ORDER

Per Pradip Kumar Choubey, Judicial Member:

This appeal filed by the assessee is directed against the order dated 29.08.2025 of the NFAC, Delhi [‘CIT(A)’] passed under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”).

Brief facts of the case are that the appellant is an individual who had not filed his return of income for the A.Y. 2014-15. The Assessing Officer was having information that the appellant had entered into a LDA with M/s Sehra Real Estate Pvt Ltd. on 27/08/2013 for the development of his immovable property situated at Mauja Rukanpura, Thana No. 5, Circle Danapur, Patna, measuring approximately 7,405.2 sq. ft. Under the agreement, the assessee transferred development rights to the developer in exchange for a share in the constructed built-up area, with a sharing ratio of 48:52 between the landowner and the developer, respectively. The total permissible built-up area was 18,513 sq. ft., entitling the appellant to 4,443 sq. ft. The developer was solely responsible for construction, approvals, financing, and sale its share. The AO was of the view that as the agreement was duly registered and possession was handed over to the developer, the transaction fell within the ambit of a 'transfer’ under Section 2(47)(v) of the Income Tax Act, 1961, read with Section 53A of the Transfer of Property Act, 1882, thereby attracting capital gains under Section 45 of the Act. Based on the facts gathered during the proceedings, it was observed that the possession of the property was handed over to the developer for execution of the project. The transaction thus constituted a transfer as defined u/s 2(47)(v) of the Income Tax Act, 1961, triggering capital gains liability u/s 45. Since no return of income was filed by the assessee for the relevant assessment year, therefore, the case of the assessee was reopened u/s 147 of the Act after recoding reasons and taking prior approval from competent authority. During the course of assessment proceedings various statutory notices were issued to the appellant, however no compliance was made by the appellant and accordingly the case was concluded u/s 147 of the Act. The Assessing Officer computed the deemed capital gain based on the cost of construction attributable to the appellant's share (4,443 sq. ft. @Rs.1,300/sq. ft.), resulting in a total consideration of Rs.57,75,900 and assessed long-term capital gains accordingly.

Being aggrieved by the said order, the assessee filed an appeal before the Ld. CIT(A) wherein the Ld. CIT(A) dismissed the appeal of the assessee.

Being aggrieved and dissatisfied by the order of the Ld. CIT(A), the assessee has submitted that the assessee entered into a registered agreement for development of his ancestral land on 27.08.2013 for the construction of residential building/apartment on the said land. It is evident from JDA on page 2 under para-3 that nature of deed is "Development Agreement". This clearly postulates that it is not the sale deed in which the land owner has relinquished his ownership. The land owner is continued to be the owner of the property throughout the development of the property and there is no transfer of ownership to the developer throughout the development period. Further on last page attached with agreement as “Endorsement of Certificate of Admissibility” it is evident that total 2% stamp duty has been paid as prescribed for agreement under article 5(b) of Schedule 1A of Bihar Stamp Duty Chart as provided under Indian Stamp Act. The ld. AR further submits that the assessee had made agreement with builder for development of land but right and title of land has not been transferred in the meaning of Transfer of Property Act nor it can be said that the title of land was transferred within the meaning of section 2(47) of I.T. Act. The learned AR submits that this case is squarely covered by identical case in a recent judgement of Hon'ble Calcutta High Court in PCIT vs Emporis