TMI Blog2021 (9) TMI 837X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Member For the Assessee : Sh. P. P. Singh, CA For the Revenue : Sh. Satpal Gulati, CIT DR ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: The present appeal has been filed by the assessee against the orders of ld. CIT (A), Ghaziabad dated 25.10.2017. 2. Following grounds have been raised by the assessee: 1. The order of the learned Commissioner of Income- tax (Appeal) erred in law and facts by way of confirming the addition of ₹ 12,99,95,547 /- as capital gain. 2. That on the facts and in the circumstances of the case, the learned Commissioner of Income- tax (Appeal) has erred in upholding the addition of ₹ 12,99,95,547/- made by the AO on account of capital gain to the returned income of ₹ 15,47,110/- without considering the conditional sale deed of property and ignoring the facts of disputed matters. 3. That on the facts and in the circumstances of the case, the learned Commissioner of Income- tax (Appeal) has erred in considering the fact that transaction of sale of land was never completed and become null and void due to the cheque dishonored, a predetermined condition for execution of sale deed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as agreement to sale unless the buyer satisfy conditions mentioned in the sale deed. 6. Since, the cheque issued of ₹ 8 crore were dis-honoured and conditions inbuilt in the sale deed not fulfilled in totality by the buyer therefore the transaction could not be treated as sale of the land. 7. The Assessing Officer did not accept the contention of the assessee and brought amount as per the sale deed to the capital gain tax. The revenue held that the receipt of the money is immaterial once the sale deed has been duly executed before the prescribed authorities. The revenue relied on the bare provisions of the act and held that there was no evidence of dis- honour of the cheque presented before the revenue authorities. Before us, during the argument, the assessee has submitted the order of the Hon ble High Court in the case of the assessee in CS(OS) 229 /2016 IA No. 4931/2019 vide order dated 22.01.2020. The entire order of the Hon ble High Court is reproduced hereunder for ready reference: 1. The plaintiff instituted this suit under Order XXXVII of the Code of Civil Procedure, 1908 (CPC) against defendants No. 1 to 5, namely (i) Goel Flexible Packaging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o, what was the entitlement of the plaintiff to the relief of recovery of ₹ 8 crores sought. 8. The counsel for the plaintiff, yesterday stated that Ghaziabad suit was only for the relief of injunction and not for the relief of declaration as null and void of the Sale Deed. 9. However the defendants, along with the application under Order XII Rule 6 of the CPC have filed a copy of the plaint in the Ghaziabad suit in Hindi language and a reading whereof showed the relief claimed therein to be of declaration as null and void of the Sale Deed. 10. However yesterday the counsel for the plaintiff kept on denying that the suit was for the relief of declaration. Owing to the counsel for the defendants being not available on first call, the matter was passed over. 11. On passover, the counsel for the defendants appeared but the counsel for the plaintiff did not appear inspite of the Court waiting for him for a considerable time and as recorded in yesterday s order. It was enquired from the counsel for the defendants yesterday, whether the defendants were willing to disclaim all rights in the land and to deliver possession thereof back to the plaintiff. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not merely by registering of sale deed, but by encashment of cheque given by defendants to plaintiff for sale consideration and which contingency, admittedly has not occurred. The plaintiff, on such contingency, had option to either sue for specific performance of agreement to sell evidenced by sale deed or for recovery of damages if any suffered by breach on part of defendants. The plaintiff, by instituting the suit at Ghaziabad, for declaration as null and void, of the sale deed, has opted to treat the sale deed as non- existent and cannot at the same time maintain this suit, in exercise of rights under Section 55(4)(b) supra, treating the sale deed as existent and having conveyed/ transferred ownership of the property to the defendants. Supreme Court in Khela Banerjee Vs. City Montessori School (2012) 7 SCC 261, though concerned with a lease agreement (and not a sale deed) executed upon condition that in case of failure to deposit instalments within prescribed time limit, the deed of agreement would become void, held that the agreement would become void and transferor/ lessor shall be free to sell plot to any third party since non- payment rendered the agreement automatically v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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