In JDA, the landowner transfers the operating rights to the developer and the developer of the construction agrees to build and give the landowners a certain agreed construction area free of charge. Although paragraph 2 and 2A of application 11/2017 CT (R) (in the T.A. version amended by NN 03/2019) requires that the amount charged to the independent buyer for the value of a similar dwelling be the value of the work the developer provided to the lessor. But such a value seems excessive and inappropriate. Indeed, the open market value of similar dwellings also includes the value of the land. In addition, the land on which the developer`s construction activity is carried out and transferred to the landowner is already the property of the owner. In such cases, the value of the work will not be similar to that of the construction of “free housing”. It is also relevant to mention here that developers usually return the value of the country by the actual buyer who paid for it. The value of the land is not divided between the dwellings/surfaces for sale only between the dwellings/surfaces that are left to the free owner of the land. Also, the developer causes huge marketing and other expenses that are only recovered by apartment/surface buyers. Thus, the price charged to the buyer will of course be much higher than the actual cost of carrying out the construction provided to the owner of the land. The deduction of only 1/3 because of the value of the land in such a scenario therefore results in an exorbitant value of these services.
The author believes that, in such cases, the assessment should be carried out either after deducting the real value of the land or on the basis of construction costs plus 10% of this amount, as stipulated in Rule 30 of the 2017 CGST rules. Assessee ran Regd. JDA and has ceded ownership of land to developers for development It is also proposed to define the terms “competent authority,” “specified agreement” and “stamp tax value” for this purpose. But then again, the author has another argument that if the government itself has already made it clear in 2017 that the sale of antique jewelry and private used vehicles is not considered a delivery, because it is not in the promotion of the company. So why doesn`t the same principle apply to the exchange of TDR services with construction work? Does this mean that there will be separate principles for goods and services? In such cases, the author understands the tax obligation. However, disputes in such cases can still be mitigated very carefully by the development of the JDA agreement, so that unnecessarily the same thing is not interpreted as a promotion of activity or delivery. – Once the project is completed, Mr. X is entitled to 60% of the project`s built-up area in the form of housing/business, etc. As in the timetable of the agreement if, as part of a development agreement, the auditor allowed the developer to enter the premises of his land to do all the things necessary for the construction of housing, it could be said that the auditor handed over ownership of his land to the developer and therefore made a “transfer” in accordance with Section 2 (47) and was taxable as the same capital gain in the year in which an agreement was reached.
Since the contract is partially in accordance with the contract of nature covered by section 53 of the Property Transfer Act 1882, Section v of Section 2 (47) is clearly attracted. In many parts of the country, there is a practice, with separate registers for land and separate for flat constructed. In such cases, therefore, there is often an evaluation problem. In the case of IN RE: M/S. KARA PROPERTY VENTURES LLP 2019 (3) TMI 924 – AUTHORITY FOR ADVANCE RULING, TAMILNNADUthe assesse has entered into two separate agreements, one for the sale of one share of undivided land and the other for the construction of complex services to the buyer, two separate counterparties being charged by the purchaser. A question was therefore asked about the tax measure.