2023 (8) TMI 82 - AT - Income Tax

Capital gains for taxation on sale of property - Date of Transfer u/s 2(47) - HELD THAT - As if the transfer of immovable property is taken place in exchange of money coupled with possession then it will be termed as sale in the eyes of law. From the above it is crystal clear that the possession of the property was handed over by the vendor to the vendees at the time of execution of the sale deed. The above said sale deed not only signed by the assessee but was also signed by the agreement holder and developer. Both of them had not raised any objection that the possession of the property has been handed over by the assessee along with others to the vendee on 11.12.2008. In the light of the above we do not have any confusion that the possession of the property was handed over to the vendee on 11.12.2008 after receiving the consideration. In our view the transfer within the meaning of section 2(47) took place if the property is transferred either by exchange or sale or by relinquishment. In the instant case the sale has taken place within the meaning of transfer of property on 11.12.2018 therefore the transfer took place only on 11.12.2018. The contention of the learned Counsel for the assessee that the possession of the property was handed over by the assessee to the Developer on 4.2.2008 is without any basis as the contents of the registered document cannot be denied or disbelieved based on a specific undated document given by the Developer. Developer happens to be the signatory of the sale deed therefore the Developer cannot issue a document contrary to the contents of the registered document to which he is a signatory. Undoubtedly the possession has been given only on 11.12.2008 and therefore it was taken place only on 11.12.2008 and hence we do not find any merit in the appeal of the assessee. Accordingly the same is dismissed.

Summary

Issues involved:

1. Justification of the Commissioner of Income Tax (Appeals) in dismissing the appeal.
2. Determination of the year of transfer of property for tax purposes.
3. Admissibility of additional evidence/documents.
4. Analysis of the sale and agreement documents to ascertain the date of transfer.

Summary:

1. Justification of the Commissioner of Income Tax (Appeals) in dismissing the appeal:
The assessee contended that the Commissioner of Income Tax (Appeals) was not justified in dismissing the appeal both on facts and in law. The Commissioner failed to appreciate that no property transfer occurred in the year under consideration, hence no tax on capital gain was applicable.

2. Determination of the year of transfer of property for tax purposes:
The assessee argued that the property transfer was completed on 04.02.2008, as per the sale deed, and not in the assessment year 2009-10 as assessed by the assessing officer. The assessee provided a certificate from the Developer indicating possession was taken on 04.02.2008. However, the Tribunal found that the possession was handed over to the purchaser on 11.12.2008, as per the sale deed, and therefore, the transfer took place on 11.12.2008, making the capital gains taxable in the assessment year 2009-10.

3. Admissibility of additional evidence/documents:
The assessee filed an application to admit additional evidence, including a confirmation letter from the purchaser regarding the possession of the property. The Tribunal rejected this additional evidence, stating it was undated, unauthenticated, and not supported by an affidavit. The assessee failed to demonstrate a reasonable cause for not producing the evidence earlier.

4. Analysis of the sale and agreement documents to ascertain the date of transfer:
The Tribunal analyzed the sale and agreement documents, including the Memorandum of Sale cum Development Agreement cum General Power of Attorney dated 04.02.2008, the Supplementary Agreement dated 05.05.2008, and the final sale deed dated 11.12.2008. It concluded that the transfer within the meaning of section 2(47) occurred on 11.12.2008, when the possession was handed over to the purchaser, and not on 04.02.2008. The Tribunal dismissed the appeal, stating that the registered document's contents could not be denied based on an undated document.

Conclusion:
All the appeals filed by the assessees were dismissed, with the Tribunal affirming that the transfer of property and the corresponding capital gains tax liability occurred in the assessment year 2009-10.