TMI Blog2013 (9) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... give rise to accrual. It was not only the money which has been received by the assessee which was required to be taxed but the consideration which had accrued to the assessee was also required to be taxed. Deemed transfer of property u/s 2(47) – Part performance - section 2(47)(v) r.w. section 45 indicates that capital gains was taxable in the year in which such transactions were entered into even if the transfer of immovable property was not effective or complete under the general law – Held that:- Charging an item of income under the head 'Capital gains" require that there should be some profit, Such profit must be arising on account of transfer and there should be capital asset which has been transferred - There was no dispute that a capital asset was involved and there was some profit also – Capital gain would be computed by considering the full value of consideration whether received or accruing as a result of the transfer - relying upon Mysore Minerals Ltd. v. CIT [1999 (9) TMI 1 - SUPREME Court] it was not only the consideration received which was relevant but the consideration which had accrued was also relevant - irrevocable general power of attorney which leads to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee had transferred the plot – thus it cannot be said that deduction u/s 54F and 54 was same - no ground had been raised for deduction u/s 54F. - in some genuine cases the difficulties may arise but it was for the Parliament or the Government to provide remedy in such cases and judicial forums cannot do anything. Ownership of the plot - society or members - When the plots remain unallotted and obviously legal ownership and beneficial ownership belonged to the society. - Held that:- the Society has entered into JDA on behalf of the Members. It is the members who are owning the plots and the Society was only a facilitator. It becomes clear from the JDA that payment for consideration was to be made to an individual plot holder and in fact consideration was mentioned in terms of per Member. - Decided against the assessee. - I.T.A. No.188(Asr)/2013, I.T.A. No.225(Asr)/2013, I.T.A. No.301(Asr)/2013, I.T.A. No.384(Asr)/2013, I.T.A. No.439 & 440(Asr)/2013, I.T.A. No.447(Asr)/2013 I.T.A. No.453 &.454(Asr)/2013, I.T.A. No.460, 461, 462 & 463(Asr)/2013,I.T.A. No.402(Asr)/2013 - - - Dated:- 28-8-2013 - SH. H.S. SIDHU AND SH. B.P.JAIN, JJ. For the Appellant: Sh. J. S. Bhasin, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. CIT(A) misdirected himself in law and on facts in confirming the taxation of notional capital gain of Rs.2,91,12,574/- by wrongly upholding the transfer of land on the date of execution of Joint Development Agreement with the developers. 4. That the ld. CIT(A) ought to have read the Joint Development agreement in totality, so as not to infer the accrual of capital gain on the very date of execution of the said agreement. 5. That when CIT(A) himself admitted that two flats, made part of sale consideration, were non-existent his upholding the taxation of capital gain, computed on a sale value, comprised mainly of the cost of said two flats, was self-contradictory. 6. That the ld. CIT(A) was not justified overlooking various judicial authorities relied upon by assessee, on a facial distinction drawn by him. 7. That the assesse's alternate claim of deduction u/s 54F ought to have been allowed by the ld. CIT(A). 8. That the ld. CIT(A) wrongly rejected the assessee's claim that the impugned capital gain, if any, could be assessed only in the hands of Society and not the assessee member. 9. That the assessee's claim not to tax the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansfer of land on the date of execution of Joint Development Agreement with the developers. 6. That the Ld. CIT(A) ought to have read the Joint Development Agreement in totality, so as not to infer the accrual of capital gain on the very date of execution of the said agreement. 7. That the cost of acquisition of the land, as wrongly computed by the AO should not have been upheld by the ld. CIT(A). The resultant computation of capital gain is thus incorrect. 8. That the Society being the owner of the land, the capital gain ought to have been assessed in the hands of the Society. 9. That the acquisition of flats, when assessed as part of sale consideration, ought to have been allowed the benefit of section 54F. 10. That the order under appeal is wholly against law and facts of the case." 5. In ITA No.384(Asr)/2013, the assessee, Smt.Jagdish Kaur Dhillon has raised following grounds of appeal: "1. That on the facts and in the circumstances of the case, the AO erred in reopening the case of the assessee as no LTCG escaped in the hands of the assessee. So, the re-assessment is liable to be quashed. 2. That the re-assessmetn made by the AO Circle III at Fero ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Constitution of India, 1950, there cannot be any discrimination when all the members of the society are similarly placed. 8. That on the facts and in the circumstances of the case, the assessee has not fulfilled all the four conditions of section 45.. So, the LTCG cannot be assessed in the hands of the assessee if the provisions of section 45 are strictly construed as section 45 creates an item of 'artificial income'. 9. That on the facts and in the circumstances of the case, the ld. CIT(A) should have taken the value of the flat at Nil as the same has not been construed till date as it is beyond the control of the assessee. In any case, the valuation of flat is on higher side. 10. That on the facts and in the circumstances of the case, the ld. CIT(A) erred in not giving the benefit of section 54/54F on account of flat allotted to the assessee. It is a barter system vides which flat was allotted along with the cash of Rs.825000/- on different dates. 11. That on the facts and in the circumstances of the case, the ld. CIT(A) erred in not considering the additional objection to the reassessment in the written arguments filed before him during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act, after deducting the cost of acquisition from the full value of consideration received or accruing as a result of transfer of capital asset full value of consideration will be determined only at the time of taking possession of flat, to be constructed by the developers, by the appellant (the alleged flat in non-existent till today). The AO has observed in the assessment order that in the absence of specific information the value of flat to the assessee can be taken at Rs.4500/- per s/ft subject to rectification if the rate offered to the general public is higher than Rs.4500 /-sq. ft which shows that the rate consideration has been taken on notional basis. Thus notional market value of the flat has been adopted by A.O. for determining full value of consideration u/s 48 of the Act. 6. That without prejudice to grounds of appeal, the Ld. CIT(A) erred in not allowing exemption u/s 54F of the Act on notional cost of residential flat to be constructed by the developers delivered to the appellant. 7. That the ld. CIT(A) has erred on facts law in upholding the assessment of alleged long term capital gain on plot of 500 sq. yd because of concept of mutuality being invol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the CIT(A) further erred on facts and in law in holding that certain terms and conditions of the Agreement which provided that the transfer of land was subject to further condition/encumbrances, were not relevant. 1.6 That the CIT(A) erred on facts and in law in not appreciating that actual physical possession of the property was not handed over by the assessee in part performance of the contract, in terms of section 53A of the Transfer of property Act and hence there was no transfer in law. That the relevant provisions of section 2(47) as also the provisions of section 53A of the Transfer of Property Act, 1822 qua the facts of this case have been misconstrued by the CIT(A) to confirm the ITO's order. That the CIT(A) failed to appreciate that registration of terms of agreement was a pre-condition to the handing over the possession of the property. 1.7 That the CIT(A) erred on facts and in law in affirming the value of the flats receivable towards part consideration of the proposed transfer of property @ Rs.4500 per sq. ft ignoring the evidence of lower value given during the course of assessment. That computation of capital gain, by assuming notional consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h were not received and hence there could be no 'transfer' under the aid Agreement. 1.5 That the CIT(A) further erred on facts and in law in holding that certain terms and conditions of the Agreement which provided that the transfer of land was subject to further condition/encumbrances, were not relevant. 1.6 That the CIT(A) erred on facts and in law in not appreciating that actual physical possession of the property was not handed over by the assessee in part performance of the contract, in terms of section 53A of the Transfer of property Act and hence there was no transfer in law. That the relevant provisions of section 2(47) as also the provisions of section 53A of the Transfer of Property Act, 1822 qua the facts of this case have been misconstrued by the CIT(A) to confirm the ITO's order. That the CIT(A) failed to appreciate that registration of terms of agreement was a pre-condition to the handing over the possession of the property. 1.7 That the CIT(A) erred on facts and in law in affirming the value of the flats receivable towards part consideration of the proposed transfer of property @ Rs.4500 per sq. ft ignoring the evidence of lower value given during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amend the grounds of appeal before the appeal is heard and disposed off." 11. In ITA No. 461(Asr)/2013, Sh.Zora Singh Mann L/H S.Vardev Singh Mann, the assessee, has raised following grounds of appeal: "1. That the ld. CIT(A) has erred in dismissing the appeal and confirming order of A.O. assessing income at Rs.1,79,32,120/-, including long terms capital gains of Rs.1,77,65,845/- 2. That the ld. CIT(A) Bathinda has erred in law and on facts in upholding the action of the AO of bringing to tax the notional capital gain of Rs.1,77,,65,845/- on the strength of Joint Development Agreement which remained unexecuted for various disputes and finally terminated by the society being the owner. 3. That the ld. CIT(A) Bathinda has erred in law and on facts in upholding the action of the AO of determining the long term capital gain of Rs.1,77,65,845/-. The impugned transaction on the basis of which the short term capital gain has been determined by the AO is not covered under the definition of transfer as defined u/s 2(47) of the Act. 4. That the ld. CIT(A) Bathinda has erred in law and on facts in upholding the action of AO of determining the long term capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluding long terms capital gains of Rs.1,77,35,838/- 2. That the ld. CIT(A) Bathinda has erred in law and on facts in upholding the action of the AO of bringing to tax the notional capital gain of Rs.1,77,35,838/- on the strength of Joint Development Agreement which remained unexecuted for various disputes and finally terminated by the society being the owner. 3. That the ld. CIT(A) Bathinda has erred in law and on facts in upholding the action of the AO of determining the long term capital gain of Rs.1,77,35,838/-. The impugned transaction on the basis of which the short term capital gain has been determined by the AO is not covered under the definition of transfer as defined u/s 2(47) of the Act. 4. That the ld. CIT(A) Bathinda has erred in law and on facts in upholding the action of AO of determining the long term capital gains of Rs.1,77,35,838/- on account of the following reasons: iii) The capital gain can only be computed in accordance with the provisions of section 48 of the Act after deducting the cost of acquisition from the full value of consideration, received or accruing as a result of transfer of capital asset. iv) But in the present cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto an agreement with M/s. Tata Housing Development Company Ltd. on 25.02.2007 in accordance with the agreement. 5. The assessee has received partial consideration of Rs.15,00,000/- in F.Y.2006-07. 6. The assessee was issued notice u/s 148 on -04.01.2010 7. The assessee filed return in response to notice issued u/s 148 8. The AO then issued notice u/s 143(2) and 142(1) alongwith a copy of the reasons recorded for issuance of notice u/s 148. 9. The AO has made additions of Rs.1,78,75,000 on account of long term capital gains and has raised a demand of Rs.61,36,455/-. 10. The assessee filed an appeal with Ld. CIT(A), Bathinda. 11. The Ld. CIT(A) Bathinda passed an order dated 07.03.2013 and dismiss the appeal filed. 12. Aggrieved with the above order, the assessee here files an appeal on the following grounds." 