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Shri Rajiv Kumar, Shri Banarsi Lal, Shri Tejinder Kumar Versus The ITO, Jagadhri

2016 (7) TMI 184 - ITAT CHANDIGARH

Long term capital gain - selection of assessment year - transfer - Held that:- There is no transfer of capital asset in assessment year 2007-08. There is no accrual or receipt of any income in favour of the assessee on account of capital gains in assessment year 2007-08. Therefore, whole of the addition in assessment year under appeal i.e. 2007-08 is unjustified. We, accordingly, set aside the orders of the authorities below and delete the entire addition on account of capital gains in assessmen .....

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rder shall dispose off all the above appeals filed by different assessees against different orders of ld. CIT(Appeals) Panchkula dated 30.12.2015 for assessment year 2007-08. 2. The issues are identical in all the appeals. Ld. Representatives of the parties mainly argued in the case of assessee Shri Rajiv Kumar and submitted that order in this case may be followed in other appeals. 3. We have heard ld. Representatives of both the parties, perused the findings of authorities below and considered .....

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d 54F of the Income Tax Act on different amounts. On ground No. 8, assessee challenged the order of ld. CIT(Appeals) in not allowing commission of ₹ 5,50,000/- paid by the assessee to the brokers from the sale proceeds of agriculture land. On ground No. 9, assessee challenged the order of ld. CIT(Appeals) in upholding the fair market value of land taken by Assessing Officer as on 01.04.1981. On ground No. 10, assessee challenged the order of ld. CIT(Appeals) in rejecting application of add .....

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assessee filed return of income on 03.03.2008 declaring income of ₹ 99,990/- + agriculture income of ₹ 1,75,000/-. The Assessing Officer issued notice under section 148 of the Income Tax Act and also issued statutory notices. The assessee in reply thereto submitted that return filed in original may be treated as filed in response to notice under section 148 of the Act. The Assessing Officer noted that assessee had sold the land for a consideration of ₹ 5.50 Cr through a Regist .....

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alance amount of ₹ 5 Crore for assessment year 2009- 10 on receipt basis. 6(i) The Assessing Officer issued show cause notice and after considering assessee's reply, referred to the provisions of Section 53A and 54 of Transfer of Property Act and Section 45 read with Section 2(47)(iv) of the Act as per para 7 of the assessment order. The Assessing Officer noted from the Sale Deed that the claim of assessee that sale of land measuring 80 Kanal for ₹ 5,50,00,000/- will take effect .....

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partly promised. The buyer issued cheque for ₹ 5 Crores undated bearing No. 009643 to the assessee and also contracted that the Sale Deed in question shall automatically be stand cancelled in the event of dishonour of post-dated cheque. The Assessing Officer framed the following questions to arrive at the decision : i) If the amount of cheque of ₹ 5 Crore was realized, what will be the effective date of transfer ? ii) If the amount of cheque of ₹ 5 Crores was not realized, wha .....

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handed over to the vendee and nothing was due for payment. Entries of Mutation would be made by the purchaser company through its officers for which vendor will have no objection. The assessee's claim that the possession of the property remained with the seller till the encashment of undated cheque and cultivation of land was being done by the seller was not maintained in view of the information collected from the Revenue Authority. 6(iii) The Assessing Officer also observed that claim of a .....

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operty in question remained with the assessee till encashment of the post-dated cheque was found false. The Tehsildar, Jagadhri has informed that Intakal had been accepted before the year end on 31.03.2007 in the name of M/s Link Infrastructure & Developers Pvt. Ltd., Delhi and physical possession had been handed over to the buyer. Accordingly, whole of the sale consideration of ₹ 5.50 Cr was held to be taxable in financial year 2006-07 relevant to assessment year 2007-08 under appeal. .....

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ssessment year under appeal i.e. 2007-08 and accordingly, computed the long term capital gain. 8. The assessee challenged the findings of the Assessing Officer before ld. CIT(Appeals). It was submitted before ld. CIT(Appeals) that assessee executed Sale Deed dated 20.03.2007 in favour of M/s Link Infrastructure and Developer Pvt. Ltd., Delhi. The total contracted consideration was ₹ 5.50 Crore. The sale consideration was received as advance of ₹ 41,50,000/- vide cheque on 15.03.2007, .....

