TMI Blog2017 (5) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... in mind any encumbrance created on the property by virtue of the alleged execution of the agreement. In this way, first grievance of the assessee is allowed for statistical purpose. Disallowance out of cost of transfer while computing capital gain - Held that:- CIT(A) has remitted this issue for re-verification and reconsideration. No interference is called for in such finding of the ld.CIT(A), because the ld.AO shall verify whether any expenditure is incurred by the assessee for transfer of this capital asset and if some expenditure was incurred then he will allow this expenditure. This ground of appeal is also allowed for statistical purpose. - ITA No.929/Ahd/2012 - - - Dated:- 5-5-2017 - SHRI RAJPAL YADAV, JUDICIAL MEMBER, AND AMARJIT SINGH, ACCOUNTANT MEMBER For the Assessee : Shri M.K. Patel, AR For the Revenue : Shri N.K. Patel, Sr.DR ORDER PER RAJPAL YADAV, JUDICIAL MEMBER: Assessee is in appeal before the Tribunal against order of ld.CIT(A)-V, Vadodara passed for the Asstt.Year 2008-09. 2. Though the assessee has taken four grounds of appeal, but his grievance revolves around a single issue viz. the ld.CIT(A) has erred in confirming additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valuation of the property is to be determined on the date of agreement i.e. 6.7.2007. The actual sale consideration would be replaced by deemed sale consideration determined for the purpose of stamp duty valuation on this date. He further contended that the AO in such situation ought to have referred this issue to the file of the DVO as per section 50C(2) of the Income Tax Act. This exercise has not been carried out, and therefore, orders of the ld.Revenue authorities are not sustainable. 5. On the other the ld.DR relied upon the orders of the Revenue authorities. He contended that except a bald statement of agreement executed on 6th July, no document was produced by the assessee. Similarly, this agreement is not registered agreement. 6. We have duly considered rival contentions and tone through the record carefully. A somewhat similar situation has been dealt by us in ITA No.55/RJT/2016 in the case of Shri Devendra J. Mehta Vs. ACIT. We have discussed the position of law and the facts are also identical. Therefore, for the sake of brevity, we would like to note the finding recorded by the Tribunal in that case and in the light of the finding of the Tribunal explaining the po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad executed an agreement to sell on 31.3.2008 and handed over the possession to the vendee, therefore, the transfer within the meaning of section 2(47)(v) was complete, and any gain ought to be assessed in the Asstt.Year 2008-09. This argument was rejected by the ld.Revenue authorities on the ground that assessee himself recognised the sale on 10.1.2011 and offered the gain in Asstt.Yar 2011-12. Before taking cognizance of this argument, it is pertinent to take note of Registration and other related Laws, Amendment Act, 2001 which has brought about radical changes in the rights flowing on the basis of the agreement executed in part performance of the contract under section 53A of 1882 Act. The amendments have been made to sections 17 and 49 of the Indian Registration Act, 1908. It is pertinent to take note of section 17(1A) as well as Section 49 of the Registration Act. 17.(1A) The documents containing contracts to transfer for consideration, any immovable property for the purpose of section 53A of the Transfer of Property Act, 1882 (4 of 1882) shall be registered if they have been executed on or after the commencement of the Registration and Other Related laws (Amendment) A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. A perusal of section 53A of the TPA would indicate that it provides a protection to transferee to retain his possession which was taken in part performance of the contract. He was able to protect his possession even after expiry of limitation to bring a suit for specific performance. But after the amendment effected in the Registration and Other Related Laws Amendment Act, 2001, it has been provided that though a contract accompanied by either of possession or executed in favour of a person in possession is compulsorily registerable under section 17(1A) of the Registration Act, 1908, if he failed to register such contract, then, he would not be able to protect his possession or any benefit conferred by section 53A of the TPA. Proviso appended to section 49 of the Indian Registration Act only postulates that such agreement could be tendered in evidence in a suit for specific performance. In other words, validity of unregistered agreement has not been denied for the purpose of adducing it as evidence for obtaining the benefit flowing from such contract. But for the purpose of protecting the possession, un-registered contract could not be enforced. The transfer within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s fair market value of the property as on the date of transfer, then the AO may refer valuation of capital assets to the valuation officer. The reason for such a mechanism is that stamp duty even in the case of the assessee was only ₹ 21,32,070/-. It was to be borne by the vendee and not by the vendor. Thus, there was no liability upon the assessee as such under the stamp valuation Act. This aspect has enhanced liability of the assessee multi-fold under the Income Tax Act, and due to this reason a mechanism has been provided in the Act for the assessee to demonstrate that actual value received by him was far less than the one adopted for the purpose of stamp duty valuation. Now in the present case, it to be seen that the assessee has entered into an agreement to sell on 31.3.2008. The time limit for filing a suit for specific performance under the Specific Relief Act has been provided in the Indian Limitation Act, and this limitation is three years from the date of agreement. In case the vendee refused to get sale deed registered, then assessee can only sue for specific performance, persuading vendee to purchase land. In that situation, the assessee would not get anything mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le of payment has been given in para-2 of the memorandum. This schedule of payment is subsequent to alleged execution of the sale deed. But one thing is clear from this memorandum, a right in persona has been created in favour of the vendee as well as in favour of the vendor, which he can be enforced with the help of suit for specific performance. In such situation, we are of the view that fair market value of this property ought to have been determined by the AO as provided in section 50C(2). We, therefore, set aside this issue to the file of the AO for re-adjudication. The ld.AO shall call for a report from the DVO as contemplated in section 50C(2) and the ld.DVO shall keep in mind any encumbrance created on the property by virtue of the alleged execution of the agreement. In this way, first grievance of the assessee is allowed for statistical purpose. 9. In the second fold of grievance, the assessee has pleaded that the ld.CIT(A) has erred in confirming the addition of ₹ 2,01,389/-. We find that the ld.CIT(A) has remitted this issue for re-verification and reconsideration. No interference is called for in such finding of the ld.CIT(A), because the ld.AO shall verify whe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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