TMI Blog2022 (9) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... As on one hand the Revenue did not dispute the fact that the impugned property was purchased by the society in the year 1969 and accordingly computed the long term capital gain, despite the fact that conveyance deed in respect of that transaction was also delayed and was ultimately executed in the year under consideration, while, on the other hand, in respect of the transaction of transfer of development right to the builder, the Revenue is considering the date of registration of the agreement, i.e. 18/02/2010, as the date of transfer for the purpose of computation of capital gains tax. Thus, in view of the aforesaid factual and legal position, we are of the considered view that development rights in the plot of land were transferred to the builder in the financial year 2000 01. Further, since provisions of section 50C of the Act were inserted in the Act w.e.f. 01/04/2003, the same are not applicable in the present case. Accordingly, grounds raised by the assessee are allowed. - ITA No.5351/Mum./2016 - - - Dated:- 14-9-2022 - Shri G.S. Pannu, President And Shri Sandeep Singh Karhail, Judicial Member For the Assessee : Shri Devendra Jain For the Revenue : Shri Anil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red, the conveyance deed of the property was not executed in its favour by the legal heirs of the seller and therefore, the name of the society was not entered in the land revenue records. The assessee further submitted that in the previous year under consideration the legal heirs have agreed to register the document and therefore there was no purchase of property by the assessee society during the year under consideration and only registration was done. As regards the sale of property, the assessee submitted that vide letter dated 04/10/2000, the assessee agreed to give development rights over the land to M/s Shree Sainath Builders, however, the agreement in this regard was entered only on 20/05/2009, and was registered on 18/02/2010. The assessee further submitted that the development right of plot of land i.e. 310 sq. mtrs. was assigned to the aforementioned builder for a total consideration of Rs. 19,29,700. The assessee submitted that the transaction of sale of plot of land pertains to the financial year 2000 01, relevant to the assessment year 2001 02, and only the agreement was executed during the previous year relevant to assessment year under consideration, which does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009 on account of provisions of section 2(47)(v). As discussed above, the agreement for development of vacant plot was entered into on 20.5.2009 and the same has been registered on 18.2.2010 and thus, both the events have happened in F.Y. 2009-10, and therefore, in the facts and circumstances of the case I am of considered opinion that the Ld. AO has correctly taxed the capital gain in A.Y. 2010-11, hence this ground no 1 of appeal of the appellant is dismissed. 4. During the course of hearing, learned Authorised Representative ( learned AR ) submitted that due to delay in execution of conveyance deed amongst the legal heirs and the assessee society, the execution and registration of agreement for development of vacant plot entered into between the assessee society and the aforesaid builder was delayed and the same was ultimately registered on 18/02/2010. The learned AR further submitted that vide letter dated 04/10/2000 assessee agreed to give development right over the plot of land to the builder for a total consideration of Rs. 19,29,700, which was accepted by the builder and advance payment of Rs. 10,00,000, was also made by the builder. The learned AR also referred to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since the original conveyance deed in respect of the property purchased from late Smt. Shridevi Shridhar Mahale, could only be registered in the year under consideration, therefore, the agreement for development of vacant plot could be entered and registered only thereafter i.e., on 08/02/2010. However, as per the assessee, the transfer in respect of the aforesaid plot of land took place in the financial year 2000-01. 7. Before proceeding further, it is relevant to note the meaning of term transfer , which is defined in section 2(47) of the Act, in relation to a capital asset. Section 2(47) of the Act reads as under: (47) transfer , in relation to a capital asset, includes,- (i) the sale, exchange or relinquishment of the asset ; or (ii) the extinguishment of any rights therein ; or (iii) the compulsory acquisition thereof under any law ; or (iv) in a case where the asset is converted by the owner thereof into, or is treated by him as, stock-in-trade of a business carried on by him, such conversion or treatment ; or (iva) the maturity or redemption of a zero coupon bond; or (v) any transaction involving the allowing of the possession of any i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er in relation to the capital asset. We are of the considered view that the term any right used in aforesaid clause is wide enough to even include the development rights in the plot of land. In the present case, it has not been disputed that assessee has transferred the development rights in the plot of land to the builder. The only issue is whether the same can be considered to have been transferred on the date of letter dated 04/10/2000, or on the date of agreement dated 18/02/2010. 9. We find that in Sanjeev Lal vs CIT, in [2014] 365 ITR 389 (SC), the Hon ble Supreme Court, while dealing with the facts, wherein the assessee claimed the benefit under section 54 of the Act in respect of the capital gains arising from transfer of property vide sale deed registered on 24/09/2004, while the agreement to sell was executed on 27/09/2002, considered the question as to whether the date on which agreement to sell was executed could be considered the date on which the property was transferred. The relevant observations of the Hon ble Supreme Court, in the aforesaid decision, are as under: 20. The question to be considered by this Court is whether the agreement to sell which had b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Shri Ranjeet Lal, the appellants were restrained from dealing with the said residential house and a law-abiding citizen cannot be expected to violate the direction of a court by executing a sale deed in favour of a third party while being restrained from doing so. In the circumstances, for a justifiable reason, which was not within the control of the appellants, they could not execute the sale deed and the sale deed had been registered only on 24th September, 2004, after the suit filed by Shri Ranjeet Lal, challenging the validity of the Will, had been dismissed. In the light of the aforestated facts and in view of the definition of the term transfer , one can come to a conclusion that some right in respect of the capital asset in question had been transferred in favour of the vendee and therefore, some right which the appellants had, in respect of the capital asset in question, had been extinguished because after execution of the agreement to sell it was not open to the appellants to sell the property to someone else in accordance with law. A right in personam had been created in favour of the vendee, in whose favour the agreement to sell had been executed and who had also paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2001. Vide impugned order, learned CIT(A) noted that the offer letter was not acted upon by the builder as the entire advance amount of Rs. 10,00,000, was not paid within the stipulated time. From the copy of the bank statement of the assessee society, we find that amount of Rs. 6,00,000, was paid by the builder on 25/11/2000, while an amount of Rs. 5,33,350, was paid in the year 2001. Therefore, it is evident that the builder had made the payment of the advance amount as agreed between the parties vide aforesaid offer letter dated 04/10/2000. Thus, all the essentials of a contract i.e. offer, acceptance and consideration are fulfilled in the present case. In any case, by non fulfilment of any condition of the contract, same becomes only voidable at the option of the parties and it does not render the contract to be void. We find that despite the delay in payment of the advance money, the vendor i.e., the assessee society honoured the initial terms of offer letter and ultimately executed agreement dated 20/05/2009, with the builder. Thus, we do not agree with the view of the learned CIT(A) that the letter of offer was not acted upon between the parties. 11. In addition to above ..... X X X X Extracts X X X X X X X X Extracts X X X X
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