TaxTMI 
TaxTMI 
2014 (1) TMI 246
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....s right in coming to the conclusion that the sale consideration was received on 21.12.2002 and the property was handed over on the same day even though the possession of the property was handed over only on 25.03.2004? the assessee seeks admission of these tax case (Appeals). The assessment year under consideration is 2003-2004 and 2004-2005. 2. The assessee, now represented by his legal representative, entered into an agreement of sale on 7.12.1999 with M/s.Alacrity Housing Limited, a company registered under the Companies Act,1956 for the sale of his property situated at 18/1, Unnamalai Ammal Street, T.Nagar, Chennai for a total consideration of Rs.75,78,750/-. The agreement states that the assessee had received an advance of Rs.7,00,000/-. Thus the balance of sale consideration came to Rs.68,78,750/-. The agreement stated that the assessee agreed to sell the subject land under several sale deeds for a specified undivided share for the total consideration as mentioned above. On receipt of the balance sale consideration, the assessee covenanted with the agreement holder to handover vacant possession of the property and the title deeds relating to the property to the company. Clau....
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.... 1,10,000 13.08.2004 Rs. 5,00,000 18.09.2004 Rs. 4,90,000 10.09.2004 Rs. 1,00,000 Rs.12,00,000 In the light of the investment thus made, the assessee claimed exemption from payment of capital gain tax. The Assessing Officer, however rejected the said claim and pointed out that the assessee had transferred the capital asset in favour of the nominees of the agreement holder by way of separate individual registered sale deeds on different dates. As per clause 9 of the agreement to sell, the assessee had agreed to hand over vacant possession of the property to the company immediately on receipt of the entire sale consideration and the assessee admitted the receipt as early as on 21.12.2002 itself. In the circumstances, the Assessing Officer viewed that the transactions, which took place between 27.02.2003 and 07.03.2003 would be liable to capital gains for the assessment year 2003-04 and in respect of sales effected relating to Sl.Nos.5 to 16, would be liable to capital gains during the assessment year 2004-2005. Out of these transactions, Sl.Nos.5 to 12 would fall outside the scope of Section 54EC of the Income Tax Act, 1961, since the investment had been made beyond t....
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....sible conclusion that one could arrive at was that on the date of payment of full consideration, i.e., on 21.12.2002, possession was also handed over to the builder. 6. Referring to the affidavit filed by the assessee executed by the builder apart from the letter given by the builder, the Income Tax Appellate Tribunal viewed that they were self serving exercise done by the assessee in an effort to escape from the rigours of capital gain liability. Applying the definition of Section 2(47) of the Income Tax Act, 1961, the Income Tax Appellate Tribunal referred to the decision of the Apex Court reported in (2002) 3 SCC 676 [Shrimant Shamrao vs. Prahlad] and came to the conclusion that the transfer as contemplated under Section 2(47)(v) of the Income Tax Act, 1961 took place as early as 21.12.2002. Hence, capital gains was exigible even in the assessment year 2003-2004, the assessee would not be entitled to claim any deduction under Section 54EC of the Income Tax Act, 1961. In the circumstances, the Income Tax Appellate Tribunal directed the Assessing Officer to tax the entire capital gain in the assessment year 2003-2004 and not in the year 2004-2005. 7. Aggrieved by this the presen....
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.... respect of those investments made beyond six months period and she placed reliance on the decision of this Court reported in [2010]323 ITR 40 (mad) [Smt.D.Kasturi vs. Commissioner of Income Tax and another] and (2007) 294 ITR 196 (AAR) [Before the Authority for Advance Rulings (Income Tax) Jasbir Singh Sarkaria,In re]. 11. We have heard learned counsel appearing for the assessee and learned Standing counsel appearing for the Revenue. 12. As already seen in the preceding paragraphs, the assessee entered into an agreement to sell as early as 07.12.1999. Clause (2) of the agreement referred to the advance received by the assessee of a sum of Rs.7,00,000/-, which would be reduced from the consideration payable under the agreement, which was stated to be a sum of Rs.75,78,750/-. Clause (6) of the agreement pointed out that on receipt of intimation of the Income Tax Clearance within 15 days pertaining to the list of nominees, the company had to present the related sale deeds to the assessee to have the sale deeds registered. Simultaneous to the presenting of the deeds before the Registering Officer, the company had to pay a sum of Rs.68,78,750/- being the balance sale consideration. C....
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....ded over possession of the property only on 25.03.2004. We do not think this date of handing over of possession on 25.03.2004 would not in any way alter the decision that we are making in this case. 15. As seen in the details given in the preceding paragraphs, the assessee executed documents in favour of 16 persons on various dates from 27.02.2003 to 25.03.2004. The assessee does not dispute the fact that even though it had received the final payment as early as 21.12.2002 for reasons best known the registered sale deeds were made only on various dates starting from 27.02.2003 and admittedly possession was given only on 25.03.2004. Thus, in the eye of law, the sale got completed when sale deeds were registered pertaining to the undivided share of the immovable property. 16. In the context of this fact, the decision relied on by learned counsel for assessee reported in [2012] 340 ITR 1 [cited supra] has to be seen. The Apex Court pointed out that immovable property can legally and lawfully transferred or conveyed only by the registered deed of conveyance, and without this, the Court will not treat such transactions as completed or concluded transfers or as conveyances as they neit....
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....int for limitation. 21. In the absence of any part performance as contemplated under Section 53A of the Transfer of Property Act, 1882 and as pointed out in the decision reported in 340 ITR 1 (cited supra), registration of sale deed alone completes the transfer. Thus, read in the context of the decision of the Apex Court if, on 27.02.2003, 27.02.2003, 07.03.2003 and 07.03.2003, four sale deeds came to be registered, on the consideration received for the purposes of Section 45 and Section 54EC of the Income Tax Act, 1961, capital gains arising on the sale under those deeds would be considered only in the assessment for the assessment year 2003-2004. As regards the sale deeds executed between the dates, 11.04.2003 and 23.03.2004, we find there are at least 12 sale deeds executed on various dates. Sale Deed Nos.13, 14, 15 and 16 were executed on 23.03.2004 and on the same date, the assessee admits that the capital gains arising thereon not being invested in REC 54EC bonds from 30.04.2004 onwards. Considering the fact that sale deeds were executed on 11.04.2003 [3 deeds]; 28.04.2003 [2 deeds]; 14.05.2003 [3 deeds]; the consideration in respect of these deeds not being invested within ....