Transfer u/s. 2(47)(v) of the IT Act so as to bring the capital gain to tax

IN THE INCOME TAX APPELLATE TRIBUNAL
“C” BENCH : BANGALORE
BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER
AND SHRI GEORGE GEORGE K., JUDICIAL MEMBER
ITA No.410/Bang/2016
Assessment year: 2006-07

M/s. Agnus Holdings Pvt. Ltd.,
Star II, Opp. IIM Bangalore,
Bannerghatta Road, Bilekahalli,
Bangalore – 560 076.
PAN: AAHCS 6660A

vs

The Deputy Commissioner
of Income Tax,
Circle 1(1)(1),
Bangalore.

Appellant by : Smt. Sheetal Borkar, Advocate
Respondent by : Shri N.S. Shasidhar, Addl. CIT(DR)(ITAT), Bengaluru.
Date of hearing : 04.08.2021
Date of Pronouncement : 01.09.2021

O R D E R

The assessee is a private limited company, engaged in the business of holding of investments, promoting and investing in start-up companies, investing in real estate properties and so on. The assessment for the assessment year 2006-07 was completed u/s. 143(3) of the Incometax Act, 1961 [the Act] on 15-2-2008. This assessment was sought to be reopened under the first proviso to section 147 of the Act and a notice u/s. 148 was issued on 20-3-2013. The assessee denied that any income pertaining to the above assessment has escaped assessment and requested that the return of income filed originally may be considered as the Return filed pursuant to the notice issued under this section. After rejecting the objections, the AO passed an Order under sec 147 read with Sec 143 (3) dated 31-01-2014.

2. According to the AO, the assessee has entered into 'Joint development agreement' with M/s Plama Developers Limited, Mangalore in respect of a land owned by the assessee (along with 3 other parties) in Mangalore, which was not disclosed that led to the income chargeable to tax escaping assessment by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment.

3. On appeal, the CIT(Appeals) confirmed the order of AO on both the reopening of assessment as well as addition made holding that there was a transfer u/s. 2(47)(v) of the Act so as to bring the capital gain to tax. Against this, the assessee is in appeal before us.

4. The next ground is with regard to the finding of the lower authorities that there was a transfer in terms of section 2(47)(v) of the Act when the JDA was entered with the Developer on 15.3.2006. The contention of the ld. AR is that the JDA was entered into with regard to joint development of the property measuring 38 cents and the assessee was to receive 24,000 sq.ft. of built-up area in the apartment project and on the day of entering into agreement the assessee has not received any consideration and the condition laid down in section 53A of the Transfer of Property Act [T.P. Act] has not been satisfied on entering into JDA.

5. In the result, the appeal by the assessee is partly allowed.
Pronounced in the open court on this 1st day of September, 2021.

Please find attached the enclosed file for the full judgement