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TMI Blog2017 (11) TMI 1903X X X X Extracts X X X X X X X X Extracts X X X X ..... n passed by the Id. CIT (A) without giving any proper opportunity of hearing to the assessee. 3. That the Ld. CIT (A) erred on facts and law in confirming the addition of Rs. 9,00,000/- despite the fact that the only source of income of the assessee is bank interest and agri. income. Hence the only source of cash deposited by the assessee are the sale proceeds of agricultural land in earlier years because the assessee has no other source of income. Moreover, where only source of income is of the assessee is from agriculture income no addition can be made under the head income from unexplained investment u/s 69 of the Income Tax Act, 1961. 4. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off." 3. The brief facts of the case are as under: As per information available from the AIR, related to the F.Y.2008-09 to the effect that assessee had deposited Rs. 25,00,000/- in cash in his Saving Bank Account, was received by the Assessing Officer and therefore, notice u/s 148 of the I.T. Act was issued and in response to the same, the assessee being an agriculturist filed his return of income to the tune of Rs. 9,175/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DR submitted that the assessee, except of filing some copies of the sale deed does not file any documents in support of his contention to the effect that his father had given gift of Rs. 9,00,000/- to the assessee. Further, the Ld. DR submitted that not a single document has ever been produced by the assessee, by which, it can be construed that the said amount of Rs. 9,00,000/- had been received as gift from his father and in the absence of substantive and or supportive material, the authorities below rightly added Rs. 9,00,000/- in the income of the assessee u/s. 69 of the Act. 8. We have gone through with the facts and circumstances of the case, relevant documents and rival submissions of the parties as in the instant case as per AIR information, it was revealed that during the F.Y.2008-09, the assessee had deposited Rs. 25,00,000/- in cash in his Saving Bank Account and therefore, proceedings under Income Tax Act have been started and out of 25,00,000/- the amount of Rs. 9,00,000/- remained unexplained, therefore, the addition was made by ld. A.O., which was subsequently confirmed by the Ld. CIT (A). The assessee in support of its case, relied upon various sale deeds, of which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an instrument of transfer, that the transfer has not been completed in the manner prescribed therefore by the law for the time being in force, the transferor or any person claiming under him shall 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. Income Tax Act Section 2 - Definitions In this Act, unless the context otherwise requires, - (47) "transfer", in relation to a capital asset, includes, - (i) to (iv)** ** ** (v) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in Section 53A of the Transfer of Property Act, 1882 (4 of 1882) ; or (vi) any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t required to be executed through a registered instrument. This position was changed by the Registration and Other Related Laws (Amendment) Act, 2001. Amendments were made simultaneously in Section 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(1A) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only where the contract contains all the six features mentioned in Shrimant Shamrao Suryavanshi (supra), that the Section 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 53A, 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 this 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 g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the aforesaid reason. This being the case, it is clear that there is no profit or gain which arises from the transfer of a capital asset, which could be brought to tax under Section 45 read with Section 48 of the Income Tax Act. 28. In the present case, the assessee did not acquire any right to receive income, inasmuch as such alleged right was dependent upon the necessary permissions being obtained. This being the case, in the circumstances, there was no debt owed to the assessees by the developers and therefore, the assessees have not acquired any right to receive income under the JDA. This being so, no profits or gains "arose" from the transfer of a capital asset so as to attract Sections 45 and 48 of the Income Tax Act. From the observation of the Apex Court it can be easily construed that if an agreement to sell is not registered, then it shall have no effect in law for the purposes of Section 53A. In short, there is no agreement in the eyes of law which can be enforced under Section 53A of the Transfer of Property Act and that in order to qualify as a "transfer" of a capital asset under Section 2(47)(v) of the Act, there must be a "contract" which can be enforceable in l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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