New Delhi, July 9 -- A Bengaluru bench of the Income Tax Appellate Tribunal (ITAT) has granted complete relief to a landowner who faced a long-term capital gains (LTCG) tax demand of more than Rs.8 crore after entering into a joint development agreement (JDA) with a builder. While the tribunal agreed that capital gains arose when the development rights were transferred, it held that the taxpayer was still entitled to full exemption under Sections 54 and 54F by treating all 23 flats received under the redevelopment project as a single residential house.

The ruling pertains to Assessment Year 2011-12 and is based on the law as it stood before amendments introduced by the Finance (No. 2) Act, 2014 and the later insertion of Section 45(5A). ...