TMI Blog2014 (5) TMI 819X X X X Extracts X X X X X X X X Extracts X X X X ..... ake committed by the tribunal. In the said case, the tribunal admitted its mistake and rectified the order which order was upheld by the Apex Court. In the present case the tribunal has recorded the categorical finding that no apparent mistake has been committed by the tribunal and no case is made out for rectification. – Decided against the assessee. - Income Tax Appeal No. - 99 of 2005, Income Tax Appeal No. - 92 of 2005, Income Tax Appeal No. - 98 of 2005, Income Tax Appeal No. - 97 of 2006, Income Tax Appeal No. - 452 of 2007, Income Tax Appeal No. - 453 of 2007 - - - Dated:- 22-5-2014 - Hon'ble Ashok Bhushan And Hon'ble Mahesh Chandra Tripathi,JJ. For the Appellant : Suyash Agarwal, Ashish Agarwal, R. B. Shukla, Rakesh Ranjan Agarwal For the Respondent : C.S.C., S. Chopra ORDER (Delivered by Ashok Bhushan,J.) All these Income Tax Appeals filed under Section 260-A of the Income Tax Act, 1961, arising out of order dated 28th December, 2004 of the Income Tax Appellate Tribunal, have been heard together and are being decided by this common judgement. The first three appeals have been filed against the order of Income Tax Appellate Tribunal dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onditions regarding modes of payment and responsibility of the purchasers for getting ceiling permission to sale. A search was conducted in November, 1994 in the premises of the assessee and certain documents relating to sale of Bungalow No. 210-B were found and seized. Besides certain noting papers about the payments received by the owners were found. A copy of the agreement dated 7.9.1991 was also found. The agreement dated 7.9.1991 was registered on a stamp paper of Rs. 6/-. On inquiry assessee admitted that the deal was for Rs. 84 lacs and out of this amount, a sum of Rs. 21 lacs was left with the purchasers for setting old disputes about the land and for obtaining necessary permission from the concerned authorities. The deal was for as is where is basis . The total sum of Rs. 63 lacs was to be received by the co-owners. The Assessing Officer levied capital gain tax on the basis of the agreement dated 7.9.1991 in the assessment year 1992-93. Aggrieved by the assessment order dated 29.3.1996, the assessee filed an appeal before the Commissioner Income Tax (Appeal). The appeal filed by the assessee was allowed vide order dated 29.11.1996 by the Commissioner Income Tax (App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital assets within the meaning of 2(47) of the Act. It is submitted that unless the possession is transferred there cannot be transfer of capital assets and Tribunal having noted that possession has not been delivered committed an error in confirming the order of the Assessing Officer charging capital gain in the assessment year 1992-93. It is submitted that the possession was not with the co-owners and which was with 1994 purchasers. He submits that dispute of possession arose after the agreement dated 7.9.1991 and thereafter, the matter was referred to arbitrator who gave the award on 12th March, 1998 and in pursuance of the award possession was given by purchasers of 1974 agreement to M/s Agarwal's Associates and thereafter, the assessee has shown capital gain in the assessment year 1999-2000. It is submitted that in the Wealth Tax for the year 1992-93 and 1993-94, the property was shown in the computation of net wealth. Further on the basis of recovery certificate issued by the Assessing Officer, a notice dated 16.1.1994 was issued attaching the property no. B-210 for recovery of arrears demanded of Rs. 4,82,378/- in respect of income Tax and Wealth Tax. It is further s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finition is an inclusive definition. Section 2(47) is as follows : transfer , in relation to a capital asset, includes, - (i) ....... (ii)....... (iii)...... (iv)....... (v) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882; or (vi) any transaction (whether 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 1 :- For the purposes of sub-clauses (v) and (vi), immovable property shall have the same meaning as in clause (d) of Section 269 U A.] As per explanation 1 of Section 2(47) of the Act immovable property shall have the same meaning as in clause (d). Section 269 UA (d) which is relevant for the present case is as follows :- (d) immovable property means - (i) any land or building or part of a building, and includes, wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsive definitions when the definition starts with includes . This Court, in the case reported in P. Kasilingam and Ors. v. P.S.G. College of Technology observed at AIR p 1400 : (SCC p. 356 para 19). A particular expression is often defined by the Legislature by using the word 'means' or the word 'includes'. Sometimes the words 'means and includes' are used. The use of the word 'means' indicates that definition is a hard-and-fast definition, and no other meaning can be assigned to the expression than is put down in definition. (See Gough v. Gough, (1891) 2 QB 665 and Punjab Land Development and Reclamation Corpn. Ltd. v. Presiding Officer, Labour Court). A reference may also be made to IRC v. Joiner All ER 1061 . The English translation of agreement have been filed in the paper book at page no. 20. The agreement reads as follows :- WHEREAS total and complete Bungalow No. 210-B, area of which is 40,000 (Forty Thousand) Sq. yards or thereabout with complete building outer and inside every type meaning thereby all the property of bungalow no. 210-B shall include in this agreement situated at West End Road, Meerut Cantt, bounded as follows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssession to be taken / retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, and (ii) any transaction entered into in any manner which has the effect of transferring or enabling the enjoyment of any immovable property (see section 269 UA(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 the general law. This test is important to decide the year of changeability of the capital gains. The transaction contemplated by Section 2(47) (vi) are transaction covering a very wide range of transaction. Sri Shukla submitted that the