Bombay HC upholds ITAT
order, treats the date of handing over of physical possession of property
by assessee-individual (i.e. March 1, 2008), and not the date of execution
of Development Agreement (i.e. September 13, 2007), as the date of transfer
for AY 2008-09; Accordingly, HC allows assessee’s capital gains exemption
claim u/s. 54EC by holding that the investments made by assessee in August
2008 was within the 6 months deadline prescribed u/s. 54EC; Revenue
had denied Sec 54EC relief by contending that 'transfer' of asset
was effected on the date of execution of Development Agreement
(i.e. September 2007) and not the date of handing over of
physical possession of property; HC notes the ratio of co-ordinate bench
ruling in Chaturbhuj Dwarkadas Kapadia wherein it was held that the date
of execution of contract is relevant provided the terms of the
contract indicate passing off or transferring of complete control over
the property in favour of the developer; HC notes that the terms of the development
agreement provide that only upon full payment of consideration, the
construction shall be undertaken by the developer; HC further observes
that on the date of execution of the development agreement, the entire
consideration was not received by assessee; HC also observes that when the
possession was handed over by assessee to the developer on March, 1, 2008
the entire consideration under the development agreement was received by
assessee and complete control over the property was passed on to the developer;
Thus, upholds ITAT order holding date of parting with possession as the
date of transfer, remarks that “This finding is fully consistent with the
law laid down by the Division Bench in the case of Chaturbhuj Dwarkadas
Kapadia.”:HC
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