14. In ITA No. 402(Asr)/2013, the assessee, Sh. Charanjit Singh Sandhu, has raised following grounds of appeal: "1. That the Ld. CIT(A) erred on facts and law in upholding the issuance of notice u/s 148 of the Act without complying the requirements of the said section which is arbitrary and unjustified and as such the assessment merits annulmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) merits deletion. 9. That the capital gains shall arise only in the year when the balance payment is received and the possession of the built up furnished flat is handed over to the assessee and as such to tax the income which is sill to be received especially when the implementation of the agreement itself is doubtful, the addition of Rs.1,77,48,072/- so made and upheld by the CIT(A) merits deletion. 10. That the Ld. CIT(A) erred on facts and law in holding that the transaction was squarely covered by the provisions of section 2(47) read with section 45 and 48 which is arbitrary and unjustified. 11. That in any case, section 53A of the Transfer of Property Act is not applicable to unregistered documents as in the instant case and as such the order is illegal, arbitrary and unjustified. 12. That the Ld. CIT(A) erred on facts and law in charging interest under section 234B of the Act which is not chargeable in the facts of the case. 13. That order of the ld. CIT(A) is erroneous, arbitrary, opposed to law and facts of the case and is thus,untenable." 15. In ITA No. 334(Asr)/2013, the assessee, Sh. Shingara Ram Ex-MLA, has raised following grounds of appeal: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned hereinabove are identical to the issues in the bunch of 30 appeals decided by the ITAT, Chandigarh Bench vide a consolidated order dated 29.07.2013 in the case of Charanjit Singh Atwal, Ludhiana vs. ITO Ward VI(1), Ludhiana in ITA No.448(Asr)/2011 and others for the assessment year 2007-08 and appeals decided by this Bench in the case of Sh. Satnam Singh Kaith vs. ITO Nawanshahar and others ITA No.180(Asr)/2013 and others, dated 19.08.2013. 17. He further invited our attention that in the present appeals, the assessees are either present or Ex-MLAs of Punjab Legislative Assembly who are members of housing society. The said society consists of in total 95 present or Ex-MLAs of Punjab Legislative Assembly. The matter with respect to some MLAs and the matter with respect to the Society itself fall under the jursidction of Chandigarh ITAT and the rest under the Amritsar ITAT jurisdiction. All the 15 matters fixed today for hearing as mentioned hereinabove are part of 95 present or Ex-MLAs hereinabove. The issues in the present appeals are common and identical as in the bunch of 30 appeals decided by the ITAT, Chandigarh Bench in the case of Charanjit Singh Atwal, Ludhiana v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e according to him as per clause 2.1 of the JDA, the possession of the property was to be handed over simultaneously to the execution and registration of JDA and since the JDA was not registered, therefore, the possession was not given. It was held by considering various contentions of Ld. Counsels and Ld. DR and cases of various Courts of law relied upon that by considering the purpose of insertion of clause (v) and clause (vi) of section 2(47) and various clauses of Power of Attorney and JDA, it becomes absolutely clear that the Society has handed over the possession of the Society to THDC/HASH and accordingly first contention of the ld. DR was rejected. ii) Vide para 59 to 61 of the order, second contention was that JDA was executed on 25.02.2007 and if possession was given then how the assessee was having possession in terms of later sale deeds executed on 2.3.2007 and 25.4.2007. It was held after considering and arguments of rival parties and facts on record that mere recitation in the sale deed to the effect that the Society was owner of land in possession measuring 21.2 acres, does not show that the society was having actual possession. What the Society was having is only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SH has purchased the membership of the members in the society which now lead to the enjoyment of the property and in that technical sense, clause (v) of the section 2(47) is applicable. viii. Vide paras 89 to 96, being the eightth contention that since the society has transferred the land through JDA on a pro-rata basis, therefore, only whatever money is received against which sale deeds have also been executed can be taxed and notional income i.e. the money to be received later, cannot be taxed. It was held that there is no dispute that no notional income can be taxed, but in the case of Capital Gain section 45 read with section 48 clearly provides that it is the profit arising from the transfer of capital asset, which would be subjected to change capital gain tax and section 48 clearly provides for taking the total consideration into account while computing the capital gains, which has already been discussed in paras 64 to 68 of the order. Therefore, the whole consideration whether received or accrued which has to be taxed under the capital gain, once the transfer of capital asset takes place. Accordingly, the contention was rejected. Further, the Chandigarh ITAT Bench in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the fact stands admitted by the assessee because assessee has filed a return declaring capital gain against part money received against the plot. Thus, it becomes clear that it is the individual member who are liable to tax in respect of transfer of plots and the Society being only a facilitator or post office. Accordingly, this contention was also rejected. 32 Vide paras 5 to 9 also the assessee has raised the additional evidence, which after considering the facts on record and arguments of Ld. Counsels allowed the admission of additional evidence. 33 Vide para 10 to 14, the revised return was treated as non-est and it was held that no disadvantage has occurred to the assessee because in the revised return, the assessee has included a sum of Rs.27,58,436/- on account of Capital Gain and the whole dispute in the assessment relates to Capital Gain arising out of sale of plot in the assessment relating to Capital Gain arising out of sale of plot in Punjabi Co-operative Housing Building Society Ltd. Mohali. In fact, the AO has ultimately assessed much higher amount of Capital Gain, which the assessee is disputing. Accordingly, this ground of the assessee was rejected. Accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Member of the Society having a plot of 500 sqyd in the Society was to receive monetary consideration of Rs. 82,50,000/- and the Members holding plot of 1000 sqyd was to receive a sum of Rs. 1.65 crores. In addition to this Member holding a plot of 500 sqyd was to receive fully furnished flat measuring 2250 sqft to be constructed by THDC/HASH and Members having 1000 sqyd were to get two such flats. According to the Assessing Officer total consideration to be received by all the Members was Rs. 1,06,42,35,000/- and furnished flats as mentioned above. Before entering into the tripartite agreement the Society in its Executive Committee meeting held on 4.01.2007 which was approved in the General Body meeting held on 26.2.2007, passed a resolution to the effect that all the Members would surrender their all rights in the property to the Society and the Society would enter into an agreement on behalf of the Members with THDC/HASH. The Assessing Officer has referred to this resolution as well as various important clauses of the JDA and has placed lot of reliance on clause 2.1 of the JDA which is as under: "The owner hereby irrevocaboy and unequivocally grants and assigns in perp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e various clauses of JDA dated 25.2.2007 and the resolution passed by the Society on 26.2.2007, capital gain was to be charged in the hands of the assessee in Assessment year 2007-08 by taking full value of the construction at Rs. 3,67,50,000/-. The assessee filed various replies which have been extracted by the Assessing Officer as under: "This has reference to your letter dated 7.12.2009, we submitted that under: "1 The agreement under reference is only in the nature of an agreement to sell and not a sale deed and therefore no capital gain can arise under the said agreement. The amounts received under the said agreement are actually the advances received and not the sale consideration and the land transferred in favour of THDC Ltd. is only on account of security. A letter from M/s Hash Builders to that effect is enclosed herewith. There are many conditions envisaged in the agreement which need to be fulfilled before the full execution of the agreement and transfer of property to THDC Lid. and receipt of the consideration. 4 Under the partial execution, the part of property measuring approx, 72 sq yards was registered in favour of THDC and sum of Rs. 12 lacs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation for the purpose of capital gain of the assessee. The assessee is a Hon'ble citizen and regular Income Tax Payee and shall discharge his liability under Income Tax when the whole land will be transferred. 5.) While making the calculation of capital gain tax, the amount of consideration has been wrongly taken of Rs. 15 lacs Instead of Rs,12 lacs. As per the agreement, sum of Rs. 3 lacs is adjustable advance. You are requested to kindly recomputed tax liability, 6.) There are various judgments on this issue. The following cases are enclosed herewith for the reference. a. CIT vs. Atam Prakash Sons (2008) 219 CTR (Del) b. Smt. Raj Rani Devi Ramna vs. CIT (1993) 201 ITR 1032 (PAT) c. Zuari Estate Development Investments Co. (P) Ltd. Vs. J.R.Kanekar, Deputy CIT. (2004) 191 CTR (Bom) In view of the above you are requested to kindly consideration the capita! gain as submitted by us." 9. The case was further fixed for 24.12.2009, On the said date the counsel of the assessee fifed another reply which is reproduced as under: 1. As per Para 6.1 of your letter, you have mentioned that there is a transfer of property upon the surrender of allotment rights. You may kindly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd, It is very clear from the agreement that no consideration was payable to the assessee unless the land was transferred. So there is a clear cut relation between the land transfer and consideration. No consideration will be received if the land is not transferred. As far as the possession as mentioned in the agreement is concerned, the same is for development only and the termination clause very clearly states that if the agreement is terminated, THDC Ltd will retain only that much land which has been transferred to them and the remaining land will be retained by the society/members. The actual position is such that no development work has till date been undertaken by the THDC Lid because the various conditions stipulated in the agreement have not been fulfilled. The possession as mentioned in the agreement and which is being made the basis by you to consider the transaction as transfer u/s 53A of the Transfer of Property Act is actually not of any consequences and actually there is no transfer except to the extent of land transferred by way of registered sale-deed. 2 Clause 6.1 of the agreement clearly states that handing over the original title -deeds is as security for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue of proposed flat is undeterminable and there is no way to determine the same. There is no provision to pay tax on the notional value. Clause 6.18 of the agreement entitled the assessee to surrender his proposed flat to THDC Ltd. and in that case only 75% of the future market-price will be received by him. In the light of above discussion it is once again requested that tax may be calculated as per the return filed by the assessee. However If the department choose to disagree with our submissions then It Is submitted that the capita! gain should be charged in the hands of the Punjabi Co-operative House Bldg. Society. It will be pertinent to note here that the proceedings in the case of the society have been reopened u/s 148 of the I.T Act 1961 by the learned D.C.I.T Mohali. In the reasons recorded by the learned D.C.I.T, it has clearly been mentioned that he proposes to tax the capital-gain in the hands of the Society. Copy of the reasons recorded is enclosed. It may be appreciated that the same amount can't be taxed twice". On 29,12,2009 again the counsel of the assessee filed a letter and submitted as under: "This being referred to the captioned proceedings Regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of section 2(47)(v) had held that once the possession even for a part of the property was handed over to the transferee, for the purpose of Section 2(47)(v) r.w.s 45, the transfer was complete. (iii) The assessee's case was also covered by the provisions of section 2(47)(vi) which deals with any transaction which had effect of transferring or enabling the enjoyment of any immovable property and assigning various rights in the property in favour of THDC and handing over the original title deeds as well as handing over of the physical vacant possession of land has the effect of transferring or enabling the enjoyment of the said property to THDC/HASH. (iv) There was no force in the contention that the amounts received under the said agreement were advances received and not the sale consideration because total consideration was structured in the JDA and the consideration was to be received as per clause 4(iv) of the JDA. In fact the assessee has himself shown the receipt and returned the same as capital gain which contradicts these arguments of the assessee. As per Section 45 of IT Act, income-tax was to be charged under the head "capital gain" on transfer of a capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avoid or postpone capital gain by either not executing conveyance deed or postpone such execution because vendor of the property could give the privilege of ownership or enjoyment of the property by executing a Power of Attorney etc. To avoid such leakage of revenue clauses (v) and (vi) were inserted to section 2(47) of the Act. He then discussed the decision of Hon'ble Bombay High Court in case of Chaturbhuj Dwarkadas Kapadia V. CIT, 260 ITR 491 (Bom) and extracted the following conditions which were required to be satisfied to cover the case u/s 2(47)(v) r.w.s. 53A of T.P. Act. (a) There should be contract for consideration (b) It should be in writing (c) It should be signed by the transferor or on his behalf (d) It should pertain to transfer of immoveable property (e) Transferee has in part performance of contract has taken possession or part possession of the property. (f) Lastly, transferee should be ready and willing to perform his part of contract. 