TMI Blog2008 (3) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... rt as "Tribunal"), Delhi Bench (B) in ITA No.4970/DEL/1999 for the Assessment Year 1996-1997 vide which the Tribunal had reversed the order of Commissioner of Income Tax (Appeal) {for short as CIT(A)} in Appeal No.75/1999-2000 and upheld order dated 26 th March, 1999, passed by the Assessing Officer holding the Asseessee is liable to pay capital gain tax under Section 45 of the Act read with Section 2(47) of the Act. 2. The Assessee, who is engaged in real estate business filed his return of income on 24 th December, 1996 declaring an income of Rs.3,24,930 (rupees three lakh twenty four thousand nine hundred and thirty). During the course of assessment proceedings it was noted by the Assessing Officer that apart from the profit declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 of 1989 for partition claiming separation of his 1/3 rd undivided share in the said property. Subsequently the claim was amended to " share instead of 1/3 rd Share. During the pendency of these proceedings the assessee Shri JK Kashyap, moved an application under order 1 Rule 10 CPC seeking to be made party to the proceedings on the averments that Shri JK Guha had entered into an agreement with him to sell his 1/3 rd share in the said property, the assessee also filed a suit for specific performance against Shri JK Guha being Civil Suit No.2312 of 1990, entitled JK Jashyap Vs. JK Guha and others in the High Court of Delhi claiming that Shri JK Guha had agreed to sell and transfer his share to the assessee for a consideration of Rs.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly on 26.9.95 an agreement as mentioned earlier, between the following parties was signed (1) the vendors, Dr.PK Guha, Ina Guha and JK Guha and (ii) the assignors Shri JK Kashyap, Sh.Praveen Nauuar and Sh.Ram Singh Chauhan and (iii) the vendee FMI Investment Pvt.Ltd. It was signed in London, U.K. wherein the vendee M/s FMI Investment Pvt.Ltd, was to purchase the property at 13-Golf Links, New Delhi. As per this agreement it was mutually decided that the 1 st , 2 nd and 3 rd parties (vendors) shall sell their ownership and priprietory rights in the property and the 4 th , 5 th and 6 th parties (assignors) shall assign all and whatever rights they claim. All the previous agreements claims and counter claims in respect of the said prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elinquished his rights in the said property for a consideration and this transfer has taken place as per Section 2(47) of the Act and thus he is liable to capital gain tax under Section 45 of the Act. 5. The order of Assessing Officer was challenged by the Assessee before CIT(A). 6. CIT(A) in his order held that since the possession of the property has not been given to the buyer and the transfer has not taken place as such the transactions are not complete, so there cannot be any liability to charge of capital gains, either short term or long term. Therefore, the addition made by the Assessing Officer was deleted by CIT(A). 7. Aggrieved with the order of CIT(A), Revenue filed an appeal before the Tribunal and the Tribunal vide impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his business or profession. It excludes certain properties such as stock-in-trade, personal effects, agricultural land etc. 11. Section 2(47) of the Act gives an inclusive definition of transfer in relation to capital asset and extinguishment of any right in the capital asset is also considered to be a transfer for the purpose of the Act. 12. The combined reading of the above provisions of law makes it clear that transfer of capital asset is not confined to the transfer of immovable property only but its scope is much wider for the purpose of the Act. Section 45(1) of the Act would apply even if the consideration is received from a party other than the one in whose favour the transfer is effected. 13. The word transfer under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has stated in the petition that "the plaintiff has a vital interest in the said property being the purchaser under agreement to sell of 1/3 rd in the suit premises which was agreed to be partitioned and thereafter to be sold to the plaintiff." 16. Moreover in the agreement to sell dated 26 th September, 1995 in which the Assessee is the fourth party and he along with Fifth party, has entered into an agreement to purchase the undivided 2/3 rd rights and undivided shares of first and second parties for a total consideration of Rs. 2 crore. 17. The Assessee has also placed on record copy of his statement recorded in suit No.2312/90 filed in this Court, which reads as under:-" Statement of Mr.J.K.Kashyap, Plaintiff on S.A. and o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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