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TMI Blog2019 (2) TMI 1351X X X X Extracts X X X X X X X X Extracts X X X X ..... ng grave error on facts and law in not allowing the sum of Rs. 1,50,00,000/- being expenditure incurred wholly and exclusively in connection with the impugned transfer u/s 48 of the Income Tax Act 2. Brief facts of the case are that in this case return was filed on 26.09.2010 claiming loss of Rs. 1,79,729/-. The A.O. noticed that assessee has sold agricultural land admeasuring 2.6941 hectare and the profit earned out of the sale proceeds amounting to Rs. 77,47,792/- was transferred to reserve and surplus. The assessee furnished copies of purchase deeds and sale deeds of the land and on going through the same, A.O. noticed that the lands in question have already been declared as non-agricultural land on 12.02.2009 and 14.05.2009 respectively. The assessee submitted before the A.O. that the possession of the aforesaid land was duly delivered to M/s Archit Steel (P) Ltd. on 30.01.2009 on payment of Rs. 2.75 Crores towards total consideration of Rs. 3.72 Crores. Copy of Agreement to Sell and possession letter, executed on 30.01.2009 are filed for consideration. 2.1. The A.O. found contradiction in the explanation of assessee. It was noted that balance-sheet filed by the assessee sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in this case. The date of transfer of property should be taken as 30.01.2009 when Agreement to Sell was executed between the parties and possession of the property was handed-over to the purchaser, subject to partpayment through banking channel. Therefore, no capital gain arises in the assessment year under appeal because the transaction took place in preceding A.Y. 2009-2010. He has submitted that in the Sale Deed the advance money received at the time of Agreement to Sell have been mentioned which supports the claim of the assessee. He has also referred to Agreement to Sell which copy is filed at page-17 of the paper book and possession letter dated 30.01.2009 (PB-20). Learned Counsel for the Assessee in support of his contention relied upon the following decisions: (i) Judgment of Hon'ble Jurisdictional Allahabad High Court in the case of Chandra Prakash Jain vs. ACIT (2014) 270 CTR 192 (Alld.), in which it was held as under : * "Section 2(47) is definition clause pertaining to transfer in relation to capital asset. The Act being a special Act which consists of specific definition clause in context of capital assets the general principles of transfer as contained in the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d allotted to builder, still her claim for deduction under section 54F was to be allowed." (iii) Order of ITAT, Ahmedabad B-Bench, Ahmedabad in the case of Smt. Sapnaben Dipakbhai Patel vs. ITO, Ward-10(1), Ahmedabad (2016) 73 taxmann.com 288 (Ahmedabad - Trib.), in which it was held as under : 20. Thus, on an analysis of various case laws, it emerges out that clause (v) and (vi) were included in section 2(47) with an intention to cover those cases of transfer of ownership where the prospective buyers becomes owner of the property by becoming a member of company, cooperative society or to include those transactions that closely resembles transfer, but are not treated as such under general law. Under section 2(47)(v) of the Act any transaction involving allowing of possession referred to section 53A of the Transfer of Property Act would come within the ambit of transfer. Even arrangement conferring privileges of ownerships without transfer of title would come within the ambit of section 2(47)(v) of the Act. The whole scheme for introduction of clauses (v) and (vi) in section 2(47) of the Act was that the capital gain is taxable in the year in which such transactions are entere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of date of sale deed." 5.1. Learned Counsel for the Assessee, therefore, submitted that no capital gain could be computed in assessment year under appeal because the transfer took place on 30.01.2009. 6. On the other hand, Ld. D.R. relied upon the Orders of the authorities below and referred to observations of the A.O. as noted above and contended that it was an afterthought story made up by the assessee, therefore, appeal of assessee has no merit. 7. We have considered the rival submissions. The issue involved in the present appeal is, whether the short term capital gain is taxable in assessment year under appeal i.e. 2010-2011. Section 2(47) of the I.T. Act provides the definition of 'Transfer' in relation to capital asset which reads as under : (47) "transfer" in relation to a capital asset, includes,- (i) the sale, exchange or relinquishment of the asset; or (ii) the extinguishment of any rights therein; or (iii) the compulsory acquisition thereof under any law ; or (iv) in a case where the asset is converted by the owner thereof into, or is treated by him as, stockin- trade of a business carried on by him, such conversion or treatment;] [or] (iva) the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has entered into an Agreement to Sell dated 30.01.2009 (PB-17) with M/s. Archit Steel (P) Ltd., in which it is provided that assessee is absolute owner of the impugned property and assessee has agreed to sell the same to M/s. Archit Steel (P) Ltd., subject to total consideration of Rs. 3.72 crores against which assessee has received a sum of Rs. 2.75 crores vide cheque 216304 Dated 30.01.2009 and balance amount to be paid at the time of execution of the sale deed. It is also mentioned in the Agreement to Sell that actual physical and peaceful possession of the impugned property has been delivered by the assessee to M/s. Archit Steel (P) Ltd., Copy of the possession letter dated 30.01.2009 is also filed which confirmed that assessee has handed-over physical possession of the impugned property to the purchaser at the time of execution of the Agreement to Sell. The assessee later on executed two sale deeds registered on 01.06.2009 in favour of purchaser and in the sale deed it is mentioned that advance of Rs. 2.75 crores was already given by the purchaser to the assessee. These facts are not in dispute. It would, therefore, prove that there was an Agreement to Sell between assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities below to deny relief to the assessee. However, we may note that such usual writings are made by the Deed Writers in the documents without knowing the contents of the Agreement to Sell. Since the Agreement to Sell and the possession letter clearly mentioned that possession of the property in question have been handed-over to the purchaser, therefore, subsequent mentioning of possession in the sale deed would be of no consequence. The explanation of assessee is also supported by the fact that substantial payment was made at the time of execution of the Agreement to Sell by way of cheque, otherwise, the purchaser would not make substantial payment without taking possession of the impugned property. Assessee has also filed copies of the invoice and ledger account at page Nos. 22 and 23 of the paper book to show that expenditure were incurred by the purchaser for improvements after taking possession which also support explanation of assessee that possession of the impugned property was handed-over by way of an Agreement to Sell (supra). The Agreement to Sell is not required to be registered as per Section 2(47)(vi) of the I.T. Act because the conditions of this provision are satis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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