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Judgment on Joint Development Agreement

March 2nd, 2022

. 2. The applicant and the defendant concluded a joint development agreement dated 26.09.2015. The applicant argues that the defendant objects under the . joint development contract and has not completed the construction work within the period specified in the joint development agreement, and the dispute must be resolved by one. The arbitrators within the meaning of clause 14 of the joint development agreement issued a legal opinion dated 04.11.2017 on the respondent, in which the defendant was invited to propose the name of the arbitrator. These joint development agreements are usually concluded using either the area sharing method or the revenue sharing method, the most common form being the area sharing method, in which agreements are concluded to develop land owned by landowners. The developer receives a share of the land (“UDS”) and in exchange for the allocation of the UDS, the landowner receives a share of the overdeveloped area. With a fair and reasonable interpretation and when applying the principle of reserved interpretation, it can be said that the possession provided for in paragraph (v) does not necessarily have to be the sole and exclusive possession. As long as the purchaser is able, by virtue of the given possession, to exercise general control over the property and to use it for the intended purpose, the mere fact that the owner also has the right to enter the property to supervise the development work or to ensure compliance with the contractual conditions does not entail incompatibility. The simultaneous ownership of the owner, who can exercise property rights to a limited extent and for a limited purpose, and that of the buyer/developer, who has general control and custody of the property, can be very well reconciled. Subsection (v) of subsection 2(47) will also be fully effective in such a situation. There is no justification for deferring the application of paragraph (v) and the resulting delineation of the capital gain at a time when the competing ownership becomes the exclusive property of the developer or purchaser after payment of the full consideration.

The evaluator entered into a Joint Development Agreement (JDA) for the development of 72 cents of the land owned by the appraiser. According to AO, JDA`s performance triggered a capital gains tax obligation in the year the property was transferred to the developer. 7.5 In C.S. Atwal v. CIT (2015) TaxCorp (DT) 61500, the High Court of Punjab and Haryana ruled that “the conclusion of a joint development agreement with an irrevocable power of attorney in favour of the promoter does not entail a `transfer` for capital gains purposes. For the purposes of tax liability, the income must actually accrue to the appraiser. In this case, the right to receive the consideration for the sale does not arise at the time of signing the contract on 8-2-2009. Without the delineation of the consideration, the appraiser is not required to pay a capital gain on the agreed sale consideration. In addition, the consideration for the sale is not mentioned in the agreement and no amount has been remitted at the time of signing the contract or thereafter. In C.S.

Atwal v. CIT (loc. cit.), it was found that “the willingness of the promoters to perform their part of the contract was lacking or could not be performed by them, which was one of the conditions precedent for the application of Article 53A”. In addition, Article 2(47)(v) refers to the `transaction` which is intended to facilitate ownership. By means of such a transaction, a purchaser such as a developer is authorized to carry out development work on the property by taking general control of the property in partial performance of the contract. The date of this transaction determines the date of the transfer. The actual date of physical possession or cases of possession are not very relevant. The determination of such a date involves, if necessary, complex investigations that may defeat the purpose of the legislation. It is sufficient that, as a result of that transaction, the purchaser has the right to perform and effectively exercise deeds of ownership in accordance with the contractual obligations. This is equivalent to legal possession. Based on the review of the terms of the JDA documents, the promoters allowed not only to enter the development property, but also to give them rights for various other purposes such as consolidating the project with others, creating a mortgage or charge for the acquisition of project funds, the sale of apartments to be developed without signing the landowner as a confirmatory part, Granted.

It can be concluded that “the developers received clear ownership of the country in question when the power of attorney was executed. It can be summarized that ownership of the land does not need to be wholly owned, and if the purchaser is able to exercise control over the entire project for its intended purpose, capital gains provisions would appear. `20. The effect of that amendment is that, during and after the entry into force of the Amending Law of 2001, where an agreement, such as the JDA in the present case, is not registered, it has no legal effect within the meaning of Article 53A. In short, in the eyes of the law, there is no agreement that can be enforced under section 53A of the Transfer of Ownership Act. Since this is the case, we believe that the High Court was correct in concluding that in order to be considered a “transfer” of capital assets under section 2(47)(v) of the Act, there must be a “contract” that can be enforced by law under section 53A of the Transfer of Ownership Act. A reading of Article 17(1A) and Article 49 of the Registration Act shows that, in the eyes of the law, no contract can be taken into account for the purposes set out in Article 53A. The Income Tax Appeal Tribunal did not correctly refer to the phrase “of the kind referred to in section 53A” in paragraph 2(47)(v) to reach the opposite conclusion. This expression has been used by the legislator since paragraph (v) was inserted by the Finance Act of 1987 with effect from 1 April 1988.

All that is meant by this expression is to refer to the elements of the applicability of § 53A to the contracts mentioned therein. Only if the contract contains the six characteristics mentioned in Shrimant Shamrao Suryavanshi (above) does the article apply, and this is understood as “of the type referred to in Article 53A”. That expression cannot be interpreted as broadly as it refers to an amendment made years later, in 2001, only to say that, although registration of a contract is required under the Amending Act 2001, the abovementioned expression `of the type referred to in Article 53A` would in some way refer only to the nature of the contract referred to in Article 53A. in turn, would not require registration. As already mentioned, according to § 53A after 2001, there is no contract within the meaning of the law, unless the said contract is registered. Since this is the case and it is clear that said JDA has never been registered, since the JDA has no effect in the eyes of the law, obviously no “transfer” can be called according to the above document. Given that we are ruling this case on this legal basis, it is not necessary to address the other issues decided by the High Court, namely whether or not the property was taken under the JDA; whether only one licence has been granted to develop the land; and whether or not the developers were willing and willing to fulfill their share of the market. Since we believe that paragraph (v) of section 2(47)(47) of the Act is not affected by the facts of this case, we do not need to address any other factual issue.

7.7 If the time limit is the essence of the contract and the schedule is 30 months to complete the construction with an additional grace period of 6 months, it cannot be said that such a contract gives the seller/owner the right to seek compensation under § 53A of the Transfer of Ownership Act. This agreement cannot be described as a contract within the meaning of § 53A of the Transfer of Ownership Act. The provisions of Article 2(47)(v) shall not apply in such a situation. This was in Sri ABVS Prakash, Hyderabad v. ACIT, Central Circle-1, Hyderabad (2014) 8 TaxCorp (A.T.) 35688 states that “the provisions of the alleged transfer under Article 2(47)(v) could not have been invoked. Without deferring the consideration to the appraiser, the appraiser is not expected to pay capital gains on the entire agreed sale consideration. If time is the essence of the contract and the schedule is not respected, it cannot be said that such a contract gives the seller/owner the right to seek redress under Section 53A of the Transfer of Ownership Act. The agreement cannot be described as a contract within the meaning of Section 53A of the Transfer of Ownership Act. It cannot be said that the provisions of paragraph 2(47)(v) will apply in the situation. Thus, capital gains could not have been taxed. The applicant`s learned lawyer asserts that there are certain disputes arising from the agreement and attempted to refer to clause 21 of the Joint Development Agreement. that the respondent accept the appointment of an arbitrator within the meaning of case 21 of the Joint Development Agreement of 23.11.2012.

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