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fidavit given by the buyer at the time of registration. The assessee submitted that assessee received sum of ₹ 50 lacs only as proceeds of the land and due tax/treatment was meted out to the aforesaid receipt. 8(i) The assessee further submitted that though the definition of transfer of capital asset under section 2(47) is extended w.e.f. assessment year 1988-89 to include any transaction involving the possession of any immovable property to be taken or retained in part performance of a co .....

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contract, there cannot be a valid sale. In the case of the assessee, there was not an absolute and complete sale as defined hereinabove. At the most, the sale deed in true sense was only a contract for sale and as such no interest or charge is created on the property. Since balance amount of ₹ 5 Crores was received during the assessment year 2009-10, hence, the taxability of the same is to be considered in that year only and not in assessment year under appeal i.e. 2007-08. 9. The assesse .....

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r. The assessee also submitted that tax liability has to be ascertained strictly in accordance with the terms of sale deed and not on the basis of assumption. As per terms of the sale deed, sale took place in two parts i.e. on 20.03.2007 and then on 16.06.2008. Thus, capital gain on amount of ₹ 4,84,06,250/- would not arise in assessment year 2007-08. 10. The ld. CIT(Appeals) considering the submission of the assessee, material on record and case law cited by assessee dismissed this ground .....

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ed within 8 km. of municipal limits and the taxable capital gain was involved. The AO after obtaining due approval u/s 151(2), issued notice u/s 148 dated 21.08.2012 which was duly served on the appellant. The appellant was required to file return within 30 days of receipt of the notice. However, no compliance was made. Subsequently, notices u/s 142(1) dated 18.10.2013 and 03.12.2013 were issued but no compliance was made. Again a notice u/s 142(1) dated 08.01.2014 was issued and served upon the .....

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rough undated cheque. The first two payments were received during the year under consideration on which the appellant through letter offered capital gain on pro rata basis. The appellant has not offered the capital gain on the entire sale proceed as the balance amount of ₹ 5,00,00,000/- was received by the appellant through undated cheque in subsequent year relevant to A.Y. 2009-10. The appellant has taken this view on the basis of clause in sale deed which says if the above cheque bounced .....

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of the ownership in exchange for a price paid or promised or part paid or part promised. In sale, the seller absolutely transfer all rights in the property sold and no right is retained by him. This aspect of sale makes it distinguishable from other modes of transfer of immovable property. The AO has also observed that components of effective sales include the parties i.e. seller and buyer, the subject to sale, the transfer deed of conveyance and the consideration. All these components have bee .....

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as per the verification from the Tehsildar, Jagadhri, the physical possession of land to M /s Link Infrastructure & Developers Pvt. Ltd. Delhi was confirmed. Change in girdawari in buyer's name was also confirmed. Intkal of the registry was accepted before the ending of year, i.e. 31.03.2007. There was no pre-condition for execution of sale deed. In fact, in the sale deed also the appellant has committed that nothing is due. The mutation would be entered or the officials of the company i .....

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a Shenoy 23 DTR 140, wherein it was held that so long as transfer is made for a consideration it is immaterial that consideration will be received in future. Thus,the sale is complete even if price is intended to be paid. So sale has taken place during the year. 6.4 Further, there is a certainty in performance of contract and no right to revocation is stipulated in the sale deed or registration deed. The saving clause in the registration deed that in case of non realization of undated cheque, th .....

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acilitate the filing of claims etc. in court of law. It does not change the time of transfer of the capital asset. Further there is merit in observation that the saving clause was to take care of the eventuality which has not taken place, as, as on the date of the assessment, the payment has already been received. Therefore, even if the appellant's contention that there was a rider in the registration deed is accepted the time factors have eroded its effect. The AO is right in observing that .....

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ocument evidencing the transfer of property has been duly registered by the competent authority i.e. Registering Authority and the necessary mutation entry has also been done and accepted on 31.03.2007. In such circumstances one has to go by the entries in the land revenue records. Therefore, the appellant's contention, if any, that the crops were grown by the appellant is not well placed as these do not nullify the effect of what is stated in the Revenue records. The Tehsildar, Jagadhri inf .....

