agreement under section 2 . The Hon’ble High Court held that the year in which the transfer of the land as a stock in trade has taken place. before us is to whether was handed over to the developer within of Property Act, at the time of entering the DA or possession was handed over at the time of completion of construction 10.8 The clause 2 of the dev subject to retention of FSI retained by the owner, the owner developer for construction and development of the said plot. The clause 5 provides for consideration which will be 42% constructed area, including loading of TDR, in lieu of constructed area retained by the developer, which will be 58% along with 58% land area. Further, clause 14(1) has provided that “developer shall be deemed to have been allowed to enter upon the said property developer for the purpose of the construction o The developer was specifically allowed to constru office only. Further, give possession to any of the party to whom out of the developer shares owners area to owners and the developer was allowed to give ITA NO. 3773, 4875 & time of entering the DA or possession was handed over at the time of completion of construction of the property. clause 2 of the development agreement provided that subject to retention of FSI retained by the owner, the owner developer for construction and development of the said plot. The for consideration which will be 42% constructed area, including loading of TDR, in lieu of constructed area retained by the developer, which will be 58% along with 58% land area. clause 14(1) has provided that “developer shall be deemed een allowed to enter upon the said property developer for the purpose of the construction of the said new building thereon” The developer was specifically allowed to construct a temporary site clause 24C provided that developer shall give possession to any of the party to whom he allotted any ar out of the developer shares, without first giving possession of owners area to owners and the developer was allowed to give Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 32 time of entering the DA or possession was handed over at the time elopment agreement provided that subject to retention of FSI retained by the owner, the owner appoint developer for construction and development of the said plot. The for consideration which will be 42% constructed area, including loading of TDR, in lieu of constructed area retained by the developer, which will be 58% along with 58% land area. clause 14(1) has provided that “developer shall be deemed een allowed to enter upon the said property developer for f the said new building thereon”. ct a temporary site clause 24C provided that developer shall not e allotted any areas , without first giving possession of owners area to owners and the developer was allowed to give possession only after 15 days thereof . also authorisation was given only for facilitation of the construction activity to the developer and no authority was given to exercise rights as owner of the land. 10.9 In view of the various clauses of the development agreement, it transpires that possession construction work on the plot of land and the developer was not authorised to exercise the right as owner thereof and enjoy such plot of land without interference on the part of the owner. In such circumstances are not attracted in the case of the assessee. 10.10 Further we find that in the case of Parks Ltd 407 ITR 137( to the developer for construction, wherein the agreement envisaged that developer would construct upon the land and in lieu of such work undertaken by the developer, the developer would be entitled ITA NO. 3773, 4875 & possession only after 15 days thereof . Under the power of au also authorisation was given only for facilitation of the construction activity to the developer and no authority was given to exercise s as owner of the land. In view of the various clauses of the development agreement, it possession was given merely for carrying out construction work on the plot of land i.e. the permissible possession and the developer was not authorised to exercise the right as owner thereof and enjoy such plot of land without interference on the part In such circumstances, provisions of section 2(47)(4) are not attracted in the case of the assessee. Further we find that in the case of Infinity Infotech 137(Cal), also possession of the land was given r for construction, wherein the agreement envisaged that developer would construct upon the land and in lieu of such work undertaken by the developer, the developer would be entitled Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 33 Under the power of authority also authorisation was given only for facilitation of the construction activity to the developer and no authority was given to exercise In view of the various clauses of the development agreement, it was given merely for carrying out the permissible possession and the developer was not authorised to exercise the right as owner thereof and enjoy such plot of land without interference on the part provisions of section 2(47)(4) Infinity Infotech , also possession of the land was given r for construction, wherein the agreement envisaged that developer would construct upon the land and in lieu of such work undertaken by the developer, the developer would be entitled to retain 61% of the land while the balance 39% of the land together with construction thereon would belong to the assessee i.e of the above case, Hon’ble High Court held as under: “There could be rare situations where the transfer may be simultaneous with the owner retains any right in the constructed area that may come up in future, it would scarcely be a case of a transfer taking place at the time of the execution of the agreement. The matter may be viewed from anothe possession of the land is made over to a mason or a civil engineer for the purpose of making a construction thereon, it would not imply that possession is made over to the mason or the civil engineer for their enjoyme in de facto possession under the de jure possession of the owner and only for the purpose of undertaking the construction at the land in question. Till such time that the construction came up and 39% of the constructed area was made over to the assessee, it could not be said that possession of the balance land, in the sense that the expression carries in Section 2(47)(v) assessee to the developer. It is true that the developer could have retained possession of the land and declined to return possession thereof to the assessee since ITA NO. 3773, 4875 & to retain 61% of the land and the proportionate constructed area e balance 39% of the land together with construction thereon would belong to the assessee i.e. owner of land. In the facts of the above case, Hon’ble High Court held as under: There could be rare situations where the transfer may be simultaneous with the execution of the agreement, but where the owner retains any right in the constructed area that may come up in future, it would scarcely be a case of a transfer taking place at the time of the execution of the agreement. The matter may be viewed from another perspective. Merely because de facto possession of the land is made over to a mason or a civil engineer for the purpose of making a construction thereon, it would not imply that possession is made over to the mason or the civil engineer for their enjoyment of the property. Such persons would be possession under the de jure possession of the owner and only for the purpose of undertaking the construction at the land in Till such time that the construction came up and 39% of the cted area was made over to the assessee, it could not be said that possession of the balance land, in the sense that the expression Section 2(47)(v) of the Act, had been made over by the ee to the developer. It is true that the developer could have retained possession of the land and declined to return possession thereof to the assessee since Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 34 and the proportionate constructed area e balance 39% of the land together with construction owner of land. In the facts There could be rare situations where the transfer may be execution of the agreement, but where the owner retains any right in the constructed area that may come up in future, it would scarcely be a case of a transfer taking place at the time of the execution