IN THE INCOME TAX APPELLATE TRIBUNAL “PATNA” BENCH, PATNA BEFORE SHRI DUVVURU RL REDDY, VP AND SHRI RAJESH KUMAR, AM ITA No.384/PAT/2024 (Assessment Year:2011-12)

Shri Hari Narayan Gupta (HUF)

C/o M/s Kanak Mandir, Opp. IOC ITO, Ward-6(5)

Petrol Pump, Boring road, Patna- Vs. Patna, Bihar

80001, Bihar (Appellant) (

Respondent)

PAN No. AADHN3834N Assessee by : S/Shri A.K. Rastogi &

Rakesh Kumar, Ars Revenue by : Shri Ashwani Kr. Singal, DR Date of hearing: 24.11.2025 Date of pronouncement: 23.02.2026

O R D E R

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 30.03.2024 for the AY 2011-12.

2. The only issue raised by the assessee is against the confirmation of addition by the ld. CIT (A) of ₹1,33,85,300/- as made by the ld. AO on account of long-term capital gain arising from the property given for the Joint Development Agreement.

3. The facts in brief are that the assessee is deriving income from business and is a senior citizen. During the year, the assessee filed the return of income on 29.09.2011, showing total income of ₹4,24,260/-. Thereafter, the case of the assessee was reopened u/s

147 of the Act by issuing notice u/s 148 of the Act on 18.12.2018, for the reason that the income of the assessee to the tune of ₹1,33,85,300/- from Long-Term Capital Gain, arising from and with respect to Land Development Agreement (LDA) dated 04.08.2010, between the assessee and M/s Artech Construction Engineering Pvt. Ltd. has escaped assessment. In this LDA between the assessee and developer, it was agreed to develop the property by the builder, with share of 42.5% of the total land area of 12598 sq. ft. owned by the appellant which would be constructed by the land developer and share of constructed buildings to be taken by the appellant was 13385.3 sq.ft comprising total floor area of 31495 sq.ft. and developer would be entitled to ownership of 57.5% of the total constructed area. The ld. AO also called for the development agreement from the office of the Registrar for Properties u/s 133(6) of the Act which was duly furnished to the assessee. As per the land development agreement registered the total value of land was ₹59,84,000/- and the value of share owned by the assessee at full total value of land stands at 25,43,200/-. The ld. AO noted that the assessee has relinquished the rights over his share of land in terms of the land development agreement and the Provisions of Section 53A of transfer of property Act are attracted and capital gain has arisen from transfer of property u/s 2(47)(v), 45 and 48 of the Act. The assessee filed the written submission before the ld. AO however, finally, the ld. AO computed the capital gain arising from the said transfer at ₹1,33,85,300/- as under:-

1) Total area of land as per JDA 12,598 SFT 2) Total permitted Super Build Area to be constructed on the land (As 31495 SFT per FAR Provisions)

3) Total number of land owners One 4) Share of this Land Owner in the land Full

4. The ld. CIT (A) in the appellate proceedings dismissed the appeal of the assessee by passing a very cryptic order by observing that the Long-Term Capital Gain was correctly computed by the ld. AO and brought to tax. The ld. CIT (A) relied on the decision of Chaturbhuj Dwarkadas Kapadia of Bombay vs. Commissioner of Income-tax [2003] 129 Taxman 497 (Bombay)/[2003] 260 ITR 491 (Bombay)/[2003] 180 CTR 107 (Bombay)[13-02-2003], however, the facts are distinguishable as in that case the substantial payments were made at the time of execution of joint development agreement.

5. After hearing the rival contentions and perusing the materials available on record, we find that the assessee has entered into a Land Development Agreement with the builder as stated hereinabove and builder has been allowed to construct the property under the said development agreement. The assessee was to get 42.50% of the total constructed area and b