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s that the possession has been handed over to the buyer on the date of registry itself. It is to be noted that the document evidencing the transfer of property has been duly registered by the competent authority i.e. Registering Authority and the necessary mutation entry has also been done and accepted by 31.03.2007. Truly speaking such an affidavit is not valid in the eyes of law as it states something which is not borne out of legally valid documents and record. If such affidavit has to take p .....

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the encashment of post dated cheque, there is contrary finding by the AO that the Tehsildar, Jagadhri informed that Intkal has been accepted before the year end on 31.03.2007 in the name of M/s Link Infrastructure & Developers Pvt. Ltd.Delhi This shows M/s Link Infrastructure & Developers Pvt. Ltd. Delhi. at Intkal of the registry was accepted before 31.03.2007 and possession of the land was also not with the appellant till the encashment of the post dated cheque. 6.8 The appellant has .....

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he registered sale deed the possession of land has already been handed over and the condition intended in case of dishonor of cheque, the sale deed in question shall automatically be stand cancelled. The registered deed, in the instant case, does not stipulate that the registration receipt and delivery of possession will be given after receipt of entire consideration amount. So, the decision of Hon'ble Patna High Court is not applicable in the instant case being on different facts. 6.9 The a .....

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cases are distinguishable from the facts of the instant case. In the case of Roop Singh (supra), Smt. Burfi (supra), A.R. Dahiya (supra), the issues relate to taxability of interest on enhanced compensation received on compulsory acquisition of the land. In other cases, the Hon'ble Court/Tribunal have held that the transfer of capital asset takes place in the year of transfer, so, such decisions are in favour of revenue and not applicable on the facts of instant case where the appellant is .....

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fer of possession of property takes place only when sale deed is executed and title of property is transferred from vendor to vendee. The appellant has also relied on the judgment of Hon'ble Madras High Court in the case of Smt. D. Kasturi Vs. CIT [2010] 323 ITR- 40 wherein Hon'ble High Court held that where assessee had executed agreement for transfer in respect of property and given possession to party and received consideration, doctrine of part performance as per section 53 A of Tran .....

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he appellant's case where the appellant has executed the sale deed on 20.03.2007 relevant to A.Y. 2007-08 and as per sale deed and revenue records the transfer of property has already happened and possession has also been granted. So, the appellant's .reliance in these cases does not support its contention for taxability of capital gains at two different points of time on receipts of part sale consideration in two financial years. Further, I make reference to the word 'transfer' .....

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vered within the definition of term 'transfer' [CIT Vs. Singla Rice & General Mills 82 ITD 778 (Del.)]. Section 2(47) deals with various situations of 'transfer' and sub clause (v) deals with specific situation for considering 'transfer', if a transaction which involves allowing the possession of any immovable property. 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 na .....

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ct are satisfied, then the ownership of the property is considered to be transferred. The 'transfer' as per section 2(47)(v) includes such second situation cases. This does not mean that in all situations the possession of property is pre-requisite before or during the registration of sale deed for effective transfer of capital assets. In the instant case, the transfer is by way of registered sale deed wherein it has been mentioned -'possession of land in question had been handed ove .....

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)(v) as contemplated by the appellant. In the judgment given by Hon'ble High Court of Bombay in the case of Chaturbhuj Dawarkadas Kapadia Vs. CIT 260 ITR 491, the Hon'ble Court observed that however/the mode of 'transfer' as per section 2(47)(v) read with section 53A of TP Act is in the cases of such agreements which are in the nature of development agreements where the possession has been transferred the agreement has been made but the title has not been transferred by way of re .....

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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). So , the Hon'ble High Court while examining the provisions of section 2(47)(v) read with section 53A of TP Act reached to the conclusion that the year of chargeability of capital gains is the year in which the contract is executed. 6.12 Further, a reference is made to the observations of Hon'ble Calcutta High Court in the case .....

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shall, operate from the time from which it would have commenced to operate if no registration therefore had been required or made, and not from the time of its registration. It is well known that where an instrument which purports to transfer title to property requires to be registered, the title does not pass until registration has been effected. Section 47 of the Registration Act does not create a new title. It only affirms a title which has been created by the deed. The title is complete and .....

