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ThynkTax /Tax Reference /Case Laws /T.K. Dayalu - Joint Development Agreement

T.K. Dayalu - Joint Development Agreement

High Court·2011·ITR
Facts

Land owner entered into a Joint Development Agreement (JDA) with a builder; question on year of taxability of capital gains.

Issue

Whether capital gains arise on signing of JDA or on receipt of constructed flats?

Held

On signing of JDA when possession is handed over (Section 53A of Transfer of Property Act) - even if monetary consideration is deferred.

Ratio

"Transfer" under Section 45 is wider than legal conveyance; possession + part performance triggers tax.

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