of the agreement. The matter may be r perspective. Merely because de facto possession of the land is made over to a mason or a civil engineer for the purpose of making a construction thereon, it would not imply that possession is made over to the mason or the civil nt of the property. Such persons would be possession under the de jure possession of the owner and only for the purpose of undertaking the construction at the land in Till such time that the construction came up and 39% of the cted area was made over to the assessee, it could not be said that possession of the balance land, in the sense that the expression of the Act, had been made over by the It is true that the developer could have retained possession of the land and declined to return possession thereof to the assessee since the developer was in physical control thereof. But such resistance of the developer would not have the Act of 1882. It was only after the apportionment of the areas upon the construction on the land being completed that the developer could have rightfully retained po developer's 61% share and resisted dispossession by discharging his obligation under the agreement and seeking refuge in terms of Section 53A pertaining to the developer's entitlement not having being executed. In any view of the matter, the right of the developer to retain possession and protect such possession under of 1882 could never have arisen prior to the construction being completed and the apportionment effected. 10.11 Further we find that Hon’ble Supreme Court in the case of Seshasayee Steel (P development agreement gran selling and construction and permitted to execu to developer. The Hon’ble court he possession under section 53A of the transfer of property 14 the Hon’ble court held that “ section 53A, which is a legal concept and which denotes control over the land and not actual physical occupation of the land. This being ITA NO. 3773, 4875 & the developer was in physical control thereof. But such resistance of the developer would not have been protected under Section 53A the Act of 1882. It was only after the apportionment of the areas upon the construction on the land being completed that the developer could have rightfully retained possession of the developer's 61% share and resisted dispossession by discharging his obligation under the agreement and seeking refuge in terms Section 53A of the Act of 1882 despite the formal conveyanc pertaining to the developer's entitlement not having being executed. In any view of the matter, the right of the developer to retain possession and protect such possession under Section 53A 1882 could never have arisen prior to the construction being completed and the apportionment effected.” we find that Hon’ble Supreme Court in the case of P) Ltd. 115 Taxman.com 5 (SC) development agreement granting permission to start advertising, truction and permitted to execute sale agreements to developer. The Hon’ble court held that such permission is not under section 53A of the transfer of property court held that “possession within meaning of section 53A, which is a legal concept and which denotes control over the land and not actual physical occupation of the land. This being Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 35 the developer was in physical control thereof. But such resistance of Section 53A of the Act of 1882. It was only after the apportionment of the areas upon the construction on the land being completed that the ssession of the developer's 61% share and resisted dispossession by discharging his obligation under the agreement and seeking refuge in terms of the Act of 1882 despite the formal conveyance pertaining to the developer's entitlement not having being executed. In any view of the matter, the right of the developer to retain Section 53A of the Act 1882 could never have arisen prior to the construction being we find that Hon’ble Supreme Court in the case of 115 Taxman.com 5 (SC) considered a ting permission to start advertising, te sale agreements ld that such permission is not under section 53A of the transfer of property Act. In para possession within meaning of section 53A, which is a legal concept and which denotes control over the land and not actual physical occupation of the land. This being the case, the section 53 of the possibly be attracted. 10.12 Respectfully following the finding of the Hon’ble Supreme Court and other High Court assessee cannot be treated as transfer the Act read with section 53A of the assessment year 2009 the Ld. CIT(A) on the issue in dispute and accordingly the same as far as the year of taxability of capital gain is concerned. The ground no. 1 of the appe dismissed. 11. Now we come to the second issue of quantum of the capital gain to be taxed in the hand of the assessee by the revenue in ground No. by the assessee in ground No. ITA NO. 3773, 4875 & the case, the section 53 of the Transfer of Property Act be attracted. Respectfully following the finding of the Hon’ble Supreme and other High Court, we hold that the capital asset of the assessee cannot be treated as transferred under section 2(47)(4) of read with section 53A of the Transfer of Property Act assessment year 2009-10. We do not find any error in the finding of the Ld. CIT(A) on the issue in dispute and accordingly the same as far as the year of taxability of capital gain is concerned. The ground no. 1 of the appeal of the Revenue is accordingly Now we come to the second issue of quantum of the capital gain to be taxed in the hand of the assessee, which has been raised by the revenue in ground No. 2 and 3 of the appeal as well as raised see in ground No. 1 of its appeal. Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 36 Transfer of Property Act cannot Respectfully following the finding of the Hon’ble Supreme the capital asset of the under section 2(47)(4) of er of Property Act in 10. We do not find any error in the finding of the Ld. CIT(A) on the issue in dispute and accordingly, we uphold the same as far as the year of taxability of capital gain is concerned. al of the Revenue is accordingly Now we come to the second issue of quantum of the capital , which has been raised of the appeal as well as raised 12. The assessee in its computation of long treated the consideration received in the form of constructed area to the extent relatable to loading of TDR a Assessing Officer however considered it to be a taxable item. The Ld. CIT(A) in para 6.8 of the impugned order following the decision of the Tribunal in the case of Voltas Ltd (supra) has held that provisions of section 50C are not applicable on transfer of development rights. The said finding of the Ld CIT(A) is reproduced as under : “6.8 Recently the Hon'ble ITAT in the No.5330/Mum/2009 ITA No.5331 of 2009 vide dated 16 held that Section 50C be applicable to a transfer by assessee of capital assets being "land or transferred by assessee being development rights the land", the provisions of Section 50C is inapplicable for said conclusion. Reliance has been placed on Section 269UA by Hon' ITAT. Under the said provisions "rights in land and building" was specifically included, as such, cleariy understood and treated building". The Tribunal finally held that "rights in lan will not be covered u/s.50C. ITA NO. 3773, 4875 & The assessee in its computation of long-term capital gain has treated the consideration received in the form of constructed area to nt relatable to loading of TDR as not taxable. The however considered it to be a taxable item. The Ld. 6.8 of the impugned order following the decision of in the case of Voltas Ltd (supra) has held that provisions of section 50C are not applicable on transfer of ts. The said finding of the Ld CIT(A) is reproduced Recently the Hon'ble ITAT in the case of Voltas Ltd. ITA No.5330/Mum/2009 ITA No.5331 of 2009 vide dated 16-09 Section 50C be applicable to a transfer by assessee of ital assets being "land or building" or both. Capital assets transferred by assessee being development rights "in land" and "not the land", the provisions of Section 50C is inapplicable for said conclusion. Reliance has been placed on Section 269UA by Hon' the said provisions "rights in land and building" was specifically included, as such, "right in land and building" have been cleariy understood and treated as independent of "land and building". The Tribunal finally held that "rights in land or will not be covered u/s.50C.” Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 37 term capital gain has treated the consideration received in the form of constructed area to s not taxable. The Ld. however considered it to be a taxable item. The Ld. 6.8 of the impugned order following the decision of in the case of Voltas Ltd (supra) has held that provisions of section 50C are not applicable on transfer of ts. The said finding of the Ld CIT(A) is reproduced case of Voltas Ltd. ITA 09-2016 is Section 50C be applicable to a transfer by assessee of building" or both. Capital assets "in land" and "not the land", the provisions of Section 50C is inapplicable for said conclusion. Reliance has been placed on Section 269UA by Hon'ble the said provisions "rights in land and building" was "right in land and building" have been independent of "land and d or building" 12.1 Further in para, has held the consideration corresponding to allowing loading of TDR as not taxable. The relevant finding of the Ld. CIT(A) is reproduced as under: “6.9 After considering the totality of facts, rival submissions, the applicable law find force in the argument of the the various decision given by the judicial High Bombay High Court decision in the case of Sambhaji Co Housing Ltd and decision of Mumbai Tribunal ir the caseof Voltas Ltd. ITA No.5330/Mum/2009 ITA No.5331 of 2009 on identical facts. The provisions of settled law and well accepted rule of provisions are to be construed strictly. Thus, while deemirg provisions neither any words can be added nor deleted from language used expressly. In view of the a of jurisdictional the form of constructed area to the is not taxable.” 12.2 The amount of full value of consideration has been taken by the Assessing Officer in assessment year 2012 consideration, at registered agreement value by ITA NO. 3773, 4875 & , Para 6.9 of the impugned order the consideration corresponding to allowing loading of TDR s not taxable. The relevant finding of the Ld. CIT(A) is reproduced After considering the totality of facts, rival submissions, the applicable law and on the basis of discussion mentioned above, I find force in the argument of the appellant and draw strength from the various decision given by the judicial High Court especially Bombay High Court decision in the case of Sambhaji Co Housing Ltd and decision of Mumbai Tribunal ir the caseof Voltas No.5330/Mum/2009 ITA No.5331 of 2009 on identical facts. The provisions of section 50C are deeming provisions. It is settled law and well accepted rule of interpretation that deeming provisions are to be construed strictly. Thus, while interpreting deemirg provisions neither any words can be added nor deleted language used expressly. In view of the above referred decision of jurisdictional High Court, I hold that consideration received in the form of constructed area to the extent relatable to loading ” The amount of full value of consideration has been taken by the in assessment year 2012-13 i.e. year under at registered agreement value by Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 38 Para 6.9 of the impugned order, the Ld. CIT(A) the consideration corresponding to allowing loading of TDR s not taxable. The relevant finding of the Ld. CIT(A) is reproduced After considering the totality of facts, rival submissions, the and on the basis of discussion mentioned above, I appellant and draw strength from Court especially Bombay High Court decision in the case of Sambhaji Co-operative Housing Ltd and decision of Mumbai Tribunal ir the caseof Voltas No.5330/Mum/2009 ITA No.5331 of 2009 on identical ovisions. It is interpretation that deeming interpreting deemirg provisions neither any words can be added nor deleted bove referred decision High Court, I hold that consideration received in extent relatable to loading TDR The amount of full value of consideration has been taken by the 13 i.e. year under at registered agreement value by stamp value authorities at ₹18,38, in assessment year 2009 on the basis of his valuation report full value of consideration has been taken at ₹10,01, 29/01/2016, on substantive basis. 13. Before the Ld. CIT(A) the value of the constructed area for determination of cost of consideration. The assessee relied on various decisions. After considering the decisions, the Ld. CIT(A) determined full value of consideration as 42% of the cost of construction of the area exchanged. The Ld. CIT(A) observed that cost of construction on the basis of the valuation report of the DVO is therefore 42% of said amount works out to CIT(A) accordingly directed the assessee to compute the capital gain after excluding the consideration relatable to loading of the TDR. The relevant finding of the Ld. CIT(A) is reproduced as under: ITA NO. 3773, 4875 & 18,38,53,000/-. Subsequently, the Assessing Officer in assessment year 2009-10 referred the matter to the on the basis of his valuation report full value of consideration has 10,01,28,000/- as per valuation report dated 29/01/2016, on substantive basis. Before the Ld. CIT(A), the assessee contested for taking 42% of e constructed area for determination of cost of consideration. The assessee relied on various decisions. After considering the decisions, the Ld. CIT(A) determined full value of consideration as 42% of the cost of construction of the area . CIT(A) observed that cost of construction on the basis of the valuation report of the DVO is ₹18,74,74, therefore 42% of said amount works out to ₹7,87,73, CIT(A) accordingly directed the assessee to compute the capital gain xcluding the consideration relatable to loading of the TDR. The relevant finding of the Ld. CIT(A) is reproduced as under: Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 39 Assessing Officer 10 referred the matter to the Ld. DVO and on the basis of his valuation report full value of consideration has luation report dated , the assessee contested for taking 42% of e constructed area for determination of cost of consideration. The assessee relied on various decisions. After considering the decisions, the Ld. CIT(A) determined full value of consideration as 42% of the cost of construction of the area . CIT(A) observed that cost of construction on the 18,74,74,699/-and 7,87,73,911/-. The Ld. CIT(A) accordingly directed the assessee to compute the capital gain xcluding the consideration relatable to loading of the TDR. The relevant finding of the Ld. CIT(A) is reproduced as under: “7.1 The Delhi ITAT in the case of Vasavi Pratapchand vs. DCIT 90 TTJ has discussed the identical issue. The facts of the case are that assessee in this case 2.85 acre in Delhi. Assessee entered into a with the builder under which assessee got 56% of the total constructed area as his share against 44% of the land transferred. The question for of the assessee's interest in land para 9:- "As far as consideration part is concerned, we are of the view that value of 44 per cent of land was equal 56 per cent built up area. The sale consideration to the seller and cost of acquisition to the buyer are two sides of the same coin. Both the parties to the agreement knew as to what and what was being receive both the assets agreed to transfer 44 per cent of land, it must have kept in value of construction of 56 per cent of built up area. Therefore, we are of the considered opinion 44 per cent land was the cost of construction of 56 per cent built up area which was to be incurred by the builder. This very sum would also amount to investment by assessee and, therefore, the cost of construction of th would also amount to the cost of acquisition of the flats by assessees. 