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ital asset' can be chargeable to income-tax if the transfer is effected in the previous year and if no amount is received? " The Hon'ble High Court answered the question in favour of the Revenue. While answering the question in favour of the Revenue, the Hon'ble High Court observed as under :- "The Madras High Court in T. V. Sundaram lyengar and Sons Ltd. v. CIT [1959137ITR 26 opined (per headnote): "In order to attract liability to tax on capital gains under section 1 .....

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Supreme Court in Alapati Venkataramiah v. CIT [1965] 57 ITR 185 held (per head note) : "Before section 12B of the Indian Income-tax Act, 1922, could be attracted, title must pass by any of the modes mentioned in section 12B, i.e., sale, exchange or transfer. In the context 'transfer' meant effective conveyance of the capital asset to the transferee. Delivery of possession of immovable property could not by itself be treated as equivalent to conveyance of the immovable property.&quo .....

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no sale or transfer of these assets took place before April 1, 1948, and no capital gains arose in the relevant previous year. " Therefore, the transfer is effective only from the date when the title passes to the other party. For determining the year of chargeability it is the date of effective transfer of title that is relevant and capital gains are assessable as income of the year in which the transfer took place, even though they may be realized later." 6.13 In view of aforesaid d .....

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ed 20.03.2007 through which assessee received only meager advance of 10% and it was specifically mentioned in the sale deed that in case the undated cheque of ₹ 5 Crores is bounced, the sale deed will be automatically cancelled. He further submitted that on the same day i.e. on 20.03.2007, the buyer has executed the affidavit which is duly attested by Executive Magistrate, Jagadhri in which the buyer has specifically affirmed that sale deed of the land has been registered but the spot poss .....

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n with the assessee. 11(i) The ld. counsel for the assessee further submitted that sale deed was executed with advance because the buyer company will have to get land use changed from the Revenue authorities with permission to develop by raising construction. In case no land use change permission has been granted or construction is not allowed by the authorities, the buyer use to cancel the sale deed and advance many is refunded. He has, therefore, submitted that intention of the parties from th .....

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how that the transaction would take place only on encashment of the undated cheque i.e. on16.06.2008 when full consideration have been paid and possession of the land have been handed over to the buyer. The ld. counsel for the assessee further submitted that moreover the fraud has been committed by the buyer with the help of Revenue authorities on innocent villagers/sellers including the assessee who are illiterate and agriculturists by misrepresentation in the sale deed i.e. factum of post-date .....

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to enquire into the complaints of petitioners vide order dated 31.05.2007, copy is placed on record. 11(2) The ld. counsel for the assessee submitted that only after intervention of the High Court and District authorities, the assessee is able to get en-cashed the undated cheque on 16.06.2008 whereby ₹ 5 Crore was received by assessee as sale consideration. Therefore, no income accrued or have been received by assessee in assessment year under appeal. Therefore, no capital gain is leviabl .....

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igh Court had taken the cognizance of the same and directed the investigation through senior officer of the Crime Branch to look into the allegations and even the Collector, Yamuna Nagar was directed to take remedial action. Special Investigation Team was formed under the head of Additional Director General of Poilice. The ld. counsel for the assessee, therefore, submitted that these facts will clearly reveal that there was no intention of the buyer to pay the sale consideration to the assessee .....

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ayal V CIT 122 ITR 461. ii) Order of ITAT Chandigarh Bench in the case of CIT V Mrs. K.Atma Ram 6 CCH 202. iii) Order of ITAT Hyderabad Bench in the case of M/s Mali Florex Ltd. V DCIT in ITA 891/2011 dated 28.09.2012. iv) Order of ITAT Ahmedabad Bench in the case of Hansmukh Chottalal Patel Vs ITO in ITA 150/2012 dated 14.12.2012. v) Judgement of Hon'ble Patna High Court in the case of Smt. Raj Devi Ramna V CIT 201 ITR 1032. vi) Order of ITAT Kolkata Bench in the case of Chanchal Kumar Sirk .....

