9911796707
TMI Blog2015 (12) TMI 1770X X X X Extracts X X X X X X X X Extracts X X X X ..... served on the respondent on 25.01.2011 calling for the return of income for the above Assessment Year. Thereafter, as the respondent did not file the return of income in response to the notice issued under Section 153A, reminders were sent and ultimately, the respondent filed a return of income on 02.08.2011 by declaring a total income of Rs. 1,63,10,100/- and agricultural income of Rs. 30,000/-. Further notices were issued under Section 142(1) and 143(2) of the Income Tax Act on 03.08.2011. The Assessee was governed by the provisions of Section 5A of the Income Tax Act. Accordingly, 50% of the income was brought to tax in the hands of the respondent herein and the remaining 50% in the hands of his spouse who is respondent in the other appeal. The assessment was completed on 29.12.2011 inter-alia holding that the sale of 18 flats to M/s. Audi constructions Private Limited is a colourable device adopted by the respondent for settling dues of Mr. Monserrate and that the entire gains arising from the transaction of assignment of rights amounting to Rs. 14,05,63,839/- has to be brought to tax in the Assessment Year 2008-2009. It was further held that the assignment of rights over the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment Year. The learned Tribunal thereafter examined the definition of the word "transfer" in terms of Section 2(47) of the Income Tax Act. The learned Tribunal further found that reading the said Section when an agreement of sale has been executed, as the flats were yet to be constructed, it cannot be said that there is sale, exchange or relinquishment of the asset. It is further held that from the agreement, it is apparent that the respondent has not extinguished his right but has discharged his obligation under the agreement to sell and, therefore, sub-clause (i) to Section 2(47) was not clearly applicable during the subject Assessment Year, so that it can be said that the transfer has taken place during such year. The learned Tribunal further noted that it is an undisputed fact in the case that the Assessee has not delivered the possession of the flats to M/s Audi Construction Pvt. Ltd., even though the Assessee has received the advance and has executed the agreement to sell. Since the possession has not been delivered, the provisions of Section 53A of the Transfer of Property Act, will not apply and therefore clause no.(v) of Section 2(47) will not apply during the subject Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... session to be taken over or retained in part performance of a contract of the nature referred to in Section 53A of the Transfer of Property Act would come within the ambit of Section 2(47)(v). That, in order to attract Section 53A, the following conditions need to be fulfilled. There should be a contract for consideration; it should be in writing; it should be signed by the transferor; it should pertain to transfer of immovable property; the transferee should have taken possession of the property; lastly, the transferee should be ready and willing to perform his part of the contract. That even arrangements confirming privileges of ownership without transfer of title could fall under Section 2(47)(v). Section 2(47)(v) was introduced in the Act from Assessment Year 1988-89 because prior thereto, in most cases, it was argued on behalf of the assessee that no transfer took place till execution of the conveyance. Consequently, the assessees used to enter into agreements for developing properties with the builders and under the arrangement with the builders, they used to confer privileges of ownership without executing conveyance and to plug that loop hole, Section 2(47)(v) came to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which possession is parted with by the transferor is the date which should be taken into account for determining the relevant Accounting Year in which the liability accrues. It was argued on behalf of the assessee that in this case, irrevocable licence was given in terms of the contract only during the Financial Year ending 31st March, 1999, and, therefore, there was no transfer during the Financial Year ending 31st March, 1996. On the other hand, it was argued on behalf of the Revenue that one has to go by the date on which the developer substantially performed the contract. It was argued on behalf of the Department that since substantial payments were made during the Financial Year ending 31st March, 1996, and since majority of permissions were obtained during that year, the liability to pay capital gains tax accrued during the Assessment Year 1996-97. In this case, the agreement is a Development Agreement and in our view, the test to be applied to decide the year of chargeability is the year in which the transaction was entered into. We have taken this view for the reason that the Development Agreement does not transfer the interest in the property to the developer in general l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not find merit in the argument of the assessee that the Court should go only by the date of actual possession and that in this particular case, the Court should go by the date on which irrevocable licence was given. If the contract, read as a whole, indicates passing of or transferring of complete control over the property in favour of the developer, then the date of the contract would be relevant to decide the year of chargeability." 8. In the present appeals, taking note of the said observations and the findings of the fact arrived at by the learned Tribunal on the basis of the agreements executed by the Assessee, that there was no transfer of possession in terms of the provisions of Section 2(47) of the Income Tax Act, in the subject year we find that the findings of the learned Tribunal deleting the capital gains of Rs. 14,05,63,839/- cannot be faulted. The findings of the fact arrived at by the learned Tribunal on that count cannot be re-appreciated by this Court. The learned counsel appearing for the appellant has not shown any perversity in such findings and/or there was any misreading of evidence on record. Admittedly, in the present cases, there was no irrevocable li ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
