आयकर अपील(cid:547)य अ(cid:876)धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A‘ Bench, Hyderabad (cid:302)ी (cid:874)वजय पाल राव, उपाÚ य¢ एवं (cid:302)ी मधुसूदन साव(cid:875)डया, लेखा सदè य के सम¢ ।

Before Shri Vijay Pal Rao, Vice-President A N D Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA No.1619/Hyd/2025 (िनधा१रण वष१/Assessment Year: 2016-17)

Shri Sahodhar Reddy Muddasani Hyderabad PAN:AELPM9122N	Vs.	Dy.CIT Central Circle 1(3) Hyderabad
(Appellant)		(Respondent)
िनधा१ ौरती (cid:554)ारा/Assessee by: CA Shri C Maheshwar Reddy
राज(cid:830) व (cid:554)ारा/Revenue by: Shri Sankar Pandi P, Sr. DR
स ुनवाई की तारीख/Date of hearing: 06/01/2026
घोषणा की तारीख/Pronouncement: 16/01/2026

आदेश/ORDER Per Madhusudan Sawdia, A.M.:

This appeal is filed by Shri Sahodhar Reddy Muddasani (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals)-12, Hyderabad (“Ld. CIT(A)”) dated 24.09.2025 for the A.Y. 2016-17.

2. The assessee has raised the following grounds of appeal:

3. The brief facts of the case are that the assessee is an individual deriving income from business and profession and house property. The assessee filed his return of income for the Assessment Year 2016–17 on 16.01.2018 declaring total income of Rs.5,85,350/-. A search and seizure operation under section 132 of the Income Tax Act, 1961 (“the Act”) was conducted on 09.08.2018 in the case of the assessee along with M/s Moksha Infracon Private Limited ( “the developer”) and M/s Kaveri Infra Projects Private Limited. Consequent to the search, notice under section 153A of the Act was issued by the Learned Assessing Officer (“Ld. Ld. AO”) to the assessee on 18.03.2019. During the assessment proceedings, the Ld. AO noticed that the assessee, along with Shri Cheruku Anand Reddy and Shri Manohar Reddy Cheruku (hereinafter collectively referred to as “the landowners”), had entered into a Joint Development Agreement (“JDA”) dated 19.01.2016 with the developer. As per the terms of the JDA, in respect of land measuring 676 sq. yards, the landowners were entitled to receive 1,853 sq. ft. of built-up area. The Ld. AO held that the execution of the JDA constituted a “transfer” within the meaning of section 2(47) of the Act and that capital gains under section 45(1) of the Act arose in the year of execution of the JDA. Accordingly, the Ld. AO computed long-term capital gain of Rs.3,65,904/- and added the same to the income of the assessee. The assessment was completed by the Ld. AO under section 153A of the Act vide order dated 26.04.2021, determining the total income of the assessee at Rs.9,51,254/-.

4. Aggrieved with the order of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A), who dismissed the appeal of the assessee by relying upon the judgment of the Hon’ble Andhra Pradesh High Court in the case of Potla Nageswara Rao vs.

DCIT 50 taxmann.com 317.

5. Aggrieved with the order of the Ld. CIT (A), the assessee is in appeal before this Tribunal. The Learned Authorized Representative (“Ld. AR”) submitted that the only issue arising for adjudication out of the grounds of the assessee is the addition of Rs.3,65,904/- towards long-term capital gains. It was contended that no taxable transfer within the meaning of section 2(47) of the Act had taken place during the year under consideration, as the assessee had not received any consideration under the JDA during the relevant year. It was further submitted that possession, if any, was handed over only for the limited purpose of development and not in the nature of possession contemplated under section 2(47)(v) of the Act read with section 53A of the Transfer of Property Act. The Ld. AR submitted that reliance placed by the Ld. CIT(A) on the judgment of the Hon’ble Andhra Pradesh High Court in Potla Nageswara Rao (supra) is misplaced in view of the later decision of the Hon’ble Telangana High Court in the case of Smt

Click Here to Read the rest of this document