Crystal Mercantiles Private Limited Vs. ITO, Ward-7(1), Kolkata

Parties Involved

Facts Summary

The assessee, Crystal Mercantiles Private Limited, is a company engaged in the business of construction. The original return of income was filed showing ‘NIL’ income. Subsequently, information was received that the assessee, along with other co-owners, had entered into a joint development agreement for the transfer of land on 24.05.2013 with M/s. Vedic Reality Pvt. Ltd. The assessee agreed to give possession of his portion of land. Thus, there was a transfer of land as per section 2(47)(v) and (vi) of the Income Tax Act, 1961, but the assessee did not offer the long-term capital gains on the same. The assessment was reopened, and the Assessing Officer issued notices to explain the joint development agreement. As per the agreement, the assessee transferred his portion of land, which was treated as long-term capital gains.…

Legal Issues

• 1. Whether the appeal order passed u/s 250 of the Income Tax Act, 1961 by the Learned Commissioner of Income Tax (Appeals) is unlawful, unwarranted, and against natural justice.
• 2. Whether the execution of the Joint Development Agreement can be equated as a Transfer of Property under section 58A of the Transfer of Property Act, 1882 and section 2(47)(v)/(vi) of the Income Tax Act, 1961.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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