transaction contemplated under Sub-clause (vi) are transaction pertaining to becoming a member of, or acquiring shares in, a co-operative society, company or other association by way of agreement or any arrangement only. No such restrictive meaning can be given to sub-clause (vi). The last two portion of the bracketed clause reads or by way of any agreement or any arrangement or in any other manner whatsoever . Thus, the transaction contemplated un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill be and second party shall be responsible to pay all the amounts received by the signatures of the first party. In paras 6 and 7 of the agreement, the second party is made responsible for obtaining the requisite permissions for sale. In para 11, it is clearly mentioned that, if the first party object to execute and register the sale deed or agreement etc. as per direction of the second party then the second party have a right to sue for specific performance and get the registration through court, in this condition all the expenses of court will be the liability of the first party. (xii) In view of the various conditions and stipulations in he above agreement and on reading the agreement as a whole, it is found that the owners had done everything on their part to transfer the rights in the property. It may be pointed out again that this agreement has been treated to be binding by the parties and both the parties have acted upon the same. The owners do not deny that the propery was not transferred to M/s Agarwal's Associate. In fact, the version of the assessee is that the transfer took place in the year 1999 when delivery of possession was given to the purchaser, this co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t taxable in respect of sale agreement dated 7.9.1991 in pursuance of which possession over property was transferred to the buyer who constructed shops and payments of Rs. 55,00,000/- was received through cheques. 2. Ld. CIT (A) has erred in law and on facts in holding that there was no transfer of property whereas A.O. had sufficient material on record to substantial that there was transfer of property within the provisions of Section 2(47) and 53A of I.T. Act, 1961. 3. Ld. CIT (A) has erred in law and on facts in deleting capital gain without appreciating material available on record. Grounds of Section 2(47) has been taken in grounds of appeal. Section 2(47) obviously includes Section 2(47) (v) as well as 2(47) (vi). The CIT (A) has referred to Section 2(47) (v) and has held that the transaction cannot be covered under Section 2(47) (v). We do not find any illegality in the tribunal's proceeding to examine the case in the light of Section 2(47) (vi). All the facts being on record whether transaction is covered by Section 2(47)(v) or 2(47) (vi) was well within the domain of the tribunal while deciding the appeal filed by the department. Thus, the submission of Sr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iting signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty; (2) that 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; (3) that the transferee has done some act in furtherance of the contract; and (4) that the transferee had performed or is willing to perform his part of the contract. Section 2(47)(v) of the Income-tax Act reads as follows:- transfer , in relation to a capital asset, includes, - (i) ... (ii) ... (iii)... (iv) ... (iva)... (v) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882); or Section 2(47)(v) of the Income-tax Act comes into the aid of the Department only if the conditions of Section 53A of the Transfer of Property Act are satisfied. From a reading of the above provisions, it is clear that unless there is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner Income Tax Vs. Smt. Najoo Dara Deboo decided on 16.9.2013. The questions which were framed in the said appeal have been reproduced in the judgement which were following question :- 1. Whether on the fact and circumstances of the case Income Tax Appellate Tribunal was justified in concluding that there was no extinguishment of right in the property, in question, by the assessee and no transfer of capital asset within the meaning of Section 2(47)(ii) of the Income Tax Act, 1961 during the previous year relevant to the assessment year 1995-96. 2. Whether on the fact and circumstances of the case income Tax Appellate Tribunal has not erred in law in holding that vide original agreement dated 29.12.1994 registered on 4.1.1995 it was only intended to transfer the impugned property and the transfer took place after March, 1997, only, on the basis of a certificate dated 29.8.2000 issued by the builder to this effect, in total disregard to the provisions of Registration Act, 1908. 3. Whether on the fact and circumstances of the case Income Tax Appellate Tribunal was right in law in holding that the impugned property had been converted into stock in trade and thus CBDT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 1961 Act. As stated above, the expression rectification of mistake from the record occurs in section 154. It also finds place in section 254(2). The purpose behind the enactment of section 254(2) is based on the fundamental principle that no party appearing before the Tribunal, be it an assessee or the Department, should suffer on account of any mistake committed by the Tribunal. Thus fundamental principle has nothing to do with the inherent powers of the Tribunal. In the present case, the Tribunal in its order dated September 10, 2003 allowing the rectification application has given a finding that Samtel Color Ltd. (supra) was cited before it by the assessee but through oversight it had mised out the said judgement while dismissing the appeal filed by the assessee on the question of admissibility / allowability of the claim of the assessee for enhanced depreciation under section 43A. One of the important reasons for giving the power of rectification to the Tribunal is to see that no prejudice is caused to either of the parties appearing before it by its decision based on a mistake apparent from the record. Rule of precedent is an important aspect of legal certainty in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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