TMI Blog2018 (9) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... (old residential property in question) has been transferred by the assessee in favour of the vendee/transferee on 16.09.2011 and, therefore, since purchase of the new property on 04.10.2010 which fact has been disputed by the AO/Ld. CIT(A) the purchase of the property is well within one year from the date of transfer as per sec. 2(47) of the Act, therefore, we allow the appeal of the assessee. CIT(A) erred in understanding the ratio decidendi laid by the Hon’ble Supreme Court in Sanjeev Lal, supra and, therefore, he erred in passing the impugned order, so we set aside the order of the Ld. CIT(A) and we allow the appeal of the assessee and direct AO to grant exemption u/s. 54 of the Act in accordance to law. We are of the opinion that though the agreement to sell is not registered, the vendee can seek decree of specific performance on the basis of unregistered agreement to sell - Decided in favour of assessee - I.T.A. No. 1356/Kol/2017 - - - Dated:- 7-9-2018 - Shri A. T. Varkey, JM And Dr. A. L. Saini, AM For the Appellant Shri P. R. Kothari, FCA For the Respondent Shri Rabin Choudhury, Addl. CIT. Sr. DR ORDER Per Shri A.T.Varkey, JM This appeal preferre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the said definition, whenever there is an extinction of any right in respect of a capital asset such an extinction would mean transfer of the property. He, therefore, submitted that by executing the agreement to sale, a right has been created in favour of the buyer of the property and certain right in respect of the old residential house which the assessee enjoyed had been extinguished and, therefore, the agreement dated 16.09.2011 ought to have been considered as the date of transfer and not the registration date 27.12.2011 as taken by the AO/Ld. CIT(A). For the said proposition, the Ld. AR cited the decision of the Hon ble Supreme Court in Sanjiv Lal in Civil Appeal No. 5899-5900 of 2014 (SC) which is placed from pages 1 to 16 of the paper book (PB). 5. We note that in order to avail the benefit of sec. 54 of the Act, one must purchase a residential house/new asset within one year before or two years after the date on which transfer of the old residential house in respect of which the long term capital gain had arisen. In the instant case, the residential house was transferred by the assessee vide sale deed registered on 27.12.2011. The sale deed has been executed in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d been executed and who had also paid ₹ 1 lac by way of advance/earnest money. It is not the case of the AO/Ld. CIT(A) that the vendee as per agreement to sale is not the vendee when the registration of conveyance deed was executed on 26.12.2011 and, therefore, as per the ratio laid by the Hon ble Supreme Court in Sanjeev Lal (supra), we find force in the claim made by the assessee to claim exemption u/s. 54 of the Act and we hold that once an agreement to sale is executed in favour of vendee, the said vendee gets a right to get the property transferred in his favour by filing a suit under Specific Performance Act and, therefore, some right in respect of the said property (old residential property) belonging to the assessee had extinguished and some rights have been created in favour of the vendee/transferee when the agreement to sale has been executed. Thus, a right in respect of the capital asset (old residential property in question) has been transferred by the assessee in favour of the vendee/transferee on 16.09.2011 and, therefore, since purchase of the new property on 04.10.2010 which fact has been disputed by the AO/Ld. CIT(A) the purchase of the property is well withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, not as evidence of a completed sale, but as proof of an oral agreement of sale, the deed can be received in evidence making an endorsement that it is received only as evidence of an oral agreement of sale under the proviso to Section 49 of 1908 Act. 12. Recently in the case of K.B. Saha and Sons Private Limited v. Development Consultant Limited1, (2008) 8 SCC 564 this Court noticed the following statement of Mulla in his Indian Registration Act, 7th Edition, at page 189:- ......The High Courts of Calcutta, Bombay, Allahabad, Madras, Patna, Lahore, Assam, Nagpur, Pepsu, Rajasthan, Orissa, Rangoon and Jammu Kashmir; the former Chief Court of Oudh; the Judicial Commissioner's Court at Peshawar, Ajmer and Himachal Pradesh and the Supreme Court have held that a document which requires registration under Section 17 and which is not admissible for want of registration to prove a gift or mortgage or sale or lease is nevertheless admissible to prove the character of the possession of the person who holds under it...... This Court then culled out the following principles:- 1. A document required to be registered, if unregistered is not admissible into evid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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