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Capital gain is leviable in assessment year under appeal. He has submitted that merely because entire sale consideration was not received in assessment year under appeal, is no ground to allow relief to the assessee. He has relied upon decision of the Supreme Court in the case of Sanjiv Lal V CIT 365 ITR 389. 15. We have considered the rival submissions and perused the material on record. Hon'ble Hon'ble Punjab & Haryana High Court in the case of Hira Lal Ram Dayal V CIT (supra) held .....

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prove by cognet evidence and satisfy the Tribunal that no sale in fact took place, in that case, the Tribunal has to come to the conclusion that there was no capital gains. As is apartment from the observations made in the order of the Tribunal, the Tribunal was under the misapprehension that the registered sale deed was final and, therefore, refused to look into the other material produced by the assessee with a view to prove its case that the sale transaction was a sham transaction. It is, ho .....

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The matter can be viewed from another angle. It is a matter of daily happening that people, who want to avoid payment of tax, would sell the property by getting the sale deeds registered at under- estimated value. If it is held that the sale deed is final, in that case, the IT authorities will be debarred from looking into as to how much sale consideration passed under the transaction, which is not the law. The factum of sale and the proceeds are the real questions to be determined by the IT au .....

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f nullifying the effects of registered documents is a question of law but the Tribunal had relied upon a decision of the Punjab & Haryana High Court in the case Hira Lal Ram Dayal vs.CIT (1980) 14 CTR (P&H) 88 : (1980) 122 ITR 461 (P&H), for the proposition that the registered sale deed is not the last word for transfer and, if there is evidence available on record that the two sale deed were bogus, sham or manipulated the assessee could not be subjected to capital gains tax on the t .....

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. The assessee entered into sale agreement on 25/2/2007 for sale of land admeasuring 15 acres 39 guntas. The assessee received ₹ 8 lakhs out of total consideration of ₹ 2.24 crores. According to the Assessing Officer there is a relinquishment of right over the property to the purchaser which amounts to transfer u/s. (47) of the Income-tax Act, 1961. In our opinion the conclusion of the Assessing Officer is farfetched. The assessee received only a meagre consideration of ₹ 8 lak .....

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any right of ownership, use or possession of the property, or transferring any right over the income arising from such property to the purchaser and having decided to execute the sale deed in a future date the transaction of sale of properly was not completed in terms of section 2(47) of the Act., specifically, read with the Sec 53A of Transfer of Property Act, 1882. We place reliance on the judgement of Patna High Court in the case of Smt. Raj Rani Devi Ramna vs. CIT ( 201 ITR 1032) wherein it .....

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out transferring any right of ownership, and no possession of property is given or right to use the property or right received income arising in the property also not given to the purchaser, in such circumstances, it is not a transfer in terms of section 2(47) of the IT Act, 1961. We also place reliance on the decision of CIT vs. Rasiklal Maneklal (HUF) (177 ITR 198)(SC) wherein the apex court held, affirming the decision of the High Court, that there was neither an "exchange" nor a &q .....

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r the relinquishment. Where, upon amalgamation, the company in which the assessee holds shares stands dissolved, there is non "relinquishment" by the assessee. In view of the above discussion, there is no relinquishment of right over the property. Accordingly, the appeal of the Revenue is dismissed. 15(iv) ITAT Ahmedabad Bench in the case of Hansmukh Chottalal Patel V ITO (supra) held as under : "8. We have heard the rival submissions and perused the material on record. The factua .....

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of forward dated cheques. The first installment was by way of 2 cheques dated 16.12.2006 of ₹ 4.25 lacs each and the last cheque was dated 28.2.2009 was of ₹ 21,69,200/-. As per the agreement it was agreed by both the parties that only after the encashment of the cheques, the seller will hand over the vacant and peaceful possession of the land to the buyer. From the translated copy of the deed of confirmation dated 4.2.2009 it is stated that the Assessee has handed over the vacant an .....

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2008, the actual rights and benefits in the land were transferred by the Assessee on receipt of the final installment i.e. in AY 2009.10. The Assessee has disclosed the capital gains in the return in AY 2009-10. The Revenue has not been in a position to controvert the aforesaid facts by bringing any contrary material on record. 8.1. In the case of Smt. Raj Rani Devi Ramna Vs CIT (1993) 201 ITR 1032 (Pat) the Hon'ble HC has held that the properties do not necessarily pass as soon as the instr .....