7.2 In case of CIT vs. Jai Trikanand The Bombay assessee was owning a plot of ITA NO. 3773, 4875 & The Delhi ITAT in the case of Vasavi Pratapchand vs. DCIT discussed the identical issue. The facts of the case are that assessee in this case was owning a plot of land admeasuring 2.85 acre in Delhi. Assessee entered into a development agreement with the builder under which assessee got 56% of the total constructed area as his share against 44% of the land transferred. The question for consideration was how the consideration for 44% of the assessee's interest in land be calculated. The Bench held in "As far as consideration part is concerned, we are of the view that value of 44 per cent of land was equal to the cost of construction of 56 per cent built up area. The sale consideration to the seller and acquisition to the buyer are two sides of the same coin. Both the parties to the agreement knew as to what was being transferred and what was being received. In the case of exchange, the price of both the assets would be the same. So, when the assessees had agreed to transfer 44 per cent of land, it must have kept in value of construction of 56 per cent of built up area. Therefore, we sidered opinion that consideration for the transfer of 44 per cent land was the cost of construction of 56 per cent built up area which was to be incurred by the builder. This very sum would also amount to investment by assessee in the construction of flat and, therefore, the cost of construction of the flats by the builder amount to the cost of acquisition of the flats by In case of CIT vs. Jai Trikanand Rao - 60 SOT 0189(Mumbai). ITAT also considered a similar issue. In this case, assessee was owning a plot of land and entered into a development Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 40 The Delhi ITAT in the case of Vasavi Pratapchand vs. DCIT discussed the identical issue. The facts of the case are was owning a plot of land admeasuring development agreement with the builder under which assessee got 56% of the total constructed area as his share against 44% of the land transferred. consideration was how the consideration for 44% be calculated. The Bench held in "As far as consideration part is concerned, we are of the view that cost of construction of 56 per cent built up area. The sale consideration to the seller and acquisition to the buyer are two sides of the same coin. Both was being transferred d. In the case of exchange, the price of would be the same. So, when the assessees had agreed to transfer 44 per cent of land, it must have kept in mind the value of construction of 56 per cent of built up area. Therefore, we that consideration for the transfer of 44 per cent land was the cost of construction of 56 per cent built up area which was to be incurred by the builder. This very sum would in the construction of flats e flats by the builder amount to the cost of acquisition of the flats by 60 SOT 0189(Mumbai). In this case, land and entered into a development agreement as per which the developer was to demolition of old structure and construction of the building and in view thereof the developer agreed to give 50% o area in the form agreement, a interest free security the assessee which was refundable after giving constructed area to the assessee on compl constructed area came to Rs.2166.2 Sq. Meter out of which assessee got constructed area of Rs.1082.7 Sq. Meter in the forrn of flat. Assessee sold certain consideration was how to c and developmen "Now coming to the matter in controversy before us, as observed above, the 50% of the market together with value of additional agreement would be deemed to be the cost of construction of the constructed ar development agreement. Assessee thus is entitled 10 proportionately claim deduction for cost o faxing capital gains arrived from 7.3 In case of CIT vs. Khivraj Motors 380 ITF. 215(Karnataka). In this case assessee was occupying the premises as tenant, taken on lease for a long period undivided interest in property and lease under agreement, the cost of construction Rs.800 Per Square Feet and hence consideration for Rs.22100 Square Feet constructed area received by as Rs.17,68,800. The Assessing Officer, in principle, accepted the cost of ITA NO. 3773, 4875 & agreement as per which the developer was to bear the cost of demolition of old structure and construction of the building and in view thereof the developer agreed to give 50% of the constructed area in the form of flats in the building. Under development agreement, a interest free security deposit was given of Rs.1 crore to the assessee which was refundable after giving possession of the constructed area to the assessee on completion of the building, constructed area came to Rs.2166.2 Sq. Meter out of which assessee constructed area of Rs.1082.7 Sq. Meter in the forrn of flat. Assessee sold certain flats out of such area received. Question for consideration was how to compute taxable income on sale of flats and development agreement. The Bench held. in para 11. "Now coming to the matter in controversy before us, as observed above, the 50% of the market value of the total land in question together with value of additional FSI, if any, on the date of agreement would be deemed to be the cost of construction of the constructed area which falls in the share of the assessee as per the development agreement. Assessee thus is entitled 10 proportionately claim deduction for cost of construction while faxing capital gains arrived from the sale of two fats." In case of CIT vs. Khivraj Motors 380 ITF. 215(Karnataka). In assessee was occupying the premises as tenant, taken on lease for a long period and agreed to vacate in consideration of undivided interest in property and constructed area for 65 years of lease under agreement, the cost of construction was specified at Rs.800 Per Square Feet and hence consideration for Rs.22100 Square Feet constructed area received by assessee was taken at The Assessing Officer, in principle, accepted the cost of Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 41 bear the cost of demolition of old structure and construction of the building and in f the constructed of flats in the building. Under development deposit was given of Rs.1 crore to possession of the etion of the building, total constructed area came to Rs.2166.2 Sq. Meter out of which assessee constructed area of Rs.1082.7 Sq. Meter in the forrn of flat. flats out of such area received. Question for taxable income on sale of flats "Now coming to the matter in controversy before us, as observed value of the total land in question FSI, if any, on the date of agreement would be deemed to be the cost of construction of the the share of the assessee as per the development agreement. Assessee thus is entitled 10 f construction while In case of CIT vs. Khivraj Motors 380 ITF. 215(Karnataka). In assessee was occupying the premises as tenant, taken on in consideration of constructed area for 65 years of was specified at Rs.800 Per Square Feet and hence consideration for Rs.22100 sessee was taken at The Assessing Officer, in principle, accepted the cost of construction as the developer who informed to of Rs.19,42,79,237/ The court held that cost of construction as per agreement date of development agreement be adopted. Thus on principle, the High Court of Karnataka adopted consideration as cost of construction. 7.4 I have duly consi hesitation in agreement to be decided based on consideration under development agreement. The calculation of capital gain construction of area received by appellant under agreement. A reference to the construction is at construction of the area e Accordingly, it is hel under development agreement is R 7,87,73,911/ of the discussion mentioned in pa to loading of TDR calculate the capital gain allowed.” 14. Before us, the Ld. counsel assessee always retained and owned the plot of land and exchanged 58% of interest in 1828.80 m² plot with 42% constructed area, ITA NO. 3773, 4875 & construction as consideration, but on receiving information from the developer who informed to have incurred the construction cost of Rs.19,42,79,237/-, calculated cost of construction accordingly. The court held that cost of construction as per agreement date of development agreement be adopted. Thus on principle, the Court of Karnataka adopted consideration as cost of I have duly considered the judicial authorities and have no holding that consideration under development agreement to be decided based on cost of construction area as consideration under development agreement. The consideration for calculation of capital gain to be computed based on cost of construction of area received by appellant under agreement. A reference to the valuation report of DVO clearly reflects that cost of construction is at Rs.18,74,74,699/-. Hence, 42% of the cost of construction of the area exchanged be adopted at Rs.7,87,73,911/ Accordingly, it is held that consideration received by under development agreement is R 7,87,73,911/-. Further, in view the discussion mentioned in paras 6 the consideration relatabl to loading of TDR is not taxable. The assessing officer is directed