TMI Blog1981 (8) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... ut 160 rooms. They are all in the possession of various tenants. The property had been purchased by the assessee-company on January 21, 1963 for Rs. 4,25,000 from Arya Dharam Sewa Sangh, New Delhi. On May 31, 1967, and June 9, 1967, the assessee-company entered into agreements of sale with certain parties who were shareholders of the assessee-company and who had credit balances in their accounts with the company. By these agreements, the assessee agreed to sell to these persons 9 of the units bearing municipal Nos. 411, to 416, 420, 421 and 422 for consideration aggregating to about Rs. 4,42,000. The accounts of the shareholders above mentioned were debited with the amounts of the consideration in respect of the property agreed to be sold to them, these debit entries being made on 1st July, 1967, relevant for the assessment year 1968-69. The agreements of sale, however, provided that the sale deeds would be got registered before December 31, 1967. The agreements also recited that the possession of the properties which was with the tenants was being given over to the intending purchasers from the dates of the respective agreements and according to the agreements the intending purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d been no sale of the property effected during the previous year since there had been no registered documents executed by the assessee in respect thereof. The decisions of the Supreme Court in the case of CIT v. Bhurangya Coal Co. [1958] 34 ITR 802 and in the case of Alapati Venkataramiah v. CIT [1965] 57 ITR 185 were relied upon in support of the contention that there was no question of assessing any capital gains until there had been a valid transfer of the property by duly executed and registered document. The AAC called for a report from the ITO who submitted that even if the transactions fell short of the requirements of sale within the meaning of the Transfer of Property Act read with Indian Registration Act there had been, at least, relinquishment of the right, title and interest of the company over the 9 units of the property. But the AAC pointed out that even in regard to the plea of relinquishment the same objection based on the absence of the registered document would prevail. He, therefore, held that there was no capital gain assessable for the present year. The revenue filed an appeal to the Appellate Tribunal. Before the Tribunal reliance was placed on behalf of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letting value of all the 12 units of this property show that it fully owns the ownership of the property as well as the income thereof." Aggrieved by the order of the Tribunal, the Commissioner has had this reference made to this court of the question already set out. It will be seen from the frame of the question that the department is no longer agitating the question whether a valid sale had been effected by the assessee of the properties in question during the previous year. The finding of the AAC that there could be no sale without a duly registered document appears to have been accepted by the department. In fact so far as that aspect of the matter is concerned there can be no doubt at all in view of the decisions of the Supreme Court already referred to and which have been applied to two decisions of this court, namely, in the case of CIT v. Meatles Ltd. [1972] 84 ITR 37 and in the case of CIT v. Hindustan Cold Storage and Refrigeration P. Ltd. [1976] 103 ITR 455. In view of these Bench decisions of this court it is not necessary to refer to other authorities. Learned counsel for the applicant, referred to the decision of the Supreme Court in Associated Clothiers Ltd. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the learned counsel is merely trying to rely upon some general observations at p. 485, which in our opinion are not of any assistance in the present case. So far as the second Allahabad case is concerned, the facts were somewhat special and in any event in view of the earlier decisions of this court we are unable to adopt the line of reasoning of the Allahabad High Court, which, we may incidentally point out, is at variance also with the view taken by the Bombay High Court in the case earlier referred to. Mr. Wazir Singh suggested that this was a case governed by s. 53A of the Transfer of Property Act. But even this contention cannot be upheld in this particular case. We have already extracted the findings of the Tribunal in para. 13 of the order. The Tribunal has clearly found that though an agreement for sale was entered into, possession of the property had not been handed over either physically or constructively to the intending purchasers. In view of this clear finding of the Tribunal even this plea, based on the doctrine of specific performance, does not survive. That apart, as we have already pointed out, even where the doctrine could have been availed of, it was not cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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