23 If the above conditions were satisfied then the transfer can be said to have taken place for the purpose of Section 45. According to him as per the decision of C h a t u r b h u j D w a r k a d a s K a p a d i a V . C I T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tle deeds of the property as mentioned in the list Annexed hereto and marked as Annexure IV and physical, vacant possession of the property has been handed over to THDC simultaneously to the execution and registration of this agreement to develop the same as set out therein". Thus possession in part performance of contract has been handed over to the transferee without any ambiguity in the previous year 2006-07 itself. e) An irrevocable transfer has thus been made which is not dependent on any condition to be fulfilled. f) Further coining to "consideration" part . As per Para 4,1 Rs,6,00,000 per holder of 1000 Sq,Yards has to be paid by transferee on account of earnest money , which has been paid to the assessee, Further as Per Para 4.1 (ii) clearly states that in lieu of. Rs, 12,00,000 per plot holder of 500 Sq. Yards and Rs.24,00,000 per plot holder of 1000 Sq. Yards is being paid on the execution of agreement against' which the Society on behalf of members will transfer 3.08 Acres of the contiguous land out of property, It has been confirmed that against the above payment the land measuring,3.08 acres has been transferred in the name of THDC and registered vide sale deed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ara 2.1 of the Joint Development Agreement and discussed in detail in preceeding paragraphs. m) Thus the "transfer" would be deemed to happen in the previous year 2006-07 itself. n) It has already been discussed in detail that registration of conveyance deed and receipt of entire consideration is not at all important in the year in which deemed transfer u/s 2(47)(v) of IT Act has taken place. o) Further the Agreement is clear and there is no ambiguity regarding irrevocable rights being given to the transferee. As regards certain petty conditions and provisions relating to termination of the contract, it Is observed that these clauses are necessary part of such type of joint development agreement. At the same time such agreements including this agreement has the provisions of 'disclaimer' 'partial invalidity' 'indemnity' and 'arbitration'. The disputes arising, if any, shall be resolved as per the provisions and awards shall be granted, in appropriate cases by the arbitrator. These provisions are there to safeguard the interest of all the parties to the joint development agreement and parties would be indemnified by each other and shall also receive award if the terms/conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formance taken the possession of the property or part thereof from the transferor and if already in possession, continues in the possession in part performance of the contract. e Transferee must have done something in furtherance of the contract. f The transferee must have performed or willing to perform his obligations in such contract. In view of the above conditions in the present case, condition no. (d) and (f) have not been complied because the assessee and/or society has not handed over the possession to THDC/HASH. In this regard he particularly referred to clause 2(1) of the JDA and pointed out that the possession was to be handed over to THDC/HASH simultaneously with the execution and registration of the JDA. Since the JDA was not registered therefore, it is clear that the possession was not handed over. In any case the possession if at all was granted as permissive license with right to developers i.e. THDC/HASH only for the purpose of development of the land and not as part of performance of the contract of transfer of land. The fact that possession was not handed over to the THDC/HASH also becomes clear from the sale deed dated 2.3.2007 (Placed at page 119 to 136). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... envisaged in the shape of license to the developers for undertaking the development of property and legal possession was neither handed over or intended to be handed over. III Money which is received at the time of execution of JDA can be termed as advance payment. In any case when these amounts were adjusted as part of sale consideration for sale of part of the property and the same have been retuned by the assessee as long term capital gains through revised return in the year of receipt. IV It was emphasized that in any case Section 53A of T.P. Act has been amended by Amendment Act, 2001 whereby registration of agreement has been made mandatory for the same to be enforceable. Since JDA was never registered therefore, recourse could not be taken to Section 2(47)(v) of the Act because JDA was not registered. Pursuant to amendment in Section 53A of T.P. Act with effect from 24.9.2001 it was only the amended provision which can be read with Section 2(47)(v) of the Act. In this regard he referred to decision of Hon'ble Supreme Court in case of Surana Steels P Ltd. V. CIT, 237 ITR 777. In that case it was observed that when a section or an Act of Parliament is introduced into anot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment and clause 14(iv) regarding termination of contract. In the case before us, there was no willingness on the part of developer i.e. THDC/HASH to perform the above obligation because of the following - (i) THDC/HASH failed to obtain necessary approval and did not undertake any development work on land. (ii) THDC/HASH i.e. developer has not paid timely payment in timely installments of agreed consideration. (iii) HASH has not obtained approval from various authorities and had not commenced construction within six months of handing over all final plans. (Reference was made to page 34 of the paper book). (iv) THDC/HASH vide letter dated 4.2.2001 (Page 23 to 24 of the additional evidence) refused to make further payment as stipulated in the agreement. (v) The transferor has gone back on their representation to complete construction in the time bound manner and in handing over the flats to the Society /its Members. In this regard he also referred to para 16 of the commentary by "MULLA - Dinshaw Frederick Mulla" (copy of which has been filed at page 102 and 103 of the paper book). He pointed out how the ld. authors have discussed the significance of the willingness of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. V CIT, 225 ITR 746 (S.C) 52 CIT V. Balrampur Commercial Enterprises Ltd., 262 ITR 439 (Cal) CIT V. K. Jeelani Basha, 256 ITR 282 FOBEOZ India (P) Ltd. V ITO, ITA No. 9231/Mum/2010 (copy filed) It was claimed that since the flats were never constructed and given to the assessee, therefore, if the value of the flat is added in the total consideration then it will be totally on notional basis and since notional income cannot be taxed, therefore, the value of these flats, in no case, should be considered in the total consideration. Further if notional receipts were taxed then the assessee would be deprived to take benefit available in the IT Act. For example if whole consideration was received the assessee could have easily taken benefit of Section 54EC and other provisions like Section 54 by investing in any specified asset or a house. Since full consideration has not been received and the assessment of the whole consideration will lead to unintended consequences like denial of deduction u/s 54 EC etc. IX It was contended that since JDA has already been terminated vide Society's resolution dated 13.6.2011 and thereafter on 31.10.2011 even special Power Of Attorney execut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions and have also filed written submissions. It was pointed out by the CIT-DR for the revenue that though copy of the special power of attorney has been filed at pages 153 to 165 but two of the most important crucial pages containing clause "u" to "z" and last page No. 9 are missing. He made an allegation that this has been done deliberately which was controverted by the ld. counsel of the assessee and he submitted that this is a simple mistake and he would file those papers. The ld. DR for the revenue in view of these submissions submitted that these pages can be referred in case of Punjabi Coop House Building Society Ltd. in ITA No. 310 556/Chd/2012 at page 40 to 52 of the paper book in that case. The submissions of the revenue can be summarized as under: (I) The Society passed a resolution in its executive committee on 4.01.2007 which was confirmed / ratified in the General Body Meeting on 25.2.2007. In the Society there were two types of Members holding plots of 500 sqyd and 1000 sqyd. It was resolved that members would surrender the respective plots of 500 sqyd and 1000 sqyd in favour of the Society for further transfer of the entire land by the Society in favour of THDC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to THDC/HASH. (iii) Society permitted THDC/HASH to mortgage, sell and create charge in the property. (iv) The Society resolved to execute an irrevocable special power of attorney which could not be revoked in any circumstances without proper consent of THDC/HASH and such power of attorney was actually executed on 26.2.2007. Through this power of attorney THDC/HASH has been authorized to mortgage or create charge by the Society. THDC/HASH was authorized to give the possession of the property or any part thereof to the authorities to whom same was required to be handed over which was not possible unless THDC/HASH was handed over the possession of the property and the rights of the ownership. Through this power of attorney the right to sell was also given which is again not possible without transfer of possession or ownership. These clauses clearly show that complete control over the property confirming all privilege of ownership was given in favour of THDC/HASH and thus such transfer of ownership satisfies the requirements of Section 45 r.w. clause (ii), (v), (vi) of Section 2(47) of the Act. (II) The Ld. CIT DR for the revenue contended that Hon'ble Supreme Court in case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of attorney' transactions. To curb the leakage of Revenue, through such transaction, clauses (v) (vi) were added to section 2(47) which defines transfer. This has been explained by Circular No. 495 dated 22.9.1987. The Board has clarified through paras 11.1 11.2 that newly inserted clauses (v) (vi) would enlarge the definition of transfer whereby the cases of transfer what is popularly known as 'power of attorney' transaction which allows the enjoyment of right in the property would be covered by new definition. The new clauses would also cover arrangements by which the property could be enjoyed by becoming a member of the company or such other arrangement. According to him it may not be out of place to invoke Heydon's Rule of interpretation of statutes for interpreting these clauses. The Heydon's Rule is mainly applicable wherever the true meaning of amended provisions is to be understood. If the amendments are seen through prism of Heydon's Rule, it would become clear that amended clauses have been brought on the statute to overcome the earlier mischief. Properties could be transferred without execution of proper sale deeds and the same could be enjoyed by the respective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... need not be applicable for construing the meaning of the 'transfer" with reference to section 2(47) of the Act. Similar view has been taken by the ITAT Cochin Bench in the case of G. Sreenivasan Vs DCIT 140 ITD 235 and Pune Bench of the Tribunal in the case of Mahesh Memichandra Ganeshwade 51 SOT 