HC : Upholds ITAT order taxing land development agreement on signing of deed

HC : Upholds ITAT order taxing land development agreement on signing of deed:

HC upholds ITAT's order, capital gains on land transfer taxable in year of entering into development agreement between assessee and developer; Invokes deemed 'transfer' u/s 2(47)(v) with respect to part performance of contract mentioned u/s 53A of Transfer of Property Act (TPA); Rejects assessee's argument of non-receipt of sale consideration as Sec 53A of TPA does not contemplate any payment of consideration; By entering into development agreement and parting with land possession, assessee received right to receive consideration on a later date, being enough to attract exigibility to capital gains tax : Andhra Pradesh HC The ruling was delivered by division bench of Chief Justice Kalyan Jyoti Sengupta and Justice Sanjay Kumar. Advocate K. Vasanth Kumar argued on behalf of the assessee.  Taxsutra Note: In few contrary rulings, Hyderabad ITAT in Fibars Infratech Pvt. Ltd. [TS-14-ITAT-2014(HYD)] and S. Ranjith Reddy [TS-254-ITAT-2013(HYD)] held that capital gains is not taxable in the year in which Development Agreement is executed, absent 'willingness to perform'. Further, Hyderabad ITAT held that proposition laid down in Bombay HC ruling in Chaturbhuj Dwarkadas Kapadia [TS-1-HC-2003(BOM)] that date of Development Agreement is material to decide 'transfer' date cannot be applied to all Development Agreements.