TMI Blog2020 (10) TMI 1115X X X X Extracts X X X X X X X X Extracts X X X X ..... (vii) inasmuch as it enables one to exercise, for all practical purposes, rights in and over the property received . While the sale, resulting in a de jure ownership, is complete only on 24/4/2013, the de facto transfer, leading to a de facto ownership, gets completed earlier on 30/3/2013 on the execution of the instrument of sale, with each party having fulfilled his part of the contract to transfer. There is thus receipt of the subject land by the assessee on 30/3/2013, i.e., during the previous year relevant to AY 2013-14, the immediately preceding year. The taxable event u/s. 56(2)(vii)(b) thus takes place during the said year, and not the current year. That, for that year, the law did not bring the short consideration to tax, but only where the subject property is received without consideration, is a different matter altogether, with which we are not concerned and, in fact, is, to that extent, an irrelevant consideration. The Revenue s action in invoking s. 56(2)(vii)(b)(ii) for the current year is thus not sustainable in law. - Decided in favour of assessee. - ITA No.94/JAB/2018 - - - Dated:- 27-10-2020 - Shri NRS Ganesan, Judicial Member And Shri Sanjay Arora, Accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vable property and the date of registration are not the same, the stamp duty value on the date of the agreement may be taken for the purposes of this sub-clause: Provided further that the said proviso shall apply only in a case where the amount of consideration referred to therein, or a part thereof, has been paid by any mode other than cash on or before the date of the agreement for the transfer of such immovable property; (c) any property, other than immovable property, - Provided that where the stamp duty value of immovable property as referred to in sub-clause (b) is disputed by the assessee on grounds mentioned in sub-section (2) of section 50C, the Assessing Officer may refer the valuation of such property to a Valuation Officer, and the provisions of section 50C and sub-section (15) of section 155 shall, as far as may be, apply in relation to the stamp duty value of such property for the purpose of sub-clause (b) as they apply for valuation of capital asset under those sections: Provided further that this clause shall not apply to any sum of money or any property received Accordingly, the difference of ₹ 2,30,67,500, i.e., between the guideline ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e., 30.3.2013, for which reference is made to s. 47 of the Registration Act, 1908, which reads as under: 47. Time from which registered document operates. - A registered document shall operate from the time from which it would have commenced to operate if no registration thereof had been required or made, and not from the time of its registration. Section 56(2)(vii)(b), as it stood at the relevant time, i.e., up to the previous year ending 31/3/2013, did not include receipt of an immovable property for a lesser consideration as a taxable event, so that the deeming fiction of section 56(2)(vii)(b), as invoked, would not apply for AY 2013-14. For AY 2014-15, there is no taxable event inasmuch as the transfer and, thus, the receipt of the immovable property has been completed on 30.3.2013, the immediately preceding previous year. 4. We have heard the parties, perused the material on record, and given our careful consideration to the matter. The controversy 4.1 The question before us is if the property under reference stands received by the assessee during fy 2012-13 or fy 2013-14, i.e., the previous years relevant to AYs. 2013-14 and 2014-15 respectively. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e property valued above rupees one hundred, shall, on or after the said date, be recognized in law, including the Act , only where it is per a registered document, which in the instant case is only on 24/4/2013, falling in the current year. It is the date of registration that is therefore relevant, and the date of execution of the document is, for the purpose, irrelevant. As per the assessee, the transfer in the instant case is by way of sale, covered u/s. 2(47)(i). The transfer under the Act is therefore complete on 30.3.2013, the date of execution of the sale deed inasmuch as a unregistered document, on registration, relates back to the date from which it would otherwise have effect. Further, the Registration Other Related Laws (Amendment) Act, 2001, making amendments to section 49 and section 53A of the Registration Act, 1908 and Transfer of Property Act, 1882 respectively, as well as inserting sub-section (1A) to section 17 of the 1908 Act, for which reference was made by the Revenue to the Balbir Singh Maini (supra), shall have no bearing in the matter. This is as section 53A of the TP Act relates to the doctrine of part performance, while the instant transaction is on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1974; the two dates falling in AYs. 1974-75 and 1975-76 respectively, so that the issue was of the effective date of transfer u/s. 2(47) for the purpose of charge of capital gains u/s. 45 of the Act. The Hon ble Court noticing the divergent views by the said Court itself, after deliberation at length, held that the transfer as defined u/s. 2(47) of the Act has to be given a simple meaning, taking into consideration the object of the Act. For the purpose of tax on capital gains u/s. 45, transfer of immovable property of value exceeding ₹ 100/- is effected on the date of execution of the transfer, and not either on the date of presentation of the document for registration or on the date on which registration of the deed is completed. That is, the capital gains has to be assessed to tax for the assessment year relevant to the previous year within which the date of execution of the deed for transfer falls, and not the subsequent year relevant to the previous year in which the deed is registered. Heavy reliance was placed by it on Podar Cement P. Ltd . (supra). 