9911796707
TMI Blog2019 (6) TMI 989X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee prior to the receipt of the sale consideration. Thus to that extent the deduction U/s 54B of the Act is not available as the said investment was not made subsequent to the sale existing asset. The ld. DR has thus submitted that the impugned may be modified by reducing the claim of deduction U/s 54B of the Act by a sum of Rs. 1.09 Crores. 3. On the other hand, the ld. AR of the assessee has submitted that the Tribunal has considered the sale transaction vide sale agreement dated 22.11.2012 and therefore, the sale was prior to the purchase of agricultural land vide sale deed dated 28.01.2013. He has further submitted that the Tribunal has also considered the receipt of sale consideration as well as payment of purchase consideration through post dated cheque and therefore, the assessee has established the fact that the purchase of agricultural land is subsequent to sale of the existing property. He has asserted the Tribunal has passed an elaborate order on the merits of the case after considering each and every facts as well as contention of the parties and therefore, the Revenue has not made out of case of apparent mistake in the impugned order which can be rectifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 57,77,440/- 28/01/2013 Total 3,14,77,440/- Thus, it is clear that some of these cheques were dated prior to the sale deed dated 28/01/2013 and some of the cheques are post dated i.e. 25/02/2013. The only one cheque of Rs. 57,77,440/- is dated 28/01/2013. These facts are not in dispute. The cheque dated 01/4/2013 was presented and encashed in the bank account of the assessee on 07/01/2013, therefore, it is established from the bank statement of the assessee that the assessee received the part sale consideration to the extent of Rs. 88.00 lacs on 07/01/2013 when the said cheque was encashed and credited to the bank account of the assessee. This fact shows that prior to the sale deed dated 28/01/2013, the assessee and the purchaser had agreed for the purchase and sale consideration and the cheques were also handed over to the assessee by the purchaser much prior to the date of sale deed dated 28/01/2013. Once the parties have the prior agreement regarding the sale consideration of the existing agricultural land then the agreement to sell dated 22/11/2012 cannot be an afterthought self serving document. It is apparent from the record that the assessee rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id through post dated cheques are relevant for the purpose of deciding the issue of eligibility of deduction U/s 54B of the Act. 6.1 Section 54B of the Act was brought into statute by the Finance Act, 1970 as a consequential amendment of Section 2(14) and Section 47 whereby the capital gain arising from transfer of agricultural land situated in the municipal or other urban area was brought to tax even where such land was held for bonafide agricultural purposes. Therefore, with a view to relieving the burden of taxation on the capital gain in such cases, a provision has been made U/s 54B for exempting from the tax, the capital gain arising from the transfer of agricultural land in certain circumstances. Thus, the provisions of Section 54B are beneficial provision and relieving the genuine assessee from the tax burden on transfer of agricultural land subject to the condition that such agricultural land was being used by the assessee or parents for agricultural purposes and the assessee has, within a period of two years after the date of sale, has acquired new agricultural land. Thus the amount of capital gain which is not exceeding the cost of acquisition of new land shall not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the assessee sold existing agricultural land and purchased new agricultural land. If the intent of the assessee is manifest from the facts and circumstances that the assessee purchased the fresh agricultural land in lieu of the existing agricultural land then the conditions as envisaged in Section 54B of the Act are satisfied. We have already discussed the facts that the assessee received the purchase consideration through post dated cheques which were encashed in part prior to the payment of the purchase consideration through post dated cheques. As discussed above, both the receipts of sale consideration and purchase consideration are through post dated cheques as evident from the record and none of the cheques was encashed on the date of execution of the sale deed but the receipt of sale consideration is after the agreement to sell dated 22/11/2012 and much prior to the sale deed dated 28/01/2013 whereas the entire purchase consideration was paid out from the bank account of the assessee only after the sale deed dated 29/11/2012. These facts clearly established that the receipt as well as payment are through post dated cheques and therefore, the assessee has established the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement to sale dated 11.04.2007, therefore, the conversion of the land after the execution of agreement to sale is a post facto conversion and the transfer would effects from the date of agreement to sale specifying all the conditions as stipulated u/s 2(47) (v) of the Act r.w.s. 53A of the Transfer of Property Act. Once, the sale deed is executed in pursuant to agreement to sale and all the conditions stipulated u/s 2(47) of the Act are satisfied it would constitute transfer and would be effective from the date of agreement to sale itself. 7. Though as per the amendment brought to the registration Act 1908 vide amendment Act 2001 an agreement for sale of any immovable property without registration shall have no effect of transfer however, the agreement in question has to be seen along with the sale deed executed subsequently. It is not a case of transfer based only on unregistered documents but in this case the parties to the agreement have executed sale deed in performance of the agreement. Therefore, the transfer of immovable property would be considered as a combined act of agreement to sale and sale deed as a single transaction of transfer with effect from the date on whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xecuting the sale deed. Thus, by virtue of the agreement to sell some right is given by the vendor to the vendee. The question is whether the entire property can be said to have been sold at the time when an agreement to sell is entered into. In normal circumstances, the aforestated question has to be answered in the negative. However, looking at the provisions of Section 2(47) of the Act, which defines the word "transfer" in relation to a capital asset, one can say that if a right in the property is extinguished by execution of an agreement to sell, the capital asset can be deemed to have been transferred. Relevant portion of Section 2(47), defining the word "transfer" is as under: '2(47) "transfer", in relation to a capital asset, includes,- (i)** ** ** (ii) the extinguishment of any rights therein; or.....................' 21 Now in the light of definition of "transfer" as defined under Section 2(47) of the Act, it is clear that when any right in respect of any capital asset is extinguished and that right is transferred to someone, it would amount to transfer of a capital asset. In the light of the aforestated definition, let us look at the facts of the present case where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Legislature is to give him relief in the matter of payment of tax on the long term capital gain. If a person, who gets some excess amount upon transfer of his old residential premises and thereafter purchases or constructs a new premises within the time stipulated under Section 54 of the Act, the Legislature does not want him to be burdened with tax on the long term capital gain and therefore, relief has been given to him in respect of paying income tax on the long term capital gain. The intention of the Legislature or the purpose with which the said provision has been incorporated in the Act, is also very clear that the assessee should be given some relief. Though it has been very often said that common sense is a stranger and an incompatible partner to the Income Tax Act and it is also said that equity and tax are strangers to each other, still this Court has often observed that purposive interpretation should be given to the provisions of the Act. In the case of Oxford University Press v. CIT [2001] 247 ITR 658/115 Taxman 69 this Court has observed that a purposive interpretation of the provisions of the Act should be given while considering a claim for exemption from tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of immoveable property is executed a right in personae is created in favour of the vendee and thereby the vendor is restrain from selling the property to someone else because the vendee gets the legitimate right to enforce specific performance of the agreement. In view of the above facts and circumstances of the case as well as the decision of Hon'ble Supreme Court we hold that the transfer of the land in question would be regarded as on the date of agreement to sale dated 11.04.2007. The order of the authorities below qua this issue are set aside. " Accordingly, in view of the above discussions as well as the facts and circumstances of the case and following the earlier order of this Tribunal, we hold that the assessee has satisfied the conditions of acquiring new agricultural land against the sale of existing agricultural land and therefore, it is a case of substitution of existing agricultural land by new agricultural land and consequently the assessee is eligible for deduction U/s 54B of the Act in respect of the agricultural land purchased for total cost of Rs. 2,47,60,900/-. Accordingly, the orders of the authorities below are set aside qua this issue." Thus, the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
