Article
Capital Gains arising out of Joint Development Agreements – Analysis of Section 45(5A) of Income-tax Act
By Janane G
The transfer of immovable property by land owners under the mechanism of Joint Development Agreement (‘JDA’) has evolved over the years. The article in this issue of Direct Tax Amicus analyses the provisions of Section 45(5A) of the Income-tax Act, 1961 in a scenario where the JDA is unregistered. For the period prior to said section, the article discusses the Bombay High Court decision in Charturbuj Dwarakadas Kapadia (in respect of trigger point for capital gains) and the Supreme Court decision in Balbir Singh holding that provisions of Section 2(47)(v) and (vi) will not apply in cases where the JDA is not registered. Highlighting the salient features of Section 45(5A), the author also investigates as to whether its provisions would apply to JDA entered prior to 1 April 2017. Point of taxability in case of unregistered JDA, after the introduction of Section 45(5A), is discussed in the light of ITAT Chennai decision in Tamil Nadu Brick Industries which had held that where JDA is unregistered, but GPA is registered, the same would amount to ‘transfer’. Lastly, discussing the question of determination of consideration where execution of GPA is construed as transfer, the author states that evolution of interesting jurisprudence is expected...
Notifications & Circulars
- Additional particulars to be furnished by deductors at the time of preparing statements of tax deducted
- TDS and TCS at higher rates – Functionality ‘Compliance Check for Sections 206AB and 206CCA’ introduced
- Time limits of specified compliances extended in view of pandemic
- TDS on goods – Guidelines under new Section 194Q issued
Ratio decidendi
- Vivad Se Vishwas scheme – Eligibility when delay in filing appeal condoned by CIT(A) after filing of declaration – Bombay High Court
- Expenses incurred for pursuing scheme of demerger allowable when demerged entity vested in assessee – Delhi High Court
- Donations by charitable trust for educational services, to charitable and religious institutions for philanthropy exempt under Section 11, even when for activities other than education – Madras High Court
- Narrow time frame to respond to SCN and dysfunctionality of e-filing portal are sufficient grounds to set aside assessment order – Delhi High Court
- TDS on FTS – Retrospective amendment in Section 195 not to disallow expenditure retrospectively under Section 40(a)(i) – ITAT Delhi
