TMI Blog1983 (6) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate Tribunal was right in holding that under section 2(47) of the Income-tax Act, 1961, 'transfer' included extinguishment of any rights in the property and the agreement of sale of agricultural lands brought about extinguishment of some rights of the assessee in the property and as the transfer had preceded the purchase of the agricultural lands by the assessee, section 54B(ii) was attracted and, therefore, there was no liability to capital gains ? " The assessee had entered into an agreement of sales dated July 29, 1971, on four-rupee stamp paper, agreeing to sell 3.68 acres of agricultural lands in Krishnanarayanapuram in favour of one Shri M.H.M. Yacob. Accordingly, the assessee executed a sale deed covering an extent of 34 cents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sale will not tantamount to a sale itself and even assuming for argument's sake, that some interest restricting the power of alienation of the assessee has been conferred under the agreement of sale, the said conferment of the interest will not tantamount to sale of identical agricultural lands by the agreement of sale and, hence, the claim of the assessee for exemption under s. 54B(ii) of the I.T. Act cannot be sustained. We are entirely in agreement with the contention advanced on the side of the Revenue. In the first place, the agreement of sale does not amount to a transfer of interest in agricultural lands. In the second place, as rightly contended on the side of the Revenue, even the conferment of the interest restricting the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural lands for claiming the benefit under s. 54B(ii) of I.T. Act. Even though it appears pitiable in the case of the assessee, who appears to have purchased agricultural lands even before executing the sale deed with the advance consideration received under the agreement of sale, law does not permit the grant of exemption, since exemption under s. 54B(ii) is prefixed with specific and definite conditions and obligations. Section 54B reads as follows : "(1) Where the capital gain arises from the transfer of a capital asset being land which, in the two years immediately preceding the date on which the transfer took place, was being used by the assessee or a parent of his for agricultural purposes, and the assessee has, within a period o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cultural land before the purchase of some other agricultural land by way of substitution and the above words do not at all contemplate a restriction of the right to alienate agricultural land by the assessee as a transfer. What is intended is outright sale of agricultural land for the purpose of claiming exemption under s. 54B. Section 5 of the Transfer of Property Act, 1882, defines " transfer" as follows : " In the following sections 'transfer of property' means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself and one or more other living persons and to transfer property is to perform such act. " The agreement of sale will give only a right to sue for tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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