TMI Blog2013 (8) TMI 759X X X X Extracts X X X X X X X X Extracts X X X X ..... 4/Mds/2010, C.O.No. 121/Mds/2010 - - - Dated:- 4-5-2012 - Shri N. S. Saini And Shri Vikas Awasthy,JJ. For the Petitioner : Shri Shaji P. Jacob, Addl. CIT For the Respondent : Shri S. Sridhar, Advocate ORDER Per N. S. Saini, Accountant Member The appeal by the Revenue and the cross objection by the assessee are against the order of the CIT(A)-IX, Chennai, dated 16.6.2010. 2. The sole grievance of the Revenue, as projected in the ground of appeal raised in this appeal, is that the CIT(A) has erred in holding that the capital gains was not taxable in assessment year 2007-08. 3. The brief facts of the case are the assessee had inherited a property at Teynampet, Chennai, alongwith his brother Shri Vijay. The assessee and his brother sold a portion of the above said property to M/s Ceebros Hotels Pvt. Ltd. Chennai, by executing irrevocable Power of Attorney registered with Sub-Registrar as document No.637 of 2003 dated 20.11.2003 and also executed an agreement for joint development and sale dated 20.11.2003 in favour of M/s Ceebros Hotels Pvt. Ltd. alongwith his brother. The assessee s share of deemed sale consideration arising out of the above joint developme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g out of the above sale should be taxable only in assessment year 2004-05. However, the Assessing Officer did not accept the contention of the assessee and brought to tax the balance between the sale value attributable to the assessee as per sale deed registered on 27.3.2007 and actual capital gain assessed in assessment year 2004-05. 4. On appeal before the CIT(A), the assessee has submitted as under: 1. The appellant had inherited property at Teynampet, Chennai along with his brother Mr. Vijay. The appellant along with his brother sold a portion of the above said property to M/s Ceebros Hotels Pvt Lt d., Chennai by executing irrevocable Power of Attorney registered with Sub registrar as document No.637 of 2003 dated 20.11.2003 and also executed an agreement for joint development and sale dated 20.11.2003 in favour of M/s. Ceebros Hotels Pvt Ltd along with his brother. The entire consideration was received and the entire property had been handed over and taken possession by M/s.Ceebros Hotels Pvt. Ltd. The appellant's share of deemed sale consideration arising out of the above joint development worked out to Rs.4,22,50,000/-. The Capital gains arising from the above sale was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussion, the following inferences are drawn: (a) The appellant and his co-owner(brother) Shri B.Vijay' entered into the Memorandum of Agreement for the joint development of the said land with one M/s. Ceebros Hotels Pvt. Ltd. on 0.11.2003 and also given irrevocable Power of Attorney in favour of M/s. Ceebros Hotels Pvt. Ltd. and handed over possession of the property. (b) The appellant Shri B. Gautham had already filed his return of income for the Asst. year 2004-05 by admitting the capital gains of Rs.2,45,35,429/- from the sale of the land under question and remitted the taxes of Rs. 54,06,741/- thereon by which the learned AO has passed order on 26.12.2006. (c) In the year 2007-08, it is seen that the said land was registered in the name of M/s. Ceebros Hote s Pvt. Ltd. and the registered value as per the guide line is Rs.23,50,85,500/- and accordingly the AO has assessed the difference in value of guideline value adopted for the Memorandum of Agreement and the guide line value adopted for Registration purposes. Total sale value as reported in AIR Rs. 23,50,85,500 Appellant s share 50% of the above 23,50,85,500 Rs.11,75,42,750/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s chargeable to tax in the year of transfer and thus the moot question is the year of transfer. The impugned asset transferred is an immovable property and hence A.O. held that the date of registration of sale deed ie. 29.03.2007 is the date of transfer and hence Capital gains arose in A.Y. 2007-08. 