TMI Blog2018 (9) TMI 1163X X X X Extracts X X X X X X X X Extracts X X X X ..... fter amendment of Registration Act, 1908 in the year 2001, unless the document containing the contract to transfer any immovable property is registered, it shall not have any effect in law. In the instant case, there is no Joint Development Agreement (JDA), but only an unregistered sale agreement, which could not be fulfilled due to external reasons and there was no handing over of possession at any point of time to the purchaser. The property in question as on the date is still with the assessee and there is no transfer of the impugned property at any point of time. Therefore, the addition made by the Assessing Officer is uncalled for and we uphold the finding of the CIT(A). - Decided against revenue - ITA No. 272/Coch/2018 - - - Dated:- 17-9-2018 - Shri Chandra Poojari, AM And Shri George George K, JM For The Appellant : Smt. A. S. Bindhu For The Respondent : Sri. Mathew Joseph ORDER Per George George K . , JM This appeal at the instance of the Revenue is directed against CIT(Appeals) s order dated 21. 03. 2018. The relevant assessment year is 2010-2011. 2. The grounds raised by the Revenue read as follows:- 1 . The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The A. O. concluded that since the resultant capital gain was not offered for taxation, there was escapement of income and he issued notice u/s 148 of the I. T. Act on 16. 07. 2017. 3. 1 The assessee in response to notice issued u/s 148 of the I. T. Act, filed a return of income disclosing the income declared in the original return of income. The assessee contended that the agreement for sale was not acted upon and the advance amount received by the purchaser was refunded. It was submitted that the assessee was the owner of the property even as on the date of assessment proceedings. It was further submitted that as per the terms of the agreement for sale, the assessee-vendor was supposed to develop the land so as to make it fit for construction by the purchaser and in view of the local agitation against the development of the property, the assessee could not fulfill the terms of the agreement and agreement for sale was cancelled. The cancellation agreement dated 04. 05. 2011 was also produced before the Assessing Officer. However, the A. O. rejected the objections raised for bringing to tax capital gains on the impugned property measuring 62 cents and completed the reassessment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of local resistance, those conditions stipulated in the agreement to sale could not be fulfilled and ultimately the agreement to sale had to be cancelled and the amount of advance received had to be refunded to the buyer . Till date out of receipt of advance of Rs . 2 . 17 crores, Rs . 1 . 80 crores has already been refunded to the said buyer . The appellant contended that the possession of the property was never handed over to the buyer, the agreement was never registered and ultimately, the proposed sale had to be cancelled altogether . The assessee contended that since property has not been sold at all, the question of capital does not arise . Legally speaking, the appellant contended the agreement to sale has no evidentiary value as the same had not been registered and the same should have been ignored by the Assessing officer in the light of decision of Hon'ble Supreme Court in the case of CIT vs . Balbir Singh Maini . In my opinion, since there is no evidence to prove that the possession of the property was handed over to the buyer, the agreement to sale was not registered, and later on the same was cancelled, and advance taken was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act . This being the case, we are of the view that the High Court was right in stating that in order to qualify as a transfer of a capital asset under section 2(47)(v) of the Act, there must be a contract which can be enforced in law under section 53A of the Transfer of Property Act . A reading of section 17(1A) and section 49 of the Registration Act shows that in the eyes of law, there is no contract which can be taken cognizance of, for the purpose specified in section 53A . The Income-tax Appellate Tribunal was not correct in referring to the expression of the nature referred to in section 53A in section 2(47)(v) in order to arrive at the opposite conclusion . This expression was used by the Legislature ever since sub-section (v) was inserted by the Finance Act of 1987, with effect from April 1, 1988 . All that is meant by this expression is to refer to the ingredients of applicability of section 53A to the contracts mentioned therein . It is only where the contract contains all the six features mentioned in Shrimant Shamrao Suryavanshi (supra), that the section applies, and this is what is meant by the expression of the nature referred to in section 53A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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