TMI Blog2023 (1) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances, despite recital to that effect in the sale deed, is, in contradistinction to Rakhi Agrawal [ 2020 (10) TMI 1115 - ITAT JABALPUR] inconceivable. The genuineness of the transaction is thus validly doubted. The argument as to the applicability of Rakhi Agrawal [Supra] is, thus, for each of the separate reasons afore-stated , and which shall operate either in conjunction or without prejudice, misplaced. In fact, we have found the transaction as reflected in the sale deed dated 30/3/2013, citing reasons therefor, as not a genuine transaction. The date of delivery of possession in the instant case is on 07/6/213 or, in any case, not by 31/3/2013. The question, thus, is even not if the said decision covers in the instant case, but if the impugned transaction can be regarded as genuine, and have our approval? As explained by the Apex Court in McDowell Co. Ltd. [ 1985 (4) TMI 64 - SUPREME COURT] the question in every such case to ask is not if there has been an infringement of law, which we have found it as so, but if it is an arrangement to which the judicial process can grant approval. The answer to which is clearly in the negative in the instant case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration, i.e., as is the stated, consideration, both of which get paid only in the following year. In other words, the given facts and circumstances of the case, taken into entirety, do not, on preponderance of human probabilities, support the proposition of payment of the undisclosed consideration during the previous year relevant to AY 2013-14. That apart, the argument is of no legal consequence as the deeming afore-said shall apply. We, in view of the foregoing, reiterate our finding of s. 56(2)(vii)(b)(ii) as being applicable in the facts and circumstances of the case for the current year. We decide accordingly, upholding the impugned addition. Assessee s appeal is dismissed. - I.T.A. No. 27/JAB/2022 - - - Dated:- 9-1-2023 - Shri Sanjay Arora, Hon ble Accountant Member And Shri Manomohan Das, Hon'ble Judicial Member For the Appellant : Shri G.N. Purohit, Sr. Advocate And Ms. Uma Parashar, Adv. For the Respondent : Shri Shiv Kumar, Sr. DR ORDER PER SANJAY ARORA, AM: This is an Appeal by the Assessee agitating the Order dated 12/11/2021 by the Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre, Delhi ( CIT(A) , for short), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate authority found s. 56(2)(vii)(b)(ii) as applicable, so that an addition for Rs. 38.78 lacs, being the assessee s share in the shortfall in the disclosed consideration, is liable to be assessed thereunder. Aggrieved, the assessee is in second appeal before us. As informed upon asking by Shri Purohit, the ld. counsel for the assessee, during hearing, the assessment, similarly made, in the case of Shri Atul Jeswani, the assessee s brother, is pending at the first appellate stage. 3. Before us, while the assessee relied on Rakhi Agrawal (supra) as fully covering his case, the ld. Sr. DR, Shri Shiv Kumar, sought to distinguish the same by taking us to para 4.4.3 (at pg. 13) of the said order, whereat the Tribunal has recorded the fact of full payment of the sale consideration by the assessee-purchaser. The assessee, in the instant case, had in the instant case paid a mere fraction thereof, i.e., at Rs. 10 lacs, out of the total agreed consideration of Rs.50 lacs. It is incomprehensible, he would submit, that any seller would agree to execute the sale deed as well as deliver the possession of the subject property, as stated therein, on a mere token advance. This, he would co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 56(2)(vii)(b) was inserted by the Finance Act, 2013 w.e.f. 01/04/2014. If the transfer of the property is considered in FY 2012-13, the aforesaid provision is not applicable in the said transaction, however, if the transfer is considered in FY 2013-14 then the said provision is clearly applicable to the appellant. Any person in India is free for tax planning being within the law, however, it seems that the appellant could not plan the taxation of the said transaction property. He had made part payment in FY 2012-13 but the major portion of the payment could have been made in the next year, i.e., FY 2013-14. Also, on perusal of the sale deed, it is seen in the reverse of Page no. 10 that the Assistant Registrar has signed the registration documents on 07/06/2013 (FY 2013-14), and the documents were produced before him on 28/03/2013 (FY 2012-13). The final date on the registry document is to be considered for all legal purposes. It is also pertinent to mention that most of the payments are just prior to the final date of registry and thereby indicating the performance of the contract just prior to the final date of registry . It appears that the appellant has attempted to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that case again due to shortfall in the payment of the stamp duty, would be fatal to the claim of transfer or receipt of the IP under reference. The said decision, as thus apparent, is concerned only with the time of receipt of an immovable property which is the subject matter of transfer, in terms of s. 56(2)(vii)(b), and which the Tribunal considered in that case as complete, not u/s. 2(47)(i), as contended before it, but u/s. 2(47)(vi), on the execution of the sale deed which was accompanied by payment of consideration and delivery of possession. The same reason/s as prevailed to oust the claim u/s. 2(47)(i) in that case, i.e., non-registration, would equally fail the assessee s claim, even if made, u/s. 2(47)(v), i.e., part-performance of a contract, as well. This is as, even as discussed in Rakhi Agrawal (supra) (para 4.3.3), the requirement of registration, after the coming into force of the 2001 Act (i.e., Registration Other Related Laws (Amendment) Act, 2001), whereby amendments were made to s. 17 (by way of insertion of sub-section (1A)) and s. 49 of the 1908 Act, as also sec. 53A of the 1882 Act, extends to a contract to transfer as well. The