2. According to the assessee Joint Development agreement was entered into On 20-11-2003 and hence capital gains arose in A.Y. 2004-05 in view of sec. 2(47) of IT. Act r.w.s. 53A of the Transfer of Property Act. Claim of the assessee is not correct since the conditions set out in sec. 53A of the Transfer of Property Act are not complied with. The essential conditions are : There should be a sale agreement in writing signed by the transferor Transferee has taken possession of the property Transferee is willing to perform his part of the contract 3. The words "the contract, though required to be registered, has not been registered, or" appearing in sec. 53A was omitted w.e.f 24-09-2001. Hence registration of sale agreement is mandatory after 24-09-2001 to enforce sec. 53A. Correspondingly, by an amendment of 2001, sub-section (lA) has been introduced in sec. 17 of the Regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment. As per the sale deed, both brothers ie. assessee and Sri B. Vijay are equal owners of the property [page 7 of Paper Book] and the claim that 6.5 grounds was transferred separately by Sri Vijay is against facts on record. 7. He also relied on the decision of the Hon'ble Supreme Court in the case of Nangegowda Anr vs Gangamma Ors, in Civil Appeal No.2006 of 2006, where it was held as under: 8. We have bestowed our consideration to the rival submissions. Section 53A of the Act which is relevant for the purpose reads as follows: '53A. Part performance- Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d defendant no.3 Jayamma got possession of the property in pursuance of the agreement to sale dated 27th November, 1982, there was no occasion for Honnanna to recite in clear terms that he was in possession of the property. view of the aforesaid, we are of the opinion that the finding recorded by the Trial Court as affirmed by the High Court tl defendants did not get possession of the property after execution of the sale deed is on correct appreciation of facts, which do not call for interference in this appeal. In view of this finding, in our opinion, the provision of Section 53A of the Transfer of Property Act is not attracted and defendants cannot take advantage of that. 11. In the result, we do not find any merit in this appeal which is dismissed accordingly but without any order as to the costs. 8. We have heard the rival submissions and perused the orders of the lower authorities and materials available on record. The facts relevant to the issue under consideration are that the assessee was owner of land measuring 27.38 grounds alongwith his brother namely, Shri Vijay, both having equal share. The assessee entered into an agreement with M/s Ceebros Hotels Pvt. Ltd along ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied tax thereon and after this it was not open to the Department to again tax the very said property as transfer by the assessee in assessment year 2007-08. He also argued that merely because agreement to sale was not registered, it cannot be held that on handing over of the possession of the property in assessment year 2004-05, no transfer took place. He also pointed out that a registered power of attorney was executed in favour of the purchaser in assessment year 2004-05 and simply because of a technical requirement of Registrar, at the request of the purchaser, the assessee again signed the sale deed and at that time no consideration whatsoever was received by the assessee. We find that in respect of the property in question, the Assessing Officer has taken assessee s share of sale consideration at Rs. 11,75,42,750/- on the basis of stamp duty value and brought to tax the entire sale consideration as capital gains being Rs. 2,45,36,429/- in assessment year 2004-05 and balance Rs. 9,30,06,321/- in assessment year 2007-08. Thus, the Assessing Officer has not allowed any deduction for the indexed cost of the property in question which cannot be justified. 12. Be that as it may. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract: Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof. 14. Thus, in our considered opinion, merely because an agreement to sale has not been registered, which otherwise is in the nature of agreement referred to in section 53A cannot be taken out of ambit of section 2(47)(v) of the Act when parting of the possession of immovable property has taken place. The provisions of clause 10 of the MoU dated 20.11.2003 entered into between the assessee alongwith his brother with the purchaser reads as under: 10. As far as the area of land earmarked for the Developer is concerned, the Developer is at perfect liberty to plan for development/sale of the said area and accordingly develop or sell and the owners will not interfere with the same. But, it is made clear to the Developer that the Developer should not part with possession of the property earmarked for the Developer either as a whole or in parts without handing over poss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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