155. (VI) It was contended that there is no force in the submissions of the Ld. Counsel for the assessee that THDC/HASH were not willing to perform their part of the contract. It was pointed out that developers i.e THDC/HASH have made payments as per clause 4(i)(ii) (iii) of the JDA. The developers have also approached the concerned authorities for permissions and approvals as per the obligation agreed in the JDA. However, a PIL was filed against the developers against TATA Camelot Project (this is the name of the project which was to be developed by THDC on the land acquired from the Society). The PIL was dismissed vide order dated 26.3.2012 (copy of order filed on record). A reference to paras 3, 4, 25 26 of this order would clearly show that Hon'ble High Court has observed that against the rules of sanction under the Environment (Protection) Act, the respondent i.e. Developers hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cipal Authority. It also includes Department of Environment, Electricity Board etc. Since permission from Department of Environment etc was not available because of ongoing litigation which was filed through a PIL, therefore, it cannot be said that Developer was not wiling to make the payment. As per the JDA, the payment would become due only when such permission were granted by various authorities. In fact M/s Hash Builder wrote a letter on 04.02.2011 through which it was stated that since High Court has stayed the construction, therefore, payment could not be made. Further, as PIL was filed in the Hon'ble High Court and the matter had gone even to the Hon'ble Supreme Court and THDC/HASH has vigorously defended the same. This fact clearly shows that developer i.e. THDC/HASH was willing to perform in all respects to the JDA. (VII) It was also contended that the society has already terminated the contract and in this respect reference was made to the Resolution passed by general body of the meeting dated 13.6.2011 and legal notice was issued to THDC/HASH. First of all, there is no evidence on record to show that such notice was served upon THDC/HASH. In any case, as contended earl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been done. (VIII) It was contended that there is no force in the submissions that the value of the flats which has not been constructed, cannot be included in the total consideration because that would be a case of taxing the notional income. He referred to clause 4 of the JDA which deals with the consideration and pointed out that allotment of flat was part of the consideration. As per the resolution of the Executive Body of the Society which was latter ratified by the General Body as well as the terms of the JDA very clearly show that in addition to monetary consideration each Member having 500sqyd plot was entitled to receive one fully furnished flat measuring 2250 sqft and the Members holding 1000 sqyd plot were entitled to two such flats. This clearly shows that upon entering the JDA, the Members got vested rights to receive such flats and therefore, as per the definition of capital gain in Section 45 such flat has also arosen from the JDA and therefore, has to be included in the total consideration. He again emphasized that receipt of consideration has nothing to do with its taxability u/s 45 and it is the accrual of consideration which means a portion of the consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lause 14(iv) and such notice has already been given. JDA was entered in 2007 and ended in 2011 and that is why the assessee was forced to cancel this agreement. In any case THDC/HASH are not related to the assessee, therefore, it was not possible to create self-serving documents. 27. We have considered the rival submissions and carefully gone through the written submissions filed by both the parties in the light of material on record, paper books and various judgments cited by the parties. The main issue is whether assessee is liable to capital gain tax in the year under consideration i.e assessment year 2007-08 in view of the JDA. For charging capital gains, the charging section is 45 and the relevant portion is as under:- Section 45. [(1)] Any profits or gains arising from the transfer of a capital asset effected in the previous year shall, save as otherwise provided in sections [54, 54B, [ [54D, [54E, [54EA, 54EB,] 54F [ 54G and 54H], be chargeable to income-tax under the head "Capital gains", and shall be deemed to be the income of the previous year in which the transfer took place. 28 The plain reading of the above provision would show that charging an item of income und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immovable property. Explanation.--For the purposes of sub-clauses (v) and (vi), "immovable property" shall have the same meaning as in clause (d) of section 269UA;] Clauses (v) (vi) to section 2(47) of the Act have been inserted by Finance Act, 1987 w.e.f. 1.4.1988. The purpose of this insertion has been explained by CBDT in Circular No. 495 dated 22.9.1987. The relevant part 11.1 and 11.2 of the circular reads as under:- "11.1 The existing definition of the word " transfer " in section 2(47) does not include transfer of certain rights accruing to a purchaser, by way of becoming a member or acquiring shares in a co-operative society, company, or as way of any agreement or any arrangement whereby such any building which is either being constructed or which is to be constructed. Transactions of the nature referred to above are not required to be registered under the Registration Act, 1908. Such arrang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty or cumbersome procedure of obtaining permission, some properties were being sold by way of sale agreement and also execution of General Power Of Attorney and possession was given on receipt of full consideration without executing the proper sale deeds etc. which as mentioned earlier was not even permissible in some cases. These transactions are popularly called "power of attorney" transactions. To avoid these and to stop the leakage of Revenue, the Parliament has inserted clauses (v) (vi) to section 2(47) so as such type of transactions are also be brought in to taxation net. However, interpretations of these clauses has led to lot of litigation and the main point of litigation was that at what point of time the possession can be said to have been given. In the present case, the Revenue has mainly relied on two decisions namely (i) Chaturbhuj Dwarkadas Kapadia v CIT 260 ITR 491 (Bom.) and; (ii) Authority for Advance Ruling (AAR) New Delhi in the case of Jasbir Singh Sarkaria 294 ITR 196. 33. In the case of Chaturbhuj Dwarkadas Kapadia v CIT (supra), the facts before the Hon'ble Bombay High Court were that assessee who was an individual had 44/192 undivided share in an immov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer of Property Act, 1882, and (ii) any transaction entered into in any manner which has the effect of transferring or enabling the enjoyment of any immovable property. Therefore, in these two cases capital gains would be taxable in the year in which such transactions are entered into, even if the transfer of the immovable property is not effective or complete under the general law. Under section 2(47)(v) any transaction involving allowing of possession to be taken over or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act would come within the ambit of section 2(47)(v). In order to attract section 53A, the following conditions need to be fulfilled. There should be a contract for consideration ; it should be in writing ; it should be signed by the transferor ; it should pertain to transfer of immovable property ; the transferee should have taken possession of the property ; lastly, the transferee should be ready and willing to perform his part of the contract. Even arrangements confirming privileges of ownership without transfer of title could fall under section 2(47)(v). Section 2(47)(v) was introduced in the Act fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Practice of Income Tax by Kanga and Palkhivala Eighth Edition at page 766. Relevant observations read as under: "Cls. (v) and (vi) of s. 2(47), inserted by the Finance Act 1987 with effect from 1st April 1988, provide that "transfer" includes (a) any transaction which involves the allowing of the possession of an immovable property (s. 269UA(d)) to be taken or retained in part performance of a contract of the nature referred to in s.53A of the transfer of Property Act 1882, and (b) any transaction entered into in any manner which has the effect of transferring, or enabling the enjoyment of, any immovable property (s. 269UA(d)). Therefore in these two cases capital gains would be taxable in the year in which such transactions are entered into, even if the transfer of the immovable property is not effective or complete under general law." 36 From the above, it is clear that Court was of the view that in case any transaction covered by clause (v) and (vi) to section 2(47) the liability for capitol gain would arise on the date when such transactions are entered into. In the judgment at some other places, the similar observations have been made. However, despite this obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts, one cannot go by substantial performance of a contract. In such cases, the year of chargeability is the year in which the contract is executed. This is in view of section 2 (47)(v) of the Act." Secondly it is mentioned in the order of the Court that law was not very clear on this point and since the assessee has admitted and paid capital gain in the Assessment year 1999-2000, therefore, tax was held to be chargeable in Assessment year 1999-2000. Thirdly certain shortcomings were also noted i n t h e o r d e r o f t h e Tribunal where certain documents were mentioned to have been executed before March 31, 1996 e.g. the following observation of the Tribunal was not found correct as something is done on Ist April, 1997 then the same cannot fall in the year ending 31.3.1996. "From the dates it is evident that from the very next day, i.e., April 1, 1997, from the end of the financial year ending on March 31, 1996, the builder was using the well water against payment of relevant charges to the assessee." 37 Thus it is very clear that in cases where an arrangement had been entered into by an assessee in terms of clause (v) of Section 2(47) which has effect of handing over the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cerned government department and obtain other permissions and sanctions for developing the land at its own risk and cost. The Developer was to take 84% of the built up area and balance 16% would belong to assessee and other co-owner. The consideration for the agreement was taken as the built up area to be handed over to the owners free of cost. The owners were entitled to visit the site in order to review the progress of the project. It was clarified by clause 18 that ownership would remain exclusively with the owners till it vests with both the parties as per their respective shares on the completion of the project. The other clauses and the steps in the agreement were that a sum of Rs. 1 crore towards payment of earnest money at the time of entering into agreement; a special power of attorney was to be executed in favour of the Developer to enable to deal with the Statutory authorities etc. for obtaining necessary approvals / sanctions; letter of intent was to be obtained not later than March 8, 2006 and in case of a failure to do so, the agreement shall stand terminated. Letter of intent is basically a license granted by the Director of Town Planting to Developer of land for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome of the previous year in which the transfer took place. That means, the income on account of arisal of capital gain should be charged to tax in the same previous year in which the transfer was effected or deemed to have taken place. The effect and ambit of the deeming provision contained in section 45 has been considered in decided cases and leading text books. The following statement of law in Sampath Iyengar's Commentary (10th Edition-- Revised by Shri S. Rajaratnam) brings out the correct legal position : "Section 45 enacts that the capital gains shall by fiction 'be deemed to be the income of the previous year in which the transfer took place'. Since this is a statutory fiction, the actual year in which the sale price was received, whether it was one year, two years, three years, four years etc. previous to the previous year of transfer, is beside the point. The entirety of the sum or sums received in any earlier year or years would be regarded as the capital gains arising in the previous year of transfer. . . . . In the words of section 45, the capital gains arising from the transfer 'shall be the income of the previous year in which the transfer took place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m "possession" in ordinary language, in all areas of law and in all legal systems, is to ask for the impossible". In the above case of Anil Kumar Bhunja [1979] 4 SCC 274, Sarkaria J. speaking for a three-judge Bench also referred to the comments of Dias and Hughes in their book on Jurisprudence that "if a topic ever suffered too much theorizing it is that of 'possession'". Much of the difficulty is caused by the fact that possession is not a pure legal concept, as pointed out by Salmond. The learned judge then explained the connotation of the expression "possession" by referring to the well known treatises on jurisprudence (page 278) : "'Possession', implies a right and a fact : the right to enjoy annexed to the right to property and the fact of the real intention. It involves power of control and intent to control, (see Dias and Hughes) 14 . . . . 