TaxTMI 
TaxTMI 
2006 (3) TMI 290
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....ce: "1. The learned CIT(A) erred in upholding capital gain of Rs. 48,59,900 as short-term capital gain as against Rs. 44,44,725 assessed by the learned Assessing Officer as long-term capital gain and Rs. 43,36,235 shown by the assessee as long-term capital gain, thereby enhancing the assessment. It is submitted that long-term capital gain as shown by the assessee may kindly be upheld as correct. 2. Without prejudice to ground No.1 above, the learned CIT(A) erred in not allowing deduction of Rs. 69,010 being stamp duty paid by the assessee on agreement dated 16-11-1990 paid by the assessee on demand by the registering authorities. It is requested that the said amount be allowed to be deducted in computing the capital gain. 3. Without prejudice to ground Nos. 1 and 2 and alternately, without admitting the correctness of the order of the learned CIT(A), if his finding that the transfer took place on 12-5-1998 is to be upheld, then, the entire capital gain would be assessable in assessment year 1999-2000 in which case the capital gain even as declared by the assessee may kindly be directed to be deleted from the income of the assessment year 1997-98. 4. Further without prej....
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....ty in the agreement undertaken between the owner and the said Saraswathi. The aggregate amount of Rs. 6,83,100, which included registration charges of Rs. 7,000, was paid in four financial years, starting from financial year 1990-91 to financial year 1995-96, the details of which have been furnished on page 3 of the assessment order. On the basis of the aforesaid facts, it was contended that on payment of the first instalment of Rs. 1,19,465 on 1-11-1990, the assessee acquired the right to conveyance etc. in respect of the three shops. It was further explained that the assessee entered into agreement with the IDBI on 15-12-1995 by way of an agreement titled "assignment deed" for a consideration of Rs. 55,50,000 by which the rights in shops were assigned to IDBI. As per the provisions of section 269A of the Act, the assessee applied to the Appropriate Authority for No Objection Certificate (NOC) by filing Form No. 37-I. In this form, the assessee and the IDBI were shown as assignor and assignee. Acting on the application, the Appropriate Authority granted the NOC. Thereafter, the assessee transferred and handed over the rights in the shops to the IDBI. On the basis of the aforesaid ....
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....ns. Thus, he computed the capital gains at Rs. 61,19,325. The computation is reproduced below for the sake of ready reference: -------------------------------------------------- "Sales consideration received Rs. 55,50,000 Less: Cost of acquisition of right of assignment 10% of agreed price (Rs. 68,310) Indexed cost of acquisition Rs.1,14,475 Add: Payments made later on Rs.6,14,790 Add: Stamp duty charges as claimed by the assessee Rs. 69,010 Rs. 5,69.325 ....
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....ted to short-term capital gains. The learned CIT(A) also did not allow the deduction of stamp duty of Rs. 69,010 as the transferee was liable to pay such duty. In view of these findings, he computed the short-term capital gains at Rs. 48,59,900, being the difference between the sales consideration of Rs. 55,50,000 and cost of acquisition of Rs. 6,90,100. Thus, the income of the assessee and tax payable thereon were enhanced after hearing the assessee in respect of these matters. 3.1 Before us, the learned counsel referred some important dates in respect of purchase and sale of the immovable property, which are reproduced below for the sake of ready reference. ---------------------------------------- Sl No. Date Nature of transaction ---------------------------------------- 1 1-11-1990 Agreement regarding booking of shops 2 15-12-1995 Agreement for assigning  ....
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....he agreement and the balance amount was to be paid in four instalments, as mentioned therein. It may be pointed that 35 per cent of the purchase consideration was to be paid on taking possession of the shop and 15 per cent on execution of a deed of apartments under section 2 of the Maharashtra Apartment Ownership Act. It may be noted here that the agreement was in respect of purchase of the shop and the payment was to be made in instalments over a period of time. The last two instalments were payable on taking possession and execution of the deed. 3.3 The learned counsel referred to pages 30 to 56 of the paper book, being "agreement for assignment", dated 15-12-1995, executed between the assessee and the IDBI. The aforesaid Saraswathi Construction Company was a consenting party to this agreement. According to this agreement, the assessee agreed to assign her rights, title or interest whatsoever in respect of three shops for a consideration of Rs. 55,50,000. As per the terms of this agreement, a sum of Rs. 27,75,000 was paid to the assessee on the execution of the agreement. A sum of Rs. 16,65,000 was payable within 15 days of the receipt of the NOC. Balance amount of Rs. 11,10,0....
