TMI Blog2019 (12) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... e first part hereby gives permission to the party of the second part to start construction on the land. Clause 16 would, therefore, lead to the position that a license was given to another upon the land for the purpose of developing the land into flats and selling the same. Such license cannot be said to be possession within the meaning of Section 53A, which is a legal concept, and which denotes control over the land and not actual physical occupation of the land. This being the case, Section 53A of the T.P. Act cannot possibly be attracted to the facts of this case for this reason alone. We now turn to the argument of the learned senior counsel appearing on behalf of the assessee based on Section 2(47)(vi). it is clear that the expression enabling the enjoyment of must take colour from the earlier expression transferring , so that it can be stated on the facts of a case, that a de facto transfer of immovable property has, in fact, taken place making it clear that the de facto owner s rights stand extinguished. It is clear that as on the date of the agreement to sell, the owner s rights were completely intact both as to ownership and to possession even de facto, so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the sale agreement are set out hereinbelow: 1. The consideration for the sale of the property shall be ₹ 5,50,000/- (Rupees Five Lakhs Fifty Thousand only) per ground. The total area of the property to be sold is around 100 grounds and the total sale consideration of ₹ 5,50,00,000/-(Rupees Five Crores Fifty Lakhs only) will be paid directly by the nominees/members on behalf of PARTY OF THE SECOND PART or by the PARTY OF THE SECOND PART, whichever is earlier. The property shall be free of all encumbrances at the time of registration. 2. It is agreed that the total extent of the property is 100 grounds approximately including the areas allotted for road and other amenities, plus the actual extent available for flats. 12. THE PARTY OF THE FIRST PART has already handed over to the PARTY OF THE SECOND PART Xerox copies of all land documents of the schedule mentioned property for their legal counsel s scrutiny and opinion. THE PARTY OF THE SECOND PART have also satisfied themselves about the title deeds. The PARTY OF THE FIRST PART agree to show the original title deed which are kept with them to the nominees of the second part as and whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 23.10.2009, but this time again the assessee did not turn-up, so a third letter was issued on 11.12.2009 fixing the case for hearing on 22.12.2009. In response to the aforesaid letter, the assessee, by letter dated 29.12.2009 stated as follows: - I refer to your letter dated 11.12.2009. I request you humbly and sincerely not to pass any order u/s 144 and to give me time for one month from today. I shall positively submit all necessary statements and documents within 30 days of today to your satisfaction. I seek this time only because of my very serious illness after an abdominal surgery. Since time bar was foremost in the mind of the Assessing Officer, limitation falling on this transaction by 31.12.2009, a Best Judgment Assessment Order was then passed under Section 144 of the I.T. Act dated 31.12.2009. Vide this Order, the entire sale consideration was treated as a capital gain and brought to tax. An appeal was preferred against this Order. The Commissioner of Income Tax (Appeals) (hereinafter referred to as CIT (A) for brevity) by Order dated 28.10.2010 examined the three documents in question and ultimately dismissed the appeal. The Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read, could be said to fall within any of the clauses under Section 2(47). According to the learned senior counsel, this could not be said to be the case, as a result of which, in any event, there would be no transfer of a capital asset within the meaning of Section 2(47), so far as this Assessment Year is concerned. Shri K. Radhkrishnan, learned senior counsel appearing for the Revenue, took us through the Assessment Order, Order of the CIT (A) and the ITAT as well as the High Court s judgment, and supported these judgments stating that clearly Section 2(47)(v) could not be made out on the facts of this case and, therefore, in any case, this appeal should be dismissed. No other point had been argued before the forums below, and need not therefore be entertained. Having heard learned counsel for both the parties, it is necessary to first set out the statutory provisions: Section 2(47) of the Income Tax Act, 1961: 2. In this Act, unless the context otherwise requires,- . . (47) transfer , in relation to a capital asset, includes,- . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract: Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof. In order that the provisions of Section 53A of the T.P. Act be attracted, first and foremost, the transferee must, in part performance of the contract, have taken possession of the property or any part thereof. Secondly, the transferee must have performed or be willing to perform his part of the agreement. It is only if these two important conditions, among others, are satisfied that the provisions of Section 53A can be said to be attracted on the facts of a given case. On a reading of the agreement to sell dated 15.05.1998, what is clear is that both the parties are entitled to specific performance. (See Clause 14) Clause 16 is crucial, and the expression used in Clause 16 is that the party of the first part hereby gives permissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o transfer of immovable property has, in fact, taken place making it clear that the de facto owner s rights stand extinguished. It is clear that as on the date of the agreement to sell, the owner s rights were completely intact both as to ownership and to possession even de facto, so that this Section equally, cannot be said to be attracted. Coming to the third argument of the learned senior counsel on behalf of the appellant, what has to be seen is the compromise deed and as to which pigeonhole such deed can possibly be said to fall under Section 2(47) of the Income Tax Act. A perusal of the compromise deed shows that the agreement to sell and the Power of Attorney are confirmed, and a sum of ₹ 50 lakhs is reduced from the total consideration of ₹ 6.10 crores. Clause 3 of the said compromise deed confirms that the party of the first part, this is the appellant, has received a sum of ₹ 4,68,25,644/- out of the agreed sale consideration. Clause 4 records that the balance ₹ 1.05 crores towards full and final settlement in respect of the Agreement entered into would then be paid by 7 post-dated cheques. Clause 5 then states that the last two cheques w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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