TMI Blog2006 (6) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... e end of the relevant previous year. In these circumstances, when only a small portion of sale consideration was received as earnest/deposit money and when the developer could not have, therefore, exercised his rights under the contract which were to crystallize on making the payments after the receipt of no objection certificate from the authorities, it cannot be said that there is anything to indicate, leave aside establish, passing of or transferring of complete control over the property in favour of the developer which is sine qua non for taking the date of contract as relevant for the purpose of deciding the year of chargeability of capital gains. Therefore, on the facts of the present case, the date of development agreement would not really be relevant to decide the year of chargeability. The conclusions arrived at by the CIT(A) is confirmed and no interference is required in the matter - appeal dismissed. - Member(s) : PRAMOD KUMAR., SMT. P. MADHAVI DEVI. ORDER-BY THE BENCH: This appeal of the Revenue is directed against CIT(A)'s order dt. 18th July, 2002. 2. The only ground of appeal raised by the Revenue is against the order of the CIT(A) deleting the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the previous year relevant to asst. yr. 1994-95. Aggrieved, the Revenue is in appeal before us. 5. The learned Departmental Representative submitted that the issue is now covered in favour of the Revenue by the decision of the jurisdictional High Court in the case of Chaturbhuj Dwarkadas Kapadia vs. CIT (2003) 180 CTR (Bom) 107 : (2003) 260 ITR 491 (Bom), wherein it has been held that in the case of development agreement, the date of contract is the date of transfer in view of s. 2(47)(v) of IT Act. According to him, the facts and Circumstances are similar to the case on hand and hence the issue is covered in favour of the Revenue. 6. The learned counsel for the assessee however tried to distinguish the said decision on the ground that the facts and circumstances of the case are different. The learned counsel submitted that s. 2(47)(v) clearly provides that a transaction involving allowing of the possession of any immovable property to be taken or retained in part performance of the contract of the nature referred to in s. 53A of the Transfer of Property Act, would amount to transfer. Thus, according to him, though the agreement of sale-cum-development was executed on 29th Mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertificate from the appropriate authority under the provisions of Chapter XXC of the IT Act, 1961. (c) Balance of Rs. 2,35,00,000 (Rupees two crores thirty-five lakhs only) within four months from the receipt of no objection certificate from the appropriate authority under the provisions of Chapter XX-C of the IT Act, 1961. The time for payment of each of the abovementioned instalments shall be of the essence of the contract and in the event of the purchasers committing default in payment of, the instalments in sub-cl. (b) above, this agreement shall forthwith come to an end on such default and the amount paid by the purchasers to the owners or other amounts which may have been paid by the purchasers to the owners, in addition to the said amount, shall stand forfeited to the owners. From the above it is seen that only a meager amount of Rs. 30 lakhs has been paid on 29th March, 1994 as earnest/deposit money and also the clause further provides for cancellation of the agreement if the said amount is not paid within the specified date. 8. Clause (8) of the agreement also provided that the owners shall vacate the premises occupied by them in the structure standing on the said prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... except for a small amount of Rs. 9,98,000, was received by the assessee in the very previous year in which the Revenue sought to tax it. However, the facts of the case before us are materially different. The development agreement was entered into by the assessee on 29th March 1994, i.e., just two days before the relevant previous year was to come to an end. Out of a total sale consideration of Rs. 4,21,50,000 plus four flats of carpet area of 1,500 sq. ft. each plus four car parking areas, the assessee had received only a sum of Rs. 30,00,000 as earnest/deposit money in the previous year in which development agreement was entered into. The assessee was to receive Rs. 156.50 lakhs within 15 days of receiving the no objection certificate from the appropriate authority under the provisions of Chapter XX-C of the IT Act, and Rs. 235 lakhs within four months of the issuance of the said certificate, but the application for the said NOC, as evident from the copy of the NOC at pp. 3 and 4 of the paper book, was filed on 29th March, 1994. It is thus clear that only a very small portion of the cash consideration was received in the relevant previous year. Even according to the observation r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was received as earnest/deposit money and when the developer could not have, therefore, exercised his rights under the contract which were to crystallize on making the payments after the receipt of no objection certificate from the authorities, it cannot be said that there is anything to indicate, leave aside establish, "passing of or transferring of complete control over the property in favour of the developer" which is sine qua non for taking the date of contract as relevant for the purpose of deciding the year of chargeability of capital gains. Therefore, on the facts of the present case, the date of development agreement would not really be relevant to decide the year of chargeability. 13. For the reasons set out above, we are unable to uphold the objections so strenuously argued by the learned Departmental Representative. Even as we do so, we make it clear that whether or not complete control or right to control over the property has passed to developer in the relevant previous year essentially depends on the facts of each case and on, inter alia, the rights which have accrued to the developer under the agreement which, in turn, would also depend upon the extent to which dev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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