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.... 594. In that case, the assessee entered into an agreement with Seth Anandji Haridas for purchase of 5000 sq. yards of land situated at Bombay, @ Rs. 175 per sq. yard and paid earnest money of Rs. 90,000. The vendor was to obtain requisite permission from municipal and other authorities at his cost. The agreement of purchase was to be completed within 6 months of its execution. If the permission was not obtained on any account whatsoever, the vendor was entitled to cancel the agreement and the earnest money was to be refunded. The vendor could not obtain requisite permission and wanted to cancel the agreement. This was not accepted by the assessee. Finally a tripartite agreement was entered into among Seth Anandji Haridas, the assessee and M/s. Advani and Batra. In consideration, the assessee received a sum of Rs. 5,90,000 from M/s. Advani and Batra, consisting of Rs. 5 lakhs as consideration for transfer and assigning its rights etc. and Rs. 90,000, being the earnest money paid to Seth Anandji Haridas. The Tribunal held that it was a case of transfer of a capital asset. The case of the assessee was that the agreement for sale did not create any interest or right in land in favour ....
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....of the vender and the assessee. In 1958, an agreement was reached, under which a sum of Rs. 10,000 was returned to the assessee, leading to a loss of Rs. 2,90,000, which was claimed as a capital loss. The loss was disallowed. The Hon'ble Court pointed out that on a fair reading of the correspondence between the solicitors showed that the claim of the vendor was that contract of sale continued to subsist and he had carried out of his obligation under the contract. The assessee wanted to resile from the contractual obligation and, therefore, the vendor became entitled to forfeit the earnest money and to pursue further remedies against the assessee. One of such remedy was to claim specific performance of the contract or in the alternative the claim liquidated damages. In this background, a final agreement was made, between the vendor and the assessee, under which a sum of Rs. 2,90,000 was forfeited by the vendor. The case of the revenue was that all the requirements of section 12B were not satisfied. The assessee did not own any capital asset and there was no relinquishment of the asset. The case of the assessee was that it was not a case of forfeiture of the aforesaid sum by the vend....
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.... flat on the same day. According to the stipulation, the assessee was to pay the amount in instalments and the last instalment was paid on 10-2-1973. The assessee sold the property on 10-2-1973 and claimed that gains were long-term capital gains. The Hon'ble Court pointed out that on perusal of section 2(42A) of the Act, it is clear that 'short-term capital asset' means a capital asset held by an assessee for not more than 24 months (now 36 months) immediately preceding date of its transfer. Thus, a person can be said to be holding a property as owner, lessee, mortgagee or on account of part performance of agreement etc. and in this connection, the dates of payment of instalments are not material. The assessee was put in possession of the flat on 29-5-1970 and, therefore, he held the property for more than 24 months immediately preceding the date of its transfer. 3.11 As against the aforesaid, the learned DR referred to the agreement for booking the shop dated 1-11-1990 placed in the paper book on pages 13 to 31. On page 19, it is mentioned that on the shop purchaser on getting possession of the shop from the owner before the registration of society or formation of association o....
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....ansaction involving the 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 section 53A of the Transfer of Property Act, 1882, is also deemed to be the transfer of the capital asset. It was argued that the registration of the property took place subsequently, when possession of the property was allowed to be taken constructively by the assessee and actually by the IDBI on the same day. Thus, there was a transfer of the shops on the same day by the owner to the assessee and the assessee to the IDBI and, therefore, the capital gains amounted to short-term capital gains. The learned DR also referred to the application made by the assessee before the Appropriate Authority in which she was shown as the transferor and the IDBI as transferee for full consideration of Rs. 55,50,000. Therefore, it was his case that it was not merely a transfer of the right of conveyance but the transfer of the whole properties as the assessee intended to transfer the shops. 3.12 The learned DR pointed out that the facts of the case of Tata Services Ltd. are completely distinguishable from the facts of this case. In ....
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.... subsequent payments were made by the buyers in those cases. The ratio of the decision of Ved Parkash & Sons (HUF)'s case is also distinguishable from the facts of this case. In that case, the buyer was put in possession of the property and this act amounted to transfer under the provisions of section 2(47)(v). Thereafter, he remained in possession for more than 24 months before he transferred the property. The ratio of the decision of that case is that the dates of payment are not sine qua non of the transfer. What is material is to see whether the transfer has taken place in terms of the provisions of section 2(47) of the Act. The facts of the case of Vimal Lalchand Mutha are also distinguishable from the facts of this case. In that case, an agreement to purchase a flat was entered on 8-11-1977, which was formalized on 4-12-1978. The possession of the flat was taken in June, 1981. However, no conveyance deed was executed in her favour or in the favour of the co-operative society of the building. An agreement was entered into on 28-4-1983 by which, the right, title and interest in the said flat were transferred to Chanraj Uttamchand. Thus, all the rights under the agreement of 8-1....