Income Tax Appellate Tribunal issues key property tax rulings

The Income Tax Appellate Tribunal (ITAT) has issued significant rulings regarding property taxation and capital gains in India.

A Mumbai bench of the ITAT ruled that the value of new property received under a redevelopment agreement cannot be taxed before the property is completed and possession is handed over. The tribunal deleted a ₹1.3 crore tax addition, noting that a registered redevelopment agreement creates only a contractual right to future property rather than the actual receipt of immovable property.

In a separate case, the Pune bench of the ITAT upheld a Long Term Capital Gain (LTCG) addition of approximately ₹9.92 crore. The tribunal determined that urban land purchased from the Maharashtra Housing and Area Development Authority (MHADA) constitutes a capital asset, rejecting claims that the land was agricultural.