Must Read: S. 2(47)(v) , S. 53A - Capital gain & Transfer of Property

Ms. K. Radhika vs DCIT (ITAT)

Dated: 9^th Sep. 2011

S. 2(47)(v) , S. 53A – Whether date of Development Agreement is the date of transfer for computing capital gain of the transfer of property. Held Unless provisions of section 53A of Transfer of Property Act are satisfied on facts of a case, transaction relating to Development Agreement of a property cannot fall within the scope of deemed transfer under section 2(47)(v) of IT Act.

The assessee has received only a 'meager amount' out of total consideration, the transferee is avoiding adhering to the agreement and there is no evidence that there was actual construction has been taken place at the impugned property in the assessment year under consideration and also there is no evidence to show that the right to receive the sale consideration was actually accrued to the assessee. Without accrual of the consideration to the assessee, the assessee is not expected to pay capital gains on the entire agreed sales consideration. When time is essence of the contract, and the time schedule is not adhered to, it cannot be said that such a contract confers any rights on the vendor/landlord to seek redressal under section 53A of the Transfer of Property Act. This agreement cannot, therefore, be said to be in the nature of a contract referred to in section 53A of the Transfer of Property Act. It cannot, therefore, be said that the provisions of section 2(47)(v) will apply.