TaxTMI 
TaxTMI 
TaxTMI 
2008 (3) TMI 380
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.... assessee has inherited residential house property bearing No. 51, Murugappa Mudali Street, Purasawakkam, Chennai from his mother vide will dt. 12th Aug., 1988. The said property was sold by the assessee on 25th July, 1994 for a consideration of Rs 7.80 lakhs and the sale proceed was utilised for purchasing the property situated at 4/2, Gandhi Avenue, Purasawakkam, Chennai, on 24th Aug., 1994 for a total consideration of Rs. 10,78,039. The assessee also purchased another property bearing No. 4/1, Gandhi Avenue, Purasawakkam, Chennai on, 30th April, 1990 for a sum of Rs. 6,39,353. The assessee filed his return of income for the asst. yr. 1995-96 on 14th Aug., 1995 admitting a total income of Rs. 39,590 after claiming exemption under s. 54 of....
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....le dismissing the appeal of the assessee, the CIT(A) after following the decision of the Hon'ble Bombay High Court in the case of Chaturbhuj Dwarkadas Kapadia vs. CIT (2003) 180 CTR (Bom) 107 : (2003) 260 ITR 491 (Bom) has confirmed the order of the AO. Further aggrieved by the order of the CIT(A), the assessee filed this present appeal before us. 4. Before us, the learned counsel for the assessee submitted that the development agreement under consideration would in no way result in transfer as envisaged in the definition of the same term inbuilt in the Act. He further contended that the CIT(A) has failed to appreciate that the legal principles governing the construction of a document was not followed while understanding the document of de....
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....tively. The earnest money of Rs. 1 lakh each in respect of these properties was also received by the assessee from the vendee by means of two cheques though the same was to be returned to the purchaser after handing over of the built up portion to the assessee. Apart from these agreements, a power of attorney was also executed by the assessee in favour of the purchaser. The purchaser was authorised to execute the sale deed, sale transfer, conveyance deed, and do all necessary acts and deeds for construction and sale of one half portion of the respective properties. Now, the question arises whether the agreement to sell/develop the property with power of attorney in favour of the purchaser/developer coupled with handing over of the possessio....
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....e Hon'ble jurisdictional High Court in the case of CIT vs. K. Jeelani Basha (2002) 174 CTR (Mad) 394 : (2002) 256 ITR 282 (Mad), wherein the High Court has held that: "....once possession, even of a part of the property was handed over to the transferee, for the purpose of s. 2(47)(v) of the IT Act, 1961, read with s. 45, the transfer was complete and therefore, the Tribunal was justified in calculating the capital gains on the basis of the consideration received in that particular year for that part of the property which was parted with." 9. During the course of argument, the learned counsel for the assessee has relied upon the order of the Mumbai Bench of the Tribunal in the case of Shivram Co-operative Housing vs. Dy. CIT (1999) 64 TTJ....
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....and for a limited purpose and that of the buyer/developer who has a general control and custody of the land can very well be reconciled. Clause (v) of s. 2(47) will have its full play even in such a situation. There is no warrant to postpone the operation of cl. (v) and the resultant accrual of capital gain to a point of time when the concurrent possession will become exclusive possession of developer/transferee after he pays full consideration. 27. Further, if 'possession' referred to in cl. (v) is to be understood as exclusive possession of the transferee/developer, then, the very purpose of the amendment expanding the definition of transfer for the purpose of capital gains may be defeated." 11. Keeping in view the nature of the transac....