IN THE INCOME TAX APPELLATE TRIBUNAL “PATNA” BENCH, PATNA BEFORE SHRI DUVVURU RL REDDY, VP AND SHRI RAJESH KUMAR, AM (Assessment Year: 2014-15)

Vinod Yadav ITO, Ward-6(3)

Road No.8, Rajendra Nagar, Vs. Patna, Bihar Patna (Bihar), Patna-800016, (Appellant) (

Respondent)

PAN No. AASPY4524D Assessee by : Shri Mahendra Chowdhary, AR Revenue by : Shri Ashwani Kr. Singal, DR Date of hearing: 26.11.2025 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 22.08.2025 for the AY 2014-15.

2. The issue raised by the assessee in ground of no. 2 is against the confirmation of addition of the ld. CIT (A) of ₹3,50,79,350/- as made by the ld. AO on account of long-term capital gain arising from the property given for the Joint Development Agreement.

2.1. The facts in brief are that the assessee is deriving income from pension from Bihar Vidhan Sabha and interest from SB account with bank and FDR. The assessee filed its return of income on 01.08.2014, declaring total income of ₹ 2,62,090/-. Thereafter, the case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 11.10.2018, for the reason that the income of the assessee to the tune of ₹3,50,79,350/- from Long-Term Capital Gain, with respect to Land Development Agreement (LDA) dated 07.08.2013, between the assessee and M/s Budha Homes and Developers, the Developer for the property of the assessee being land area 21,279.60 sq. fit situated at Mohalla – Kurji balooper, mauza- Digha bujurg, survey Thana- Phulwari Sarvey Plot No.3246, Tauzi No.5130,Khata No.533. In this LDA between the assessee and developer,it was agreed to develop the property by the builder in consideration of 50% of the total constructed area of 53,199 Sq Fts which comes to 26,599.5 sq. ft. and equal area would be given to the assessee. 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 were duly furnished to the assessee. 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 and capital gain has arisen from transfer of property u/s 2(47)(ii) & 24(47)(v) 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 ₹3,45,79,350/- as under:-

1) Total area of land as per JDA 21280 sq. ft 2) Total permitted Super Build Area to be constructed on the land (As 53,199 sq. ft per FAR Provisions)

3) Total number of land owners 1

4) Share of this Land Owner in the land 21280 sq. ft

5) Tota measurement of super build area under the ownership of the 265599.5 sq. ft land owner (on 50:50 basis with land owner & Builder)

6) Estimated cost of construction of Super Build Area (including ₹3,45,79,350/-

parking area) @ square feet X ₹1300/-

2.1. The ld. CIT (A) in the appellate proceedings dismissed the appeal of the assessee by passing a very cryptic order by observing thereto 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.

2.2. 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 50% of the total con