15. While recognizing that 'possession' is not a purely legal concept but also a matter of fact, Salmond (12th Ed., 52) describes possession, in fact, as a relationship between a person and a thing. According to the learned author, the test for determining 'whether a person is in possession of anything is whether he is in general c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is no warrant to postpone the operation of clause (v) and the resultant accrual of capital gain to a point of time when the concurrent possession will become exclusive possession of developer/transferee after he pays full consideration. Further, if "possession" referred to in clause (v) is to be understood as exclusive possession of the transferee/developer, then, the very purpose of the amendment expanding the definition of transfer for the purpose of capital gains may be defeated. The reason is this: the owner of the property can very well contend, as is being contended in the present case, that the developer will have such exclusive possession in his own right only after the entire amount is paid to the owner to the last pie. There is then a possibility of staggering the last instalment of a small amount to a distant date, may be, when the entire building complex gets ready. Even if some amount, say 10 per cent., remains to be paid and the developer/transferee fails to pay, leading to a dispute between the parties, the right to exclusive and indefeasible possession may be in jeopardy. In this state of affairs, the transaction within the meaning of clause (v) cannot be sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scussed the facts of the case before it. It was observed that paragraph 18 of the Collaboration Agreement provides that on issuance of letter of intent, the owners will allow and permit the Developer to enter upon and survey the land, erect site / sales office, carry out the site development work and do activities for advancing sale promotion, construction etc. The Authority further observed that if this clause is read in isolation this would suggest on passing of possession but according to Authority the other factors are to be considered. Clause 15 provided that on fulfillment of the requirements laid down in the letter of intent which is provisional license, the owners should execute an irrevocable general power of attorney in favour of the developer allowing inter alia to book and sell the dwelling unit failing under their share. This was possible only after deposit of requisite charges etc. and perhaps there was litigation regarding ownership of land which has also to be withdrawn. The Authority has discussed the significance of general power of attorney and the terms of the general power of attorney at para 33 and the relevant portion of the same is as under:- "A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the GPA. Exclusive possession, as already pointed out, is not necessary for the purpose of satisfying the ingredients of clause (v) of section 2(47). We are therefore, of the view that the irrevocable GPA executed by the owners in favour of the developer must be regarded as a transaction in the eye of law which allows possession to be taken in part performance of the contract for transfer of the property in question........" 43 Thus, the above clearly shows that irrevocable general power of attorney which leads to over all control of the property in the hands of the Developer, even if that means no exclusive possession by the Developer would constitute transfer. It can be said that it has to be construed as 'possession' in terms of clause (v) of section 2(47) of the Act. 44 A question may arise that why the transfer was not held to be taken place in Assessment year 2006-07 when first agreement was entered into on June 8, 2005. The supplementary agreement was also entered into on Sept 15, 2005 both of which fall in Financial Year 2005-06 relevant to Assessment year 2006-07. Then why transfer was not construed in Assessment year 2006-07 it was because the first agreement itsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ras and now let us discuss the facts of the case in the light of above noted legal position. 46 Undisputed facts of the case are that the assessee is a Member of Punjabi Coop House Building Society Ltd. which had 96 members (Number of members were stated as 95 during arguments but clause 13 of the JDA refers to number of members as 96). The Society was owning 21.2 acres of land in village Kansal Distt. Mohali adjacent to Chandigarh. There were two types of members firstly the members who were owning plot of 500 sqyd and secondly the members who are holding plot of 1000 sqyd. Somewhere in 2006 it was decided to develop a Group Housing commercial project and do development as per the applicable municipal building bye-laws in force and accordingly a bid was invited through advertisement in the Tribune dated 31.5.2006. HASH a developer, approached the Society with proposal for development of the property. Since Hash did not have sufficient means to develop the property, Hash had approached THDC for development of the property by constructing the building and/or structures to be used for interalia residential, public use and commercial purposes. This proposal was discussed by the Soci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty all its rights to develop, construct, mortgage, lease, license, sell and transfer the property along with any and all the construction, premises, hereditaments, easements, trees thereon in favour of THDC for the purpose of development, construction, mortgage, sale, transfer, lease, license and or exploitation for full utilization of the Property (Rights) and to execute all the documents necessary to carry out, facilitate and enforce the Rights in the Property including to execute Lease Agreement, License Agreements, Construction Contracts, Supplier Contracts, Agreement for sale, Conveyance, Mortgage Deeds, finance documents and all documents and agreements necessary to create and register the mortgage, conveyance, lease deeds, license agreement, Power of Attorney, affidavits, declaration, indemnities and all such other documents, letters as may be necessary to carry out, facilitate and enforce the Rights and to register the same with the revenue/Competent authority and to appear on our behalf before all authorities, statutory or otherwise, and before any court of law (the 'Development Rights'). The owner hereby hands over the original title deeds of the Property as mentioned in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deeds, matters and things to be done or incurred by THDC in that behalf as also to sign all letters, applications, agreements and register the same if necessary, documents, court proceedings, affidavits and such other papers containing true facts and correct particulars as made from time to time be required in this behalf. 9.2 The owner shall execute in favour of THDC the sale deed is in accordance with the provisions of clause 4.1(ii) to Clause 4.1(iv) of this Agreement and execute all other necessary documents and papers to complete the aforesaid transaction. 9.3 That all the original title deeds pertaining to property as mentioned in Annexure IV has been handed over to THDC by the owner at the time of signing of this Agreement and in furtherance of the common interest of the Parties for the development of the Project and except the Sale Transaction made by the Owner in favour of THDC as et out in Clause 4.1 above. THDC hereby undertake and assure the owner that they shall use the title deeds only for the purpose of furtherance of the Project in the manner that it does not adversely effect the Owner/Allottee in any manner whatsoever." 49 Clause 10 describes the consent giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.1 which according to the ld. counsel of the assessee were to be handed over simultaneously to execution and registration of the JDA, is not correct because clause 9.3 clearly mention that original title deed of the property have been handed over to the THDC at the time of signing of this agreement because clause 9.3 there is no mention about registration of JDA. 53 Special Power of Attorney which has been executed on 26.2.2007 and has been registered also. The irrevocable special Power of Attorney has been executed as provided in clause 6.7 of the JDA which reads as under: "6.7 The Owner shall execute an irrevocable special Power of Attorney granting its complete Development Rights in the Property in favour of THDC interalia including the right to raise finance by mortgaging the property and register the charge with the Competent Authority and execute registered sale deeds) as set out in Clause 4.1 (ii), (iii), (iv) and (v) and the Owner confirms, undertakes, declares and binds itself not to revoke the same for any reason whatsoever out of its own will and discretion without obtaining a specific prior written consent of THDC or any of its duly constituted attorneys." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial institution, execute the necessary documents and register the charge created on the Property if so required in the revenue records and/or desired by the Attorney. (aa) To sell, transfer, lease, license the Premises that may be constructed on the Property on ownership basis, lease, license and/or in any other manner for such price as the Attorneys may deem fit and proper. To collect and receive from the purchased, transferees, lessees, licensees of the Premises, monies/price and/or consideration and/or maintenance charges and to sign and execute and/or give proper and lawful discharge for the receipts. (bb) To execute from time to time all the writing, agreement, deeds etc. in respect of the premises which maybe constructed on the Property and also to execute and sign conveyance, transfer or surrender in respect of the Property or any part thereof. (cc) To sign, execute and register the conveyances or assignments and/or Power of Attorney's and/or other documents and/or agreements and/or any other writings in respect of the Property in part or full and/or the Premises constructed thereon or any part thereof in favour of any person as the Attorneys may determine including i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Security of the property by way of mortgaging the property. Thus whatever power/authorization have been given through irrevocable special Power of Attorney are emanating from the terms and conditions agreed to among the parties from the JDA. 55 The combined reading of the above clauses of the Irrevocable Special Power of Attorney and JDA clearly show that the developer was authorized to enter upon the property for not only for the purpose of development but other purposes also. THDC was authorized to amalgamate the project with any other project in the adjacent area or adjoining area as per clause (t) of the special Power of Attorney. If the possession was never given to the developer by the Society then how the developer could amalgamate the project with another project which may be acquired latter in the adjoining area. Through clause (w) THDC was authorized to hand over the possession of property or portion thereof to the authority to whom the same is required. In large Housing Society Projects sometimes Municipal authorities takes some portion of land for the purpose of roads, parks or other general utility purposes like installation of electricity transformers and befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Power of Attorney. The issue has been discussed in the judgment of Jasbir Singh Sarkaria (supra) in further discussion which has been made in para 33 regarding Power of Attorney (which has been reproduced earlier). In that case the powers were given to enter upon and survey the land, prepare lay out plans, submit building plan for sanction with the appropriate authorities to control, manage and look after and supervise the property, to obtain water and sewerage, disposal and electricity connection. In that case the developer was authorized to mortgage the property to obtain money for meeting the cost of construction on security and mortgage of land falling only to the developer's share. In that case it was held that GPA was not a license to enter upon for doing some preliminary acts in relation to development of work but the power to control the land has also been confirmed. It has also been noted that the agreement described the Power of Attorney as irrevocable and extra declaration to that effect in the Power of Attorney is not without significance. In case before us, many more powers have been given to THDC in addition to powers which have been described in that judgment and P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) what remedy Parliament has resolved and appointed to cure the disease of the common wealth and (4) the true reason of the remedy. And then, the office of all the judges is always to make such construction as shall suppress the evasions for the continuance of the mischief and pro private commando and to add force and life to the cure and remedy according to the true intent of the makers of the Act pro bono public." There is now the further addition that regard must be had not only to the existing law but also to prior legislation and to the judicial interpretation thereof." 