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| The Tax Publishers2019 TaxPub(DT) 8333 (SC) : (2020) 421 ITR 0046 : (2020) 313 CTR 0375 : (2020) 275 TAXMAN 0187 INCOME TAX ACT, 1961
Section 2(47)
Where assessee owned a land and entered into agreement with a builder to develop said land, but development agreement could not be executed and thereafter a compromise deed was executed due to which assessee relinquished its right of ownership on said land after receiving certain sale consideration from builder, then transaction fell under section 2(47)(ii) and (vi) and assessee was liable to pay tax on capital gains tax.
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Capital gains - Transfer of capital assets - Assessee entered into an agreement for development of land but later on relinquished its rights of ownership when agreement could not be executed -
Issue was as regards Transfer of a capital asset within the meaning of Section 2(47). Assessee was owner of a land and entered into agreement with a builder to develop said land. However, later on development agreement could not be executed and a compromise deed was executed between parties in terms of which assessee relinquished its right of ownership after receiving certain sale consideration from builder. Held: Assessee's rights in said immovable property were extinguished on receipt of the last cheque, as also that compromise deed could be stated to be a transaction which had the effect of transferring the immovable property in question. The pigeonhole, therefore, that would support the orders under appeal would be Section 2(47)(ii) and (vi) of the Income Tax Act in the facts of the present case.
REFERRED : CIT v. Balbir Singh Maini (2018) 12 SCC 354 : 2017 TaxPub(DT) 4346 (SC) Seshasayee Steels Pvt. Ltd. v. ACIT [I.T.A. No. 1931/Mds/2010, I.T.A. No. 98/Mds/2011, dt. 24-6-2011]
FAVOUR : Against the assessee
A.Y. :
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