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Pr. Commissioner of Income Tax, Jalandhar-I, Jalandhar Versus Smt. Ranjit Kaur C/o Basra Nursing Home, Miani Road, Dasuya

2017 (5) TMI 260 - PUNJAB AND HARYANA HIGH COURT

Validity of reopening of assessment - addition on account of long term capital gains taxable in the hands of the assessee - JDA - transfer within the meaning of sub sections (ii) and (vi) of Section 2(47) - Held that:- The matter is no longer res integra. In C.S. Atwal’s case (2015 (7) TMI 878 - PUNJAB & HARYANA HIGH COURT) held that the issue involved in this appeal stands decided by this Court. The possession delivered, if at all, was as a licencee for the development of the property and not i .....

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disposing of the appeals, we observe that the assessee appellants shall remain bound by their said stand. The issue of exigibility to capital gains tax having been decided in favour of the assessee, the question of exemption under Section 54F of the Act would not survive any longer and has been rendered academic. - The Tribunal and the authorities below were not right in holding the assessee-appellant to be liable to capital gains tax in respect of remaining land measuring for which no cons .....

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nnexure A.3, passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (in short, the Tribunal ) in ITA No. 573(ASR)/2015, claiming following substantial questions of law:- (i) Whether on the facts and circumstances of the case, the Hon ble ITAT was justified in deleting the addition made by AO relying upon the decision of Hon ble High Court in the case of C.S. Atwal Vs. CIT in ITA No. 200 of 2013, when SLP has been filed by the department in the case? (ii) Whether on the facts and c .....

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act Capital Gain within the meaning of section 45 read with section 48 of the Act? (iii) Whether on the facts and circumstances of the case and in law, the Hon ble ITAT erred in relying upon the order of Hon ble High Court and was justified in holding that no possession had been given by the transferor to the transferee of the entire land in part-performance of Joint Development Agreement dated 25.02.2007 so as to fall within the scope of Section 53A of the Transfer of Property Act 1882 ignoring .....

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der of Hon ble High Court and was justified in holding that in the absence of registration of JDA dated 25.02.2007 having been executed after 24.09.2001, the agreement does not fall under Section 53A of the Transfer of Property Act, 1882 and consequently, section 2(47)(v) of the Income Tax Act, 1961 does not apply to the present case, failing to appreciate the fact that this requirement of registration cannot be read into clause (v) of Section 2(47) of the Income Tax Act, 1961 because the said p .....

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xecuted could be taxed and the money to be received later cannot be presently taxed ignoring the fact that as per section 45 read with Section 48 of the Income Tax Act, in case of capital gain, the tax has to be paid on the total consideration arising on transfer which include the consideration which has been received as well as consideration which has arisen and became due and may be received later on? (vi) Whether on the facts and in the circumstances of the case and in law, the Hon ble ITAT e .....

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Whether on the facts and in the circumstances of the case and in law, the Hon ble ITAT erred in relying upon the order of Hon ble High Court and was justified in holding that clause (vi) of Section 2(47) of the Income Tax Act, 1961 would not be applicable in this case, ignoring the fact that the developer i.e. THDC/HASH has purchased the membership of the members of the society which would lead to its enjoyment of the property and in that sense, clause (vi) of Section 2(47) would apply to the p .....

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capital gain arising out of transfer of capital assets i.e. land. The assessment was completed by the Assessing Officer on 28.03.2014 at total income of Rs. 1,56,21,580/-. While completing the assessment, the Assessing Officer computed long term capital gain amounting to Rs. 1,51,37,787/- and added it to the declared income of the assessee. The assessee was one of the members of the Punjabi Cooperative Housing Building Society Limited. The Society consisting of 207 members was the owner of 27.3 .....

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egistered in the name of the society in respect of which it would give development rights in lieu of consideration. The agreed consideration was to be disbursed by THDC through HASH to each individual member of the society having plot size of 500 square yards partly in monetary and balance in terms of built up property. Clause 4 of the JDA provided details of the payments. The assessee had been allotted 500 square yards plot in the society. As per the JDA, she was entitled to receive monetary co .....

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on, the same tantamount to transfer. The Assessing Officer applied the provisions of Section 2(47)(v) of the Act read with Section 53A of the Transfer of Property Act, 1882 (in short, the 1882 Act ) which provides that any transaction involving allowing the possession of the immovable property to be taken or retained in part performance of contract of the nature referred to in Section 53A of the Act of the 1882 Act shall be treated as transfer for purposes of the Act. Since the JDA was signed on .....

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1,55,37,787/- on account of long term capital gains taxable in the hands of the assessee. Aggrieved by the order, the assessee filed an appeal before the Commissioner of the Income Tax (Appeals) [CIT(A)]. Vide order dated 27.08.2015, the CIT(A) deleted the addition of Rs. 1,55,37,787/- relying upon the judgment of this Court in the case of C.S. Atwal and others Vs. The Commissioner of Income Tax, Ludhiana and another, ITA No. 200 of 2013 decided on 22.07.2015. Not satisfied with the order, the .....

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ourt. In the said case, the following issues emerged for consideration:- (i) Scope and legislative intent of Section 2(47)(ii), (v) and (vi) of the Act; (ii) The essential ingredients for applicability of Section 53A of 1882 Act; (iii) Meaning to be assigned to the term possession ? (iv) Whether in the facts and circumstances, any taxable capital gains arises from the transaction entered by the assessee? After considering the relevant statutory provisions and the case law, the following conclusi .....

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