58 Going by the Heydon's Rule of interpretation if we analyze the purpose of clause (v) of Section 2(47) then it would emerge that law before making the amendment was that capital gain could be charged only if a transfer has been effected and transfer was interpreted by various Courts including the decision of Hon'ble Supreme Court in case of Alapati Venkatramian V CIT, 57 ITR 185 (SC) that proper conveyance of the property has been made under the common law. The mischief was with regard to transfer in the sense that there was common practice that properties were being transferred in such a manner that transf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te and immediate possession Cross- objections-exist in respect of the same thing as already explained. 2 Two or more persons may possess the same thing in common; just as they may owe it in common. The concurrent possession of the owner who can exercise possession right to a limited extent and for a limited purpose and that of the buyer/developer who has a general control and custody of the land can very well be reconciled." 61 In further discussion in para 26 to 28 of the above decision it has been held that it is not necessary in terms of clause (v) that the developer should have exclusive possession. The concurrent possession of the owner is possible which gives rights to a limited extent for a limited purpose. Thus it is very much possible to hold concurrent possession. Mere recitation in the sale deed to the effect that the Society was owner of and in possession of land measuring 21.2 acres, does not show that the Society was having actual possession. What the Society was having is only ownership right and the possession was only concurrent as the possessary right. Further it is a standard clause in the conveyance deed and it does not prove or indicate anything except th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstitute the income of the assessee/ transferor (d) such income shall be deemed to be the income of the same previous year in which the transfer had taken place. Two aspects may be noted at this juncture. Firstly, the expression used is "arising" which is not to be equated with the expression "received". Both these expressions and in addition thereto, the expression "accrue" are used in the Income-tax Act either collectively or separately according to the context and nature of the charging provision. The second point which deserves notice is that by a deeming provision, the profits or gains that have arisen would be treated as the income of the previous year in which the transfer took place. That means, the income on account of arisal of capital gain should be charged to tax in the same previous year in which the transfer was effected or deemed to have taken place. The effect and ambit of the deeming provision contained in section 45 has been considered in decided cases and leading text books. The following statement of law in Sampath Iyengar's Commentary (10th Edition-- Revised by Shri S. Rajaratnam) brings out the correct legal position : "Section 45 enacts that the capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " Further the expression arising has been defined in the Advanced Law Lexicon by P. Ramanatha Aiyer edited by Y.V. Chandrachud, Former Chief Justice of India: "The words "Arising or accruing" describe a right to receive profits, and that there must be a debt owed by somebody. Ld. Commissioner of Income Tax, West Bengal-II, Calcutta V. Hindustan Housing and Land Development Trust Ltd. AIR 1986 S.C 1805, 1807." The expression "accrual of income" has been defined in the same Lexicon as under: "Accrual of income. E.D Jassoon C. Ltd. V Ld. Commissioner of Income Tax, AIR 1954 S.C 470 quoted - Income may accrue to an assessee without the actual receipt of the same. If the assessee acquires a right to receive the income, the income can be said to have accrued to him though it may be received later on its being ascertained. The basic conception is that he must have acquired a right to receive the income. Bhogilal V Income Tax Ld. Commissioner, AIR 1956 Bom 411, 414 (Income Tax Act (11 of 1992) Ss. 16(1) and (3)}" 67 The combined reading of these two definitions show that it (i.e. accrual) is not equal to the receipt of income. In fact it is a stage before the point of time when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich title of immovable property could be acquired. Section 53A of TP Act read as under:- 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 the contract, [***]where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of clause (b) of the first proviso to sub section (i) of section 205 of the Companies Act, 1956 (1 of 1956) are applicable. 71 The Hon'ble Apex Court referred to the Principles of Statutory Interpretation by Shri G.P.Singh and extracted following piece: "Section 115J, Explanation clause (iv), is a piece of legislation by incorporation. Dealing with the subject, Justice G.P. Singh states in Principles of Statutory Interpretation (7th edition, 1999). 101 Incorporation of an earlier Act into a later Act is a legislative device adopted for the sake of convenience in order to avoid verbatim reproduction of the provisions of the earlier Act into the later. When an earlier Act or certain of its provisions are incorporated by reference into a later Act, the provisions so incorporated become part and parcel of the later Act as if they had been "bodily transposed into it". The effect of incorporation is admirably stated by LORD ESHER, M.R. : "If a subsequent Act brings into itself by reference some of the clauses of a former Act, the legal effect of that, as has often been held, is to write those Sections into the new Act as if they had been actually written in it with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cussed this issue at page 7 and after quoting the provisions of section 2(47) and also section 53A before and after amendment as wall as para Nos. 11.1 to 11.2 of the Board's Circular No. 495 dated 22.9.1987 observed as under:- "The above clearly shows that there was certain situation where properties were being transferred without registration of transfer instruments and people were escaping tax liabilities on transfer of such properties because the same could not be brought in the definition of "transfer" particularly in many States of the country properties were being held by various people as leased properties which were allotted by the various Govt. Departments and transfers of such lease were not permissible. People were transferring such properties by executing agreement to sell and general power of attorney as well as Will and receiving full consideration, but since the agreement to sell was not registered and though full consideration was received and even possession was given, still the same transactions could not be subjected to tax because the same could not covered by the definition of "transfer". To bring such transactions within the tax net, this amendment was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possession of the building in part performance of the nature referred to in section 53A, such person shall be deemed to be the owner. It was further observed that for all practicable purposes the assessee was the owner and possibly there cannot be two owners of same property at the same time. In fact, the amendments to section 27 were made later on but were taken into cognizance on the basis of above principle and ultimately it was held as under: "Hence, though under the common law "owner" means a person who has got valid title legally conveyed to him after comply with the requirements of law such as the Transfer of Property Act, the Registration Act, etc., in the context section 22 of the Income-tax Act, 1961, having regard to the ground realities and further having regard to the object of the Income- tax Act, namely, to tax the income, "owner" is a person who is entitled to receive income from the property in his own right. The requirement of registration of the sale deed in the context of section 22 is not warranted." Thus, from the above, it is clear that it is not necessary to get the instrument of transfer registered for the purpose of Income-tax Act when a person h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been satisfied." 74 Thus, it is clear that non registration of agreement cannot lead to the conclusion that provision of section 2(47) (v) is not applicable. Similar view has been taken by ITAT Cochin Bench of the Tribunal in case of G.Sreenivasan Vs DCIT 28 Txmann.com 200 (Coch.) and ITAT Pune Bench in the case of Mahesh Nemichandra Ganeshwade v ITO 21 Taxmann.com 136 (Pune). In view of this legal position, this contention is rejected. 75 The next contention was that the decision of Hon'ble Bombay High Court in case of Chaturbhuj Dwarkadas Kapadia (supra) is not applicable particularly because ultimately in that case it was held that capital gain tax should be charged in Assessment year 1999-2000 whereas agreement was executed in August, 1994. 76 We have already discussed the implications of the decision in case of Chaturbhuj Dwarkadas Kapadia (supra) in para 33 to 38. We had also examined why in that case capital gain was not held to be chargeable in Assessment year 1995-96.There is no need to repeat the same and in view of the said observations, we reject this contention. 77 The next contention is that it is necessary for invoking of section 2(47)(v) of the Act to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d no compensation has been received, therefore, there could not be any capital gain tax u/s 2(47) (iii) which deals with the compulsory acquisition. It was further observed that assessee could not have given possession unless and until the land was denotified. Since facts of the case are different than the case in hand and therefore, same are not relevant for our purpose. 81 Now coming to the facts, firstly it was contended that Developer i.e transferee has not obtained various permissions which were required to be taken by the Developer as per clauses 3.1, 7.9, 8.4 and 8.6 of the JDA. This is not correct as pointed out by the Ld. CIT DR that assessee had already got the municipal plan sanctioned but in the meantime PIL was filed before the Hon'ble Punjab Haryana High Court against the implementation of the project. Initially, the construction was banned by the Hon'ble High Court. However, later on it was observed in the CW P N o . 20425 of 2010 a n d a s clarified by the order of the Hon'ble Supreme Court that refusal of sanction under the Environment (Protection) Act, the society have sought a review of the order because the findings arrived were ex.parte. No order in the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the happening or arising of an Event of Force Majeure hereof shall notify the other Party of the happening or arising and the ending of ceasing of such event or circumstance with three (3) days of determining that an Event of Force Majeure has occurred. In the event any Party anticipates the happening of an Event of Force Majeure, such Party shall promptly notify the other party. iv) The Party claiming Event of Force Majeure conditions shall, in all instances and to the extent it is capable of doing so, use its best efforts to remove or remedy the cause thereof and minimize the economic damage arising thereof. v) Either Party may terminate this Agreement after giving the other Party a prior notice of fifteen (15) days in writing of the Event of Force Majeure continues for period of ninety (90) days. In the event of termination of this Agreement all obligations of the Parties until such date shall be fulfilled. 82 The combined reading of these clauses show that if any of the party could not perform its part of the obligation because of the unforeseen circumstances which included government directions, court orders, injunctions etc. such party would not be liable to other p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue with regard to clearance/sanction under the two enactments i.e. Environment (Protection) Act and W ild Life (Protection) Act is presently pending and as the promoters of the project have submitted themselves to the jurisdiction of the authorities under the said enactments we should refrain from addressing ourselves on any of the issues connected with either of the two statutory enactments as any such exercise, even though may be unintended, may have the effect of fettering the jurisdiction of statutory authorities functioning under the two relevant statutes. 