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TMI Blog2006 (6) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... e FSI. Pursuant to the said agreement, the developer paid Rs. 30 lakhs towards earnest/ deposit money on 29th March, 1994. As per the agreement, the developer was to pay Rs. 156.50 lakhs within 15 days of receiving the no objection certificate from the competent authority under the IT Act. The application for no objection certificate was made on 19th March, 1994. The power of attorney was executed on 2nd April, 1994. The commencement certificate was issued by the Bombay Municipal Corporation on 3rd Nov., 1997. After obtaining the same, the developer paid the balance consideration and the assessee and other co-owners handed over the vacant possession of the premises to the developer on 10th April, 1998. Therefore, the assessee offered the tax on long-term capital gain during asst. yr. 1999-2000. The AO reopened the assessment under s. 147 of the Act and sought an explanation from the assessee as to why the capital gain should not be taxed in asst. yr. 1994-95. The assessee filed its explanation submitting that the transfer was not complete during the asst. yr. 1994-95 and the possession of the property was handed over to the purchasers during the previous year relevant to the asst. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was handed over on 10th April, 1998. He also relied upon the decision of 'E' Bench of this Tribunal in the case of Megji Mathradas vs. Jt. CIT (2001) 70 TTJ (Mumbai) 101 : (2000) 75 ITD 52 (Mumbai), wherein it was held that mere payment of a part consideration would not attract doctrine of part performance contemplated by s. 53A of the Transfer of Property Act. He also placed reliance upon the decision of the Gauhati High Court in the case of Assam Vegetables & Oil Products Ltd. vs. CIT (2003) 185 CTR (Gau) 647 : (2003) 264 ITR 47 (Gau), wherein the handing over of possession of the property was held to be one of the requisite ingredient for application of s. 53A of the Transfer of Property Act for a deemed transfer within the meaning of s. 2(47)(v) of the IT Act. 7. Heard both the parties and considered their rival submissions. The undisputed facts of the case are that the agreement of sale was entered on 29th March, 1994 and the possession was given to the purchasers subsequent to 31st March, 1994. The agreement of sale which is placed at pp. 5 to 43C of the paper book filed by the assessee provides for various clauses under which the purchasers have agreed to develop the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authority under Chapter XX-C of the IT Act, and in the event if the owners title is not accepted within the stipulated period, the agreement shall forthwith stand terminated or cancelled in which event the owners will refund the said earnest amount or deposit paid by the purchasers to the owners. 10. Clause (24) provides for the execution of the limited power of attorney in favour of the purchasers for the purpose of enabling the purchasers to procure and submit the building plan for approval of Municipal Corporation of Greater Bombay subject to the terms and conditions in the agreement. From the above it is clear that the assessee and the co-owners could not have given the possession of the said property on or before 31st March, 1994. Sec. 53A of Transfer of Property Act clearly speaks of handing over of possession in part performance of the contract. In this case there is an agreement of sale-cum-development executed in writing and the purchasers have paid a part of the consideration on 29th March, 1994 and the possession was handed over on 10th April, 1998 and the transferee was willing to perform his part of the contract. Thus, the transfer could be said to have taken place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f passing of, or transferring of, complete control over the property which is a sine qua non for charge ability of capital gain. Under cl. 9 of the development agreement, it is provided that developer shall get the right to enter upon the property as the licensee of the owner, for the purpose of carrying out development of the said property, only on payment of balance consideration amount within the stipulated time and on providing temporary alternative accommodation to the owners. It is thus clear that even to enter as a licencee, the developer has to first make the payment of the consideration for transfer. In a situation in which less than 10 per cent of the cash consideration is paid by the developer to the assessee and in which no part of consideration in kind is paid by the assessee, it cannot be said that the developer had 'complete control' over the property. When the control or right to control is not passed, there cannot be any question of transfer of property. 12. As regards the possession, we have taken note of the copies of bills for telephone and water charges, placed before us at pp. 74 to 78, which evidence the fact that the assessee continued to be in possession o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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