to calculate the capital gain accordingly. The ground is partly Ld. counsel of the assessee submitted that the assessee always retained and owned the plot of land and exchanged 58% of interest in 1828.80 m² plot with 42% constructed area, Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 42 consideration, but on receiving information from have incurred the construction cost construction accordingly. The court held that cost of construction as per agreement on the date of development agreement be adopted. Thus on principle, the Court of Karnataka adopted consideration as cost of dered the judicial authorities and have no holding that consideration under development cost of construction area as consideration for to be computed based on cost of construction of area received by appellant under agreement. A valuation report of DVO clearly reflects that cost of . Hence, 42% of the cost of adopted at Rs.7,87,73,911/-. appellant . Further, in view ras 6 the consideration relatable not taxable. The assessing officer is directed to accordingly. The ground is partly of the assessee submitted that the assessee always retained and owned the plot of land and exchanged 58% of interest in 1828.80 m² plot with 42% constructed area, which was developed by the developer at its cost, as per terms of DA. The assessee further s developer to load TDR on its pre plot and got 42% constructed area therefore receipt of 42% constructed area is exchanged plot always belonged and conti According to the assessee for evaluating full value of the consideration taxable for transfer under DA will be value of the 42% of the constructed area without any value of the land as land always belongs to the assessee. The decision of the Tribunal Ld. CIT(A) in the impugned order. 15. The Ld. DR on the other hand consideration should be taken at which development rights have been transacted and value which ITA NO. 3773, 4875 & which was developed by the developer at its cost, as per terms of DA. The assessee further submitted that it has permitted the developer to load TDR on its pre-constructed building on 2785 m² plot and got 42% constructed area therefore receipt of 42% exchanged against 58% area of the plot and 42% plot always belonged and continue to belong to the assessee. According to the assessee for evaluating full value of the consideration taxable for transfer under DA will be value of the 42% of the constructed area without any value of the land as land always to the assessee. The Ld. counsel of the assessee relied on the Tribunal, which have already been considered by the Ld. CIT(A) in the impugned order. DR on the other hand submitted that full value of the consideration should be taken at ₹18,74,74,699/-as that is the value at which development rights have been transacted and value which Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 43 which was developed by the developer at its cost, as per terms of ubmitted that it has permitted the constructed building on 2785 m² plot and got 42% constructed area therefore receipt of 42% against 58% area of the plot and 42% nue to belong to the assessee. According to the assessee for evaluating full value of the consideration taxable for transfer under DA will be value of the 42% of the constructed area without any value of the land as land always of the assessee relied on the , which have already been considered by the submitted that full value of the as that is the value at which development rights have been transacted and value which has been taken by the stamp duty value authorities for a stamp duty purposes. 16. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that as far as non-applicability of section 50 concerned, the Ld. CIT(A) has followed the binding preced Tribunal Mumbai Bench the said finding of the Ld. CIT(A). Further regarding holding no capital gain arise on transfer of the Ld. CIT(A) has followed decision of the jurisdictional High Court in the case of Shailja cooperative Housing Society Ltd (supra) para 6.7 of the impugned order extracted as under: “6.7 The Jurisdictional High C Shailaja Co-op. Hon'ble Bench held: ITA NO. 3773, 4875 & has been taken by the stamp duty value authorities for a stamp duty We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that as applicability of section 50C on the development right is concerned, the Ld. CIT(A) has followed the binding preced Bench and therefore we do not find any the said finding of the Ld. CIT(A). Further regarding holding no capital gain arise on transfer of right to permit loading of TDR the Ld. CIT(A) has followed decision of the jurisdictional High Court Shailja cooperative Housing Society Ltd (supra) para 6.7 of the impugned order. For ready reference said Para is The Jurisdictional High Court approved the decision of op. Housing Society Ltd (supra). In the said decision, the Hon'ble Bench held: Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 44 has been taken by the stamp duty value authorities for a stamp duty We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that as C on the development right is concerned, the Ld. CIT(A) has followed the binding precedent of the and therefore we do not find any error in the said finding of the Ld. CIT(A). Further regarding holding no right to permit loading of TDR , also the Ld. CIT(A) has followed decision of the jurisdictional High Court Shailja cooperative Housing Society Ltd (supra) in . For ready reference said Para is ourt approved the decision of Housing Society Ltd (supra). In the said decision, the "The assessee was the owner of the land and building and continued to remain the same even after transfer Thus, the cost of the land and building of the existing structure could not be attributed to the additional FSI received by means of 1991 Rules. It is true that such right is a capital asset provisions of s. 2(14) but in order to compute capital g from the existence of capital consideration accruing as a result of transfer of capital asset as well as the cost of acquisition of the asset along with the cost of any improvement thereto, if any. Sec. 48 sets out th computation of income under the head capital gains by providing that the expenditure incurred wholly with the transfer of a capital asset along with the cost of acquisition and cost of any improvement, if any, shal value of consideration received or accruing as a transfer of capital asset Transfer of capital asset which does not have any cost of acquisition chargeable to lax under s. 45 The le out certain categories of capital assets under s. SS(2) as having cost of acquisition at Rs. nil, where such assets by the assessee for consideration. The effect of th that when the transferred, then the cost of acquisition has been taken at Rs. Nil except where the assessee had acquired such assets by means of purchasing from the previous owner, and capital gain wou situation when acquisition cannot be ascertained or no cost of incurred. The items of capi ITA NO. 3773, 4875 & "The assessee was the owner of the land and building and continued to remain the same even after transfer of the said capital asset. us, the cost of the land and building of the existing structure attributed to the additional FSI received by means of 1991 Rules. It is true that such right is a capital asset provisions of s. 2(14) but in order to compute capital g from the existence of capital asset, there should be sale consideration accruing as a result of transfer of capital asset as well of acquisition of the asset along with the cost of any rovement thereto, if any. Sec. 48 sets out the mode computation of income under the head capital gains by providing that the expenditure incurred wholly and exclusively in connection with the transfer of a capital asset along with the cost of acquisition of any improvement, if any, shall be deducted from the full value of consideration received or accruing as a result of the transfer of capital asset Transfer of capital asset which does not have any cost of acquisition does not result into capital gains chargeable to lax under s. 45 The legisloture in its wisdom brought certain categories of capital assets under s. SS(2) as having cost of acquisition at Rs. nil, where such assets have not been purchased by the assessee for consideration. The effect of this sub that when the assets so specified in sub-s. (2) of transferred, then the cost of acquisition has been taken at