TMI Blog2006 (6) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... ordered notice on the following questions of law: "(i) Whether, on the facts and in the circumstances of the case, the capital gains had to be assessed in the hands of the assessee-firm or in the hands of (partner) Asokan? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal is right in law and fact in confirming the order of the Commissioner of Income-tax (Appeals) reversing the assessment on the assessee-firm?" The facts leading to the impugned proceedings are the following: The assessment year concerned in these proceedings is 1983-84. The respondent/assessee is a partnership firm by name C.C. Transport Co., Calicut, consisting of three partners, namely, C. Prabhakaran, C. Gokulan and Sri Mohan. Earlier t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income. The Assessing Officer, namely, the Income-tax Officer concerned proposed to assess the assessee to capital gains arising out of the above transaction. Denying the liability to capital gains the assessee contended that the property in question had been transferred earlier on March 31, 1980, to one of its partners by name C. Asokan on his retirement from the firm and the said Asokan was in physical possession of the said property, that no deed of conveyance could be executed since the title deed was with the Chartered Bank as security for the loan taken and that since the property had become the asset of the said Asokan it was he who was liable to pay capital gains, if any. Overruling the contentions of the assessee, the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of the property from March 31, 1980, onwards in part performance of the agreement for sale. Any arrangement including part performance of an agreement enabling the enjoyment of immovable property amounts to "transfer" for the purpose of income-tax law in view of sub-clause (vi) of section 2(47), read with the Explanation thereto and clause (f)(i) of section 269UA of the Act. Clause (iiia) to section 27 of the Act also takes in a person in possession in part performance of a contract. Hence the said Asokan should have been treated as the person, if any, liable to pay capital gains. In order to attract capital gains tax, there need not be transfer of a capital asset as required under the provisions of the Transfer of Property Act, 188 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ul Kareemia and Brothers v. CIT [1984] 145 ITR 442 (AP) and Jansons v. CIT [1985] 154 ITR 432 (Karn)). It is true that section 2(47) of the Act has been couched in the widest possible terms so as to include within the meaning of "transfer" even any arrangement which has the effect of enabling the enjoyment of any immovable property. But then clauses (v) and (vi) of section 2(47) which give wider amplification to the concept of "transfer" under the income-tax law were introduced in the definition by the Finance Act, 1987, only with effect from April 1, 1988, i.e., long after the assessment year in question. Prior to the insertion of the above two clauses, the expression "transfer" had a restricted meaning and the interpretation given to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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