Search Results For: capital asset


PCIT vs. Vembu Vaidyanathan (Bombay High Court)

COURT:
CORAM: ,
SECTION(S): , , ,
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COUNSEL: ,
DATE: January 22, 2019 (Date of pronouncement)
DATE: January 28, 2019 (Date of publication)
AY: 2009-10
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CITATION:
S. 45 Capital Gains: The allottee gets title to property on issue of allotment letter. The payment of installments is only a follow­-up action. Taking delivery of possession is only a formality. Accordingly, the date of allotment is the date on which the purchaser of a residential unit can be stated to have acquired the property (CBDT Circulars applied)

It was noted that such allotment is final unless it is cancelled or the allottee withdraw from the scheme and such allotment would be cancelled only under exceptional circumstances. It was noted that the allottee gets title to the property on the issue of allotment letter and the payment of installments was only a follow­up action and taking the delivery of possession is only a formality

Bhojison Infrastructure Pvt. Ltd vs. ITO (ITAT Ahmedabad)

COURT:
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SECTION(S): , ,
GENRE:
CATCH WORDS: , , ,
COUNSEL:
DATE: September 17, 2018 (Date of pronouncement)
DATE: September 29, 2018 (Date of publication)
AY: 2008-09
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CITATION:
S. 2(14)/ 28(va): The "right to sue" which arises on breach of a development agreement is a "personal right" and not a "capital asset" which can be transferred. Consequently, the damages received for relinquishment of the "right to sue" is a non-taxable capital receipt (all judgements considered)

A development agreement was executed which enabled the assessee to utilize the land for construction and for sharing of profits. This right/advantage accrued to the assessee was sought to be taken away from the assessee by way of sale of land. The prospective purchaser as well as the defaulting party (owner) perceived threat of filing suit by developer and consequently paid damages/ compensation to shun the possible legal battle. The intrinsic point with respect to accrual of ‘right to sue’ has to be seen in the light of overriding circumstances as to how the parties have perceived the presence of looming legal battle from their point of view. I t is an admitted position that the defaulting party has made the assessee a confirming party in the sale by virtue of such development agreement and a compensation was paid to avoid litigation. This amply shows the existence of ‘right to sue’ in the perception of the defaulting party.

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