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TMI Blog2013 (8) TMI 759X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 development worked out to Rs. 4,22,50,000/-. The assessee had shown the capital gains arising out of the said sale in assessment year 2004-05 after indexation and cost of transfer which was admitted by the Assessing Officer in an assessment completed u/s 143(3) of the Act on 26.12.2006. The assessee, at the request of M/s Ceebros Hotels Pvt. Ltd signed a sale deed dated 29.3.2007 alongwith his brother since it was pleaded by M/s Ceebros Hotels Pvt. Ltd that they have dropped their original intention of developing the said property into different units and sell it to different parties and decided to retain the same for their own use and when they approached the Registrar to register the sale deed using the Power of Attorney given, they could not do so since they could not use the Power of Attorney already given in their favour to register the sale deed in their own name and requested the assessee to sign the sale deed to comply with the technical formalities for which the assessee obliged. The assessee had not received any further considera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 admitted in Asst. Year 2004-05 for which assessment was completed u/s 143(3) by the then Joint Commissioner, Range VI vide his scrutiny assessment order dated 26.12.2006. 2. Subsequently, in Asst Year 2007-08, the appellant had signed a sale deed dated 29.03.2007 along with his brother since it was pleaded by M/s Ceebros Hotels Pvt Ltd that they have dropped their original intention of developing the above said property into different units and sell it to different parties and decided to retain the same for own use and when they approached the Registrar to register the sale deed using the Power of attorney already given by the appellant and his brother, they could not do so since they cannot use the Power of Attorney already given in their favour to register the sale deed in their own name and requested your appellant to sign the sale deed to comply with the technical formalities for which your appellant obliged. The appellant had not received any further consideration for signing the sale deed, which was registered on 29.3.2007. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 Less: Capital Gain already offered and assessed In Asst. Year 2004-05 Rs. 2,45,36,429 Balance capital gains now assessed by AO Rs. 9,30,06,321 (d) The appellant has now rely on the section 2(47)(v) of the Income Tax Act for the purpose of offering capital gains even though the transfer of immovable property of the said land is not effective or complete under the general law. (e) The appellant is also relying on the jurisdictional case laws 1) D.Kasturi vs CIT and another delivered (Mad High Court 251 ITR 532) 2) Chaturbhuj Dwarakadas Kapadia vs CIT (Bom High Court 260 ITR 491) Wherein it is held that the ingredients of section 53A of the Property Act is satisfied, after the assessee parted with the possession of the property, such possession having been given after payment of agreed consideration for sale and same will result in transfer forhte purpose of Section 2(47)(v) of the Income-tax Act. It was also held in Chaturbhuj Dwarakadas Kapadia Vs CIT (Bom HC 260 T'R 491) case that capital gains is taxable in the year in which such transactions were entered into e' 'en i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, sub-section (lA) has been introduced in sec. 17 of the Registration Act to the effect that every agreement to sell has to be registered with the Registration authorities under the Registration Act, 1908, if the benefits of part performance and possession under sec. 53A of the transfer of Property are to be availed of. The binding nature of these conditions so as to apply the provisions of sec. 53A of the T.P. Act is reiterated by jurisdictional High court in K. Mani Vs M.D. Jayavel & Ors. (Mad) (2011) 7 MU 264 [copy enclosed] 4. In the present appeal, assessee has not registered the sale agreement though it was executed subsequent to 24-09-2001. 5. There is no evidence to show that transferee has taken possession of the property as an owner and not for construction purposes alone (in fact no construction was carried out at all). As evident from page 8 of paper Book, assessee only applied to CMDA for Planning Permit for construction of multi-storeyed building. Even the copy of power of attorney filed by assessee proves that the land was still in the possession of assessee. In this regard I rely on the decision of the Apex court in Nanjegowda Vs Gangamma (SC) 2011 STPL(Web) 722 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his part of the contract, then, notwithstanding that where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefore by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect 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." 8.1. From a plain reading of the aforesaid provision, it is evident that a party can take shelter behind this provision only when the following conditions are fulfilled. They are: (i) The contract should have been in writing signed by or on behalf of the transferor; (ii) The transferee should have got possession of the immoveable property covered by the contract; (iii) The transferee should have done some act in furtherance of the contract; and (iv) The transferee has either performed his part of the contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement with M/s Ceebros Hotels Pvt. Ltd alongwith his brother whereby land measuring 6.5 grounds was outrightly sold to the said purchaser for Rs. 4,22,50,000/- and 9.75 grounds of land was valued at Rs. 6,33,75,000/-. The consideration of Rs. 4,22,50,000/- was paid by cheque during the financial year 2003-04 by the purchaser to the assessee and his brother and in lieu of consideration of Rs.6,33,75,000/-, the purchaser agreed to construct about 64,350 sq ft of complex on the land left with assessee and his brother. Thus, the total consideration amounting to Rs. 10,56,25,000/- out of which assessee's share being 50% was Rs. 5,28,12,500/-. The sale deed in respect of above transaction was registered in financial year 2006-07 relevant to the year under consideration and on which stamp duty was charged on the value of Rs. 23,50,85,500/-. The assessee offered capital gains in respect of the above transaction in assessment year 2004-05 which was duly assessed by the Assessing Officer u/s 143(3) in the assessment of the assessment year 2004-05. However, the Assessing Officer observed that the stamp duty paid was on the value of Rs. 23,50,85,500/- . He brought the difference between the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be justified. 12. Be that as it may. We find that it is not in dispute that the property in question was treated as transfer u/s 2(47)(v) of the Act in the assessment year 2004-05 in the hands of the assessee and consequently, capital gains was also assessed in that assessment year. In our considered opinion, after this, treating of transfer of the property in the hands of the assessee in assessment year 2004-05 it was not open to the Revenue to again treat the same property as transfer by the very same assessee in assessment year 2007-08 also. It is not the case of the Revenue that the assessment made in assessment year 2004-05 was rectified or revised subsequently. Further, we find that section 2(47) (v) of the Act reads as under: "2. In this Act, unless the context otherwise requires .......................................................... (47) transfer , in relation to a capital asset, includes,- ............................................. [(v) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the property earmarked for the Developer either as a whole or in parts without handing over possession of the completed multistoreyed commercial complex building to the owners in the land which is more fully described in the Schedule "E" hereunder: Alternatively, it is open to the Developer to give necessary and required security to the owners to protect their interest in respect of the construction to be put up by the Developer in the land retained by the owners, which is more fully described in the Schedule "E" hereunder." 15. On the reading of the above, we do not find any force in the contention of the DR that the above clause evidences that the assessee has not parted with the possession of the property in question. Thus, we do not find any merit in this appeal of the Revenue and find no error in the order of the CIT(A) wherein it was held that the property in question has already been treated as transfer by the assessee in assessment year 2004-05 and therefore, in respect of that transfer, capital gains cannot be assessed in the assessment of assessment year 2007-08. We, therefore, dismiss the grounds of appeal of the Revenue. 16. In the cross objection filed by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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