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ribunal has concluded as under : "Assessee having executed an agreement on 19th Oct.,1995, which only contemplated sale of a property at a future date on stipulated terms and conditions without transferring any right of ownership, use or possession in the corpus or the income arising from such property to the purchases, and executed the registered sale deed on 20th Dec., 2,007, the transaction of sale of property was not completed in terms of provisions of s. 2(47)(v) of IT Act, 1961, r/w s .....

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joy the fruits of property only after that date. In view of these facts we are of the view that the assessee has rightly treated the transfer of land in AY 2009-10 and therefore the AO was not right in taxing the income on sale of land in AY 2008-09. Thus this ground of the Assessee is allowed. We thus allow the appeal of the Assessee " . 15(v) Hon'ble Patna High Court in the case of Smt. Raj Devi Ramna V CIT (supra) held as under : The properties do not necessarily pass as soon as the .....

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the Tribunal, it is apparent that the parties had clearly intended that despite the execution and registration of sale deeds, transfer by way of sale will become effective only on payment of the entire consideration amount and in this background of facts, it has be held that there was no transfer of land covered by the three sale deeds in question during the period under consideration making the assessee liable for capital gains tax under s. 45-Nitai Chandra Naskar vs. Smt. Champaklata Debi (19 .....

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Hon'ble Bombay High Court in the case of CIT V Mrs. Hemal Raj Shete in IT Appeal No. 2348 of 2013 vide judgement dated 29.03.2016 held in para 7 to 12 as under: 7. Mr.Pinto, learned counsel for the Revenue urged that in terms of section 45(1) of the Act that transfer of capital asset would attract the capital gains tax. It is further submitted that the amount to be taxed under section 45(1) is not dependent upon the receipt of the consideration. In support of the above he invites our attent .....

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of the above clauses of the agreement the deferred consideration is payable over a period of four years i.e. 2006-07, 2007-08, 2008-09 and 2009-10. Further the formula prescribed in the agreement itself makes it clear that the deferred consideration to be received by the respondent-assessee in the four years would be dependent upon the profits made by M/s. Unisol in each of the years. Thus in case M/s. Unisol does not make net profit in terms of the formula for the year under consideration for p .....

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vi Industries Ltd. vs. CIT (1971) 82 ITR 835. "The income can be said to accrue when it becomes due.... The moment the income accrues, the assessee gets vested right to claim that amount, even though not immediately." In fact the application of formula in the agreement dated 25th January, 2006 itself makes the amount which is receivable as deferred consideration contingent upon the profits of M/s.Unisol and not an ascertained amount. Thus in the subject assessment year no right to clai .....

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ay accrue to an assesee 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. There must be a debt owed to him by somebody. There must be as is otherwise expressed debitum in presenti, solvendum in futuro .... .... ....". In this case all the co-owners of the shares .....

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erved by the Apex Court in Commissioner of Income-Tax vs. M/s. Shoorji Vallabdas and Co. (1962) 46 ITR 144 "Income-Tax is a levy on income. No doubt, the Income-Tax Act takes into account two points of time at which liability to tax is attracted, viz., the accrual of its income or its receipt; but the substance of the matter is income, if income does not result, there cannot be a tax,even though in book-keeping an entry is made about a hypothetical income, which does not materialize." .....

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ued to the respondent-assessee during the subject assessment year. We are informed that for the subsequent assessment year (save Assessment Year 2007-08 for which there is no deferred consideration on application of formula), the Assessee has offered to tax the amounts which have been received on the application of formula provided in the agreement dated 25th January, 2006 pertaining to the transfer of shares. 9. The contention of the Revenue that the impugned order is seeking to tax the amount .....

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ceive ₹ 20 crores or any specified part thereof in the subject assessment year. 10. In the above view there could be no occasion to bring the maximum amount of ₹ 20 crores, which could be received as deferred consideration to tax in the subject assessment year as it had not accrued to the respondent-assessee. 11. We find that both the Commissioner of Income-Tax (Appeals) and the Tribunal have in view of the clear clauses of agreement dated 25th January, 2006 have in the facts of the .....