Rs. Nil except where the assessee had acquired such assets by means of purchasing from the previous owner, and the computation capital gain would be done accordingly. There is a difference in the situation when cost of acquisition is Rs. nil and where the cost of acquisition cannot be ascertained or no cost of acquisition has been incurred. The items of capital assets specified in s. 55(2) are th Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 45 "The assessee was the owner of the land and building and continued of the said capital asset. us, the cost of the land and building of the existing structure attributed to the additional FSI received by means of as per the provisions of s. 2(14) but in order to compute capital gains apart asset, there should be sale consideration accruing as a result of transfer of capital asset as well of acquisition of the asset along with the cost of any e mode of computation of income under the head capital gains by providing and exclusively in connection with the transfer of a capital asset along with the cost of acquisition be deducted from the full result of the transfer of capital asset Transfer of capital asset which does not does not result into capital gains gisloture in its wisdom brought certain categories of capital assets under s. SS(2) as having cost have not been purchased is sub-section is s. 55 are transferred, then the cost of acquisition has been taken at Rs. Nil except where the assessee had acquired such assets by means of the computation of the ld be done accordingly. There is a difference in the cost of acquisition is Rs. nil and where the cost of acquisition has been 5(2) are those for which the cost computing capital gains. However if the assessee had not any cost of acquisition on a capital asset and such capital asset does not fall in the category of the no capital gain would be charged. it is abundantly clear that the assessee had not incurred any cost of acquisition in respect of the right which emanated from the 1991 eligible to additional FSI. The la possession of the after the transfer of the right to additional FSI for Rs. The Departmental Representative could not point cut any particular asset as specified include the right to additional FSI. No capital gains conid be charged on tie consideration of Rs. 48 acquisition." 16.1 Since the Ld. CIT(A) has followed a binding precedent, therefore we do not find any infirmity in the finding of the Ld. CIT(A) in holding that consideration received in the form of constructed area to the extent relatable to loading of the TDR is not taxable. 16.2 As far as value of the 42% of constructed area is considered, the Ld. DVO has determin ITA NO. 3773, 4875 & for which the cost of acquisition shall be taken at Rs. nil for computing capital gains. However if the assessee had not any cost of acquisition on a capital asset and such capital asset does not fall in the category of the capital assets specified in s. S5(2) then no capital gain would be charged. it is abundantly clear that the assessee had not incurred any cost of acquisition in respect of the right which emanated from the 1991 Rules making the assessee eligible to additional FSI. The land and building earlier in the possession of the assessee continued to remain with it as such even after the transfer of the right to additional FSI for Rs. 48 96 lakhs. The Departmental Representative could not point cut any particular asset as specified in sub-S. (2) of s. 55, which would include the right to additional FSI. No capital gains conid be charged on tie transfer of the additional FSI by the assessee for sale consideration of Rs. 48-96 lakhs for the reason that it has no cost of Since the Ld. CIT(A) has followed a binding precedent, therefore we do not find any infirmity in the finding of the Ld. CIT(A) in holding that consideration received in the form of constructed area to the extent relatable to loading of the TDR is not As far as value of the 42% of constructed area is considered, DVO has determined the cost of construction at Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 46 be taken at Rs. nil for computing capital gains. However if the assessee had not incurred any cost of acquisition on a capital asset and such capital asset does specified in s. S5(2) then no capital gain would be charged. it is abundantly clear that the assessee had not incurred any cost of acquisition in respect of the Rules making the assessee nd and building earlier in the assessee continued to remain with it as such even 48 96 lakhs. The Departmental Representative could not point cut any , which would include the right to additional FSI. No capital gains conid be transfer of the additional FSI by the assessee for sale has no cost of Since the Ld. CIT(A) has followed a binding precedent, therefore we do not find any infirmity in the finding of the Ld. CIT(A) in holding that consideration received in the form of constructed area to the extent relatable to loading of the TDR is not As far as value of the 42% of constructed area is considered, ed the cost of construction at ₹8,81,46,948/-. The said report of the DVO has been reproduced by the Assessing Officer In clause 13 of said report ₹8,81,46,948/-. We respectfully following the decisions cited above, direct the Ld. Assessing Officer consideration received by the assessee at 42% of the cost of construction, which works out to one of the appeal of the assessee is accordingly allowed. As far as the argument of Ld. DR that prope in the financial year 2007 accordingly, the assessee has already withdrawn its cross objection and the lower authorities has decided the issue of transfer considering the property raise new issue, without any ground of appeal. The arguments of the Ld. DR accordingly not ITA NO. 3773, 4875 & The said report of the DVO has been reproduced by in assessment order for AY 2009 clause 13 of said report, cost of construction has been reported at We respectfully following the decisions cited above, Assessing Officer to restrict the full value of consideration received by the assessee at 42% of the cost of construction, which works out to ₹3,70,21,718/-. The ground No. one of the appeal of the assessee is accordingly allowed. As far as the that property was converted into stock in trade in the financial year 2007-08 and therefore should be taxed , the assessee has already withdrawn its cross objection and the lower authorities has decided the issue of transfer considering the property as capital asset and now the , without any ground of appeal. The arguments of the DR accordingly not relevant for adjudication of the issue Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 47 The said report of the DVO has been reproduced by order for AY 2009-10 on page 8. cost of construction has been reported at We respectfully following the decisions cited above, to restrict the full value of consideration received by the assessee at 42% of the cost of . The ground No. one of the appeal of the assessee is accordingly allowed. As far as the rty was converted into stock in trade 08 and therefore should be taxed , the assessee has already withdrawn its cross objection and the lower authorities has decided the issue of transfer pital asset and now the Ld. DR cannot , without any ground of appeal. The arguments of the relevant for adjudication of the issue-in- dispute. The ground No. 2 &3 of the appeal of Revenue are accordingly dismissed. 