parties in the instan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2013, being, in contradistinction, and despite a recital in its respect in the sale deed, in doubt in the instant case. 4.4 Apropos the aspect of genuineness, why, we wonder, would a seller sell his property without being paid the agreed consideration; rather, not even entering into a (written) agreement, much less registered? Why, in any case, would one deliver possession of his property without receiving the whole of the sale consideration? And, further still, without a registered document, as required by law? This is particularly so in view of the legal position, even as discussed in Rakhi Agrawal (supra) with reference to judicial rulings, that the seller-transferor cannot refuse registration upon execution of the sale deed and, further, nobody enjoys a better title to the property than the bona fide purchaser, so that the only recourse available to the transferor, in case of non-receipt of consideration, is to enforce recovery through the judicial process. We have already noted the legal requirement for, subsequent to the 2001 amendment, registration of the contract to transfer. Much to the same effect is the Registration (Madhya Pradesh) Amendment Act, 2009 whereby, w. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valid questions which impinge directly on the genuineness of the transaction at hand. The assessee was fully aware that as the stamp duty had not been paid in full, the sale deed would not be registered. What purpose, then, one may ask, would it serve to present the document for registration paying duty on a part of the stamp value, i.e., knowing and being fully aware that the document, being insufficiently stamped, shall not be registered for that reason ? It may be noted that the difference in valuation is huge, admitted, and undisputed. And not on account of a genuine, bona fide variation in value. Couple this with the payment of the stated consideration being only at 20% thereof, and the absence of an agreement, much less registered as required by law, and the position becomes very clear. The delivery of possession under the circumstances, despite recital to that effect in the sale deed, is, in contradistinction to Rakhi Agrawal (supra), inconceivable. The genuineness of the transaction is thus validly doubted. 4.5 The Finance Act, 2013, proposing to amend s.56(2)(vii) w.e.f. 01/04/2014, i.e., financial year beginning 01/04/2013, to include cases of inadequate consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We are, when we say so, conscious that the proviso to section 49 of the Registration Act, 1908, which reads as under, casts an exception for an unregistered document being received in evidence of a contract in a suit for specific performance under Specific Relief Act, 1877: 49. Effect of nonregistration of document required to be registered - No document required by section 17 [or by any provision of the Transfer of Property Act, 1882 (4 of 1882)], to be registered shall (a) affect any immovable property comprised therein, or (b) confer any power to adopt, or (c) be received as evidence of any transaction affecting such property or conferring such power, unless it has been registered: Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882 (4 of 1882), to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 (3 of 1877), or as evidence of any collateral transaction not required to be effected by a registered instrument. (emphasis, supplied) However, per the Amendment Act of 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he transaction cannot be ignored, and the tax authorities are entitled and duty bound to determine the true legal relation resulting from the transaction. The proviso to s. 56(2)(vii) qua stamp value as on the date of agreement, though preceded by payment of part consideration by cheque, cannot thus be given effect to. The second , and the more important aspect of the matter, is that the possession can only be regarded as delivered on 07/6/2013, i.e., the date of registration. The transaction under reference thus gets completed for the purpose of s. 2(47)(vi) only on that date . This is as, apart from the genuineness aspect, the reliance on the sale deed dated 30/3/2013, being unregistered, in evidence of the delivery of possession on that date, is rendered invalid in view of the amendment by the 2001 Act as well as by the State Legislature to s. 17 of the 1908 Act supra. 5. The argument as to the applicability of Rakhi Agrawal (supra) is, thus, for each of the separate reasons afore-stated , and which shall operate either in conjunction or without prejudice, misplaced. In fact, we have found the transaction as reflected in the sale deed dated 30/3/2013, citing reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3-14 would stand to be made u/s. 69, so that the argument of the deeming of s. 56(2)(vii)(b)(ii), which shall nevertheless hold, coming into effect only from AY 2014-15 would be of no moment. The stated proposition is in fact also not sustainable on facts. This is as, where so, the assessee would have, consistent with the probabilities of human conduct, paid the balance stamp duty the difference in value being known, and which is to be in any case paid, by 30/3/213, concluding thus the sale prior to presenting the document for registration on that date. That is, the non-payment of the stamp duty in full is, under the circumstances, indicative of non-payment of the unaccounted consideration, i.e., as is the stated, consideration, both of which get paid only in the following year. In other words, the given facts and circumstances of the case, taken into entirety, do not, on preponderance of human probabilities, support the proposition of payment of the undisclosed consideration during the previous year relevant to AY 2013-14. That apart, the argument is of no legal consequence as the deeming afore-said shall apply. 6. We, in view of the foregoing, reiterate our finding of s. 56( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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