22. Insofar as the provisions of the Environment (Protection) Act and the Wild Life (Protection) Act are concerned, it need not be emphasised that every project attracting the provisions of the Periphery Control Act and/or the provisions of the 1995 Act must satisfy the ecological concerns of the area in the light of the provisions of the two statues in question. As already held by us, a public trust has been bestowed on the authorities by provisions of the said Acts which cast on such authorities a duty to interdict any project or activity which even remotely seems to create an imbalance in the pristine ecology and envi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t THDC / HASH were declining to perform particular obligation provided in JDA. In view of this discussion, it cannot be said that transferee i.e. Developer THDC/HASH is not willing to perform his part of contract. 84 Secondly, it was contended that payments have not been made as per the JDA. However, again this is not correct. As per clause 4(iv) of the JDA, the installment for Rs. 31,92,75,000/- was required to be paid. The clause 4(iv) read as under:- "iv) Payment being Rs. 31,92,75,000/- (Rupees One Crore ninety two lacs seventy five thousand only) calculated @ Rs. 24,75,000/- (Rs. Twenty Four lacs seventy five thousand only) per plot holder of 500 Sq. yards and (Rs. 49,50,000/- (Rs. Forty nine lacs fifty thousand only) as per plot holder of 1000 square yards to be made to the Owner and / or the respective members of the Owner (as the case may be) within six(6) months from the date of execution of this agreement or within two (2) months from the date of approval of the plans / Design and Drawings and grant of the final licence to develop where upon the construction can commence, whichever is later, against which the Owner shall execute a registered sale deed for land of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention is rejected. 87 Seventh contention is that revenue wrongly held that even clause (vi) of Section 2(47) is applicable. We find no force in this contention. Clause (vi) to Section 2(47) reads as under: "any transaction (whether by way of becoming a member of, or accruing shares in, a cooperative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immovable property". 88 The plain reading of the provision shows that any transaction by way of becoming a Member or acquiring shares in the Cooperative Society or shares in the company which has the effect of transferring or enabling the enjoyment of any immoveable property would be covered by the definition of transfer. In the case before us, initially the Members of the Society were holding shares in the Society for ownership of plot of 500 sqyd or 1000 sqyd. This membership was surrendered to the Society vide resolution of the Society passed in the Executive Committee on 4.1.2007 which was later ratified in the General Body Meeting of the Society on 25.1.2007, so that the societ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is mentioned in the transfer instrument that balance of consideration would be paid after 20 years then no tax can be levied on such balance consideration of Rs. 99.00 crores which has not been received as per the contention of the ld. counsel of the assessee . But in that case no taxes can be levied even after 20 years because no transfer can be said to have taken place after 20 years and Revenue cannot do anything because capital gain can be charged u/s 45 only on transfer of capital asset. We do not think that this kind of interpretation can be made while interpreting Section 45 r.w.s. 48 by invoking the rule that there cannot be any tax on notional receipt. Generally speaking it is only the real income which can be taxed but this has to be understood subject to limitations. Commenting on these limitations, the Ld. Author Shri S. Rajaratnam in the Commentary of Law of Income Tax by Sampat Iyengar's Volume 1, (11 t h Edition) has observed at page 343 as under:- "5. Reservations on real income theory. - Whether accrual of income has taken place or not, must be judged on the principle of the real income theory. After accrual, non-charging of tax on the same because of ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thered from what a hypothetical tenant would pay which is to be objectively ascertained on a reasonable basis irrespective of the fact whether the property is let out or not [Sultan Bros. Pr. Ltd. v. CIT, (1964) 51 ITR 353 (SC); Jamnadas Prabhudas v. CIT, (1951)20 ITR 160(Bom); D.M. Vakil v. CIT, (1946) 14 ITR 298, 302(Bom); CIT v. Biman Behari Shaw, Shebait, (1968) 68 ITR 815 (Cal); Sri Sri Radha Govinda Jew v. CIT, (1972) 84 ITR 150, 156 (Cal); CIT v. Ganga Properties Ltd., (1970) 77 ITR 637, 647 (Cal); Liquidator, Mahmudabad Properties Ltd. v. CIT, (1972) 83 ITR 470 (Cal), affirmed, (1980) 124 ITR 31 (SC); CIT v. Zorostrian Building Society Ltd., (1976) 102 ITR 499 (Bom); C.J. George V. CIT, (1973) 92 ITR 137 (Ker); D.C. Anand Sons v. CIT, (1981) 131 ITR 77 (Del). Also see, CIT v. Parbutty Churn Law, (1965) 57 ITR 609, 619 (Cal); In the matter of Krishna Lal Seal, AIR 1932 Cal 836; Lalla Mal Samgham Lal v. CIT, (1936) 4 ITR 250 (Lah); New Delhi Municipal Committee v. Nand Kumar Bussi, (1977) Tax LR 2130 (Del)]" 93 Similar view has been expressed by Shri N.A. Palkhivala in his commentary on the Law land Practice of Income Tax, Volume 2 (Eighth edition) by Kanga and Palkhivala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r any specific provisions of the Act is there for charging of a particular item of income, then the same has to be charged accordingly. It may be sometimes hard to the assessee's but again it has been held in numerous decisions that Fiscal statues have to be interpreted on the basis of language used and there is no scope for equity or intent. Ld. Author Shri S. Rajaratnam in the Commentary of Law of Income Tax by Sampat Iyengar's Volume 1, page 236 in this regard has observed as under:- "Once it is shown that the case of the assessee comes within the letter of the law, he must be taxed, however, great the hardship may appear to the judicial mind. Considerations of hardship, injustice or anomalies do not play any useful role in construing taxing statutes unless there be some real ambiguity. Thus, any benevolent construction in favour of the assessee has been held to be uncalled for. 96 Therefore, it can be said that generally speaking notional income could not be subjected to tax but whenever there is a specific provision, the same has to be taxed. Now, in case of capital gain, section 45 read with section 48 very clearly provides that it is the profit "arising" from the transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctive members of the Owner (as the case may be) from HASH by executing sale deeds and registering the same. It is expressly provided that as resolved by the Owner, the total amount payable by HASH to the Owner and / or the respective members of the Owner (as the case may be) for assignment of the Development Rights and for transfer and sale of 21.2 acres of land of the Property shall be Rs. 106,42,50,000/- (Rupees One Hundred Six Crores Forty Two Lacs Fifty Thousand only) and one hundred and twenty nine (129) flats consisting of Super Area of 2250 Sq. feet ('Flats'); one flat each for sixty five members having a plot of 500 sq. yards, two flats for the (thirty) 30 members having a plot of 1000 sq. yards and 4 flats to the Owner for the 4 plots of 500 sq. yards each as per list annexed with this Agreement as Schedule B ('Sale Transaction') It is expressly agreed between the Developers that HASH shall be responsible for making all payments to the Owner and/or the respective members of the Owner (as the case may be) as per the negotiated and agreed terms between the Owner and HASH, HASH expressly undertakes to make timely payments of the Payment to the Owner and / or the respective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax, when handing over the possession for purposes of construction without being able to enjoy the construction, which is yet to commerce or in the process of construction being put up by the developer, but the solution lies in statutory clarification in such cases. In view of the increasing scale of such development agreements to solve the housing problem in the cities, a statutory clarification or circular is overdue." 99 These comments and the other detailed discussion on this aspect clearly show that capital gain tax has to be paid on the total consideration arising on transfer which would include the consideration which has been received as well as the consideration which has arosen and become due and may be received later on. In view of this discussion this contention is rejected. 100 Ninth contention is that the assessee has already terminated the agreement and has revoked the Power of Attorney. We find no force in this submissions. 101 In this regard ld. counsel of the assessee has relied on the decision of Mumbai Bench of the Tribunal in case of Chemosyn Ltd. V ACIT (supra). In that case the assessee-Company was owner of two plots bearing 256 257 in Gundabali Andhe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the right to terminate this Agreement in the event there is any material breach of the representations, warranties, undertakings, declarations, covenants and/or obligations given by the Owner under this Agreement after giving thirty (30) days written notice for rectification of such breach. In the event the Agreement is termination by THDC, all the lands registered in the name of THDC as per the terms of this Agreement upto the date of the termination shall remain with THDC and the balance lands to be transferred to THDC as per the terms of this Agreement shall not be transferred by the Owner in favour of THDC. Upon the termination, the Owner shall refund to THDC the Adjustable Advance/Earnest Money mentioned in clause 4.1(i) above within one month of such termination. In the event of failure of the Owner to refund the said amount, the Owner hereby agrees to execute a registered sale deed for land of equivalent value in favour of THDC. (ii) In the event all the requisite government and statutory approvals, authorizations, consents, licenses, approvals of all the plans/designs and Drawings as may be required for the development of this Property in relation to the Project and to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y further time as may be desired by the Owner. In the event the Agreement is terminated by Owner, all the lands registered in the name of THDC as per the terms of this Agreement upto the date of the termination shall remain with THDC and the balance lands to be transferred to THDC as per the terms of this Agreement shall not be transferred by the Owner in favour of THDC. Upon the termination, the Owner shall forfeit the Adjustable Advance/Earnest Money mentioned in clause 4(i)." 103 The reading of the above clause would show that power of termination has been given in many circumstances to THDC vide clause 14(i), (ii) and (iii). The power for termination by the owner has been mentioned in clause 14(iv) only. Reading of this clause would show that right to terminate with the owner i.e. the Society was available only in case of default in making the payment. The issue regarding default for making payment has already been discussed by us in Paras 84 to 86 above while discussing the issue of willingness on the part of the transferee to perform its part of the contract We have already held that there was no default on the part of developer i.e. THDC/HASH in making the payment, therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orney. In the absence of specific consent as provided in clause 6.7 of the JDA from THDC. 105 We may also note that CIT D.R has pointed out that total consideration was to be determined as under: (i) Consideration in cash (Rs. 82,50,000 x 129 plots) Rs. 106,42,50,000/- (ii) Consideration in kind (Rs. 101,25,000/- x 129 plots) Rs. 130,61,25,000/- Total Rs. 237,03,75,000/- Average cost of consideration Rs. 11.18 crores per acre (Total consideration of Rs. 237.03 crores divided by 21.2 acres of land) It is claimed on behalf of the assessee that JDA has been cancelled and the developer has been allowed to retain the property which has also been conveyed to developer through two sale deeds. If that is so then what would happen to the balance consideration because in such situation the assessee has received consideration of only about Rs. 5 croress per acre because the assessee has registered land measuring 3.08 acres for Rs. 15.48 crores through first conveyance deed, whereas consideration as per original agreement was Rs. 11.18 crores per acre as shown above. The difference is because of non-receipt o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, if the time-limit for filing a revised return expires, the difficulty will arise. It is for Parliament or the Central Government to provide a remedy to the assessee in such cases. Moreover, the other side of the picture as depicted in paragraph 27 (supra) should also be kept in view." Here the comments of Shri Rajaratnam