1.The assessee is an individual engaged in the business of real estate dealings as well as in real estate consultancy. Assessee is also a partner in various partnership firms from which he derives exempt income and also has agricultural income.

2.The assessee had filed his return of income for A.Y. 2016-17 on 01.02.2017 disclosing total income at Rs. Nil. Assessee was holding land  as capital asset  jointly with his wife and son. purchase in the year 1990.

3.. During  the  year  under consideration, the assessee had entered into development agreement with Developer , for development of the said land vide registered agreement . In consideration of land given for development, Developer  agreed to give the appellant constructed area in the proposed scheme to be undertaken on the said piece of land but due to some internal problems, few of the terms of the said development agreement were not complied and thus possession of the said land was not given to developer . As the possession of land was not given to the developer, transfer had not taken place within the meaning of Sec. 45 of The Income Tax Act, 1961 and therefore no capital gain is offered to tax.  as on today also the possesseion of the plot is with the assessee and no development on the same has been carried out.

4.The Ld AO has made the addition mainly on the ground that assessee is liable for capital gain under section 45(1) of the Act in view of development agreement executed between assessee and developer instead of Joint Development and accordingly considering the assessee’s share as 1/3^rd, made addition of as Long-Term Capital Gain.

Is AO is correct.

Pl guide