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2015 (7) TMI 839 - AT - Income TaxTreating the agreement for sale of land as sales - Whether there is a sale of the lands having regard to the terms of agreement of sale and as well as the method of accounting followed by the Respondent-Assessee Company - CIT exercising the power of revision u/s 263 had set aside the assessment to re-examine afresh whether the transaction of the Agreement of Sale, the Respondent Company had with M/s. Leo Edibles and Fats Limited, it amounted to sale or not and to hold this transaction should be treated as a contract of sale - Held that:- The genuineness of the agreement of sale is not doubted by the Assessing Officer. Admittedly, the Respondent-Assessee Company is in the business of real estate. Therefore, the lands which were proposed to be sold were shown / treated as stock-in-trade in the books of the Respondent- Assessee company. Therefore, the definition of term “transfer” as given in the provisions of sub-section (47) of Section 2 of the Act, has no application, because the definition is given in relation to capital asset, which is not clearly applicable to stock-in-trade. Therefore, the law applicable to the immovable property is to be considered to determine whether there is a sale or not. The Hon’ble Apex Court in the cases of CIT vs. Bhurangya Coal Co. [1958 (9) TMI 2 - SUPREME Court] and Alapati Venkatramiah [1965 (3) TMI 21 - SUPREME Court] laid down that the transfer of immovable property was considered to have taken place upon conveyancing and not the date of agreement of sale. In the case on hand, undisputedly it was only an agreement of sale, which was entered into between the Respondent-Assessee Company and M/s. Leo Edibles & Fats Limited. No Sale Deed was either executed or registered. Therefore, applying the law laid down by the Hon’ble Supreme Court in the above cases supra, it cannot be said that there is a sale of lands pursuant to the Agreement of Sale. Therefore, we concur with the order of the learned Commissioner of Income Tax (Appeals) and we do not want to interfere with the order of Commissioner of Income Tax (Appeals). Decided against revenue.
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