TMI Blog2019 (2) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... been settled. In such circumstances, we find guidance from the ratio laid down by the Apex Court in CIT Vs. Balbir Singh Maini [2017 (10) TMI 323 - SUPREME COURT OF INDIA] that where the transaction has not materialized, then no profit or gain which arises from the alleged transfer of capital asset could be brought to tax under section 45 r.w.s. 48 of the Act. The grounds of appeal raised by assessee are thus, allowed. - ITA No.888/PUN/2018 - - - Dated:- 2-1-2019 - Ms. Sushma Chowla, JM And Shri Anil Chaturvedi, AM For the Appellant : Shri M.K. Kulkarni For the Respondent : Shri Pankaj Garg ORDER PER SUSHMA CHOWLA, JM: The appeal filed by assessee is against order of CIT(A)-3, Pune, dated 25.01.2017 relating to assessment year 2011-12 against order passed under section 143(3) r.w.s. 147 of the Income-tax Act, 1961 (in short the Act ). 2. The assessee has raised the following grounds of appeal:- 1) On the facts and the circumstances of the case and in law the AO was not legally justified in assessing the Long Term Capital Gain on account of transfer of 1/4th share in his ancestral land as transfer of the land did not take place for non-handing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ensued in civil courts and High Court. The appellant will file his application for condonation of delay supported by affidavit. The delay be condoned. 6) On the facts and the circumstances of the case and in law the Assessing Officer is not justified in levying interest under S.234B/234C of the act. 3. The appeal of assessee was filed after delay of 417 days. The assessee filed an affidavit in this regard and in view of the reasons mentioned, we find merit in the plea of assessee and the delay of 417 days in filing the appeal late before the Tribunal is condoned. 4. The only issue raised in the present appeal is in respect of computation of long term capital gains, if any, in the hands of assessee. 5. Briefly, in the facts of the case, the assessee filed return of income in response to notice under section 148 of the Act at ₹ 2,94,897/-. The Assessing Officer had received information relating to sale of immovable property at Mundhwa by assessee along with other 13 co-owners for a total consideration of ₹ 2,75,73,600/-. The assessee submitted that he had not received monetary consideration towards sale of the said property and the cheques received from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ispute in the property for which suit was filed before the Civil Judge, it could not be claimed by the appellant that no monetary consideration was received by the appellant. In fact, the Hon'ble Joint Civil Judge (Sr. Division) did not pass an order cancelling the impugned sale deed which enforces that the sale deed was valid and was in invoke as on date of passing of the order by the Civil Judge. It was only a restriction imposed upon the purchaser M/s. Sai Properties that the same could not be sold to any third party or rather no third party interest could be created on the said property by the purchaser. This does not make the sale did null and void ipso-facto. In the case of the appellant, in my opinion, both the conditions pertaining to registration under the registration Act and Transfer of Property Act were fulfilled and there was even no question of part performance u/s. 53A of the Transfer of Property Act in the case of the appellant, as the full transfer had taken place once the sale deed was registered. The appeal filed before the Mumbai High Court against the order of Civil Judge is a Civil dispute and as the lower Court has not treated the sale deed executed by an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e suit property till the plaintiffs receive their balance consideration. 3. Aggrieved by this decision, the co-owners of the property preferred an appeal in the Bombay High Court, vide reg. no. FA / 1192 / 2015, which was presented on 06-Jan-2014. 4. A certified copy of the appeal filed with the Bombay HC is enclosed as Annexure V, wherein the Lonkar family has sought for the cancellation of the impugned sale deed dated l6-Sep-2010. 5. Relevant excerpts of the appeal so filed are reproduced below for quick reference:- a. Page 10, point (d) : ........ in the so called Sale Deed there is no any terms or conditions that the Sale Deed can be cancelled. It is respectful submission of the Appellants that it is statutory right of the Appellants herein to approach the Hon'ble Court under the provisions of Specific Reliefs Act for cancellation of the sale deed. b. Page 13, point (l): ..the respondent no.1 herein himself has given Public Advertisement on 21.03.2011 wherein he has categorically stated that the possession of the suit property is in the hands of the Appellants herein. c. Page 16, point (q) : ........ the Appellants herein will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the Civil Courts was that they were put in possession since they had handed over the cheques, however, the said cheques were stopped for payment by the purchasers only, as it is clear from the communication placed on record by the assessee. 10. The issue which arises in such circumstances is that in view of the dispute between the parties, can it be said that the assessee has completed sale transaction and hence is eligible for assessability of capital gains in his hands. 11. Section 2(47) of the Act lays down that transfer in relation to capital asset includes various modes of transfer in which under clause (v) it involves a transaction wherein allowing of possession of any immovable property is taken or retained in part performance of the contract of the nature referred to in section 53A of the Transfer of Property Act, 1882. Under section 53A of the Transfer of Property Act, where any person contracts to transfer for consideration any immovable property in writing, from which the terms necessary to constitute the transfer can be ascertained and the transferee has in part performance of the contract, taken possession of the property or any part thereof, and the transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d land, for which litigation was pending before the Hon ble High Court. In such circumstances, where the assessee has not received sale consideration and where the possession of land having not been transferred to the purchasers, provisions of section 45 of the Act are thus, not attracted. 14. Now, applying the ratio laid down by Apex Court to the facts of present case, wherein the initial contract was between the parties on the ground that the assessee would get permission of other co-owners numbering about 13 so as to transfer immovable asset to the purchasers. This was the basic condition of the said agreement between the parties. Admittedly, the said permission could not be obtained by the assessee and though sale deed was registered, transaction could not be culminated. It is further evidenced by the fact that only sum of ₹ 15 lakhs was paid as against total consideration of ₹ 2,75,73,600/- settled between the parties. As per sale deed, sale consideration was to be paid as per Schedule A to the said agreement, for which postdated cheques were issued, which were to be encashed as per the conditions mentioned for encashment of cheques. As per clause 8 of the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X
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