4.3.3 The third decision referred to during hearing, relied upon by the Revenue, is Balbir Singh Maini (su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther, the Act, it needs to be appreciated, is to be read as one whole. Reading the word receives de hors the word transfer , as defined under the Act, would not only make it as without a firm legal basis, it would also render the Act as internally inconsistent. In fact, the word receives in common parlance connotes putting one in effective charge of the chattel or the thing received, which agrees with the broad definition given to the term transfer under the Act. 4.4.1 We shall first examine the transaction under reference from the standpoint of section 2(47)(i), i.e., as sale simpliciter, as it actually is, so that there may be no need for travelling to any other clause of section 2(47) for the purpose (refer paras 3, 4.2 4.3.2). Section 17(1)(a) of the Registration Act requires the sale deed, where the value of the immovable property being transferred is at ₹ 100 or more, to be compulsorily registered, failing which, as per section 49, it shall not affect the immovable property comprised therein. Section 47 of the said Act, however, makes it clear that, upon registration, which in the present case takes place on 24/4/2013, the sale deed shall operate fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e argument was in terms repelled by the Apex Court vide para 11 of its decision, placing reliance on its earlier decision in Ram Saran s case. These decisions, referred to in Mormasji Mancharji Vaid (supra)(at pg. 546), hold the field to date and, besides, being by a larger bench, could even otherwise be over-ruled only by a still larger bench. The date of sale as per the law, in the present case, is thus 24/4/2013, and which therefore is the date of transfer u/s. 2(47)(i). In fact, not so construing would amount to one arm of law defeating another, which is impermissible in law, as explained in Jer Co. v. CIT [1971] 79 ITR 546 (SC) and Bihari Lal Jaiswal v. CIT [1996] 217 ITR 746 (SC). The same, in effect, is also the sum and substance of the decision in Balbir Singh Maini (supra) qua s. 2(47)(v) of the Act r/w s. 53A of the TP Act, wherein again reference has been made by it to other decisions by the Apex Court. (also refer para 4.4.2) 4.4.2 We, next, consider the transfer with reference to section 2(47)(v) (para 4.3.3). The same is clearly inapplicable inasmuch as, even as contended by the ld. counsel, Shri Agarwal, before us, that it is not a case of part perf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, in fact, moved with alacrity for the same. Some time, it may be appreciated, would always lapse between the two events, over which time the rights under Specific Relief Act of a transferee for consideration stand protected in terms of s. 49 of the Registration Act itself. Sure, no cognizance can in law be given to the document as on 31/03/2013, the year-end and, thus, the material date, in view of sec. 17 r/w s. 49 of the Registration Act. The import of the same, however, would only be that the assessee cannot be regarded as the legal owner of the subject land as at the year-end. However, even as explained in Balbir Singh Main i (supra), relied upon by the Revenue: The object of section 2(47)(vi) appears to be to bring within the tax net a de facto transfer of any immovable property. The expression enabling the enjoyment of takes its colour from the expression transferring , so that it is clear that any transaction which enables the enjoyment of immovable property must be enjoyment as a purported owner thereof. (pg. 550) We have already noted that both the parties to the conveyance deed have performed thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined, does not necessitate the consent of the transferor being obtained for registration. Consequently, sections 54 and 59 of the TP Act (which deal with transfers by way of sale and mortgage respectively) were construed as necessitating two things, viz. (a) transfer executed by the transferor, and (b) registration, which may be effected by either of the parties, but which does not depend on the consent of the transferor . It is thus not possible for the transferor to revoke the transaction, i.e., before its registration, so that the protection of law is available to the transferee . This would enable one to understand, or understand better, as to why it is said that the transferee enjoys a better right to the property than anyone else or that there is no person with a better right to defeat his claim. Section 2(47)(vi) recognizes a de facto transfer for the purposes of the Act, and there is accordingly a transfer u/s. 2(47)(vi) of the Act on the execution of the agreement on 30/3/2013. In conclusion 5. The de facto ownership, recognized in Podar Cement Pvt. Ltd . (supra), is for the purpose of section 22 of the Act. The reason/s therefor is not far to seek, i. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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