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2017 (11) TMI 983 - AT - Income TaxCapital gain claim - on doubt about the handing over of the possession of the property as per the Terms of the Agreement treated as Unexplained money under section 68 - exemption under section 54 denied - co-ownership on property - Held that:- It is in general practice to make entire payment of amount in consideration pending the execution of Sale deed, only when possession of the property is handed over to the buyer. Hence, there was no reason to doubt about the handing over of the possession of the property as per the Terms of the Agreement and as per the financial statements of the buyer company on full payment of the amount in consideration. It is undisputed position of law that for the purpose of section 2(47) of the Income Tax Act, “transfer” of immovable property is complete on handing over of the possession of the property on payment of sale consideration in performance of a contract of the nature referred to in section 53-Aof the Transfer of the Property Act. It is also undisputed fact that name of the owner on the record of House Tax and Electricity Departments is transferred on the basis of Registered Sale Deed only. Thus the report of the Income Tax Officer has no relevance. And above all, in the case of co-owner i.e. Rajendra Kanodia & Sons (HUF) who was owner of the 50% of the same property, the Assessing Officer in the assessment under section 143(3) for the same assessment year has allowed the claimed exemption under section 54 of the I. T. Act on the sale of their 50% of the property. Under these facts and circumstances, we hold that the Assessing Officer was not justified in denying the claimed exemption under section 54 of the Act to the assessee on the basis that possession of the property was not handed over to the buyer and thus, sale was not complete in absence of execution of Sale Deed. We thus, while setting aside orders of the authorities below in this regard, direct the Assessing Officer to allow the claimed exemption - Decided in favour of assessee.
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