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dvance of ₹ 50 lacs have been given on the date of execution of the sale deed. The substantial balance consideration of ₹ 5 Crores was to be paid through undated cheque No. 009643. Further, it is mentioned that due to bouncing of the aforesaid cheque, sale deed will be cancelled. Therefore, essential condition of the sale deed is transfer of the property on full payment made by the purchaser. On the same day, the buyer M/s Link Infrastructure & Developer P. Ltd. through Shri Parv .....

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r and in case of cancellation/delay, the buyer company shall be responsible for all the losses and expenses to the owner. Since the date of sale deed dated 20.03.2007 and affidavit of the buyer dated 20.03.2007 are related to the alleged transfer of property, therefore, contents of the affidavit would be relevant to consider the entire facts and circumstances of the case because it would support the contention of the assessee that the sale deed was executed only with intention that buyer company .....

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36372-M of 2007 which is decided by Hon'ble Punjab & Haryana High Court on 31.05.2007 (copy of which is placed on record) in which the petitioner prayed for direction to police authorities of District Yamuna Nagar to register a case against functionaries including the Managing Director of Zodiac Housing & Infrastructure Pvt. Ltd. for duping various agriculturists including the petitioner for committing fraud to grab their valuable agricultural land. Hon'ble High Court directed th .....

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f 2009 which is decided by Hon'ble Punjab & Haryana High Court vide judgement dated 05.02.2009 in which similar allegations were made for direction to the Superintendent of Police, Yamuna Nagar and others for taking legal actions against the Real Estate Developers & Builders who have duped/cheated hundreds of farmers in the area of Yamuna Nagar by alluring them to execute the sale deeds with a promise to pay sale consideration through cheques which later on bounced for want of suffic .....

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. These facts would also support the claim of the assessee that the buyer companies have no intention to pay any amount to the agriculturists who have executed sale deed in favour of the developers and the developers have not paid the substantial sale consideration to the agriculturists including the assessee. It is only when the investigation carried out by the State Police and Civil Authorities, as per directions of the Hon'ble Punjab & Haryana High Court, the substantial amount of sal .....

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ecause undated cheque is cleared on 16.06.2008 while sale deed was executed on 20.03.2007. The intention of the buyer company is, therefore, very clear from the beginning itself that the buyer company/builders never intended to pay substantial sale consideration to the assessee. The intention of the buyer company is also clear from the fact mentioned in the sale deed, affidavit and the attending circumstances. Though the sale deed is executed in the matter but the facts and circumstances above w .....

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ale deed. There is no transfer of capital asset in assessment year 2007-08. Thus, no income/amount accrued or received by the assessee on account of transfer of capital asset or on account of any capital gains till 16.06.2008. Therefore, no capital gain arise in assessment year 2007-08. 17. The sale deed cannot be a final word in the matter. Our view is supported by the decisions referred to above. Capital gain accrues only if there is a sale or transfer of capital asset. The assessee is able to .....

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buyer company manipulated the sale deed to dupe the assessee and other agriculturists. Undated cheque of ₹ 5 crores shows no intention of the buyer to pay any sale consideration in future to complete the transaction. The undated cheque itself shows that buyer company was not definite of the payment within the time-bound period. The intention of the parties shall have to be considered on the facts and circumstances of the case. The registration is prima-facie proof of an intention to transf .....

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al but ignored the other material evidence on record. Accrual would be right to receive the amount but no right accrued as assessee was intentionally duped by the buyer. Since one of the assessee Shri Tejinder Kumar & others have made allegation against the developers/buyers conniving with the Revenue Authorities and directions have been issued to take action into the matter by forming a Special Investigation Team also, therefore, the mutation done by the Revenue authorities in favour of buy .....

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of capital asset in assessment year 2007-08. There is no accrual or receipt of any income in favour of the assessee on account of capital gains in assessment year 2007-08. Therefore, whole of the addition in assessment year under appeal i.e. 2007-08 is unjustified. We, accordingly, set aside the orders of the authorities below and delete the entire addition on account of capital gains in assessment year under appeal, however, revenue authorities are at liberty to consider the issue of accrual or .....

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