TMI Blog2019 (1) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... MI 48 - KARNATAKA HIGH COURT). And so, if the capital asset is transferred as envisaged under section 2(47) then it has to be taxed as per law. - the issue of taxing the consideration in respect of assignment of leasehold rights need to be de novo carried out by the AO untrammeled by the finding/observations [supra] and of the CIT(A) while deciding the appeal of the assessee. - Appeal of assessee is allowed for statistical purposes. - I.T.A. No. 1245/Kol/2015 - - - Dated:- 12-12-2018 - Shri A. T. Varkey, JM And Shri M. Balaganesh, AM For The Appellant : Shri Somnath Ghosh, Advocate For the Respondent Shri Saurabh Kumar, Addl. CIT, Sr. DR ORDER Per Shri A.T.Varkey, JM This appeal preferred by the assessee is against the order of the Ld. CIT(A)-2, Kolkata dated 04.09.2015 for AY 2008-09. 2. The main grievance of the assessee is against the action of the Ld. CIT(A) in confirming the addition of ₹ 1,75,00,000/- by holding that the amount received on an agreement of assignment of immovable property which is unregistered is transfer u/s. 48 read with sec. 2(47)(v) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) read with se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee. Aggrieved, assessee preferred an appeal before the Ld. CIT(A) who confirmed the action of AO. Aggrieved, assessee has preferred this appeal before us. 4. We have heard rival submissions and gone through the facts and circumstances of the case. We note that the assessee is not the owner of the immovable property and was only the lessee enjoying the leasehold rights in the property by virtue of an Indenture of Lease dated 14.02.1970 (for ten years) which was extended for further sixty years from 14.02.1980 as per the terms and conditions of original lease document dated 14.02.1970. So, according to assessee it was only a lessee and not an owner of the immovable property. So the lessee can only enjoy leasehold rights and cannot transfer any other rights other than the leasehold rights, that too subject to the terms of lease agreement. So the assessee cannot transfer any right/interest in the immovable property, what it does not enjoy. However we note that transfer of a capital asset is chargeable to tax under the head capital gain and is deemed to be the income of the financial year in which the transfer took place. And capital asset is defined u/s. 2(14) of the Act which mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 53A of the Transfer of Property Act and sections 17 and 49 of the Indian Registration Act By the aforesaid amendment; the words the contract, though required to be registered, has not been registered, or in section 53A of the 1882 Act have been omitted. Simultaneously, sections 17 and 49 of the 1908 Act have been amended, clarifying that unless the document containing the contract to transfer for consideration any immovable property (for the purpose of section 53A of 1882 Act) is registered, it shall not have any effect in law; other than being-received as evidence of a contract in a suit for specific performance or as evidence of any collateral transaction not required to be effected by a registered instrument. Section 17(lA) and section 49 of the Registration Act, 1908 Act, as amended, read thus : 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) Act, 2001 and if such documents are not registered on or after suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction applies, and this is what is meant by the expression of the nature referred to in section 53A . This expression cannot be stretched to refer to an amendment that was made years later in 2001, so as to then say that though registration of a contract is required by the Amendment Act of 2001, yet the aforesaid expression of the nature referred to in section 53A would somehow refer only to the nature of contract mentioned in section 53 which would then in turn not require registration. As has been stated above, there is no contract in the eye of law in force under section 53A after 2001 unless the said contract is registered. This being the case, and it being clear that the said JDA was never registered, since the JDA has no efficacy in the eye of law, obviously no transfer can be said to have taken place under the aforesaid document. Since we are deciding this case on HUs legal ground, it is unnecessary for us to go into the other questions decided by the High Court, namely, whether under the JDA possession was or was not taken; whether only a licence was granted to develop the property; and whether the developers were or were not ready and willing to carry out their part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty Act. We note that this case of assessee stands on a better footing than that of the case decided by the Hon ble Supreme Court in Balbir Singh Mani (supra). So, in any event, since the agreement in question is not registered, in short there no is agreement in the eyes of law which can be enforced u/s. 53A of the Transfer of Property Act. This being the case, we are of the view that the Ld. CIT(A) as well as the AO erred in referring to the expression of the nature referred to in sec. 53A in section 2(47)(v) in order to arrive at the impugned conclusion , so we are inclined to set aside the impugned order. However, we note that any profit or gain arising from the transfer of a capital asset is chargeable to tax under the head capital gain and is deemed to be the income of the financial year in which the transfer took place. And capital asset is defined u/s. 2(14) of the Act which means property of any kind held by an assessee whether or not connected with his business or profession. As held by the Hon ble Karnataka High Court, the term capital asset has an embracing connotation and includes every kind of property as generally understood except those that are expressly excl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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