17. The Ground No. 2 ( the disallowance of interest of Ltd. 18. The Assessing Officer holding the same as not wherein the Ld. CIT(A) looking to the past history has treated part of the interest as allowable under the head income from house property, whereas disallowed the amount of used for improvement of the hou earning rent in future. related to issue in dispute is under: 8. In ground no.9, appellant has challenged disallowance of interest of Rs.15,06,920/ the property income. The AO had dealt with the issue in para ITA NO. 3773, 4875 & The ground No. 2 &3 of the appeal of Revenue are accordingly dismissed. No. 2 (two), the appeal of the assessee relates to of interest of ₹3,11,920/- related to Assessing Officer disallowed the interest holding the same as not incurred for the purpose of the business, wherein the Ld. CIT(A) looking to the past history has treated part of s allowable under the head income from house property, whereas disallowed the amount of ₹3,11,920 used for improvement of the house property to make it fit for earning rent in future. The Ld. CIT(A) has summarised the facts related to issue in dispute is under: In ground no.9, appellant has challenged disallowance of interest of Rs.15,06,920/- claimed by the appellant while comp the property income. The AO had dealt with the issue in para Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 48 The ground No. 2 &3 of the appeal of Revenue are the appeal of the assessee relates to related to ECL Finance the interest of ₹15,06,920/- the purpose of the business, wherein the Ld. CIT(A) looking to the past history has treated part of s allowable under the head income from house 920/- which was se property to make it fit for CIT(A) has summarised the facts In ground no.9, appellant has challenged disallowance of claimed by the appellant while computing the property income. The AO had dealt with the issue in para-7 of the order. It is stated that appellant has claimed interest as being paid to (i) ECL Finance Ltd. (ii) Shobha M. Desai (iii) Suresh I. Patel (HUF) The A.O. stated that such loans on which interest is claimed are not used for the disallowable. The appellant, during proceedings, stated that appellant house property. It is also stated that such interest paid is being allowed in all the past years from AY 06 interest claimed was in AY 08-09 Rs.7.68 lak assessments has been completed U/s.143(3) of interest claimed is Rs.10.50 lakhs and in AY 11 These Returns are accepted u/s.143(1). It is stated that interest paid to Smt. Shobha Desai of Rs.6 lakhs and Rs.5.95 lakhs to Suresh Patel, HUF is on the utilized for acquisition of house property. borrowings has been made of Rs.2 cr. approx. from M/s.ECL Ltd, on which interest of Rs.3,11,9200/ were borrowed at the faq carrying out improvement and finishing of house property acquired by the appellant under earning house property income in that no part of the interest is disallowable. ITA NO. 3773, 4875 & the order. It is stated that appellant has claimed interest as being ECL Finance Ltd. : ₹3,11,920/- Shobha M. Desai : ₹6,00,000/- Suresh I. Patel (HUF) : 5,95,000/- Total ₹15,06.920/ The A.O. stated that such loans on which interest is claimed are not used for the purpose of business; therefore the same are disallowable. The appellant, during the course of appellate proceedings, stated that appellant has claimed deduction house property. It is also stated that such interest paid is being all the past years from AY 06-07 to 11-12. In AY 06 interest claimed was Rs.12.29 lakhs, in AY 07-08 Rs.13.76 lakhs, and 09 Rs.7.68 lakhs, and in 09-10 at Rs.6.05 lakhs. All these assessments has been completed U/s.143(3) of the Act. In AY 10 interest claimed is Rs.10.50 lakhs and in AY 11-12 Rs.10.95 These Returns are accepted u/s.143(1). It is stated that interest Shobha Desai of Rs.6 lakhs and Rs.5.95 lakhs to Suresh Patel, HUF is on the borrowings made in the earlier years and utilized for acquisition of house property. In AY 12 borrowings has been made of Rs.2 cr. approx. from M/s.ECL which interest of Rs.3,11,9200/- is being claimed. Funds borrowed at the faq-end of the year and has been spent for improvement and finishing of house property acquired by the appellant under Development Agreement, to make it fit for ing house property income in subsequent years. It is submitted that no part of the interest is disallowable. Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 49 the order. It is stated that appellant has claimed interest as being - - 15,06.920/- The A.O. stated that such loans on which interest is claimed are not purpose of business; therefore the same are the course of appellate has claimed deduction against house property. It is also stated that such interest paid is being 12. In AY 06-07, 08 Rs.13.76 lakhs, and 10 at Rs.6.05 lakhs. All these the Act. In AY 10-11, 12 Rs.10.95 lakhs. These Returns are accepted u/s.143(1). It is stated that interest Shobha Desai of Rs.6 lakhs and Rs.5.95 lakhs to Suresh borrowings made in the earlier years and In AY 12-13, fresh borrowings has been made of Rs.2 cr. approx. from M/s.ECL Finance is being claimed. Funds end of the year and has been spent for improvement and finishing of house property acquired Development Agreement, to make it fit for subsequent years. It is submitted 18.1 Ld. CIT(A), out of the interest payment of disallowed the amount of 19. Before us, the assessee is not able to subs interest paid to ECL finance Ltd is deductible under the income from house property. The assessee has failed to borrowing from ECL finance Ltd is incurred for acquisition or construction of house property, income fro under the head ‘income from house such evidence, we do not find any the issue in dispute and accordingly uphold the same. 20. The ground 3 of the appeal relates to addition of The Ld. Assessing Officer impounded during the course of survey action under section 133 of the Act in the case of the assessee, which was carried on 21/11/2012. The Ld. background of the addition made by the AO as under: ITA NO. 3773, 4875 & Ld. CIT(A), out of the interest payment of disallowed the amount of ₹3,11,920/-. Before us, the assessee is not able to substantiate interest paid to ECL finance Ltd is deductible under the income from house property. The assessee has failed to establish that borrowing from ECL finance Ltd is incurred for acquisition or construction of house property, income from which ‘income from house property’. In absence of any , we do not find any error in the order of the issue in dispute and accordingly uphold the same. of the appeal relates to addition of Assessing Officer made addition on the basis of impounded during the course of survey action under section 133 in the case of the assessee, which was carried on The Ld. CIT(A) has summarized the background of the addition made by the AO as under: Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 50 Ld. CIT(A), out of the interest payment of ₹15,06,920/- tantiate as how the interest paid to ECL finance Ltd is deductible under the income from establish that said borrowing from ECL finance Ltd is incurred for acquisition or m which was offered In absence of any in the order of Ld. CIT(A) on the issue in dispute and accordingly uphold the same. of the appeal relates to addition of ₹1,30,000/-. made addition on the basis of loose papers impounded during the course of survey action under section 133A in the case of the assessee, which was carried on ed the factual background of the addition made by the AO as under: “9. Ground No.10 is related to the addition made of Rs.1,30,000/- u/s.69C of the appellant u/s.133A on 21.11.12 at the course of survey, a diary marked Al was impounded and pg.no.149 of the diary, an addition of Rs 1,30,000/ AO. The AO has dealt with the issue in para upon pg. 149 of payments: (i) (ii) (iii) 9.1 A.O. made addition relying on the provisions of Sec.69C of the Act. During upon the statement as 21.11.12. Shri Suresh Patel has diary are scribbling, not connected to the course of assessment proceedings, appellant expla referred expense of Rs.1.30 lakhs as personal expenditure, household expenses of Sures7 Patel were claimed to be reflected in the personal books of impounded paper pg.149 is filed in stated that RSP stand for the wife of Shri Suresh Patel expenses of Rs. 1.30 lakhs are not claimed as business expenses in the books of account of appellant and are the personal expenses of Shri Suresh Patel, recorded in the books of account of Shri ITA NO. 3773, 4875 & Ground No.10 is related to the addition made of u/s.69C of the Act. There was a survey action on the appellant u/s.133A on 21.11.12 at the office premises. During the course of survey, a diary marked Al was impounded and pg.no.149 of the diary, an addition of Rs 1,30,000/- is being made by The AO has dealt with the issue in para-6 cf the order. AO relied upon pg. 149 of the said diary which provided details of following Plumber :₹30,000/ RS :₹50,000/ Daughter-in- law :₹50,000/ A.O. made addition relying on the provisions of Sec.69C of the Act. During the course of appellate proceedings, Ld.AR has upon the statement as recorded of Shri Suresh Patel U/s.133A dtd. 21.11.12. Shri Suresh Patel has described that various notings in the diary are scribbling, not connected to the business. During the course of assessment proceedings, appellant explained the referred expense of Rs.1.30 lakhs as personal expenditure, expenses of Sures7 Patel were claimed to be reflected in the personal books of account of Shri Suresh Patel. A copy of impounded paper pg.149 is filed in compilation at pg. stated that RSP stand for the wife of Shri Suresh Patel and all these expenses of Rs. 1.30 lakhs are not claimed as business expenses in books of account of appellant and are the personal expenses of Shri Suresh Patel, which are duly explainable as aimed to be recorded in the books of account of Shri Suresh Patel.” Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 51 Ground No.10 is related to the addition made of Act. There was a survey action on the premises. During the course of survey, a diary marked Al was impounded and based on is being made by 6 cf the order. AO relied diary which provided details of following 30,000/- 50,000/- 50,000/- A.O. made addition relying on the provisions of Sec.69C of the course of appellate proceedings, Ld.AR has relied recorded of Shri Suresh Patel U/s.133A dtd. described that various notings in the business. During the ined the above referred expense of Rs.1.30 lakhs as personal expenditure, expenses of Sures7 Patel were claimed to be reflected in account of Shri Suresh Patel. A copy of compilation at pg.114. It is and all these expenses of Rs. 1.30 lakhs are not claimed as business expenses in books of account of appellant and are the personal expenses of able as aimed to be 21. The Ld. CIT(A) rejected the contention of the assessee observing as under: “9.2 I have duly considered the submissions made by the appellant and the facts Suresh Patel claimed these expenses to that these expenses are reçorded in is personal books and has no connection with the appellant. /However, Shri Suresh Patel, who is also a partner of the evidence to substantiate the by him out of explained sources. In view of being produced even in appellate proceeding, no fault can be on this ground in the ass rejected.” 22. We have heard rival submission of the parties on the issue in dispute and perused relevant clearly admitted that therefore, the assessee expenditure. The Ld. CIT(A) has noted that assessee failed to substantiate the actual expenditure incurred out of the explain sources. Before us, the ITA NO. 3773, 4875 & Ld. CIT(A) rejected the contention of the assessee I have duly considered the submissions made by the appellant and the facts found by AO in the assessment order. Shri Suresh Patel claimed these expenses to be personal and also claimed that these expenses are reçorded in is personal books of account and has no connection with the appellant. /However, Shri Suresh who is also a partner of the firm, failed to produce any evidence to substantiate the claim that such expenditure is incurred by him out of explained sources. In view of lack of any such proof being produced even in appellate proceeding, no fault can be on this ground in the assessment order. Ground no.10 stands have heard rival submission of the parties on the issue in dispute and perused relevant material on record. The assessee has that the expenditure of ₹ 1.3 lakh was incurred he assessee was required to explain source of the expenditure. The Ld. CIT(A) has noted that assessee failed to substantiate the actual expenditure incurred out of the explain us, the assessee has not filed any capital account or Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 52 Ld. CIT(A) rejected the contention of the assessee I have duly considered the submissions made by the assessment order. Shri be personal and also claimed of account and has no connection with the appellant. /However, Shri Suresh firm, failed to produce any claim that such expenditure is incurred lack of any such proof being produced even in appellate proceeding, no fault can be found essment order. Ground no.10 stands have heard rival submission of the parties on the issue in record. The assessee has 1.3 lakh was incurred, required to explain source of the said expenditure. The Ld. CIT(A) has noted that assessee failed to substantiate the actual expenditure incurred out of the explained assessee has not filed any capital account or withdrawal by the assessee and his family members to substantiate the source of expenditure. In the circumstances, we do not find any error in the order of the Ld. CIT(A) on the issue in dispute and accordingly we uphold the same. 23. In the result, the a dismissed and the appeal of the assessee for AY 2012 allowed. The cross- withdrawn. 24. As far as appeal of the concerned, the ground raise is “1. On the facts and circumstances of the case and in law, the Ld. Commissioner of the fact that transfer has been provision of Sec Transfer of property Act, 1882 which ingress lo the property is handed over to the transferee ie Vidhi Enterprises, the provisions of case, clause 9B, 22(b) and 26 of the DA clearly ITA NO. 3773, 4875 & withdrawal by the assessee and his family members to substantiate the source of expenditure. In the circumstances, we do not find any in the order of the Ld. CIT(A) on the issue in dispute and accordingly we uphold the same. In the result, the appeal of the Revenue for AY 2012 the appeal of the assessee for AY 2012 -objection of the assessee is dismissed as As far as appeal of the Revenue for assessment year 2009 e ground raise is reproduced as under : On the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax(Appeals) has erred in not considering the fact that transfer has been effected in AY 2009-10 as per the provision of Sec.2 (47) (v) of Income-tax Act, 1961 rws 53A of the Transfer of property Act, 1882 which clearly states that once the property is handed over to the transferee ie Vidhi Enterprises, the provisions of Sec 53A of ToPA are attracted. In this lause 9B, 22(b) and 26 of the DA clearly establish that the Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 53 withdrawal by the assessee and his family members to substantiate the source of expenditure. In the circumstances, we do not find any in the order of the Ld. CIT(A) on the issue in dispute and for AY 2012-13 is the appeal of the assessee for AY 2012-13 is partly objection of the assessee is dismissed as sment year 2009-10 is reproduced as under : On the facts and circumstances of the case and in law, the Ld. tax(Appeals) has erred in not considering 10 as per the rws 53A of the clearly states that once the property is handed over to the transferee ie Vidhi Sec 53A of ToPA are attracted. In this establish that the Developer had complete access to the property and that he was liable for the actions thereon. 25. The sole ground raised in the appeal of the assessment year 2009 adjudicated in the appeal for AY Revenue is also dismissed. The cross objection of the assessee for assessment year 2009 26. In the result, both AY 2009-10 and cross 2009-10 are dismissed assessment year 2012 Order pronounced in the Court on Sd/- (PAVAN KUMAR GADALE JUDICIAL MEMBER Mumbai; Dated: 06/07/2022 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. ITA NO. 3773, 4875 & Developer had complete access to the property and that he was liable for the actions thereon.” ground raised in the appeal of the assessment year 2009-10, i.e. the year of taxability, h adjudicated in the appeal for AY 2012-13, therefore said appeal of also dismissed. The cross objection of the assessee for assessment year 2009-10 is dismissed as withdrawn. In the result, both the appeals of the Revenue for AY 2012 10 and cross-objections of the assessee for AY 20 10 are dismissed, whereas appeal of the assessee for assessment year 2012-13 is partly allowed. ounced in the Court on 06/07/2022. Sd/- PAVAN KUMAR GADALE) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT Copy of the Order forwarded to : Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 54 Developer had complete access to the property and that he was ground raised in the appeal of the Revenue for has already been 13, therefore said appeal of also dismissed. The cross objection of the assessee for dismissed as withdrawn. for AY 2012-13 & objections of the assessee for AY 2012-13 and , whereas appeal of the assessee for - OM PRAKASH KANT) MEMBER 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// ITA NO. 3773, 4875 & BY ORDER, (Sr. Private Secretary ITAT, Mumbai Pankaj Enterprises ITA NO. 3773, 4875 & 4876/M/2017, & Ors 55 Sr. Private Secretary) ITAT, Mumbai