quoted at para 5164 above are also relevant again: "It is hard on the owners when required to pay tax, when handing over the possession for purposes of construction without being able to enjoy the construction, which is yet to commerce or in the process of construction being put up by the developer, but the solution lies in statutory clarification in such cases. In view of the increasing scale of such development agreements to solve the housing problem in the cities, a statutory clarification or circular is overdue." We may mention here that no doubt sometimes an assessee may be put in a difficult situation and as mentioned by Hon'ble Authority in case of Jasbir Singh Sarkaria (supra) as well as Ld. Author Shri Rajaratnam it is for the legislature to take corrective steps. However, it may not be out of place that if considering the difficulty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing:- 4.1 It is expressly agreed and understood by and between the Parties hereto (a) in the ratio of 72,28 between THDC and HASH in case Gross Sales Proceeds does not exceed Rs. 1272 crores; (b) in the ratio of 70: 30 between THDC and HASH in case Gross Sales Proceeds is equal to Rs. 1272 crores; (c) in addition (b), in the ratio of 60: 40 between THDC and HASH in respect of gross sales Proceeds in excess of Rs. 1272 crores. "It is agreed that the minimum guaranteed amount from the Gross Sales Proceeds for THDC and HASH is Rs. 890.40 crores and Rs. 225.76 crores respectively. The minimum guaranteed amount of Rs. 225.76 crores to HASH includes Rs. 58.88 crores that shall be expended by THDC towards construction of 126 flats equivalent to 2,83,500 sq. ft,, which flats are to be allotted in the names of the members of the Society or otherwise, as the case may be, calculated as Rs. 2000 per sq. ft. for the area 2,83,500 sq. ft. and the 72% share of 3 flats of 2250 Sq. ft. to be purchased by HASH @ Rs, 4500/- per sq. ft. Should the application of the ratio stipulated in (a) above result in HASH being entitled to a sum greater than the minimum guaranteed amount and THDC b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able basis. In view of these observations this contention is rejected. 110 The Ld. Counsel for the assessee had made some submissions on the issue of deduction u/s 54F. He has pointed out that this issue has been rejected wrongly by CIT(A). However, carefully perusal of the grounds of appeal show that no ground in respect of deduction u/s 54F has been raised before us and, therefore, we decline to adjudicate this issue and all the arguments made in this behalf are rejected. Though reference was made to ground No. 2.3 in this regard. The perusal of grounds No. 2.3 would show that reference has been made only to Section 54 and Section 54EC. Section 54 deals with deduction in case the assessee being an individual or HUF, transfers the residential house and in case before us, the assessee has transferred the plot. Therefore, it cannot be said that deduction u/s 54F and 54 is same. Since no ground has been raised for deduction u/s 54F, we reject this contention. 111 Ground No. 3 - The ld. counsel of the assessee submitted that without prejudice to the issues raised in grounds No. 2, 5 6, capital gain should have been taxed in the hands of the Society which is legal owner of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... withdrawal u/s 244A (3) is of consequential nature and the Assessing Officer is directed to charge interest u/s 234B of the Act in accordance with law. W ithdrawal of interest u/s 244A (3) should also be done in accordance with law. 115 In the result, appeal of the assessee is partly allowed." 38. Now, we take up`the 24 appeals before this Bench one by one as under: 1) ITA No.180(Asr)/2011 - Shri Satnam Singh Kainth vs ITO i) Grounds No. 1 2 relate to reopening of assessment under section 147 of the Act. The facts of these grounds are identical to the facts as in the case of Sh.Avtar Singh Brar (supra)and other 30 appeals decided by the ITAT Chandigarh Bench in ITA No. 448(Asr)/2011 and others vide order dated 29.07.2013 (supra) and decision therein is, therefore, identically applicable in the present case. Accordingly, we find no infirmity in the order of the ld. CIT(A), who has rightly upheld the action of the A.O. in reopening the assessment. Thus, grounds No.1 2 of the assessee are dismissed. ii) As regards grounds No. 3 to 6, the facts are identical to the facts in the case of Sh.Charanjit Singh Atwal vs. ITO (supra) hereinabove on the taxability of the capital ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entical to the facts in the case of Sh. Charanjit Singh Atwal vs. ITO and others (supra) and in the case of Satnam Singh Kainth vs. ITO and others (supra), therefore, our order in the case of Satnam Singh Kainth vs. ITO and others (supra) is identically applicable to the facts of the present appeal, which have been discussed in detail in our order in the case of Sh. Satnam Singh Kainth vs ITO (supra). Therefore, in the facts and circumstances, all the grounds i.e.3 to 10 of the assessee are dismissed. In the result, the appeal in ITA No.188(Asr)/20132 is dismissed. 22. ITA No.301(Asr)/2013 - Sh.Manjit Pal Singh L/H of Smt. Harjit Kaur As regards grounds No. 1 3, the same have been taken before the ld. CIT(A), who has dismissed the same vide para 7 of his order. 22.1. After considering the arguments made by the assessee and facts on record, we find no infirmity in the order of the ld. CIT(A) who has passed a very reasoned order vide para 7 and has rightly dismissed the grounds of the assessee. According grounds No. 1 3 of the assessee are dismissed. 22.2. As regards grounds No.2 4, the ld. counsel for the assessee, Mr. J. S. Bhasin, Advocate argued that Smt. Harjit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o reassessment u/s 147 of the Act, the similar grounds were taken before the ld. CIT(A), who has dismissed the same for the reasons mentioned in his order. 23.1. After hearing the ld. DR, we find no infirmity in the order of the ld. CIT(A) who has rightly rejected the legal grounds of the assessee by following the case in the case of Nirmal Singh Kahlon which is part of the CIT(A)'s order. Accordingly, grounds No. 1 to 3 of the assessee are dismissed. 23.2. As regards grounds No. 4 to 11, the facts in these grounds are identical to the facts in the case of Sh. Charanjit Singh Atwal vs. ITO and others (supra) and in the case of Satnam Singh Kainth vs. ITO and others (supra), where detailed orders have been passed in the said cases. Since the facts in the present case are identical to the facts in the case of Sh. Charanjit Singh Atwal vs. ITO and others (supra) and in the case of Satnam Singh Kainth vs. ITO and others (supra), therefore, our order in the case of Satnam Singh Kainth vs. ITO and others (supra) is identically applicable to the facts of the present appeal, which have been discussed in detail in our order in the case of Sh. Satnam Singh Kainth vs ITO (supra). Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is dismissed. In the result, the appeal in ITA No.440(Asr)/2013 is dismissed. 26. ITA No.447(Asr)/2013 - Dr. Ram Kumar Goyal As regards ground No.1, it is pertinent to reproduce the grounds raised before the ld. CIT(A) in his order at page 1 to 4 as under: "1. That the order passed by the Ld. AO Ward 2(3) is illegal, bad in law, against facts and without jurisdiction. 2. That in the facts circumstances of the case, Ld. AO erred in rejecting arbitrarily the claim of the status of appellant as that of HUF in respect of acquisition of plot and consequential effect thereof. 3. That in the facts circumstances of the case, Ld. AO erred in rejecting the claim of the appellant regarding assignment on 21.02.2002 of 500 sq. had plot to Manju Rinwa inspite of having furnished Photostat copies of receipt dt. 21.02.2002 affidavit of the appellant dt. 26.03.2002, letter addressed by Smt. Manju Rinwa to the President of the society and sum of Rs.3300000 (Thirty three lacs only) vide account payee cheque as part payment on account of advance towards surrender of her right in plot of 500 sq.yd held in the society having been received by Manju Rinwa i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and also filed a certificate from the developers regarding payment of Rs.33,00,000/- to Smt. Manju Rinwa during F.Y. 2007-08. The AO was asked to file his comments on the evidence filed by the A/R of the appellant during the course of appellate proceedings but the AO in his remand report has made no comment on this documentary evidence. In view of the facts stated above, I direct the AO to assess of the capital gains arising from the above said plot with Punabi Co- operative Building Society owned by the appellant and his wife in equal shares, in the hands of the appellant. But the AO may take action in accordance with the provisions of Income Tax Act, 1961 to assess the capital gains arising from plot of 500 sq. yards in the hands of Manju Rinwa. The ground of appeal is treated as allowed. 5. Ground of appeal relating to the claim of the appellant that the plot of 500 sq. yards with Punjabi Cooperative Building Society was owned by him in the status of HUF is decided as under: i) The A/R of the appellant has argued that the investment in the plot was made form the funds of HUF as the appellant owns agriculture land from which agriculture income derived by him and the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. ITO and others (supra) is identically applicable to the facts of the present appeal, which have been discussed in detail in our order in the case of Sh. Satnam Singh Kainth vs ITO (supra). Therefore, in the facts and circumstances, grounds 2 to 11 of the assessee are dismissed. In the result, the appeal in ITA No.447(Asr)/2013 is dismissed. 27. ITA No.453(Asr)/2013 - Surjit Kumar Jayani The facts relating to all the grounds raised in this appeal are identical to the facts in the case of Sh. Charanjit Singh Atwal vs. ITO and others (supra) and in the case of Satnam Singh Kainth vs. ITO and others (supra), where detailed orders have been passed in the said cases. Since the facts in the present case are identical to the facts in the case of Sh. Charanjit Singh Atwal vs. ITO and others (supra) and in the case of Satnam Singh Kainth vs. ITO and others (supra), therefore, our order in the case of Satnam Singh Kainth vs. ITO and others (supra) is identically applicable to the facts of the present appeal, which have been discussed in detail in our order in the case of Sh. Satnam Singh Kainth vs ITO (supra). Therefore, in the facts and circumstances, all the grounds of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts in the case of Sh. Charanjit Singh Atwal vs. ITO and others (supra) and in the case of Satnam Singh Kainth vs. ITO and others (supra), where detailed orders have been passed in the said cases. Since the facts in the present case are identical to the facts in the case of Sh. Charanjit Singh Atwal vs. ITO and others (supra) and in the case of Satnam Singh Kainth vs. ITO and others (supra), therefore, our order in the case of Satnam Singh Kainth vs. ITO and others (supra) is identically applicable to the facts of the present appeal, which have been discussed in detail in our order in the case of Sh. Satnam Singh Kainth vs ITO (supra). Therefore, in the facts and circumstances, all the grounds of the assessee in ITA No.4461(Asr)/2013 are dismissed. 31. ITA No.462(Asr)/2013 - Sh.Sher Singh The facts relating to all the grounds raised in this appeal are identical to the facts in the case of Sh. Charanjit Singh Atwal vs. ITO and others (supra) and in the case of Satnam Singh Kainth vs. ITO and others (supra), where detailed orders have been passed in the said cases. Since the facts in the present case are identical to the facts in the case of Sh. Charanjit Singh Atwal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. ITO and others (supra), where detailed orders have been passed in the said cases. Since the facts in the present case are identical to the facts in the case of Sh. Charanjit Singh Atwal vs. ITO and others (supra) and in the case of Satnam Singh Kainth vs. ITO and others (supra), therefore, our order in the case of Satnam Singh Kainth vs. ITO and others (supra) is identically applicable to the facts of the present appeal, which have been discussed in detail in our order in the case of Sh. Satnam Singh Kainth vs ITO (supra). Therefore, in the facts and circumstances, grounds No. 4 to 13 of the assessee are dismissed. In the result, the appeal of the assessee in ITA No.402(Asr)/2013 is dismissed. 34. ITA No.334(Asr)/2013 - Sh.Shingara Ram Sanghura As regards grounds No. 2, 3 4, the same were dealt by the ld. CIT(A), who has passed a well reasoned order and has dismissed the same. Accordingly, we find no infirmity in the order of the ld. CIT(A) and grounds No. 2, 3 4 of the assessee are dismissed. 34.1 As regards grounds No. 1, 5 to 10, the facts in these grounds are identical to the facts in the case of Sh. Charanjit Singh Atwal vs. ITO and others (supra) and in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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