TaxTMI 
TaxTMI 
2011 (9) TMI 243
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....ew flat had been purchased within one year from the sale of old flat. In support of the same, the assessee had filed photocopies of the maintenance bill for the month of April & May which were in the names of Ms. Ranna Modi & Ors. i.e. new owners. The assessee had also filed copy of the agreement dated 23-04-2004. The AO made enquiries with Ms. Ranna Modi who submitted copy of the deed of transfer dated 26-08-2004 which was also registered on 26-08-2004. As there were two agreements, further enquiries were made. It was also stated on behalf of Ms. Ranna Modi that initial agreement was made on 23-04-2004 for confirmation of purchase of flat and an amount of Rs. 17 lakhs was paid on two different dates. Thereafter, full payment was made on 30-04-2004. However, stamp duty was not paid. Possession was also taken on 30-04-2004 and Deed of Transfer was also executed on that day. The purchaser had also made application to the Society for submission of necessary papers. Finally, the deed of transfer was registered on 26-08-2004. Enquiry letter was also issued to Usha Sunder Premises CHS and in response the Society furnished the share certificate showing the transfer date of 27-08-2004. The....
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....pleted and accordingly the assessees were entitled for the exemption. Reliance was also placed on the decision of the Supreme Court in the case of CIT v. Podar Cement (P.) Ltd. [1997] 226 ITR 625/92 Taxman 541 and some other High Court decisions. The ld. CIT(A), after examination of the submissions, did not agree with the same and emphasized that since section 53A of the Transfer of Property Act itself has been amended, therefore, unless and until the agreement was registered, the same would not amount to transfer. After detailed discussion, he confirmed the action of the AO. 3. Before us, the ld. counsel of the assessee pointed out that as far as purchase of new flat is concerned, there is no dispute regarding the date of purchase which has been purchased on 25-06-2003 and that agreement was registered on 09-07-2003. The dispute is regarding the date of sale of flat. Then he referred to the agreement of transfer dated 23-04-2004, copy of which is placed at pages 1 to 8 of paper book. Through this agreement, the assessees as part owners agreed to sell the flat bearing No.402 in Usha Sunder Premises CHS on 23-04-2004 to Ms. Ranna Ashok Modi, Mr. Ashok Brijlal Modi and Mrs. Kokila....
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....Then he referred to page 16, which is copy of the letter written by Mr. Ashok Modi to he Secretary of Usha Sunder Premises CHS Ltd. stating that they have taken peaceful vacant possession of the said flat from Mrs. & Mr. Sureshchandra Agarwal, i.e., the assessees. Page 17 is copy of letter written by Ms. Ranna Modi, Mr. Ashok B. Modi and Mrs. Kokila A. Modi to the Secretary, Usha Sunder Premises CHS Ltd., through which a request for transfer of share certificate has been made. Through this letter (1) application form for membership in form No.23, (2) undertakings on Rs. 50/- each stamp paper in form Nos.26 and 4, (3) copy of form No. 20A and 20B, (4) copy of NOC, (5) original share certificate and (6) copy of agreement for sale. Three cheques were also enclosed with the application for Rs. 500/-, Rs. 100/- and Rs. 25,000/- towards transfer fees under various heads. At serial No.10 of the said letter, it was mentioned that stamp duty paid and registered deed of transfer will be submitted soon. All these facts clearly show that the other party had taken the possession and also did necessary formalities for transfer of shares. He pointed out that the whole problem arose because the tr....
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....er of Property Act, 1882, and pointed out that first three parts remain the same and the last part was amended only to the extent that earlier condition of document even not being registered was removed. He argued that this provision was basically for the benefit of a buyer and earlier even if the agreement to sell was not registered, the buyer could claim a right on the property if part of the consideration was paid and possession has been received. However, later on, after amendment, the wording of the 4th part is : "then, notwithstanding that the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract :" Thus, the above para does not prescribe that such instrument of transfer is necessarily required to be r....
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....be taken to be complete on 30-04-2004. He concluded that all these factors clearly show that the property was transferred on 30-04-2004 and since the new flat was acquired on 25-06-2003 i.e. one year from the date of sale, the assessee was entitled to deduction u/s.54. 6. On the other hand, the ld. D.R. carried us to the assessment order as well as the appellate order and pointed out that the AO as well as the CIT(A) have dealt with all the submissions of the assessee. It has been specifically pointed out in the orders how clause (v) is not applicable because clause (v) of section 2(47) clearly make reference to section 53A of the Transfer of Property Act and that Act itself has been amended and would be applicable only if such agreement was registered instrument. Since the transfer deed dated 30-04-2004 was not registered, therefore, this would not amount to transfer. The other arguments have already been controverted by the AO because enquiry made by him from Society clearly shows that bill was issued to Mrs. Ranna Modi under wrong impression and later on was cancelled. The counsel, who appeared on behalf of the transferee, i.e. Modi Family, before the AO, had clearly state....
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....able property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882) ; or (vi) any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immovable property. A plain reading of the above show that this is an inclusive definition. First, we shall deal with clause (v), which has been considered by the AO as well as CIT(A). The AO has refused to reckon the transfer on 30-04-2004 because, according to him, that instrument was not registered and after the amendment to sec. 53A w.e.f. 24-09-2001, it is mandatory for application of sec. 53A of the Transfer of Property Act, 1882, that such instrument of transfer should be registered. Sec. 53A of Transfer of Property Act, 1882, before amendment and after amendment reads as under : Before amendment : "53A. Where any person contracts to transfer for consideration any immovable property by writing signed ....
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....affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof." The above clearly shows that paras 1, 2 and 3 remain the same and there is change only in the 4th para by way of omission of the words "the contract, though required to be registered, has not been registered, or, "which, according to the AO, means after 24-09-2001 the provisions of section 53A would not be applied if the document was registered but a reading of the whole provision clearly shows that this provision is basically for the benefit of a buyer and it has been provided that where an instrument of transfer has been executed in writing and in part performance such transferee has taken possession and paid consideration and transferee has performed or willing to perform his part of the contract, then this would constitute part performance. Even after amendment, it has not been specifically provided that such instrument of transfer is necessarily to be registered. Without going further on this aspect, we have to ascertain the true meaning in the context of clause (v) of sec. 2(47). Clause (v) has been inserted by the Finance Act, 1987, w.e.f. 01-04-1988 ....
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....ct, 1882. Rather, it defines any transaction involving allowing of possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act. This means such transfer is not required to be exactly similar to the one defined u/s.53A of the Transfer of Property Act, otherwise legislature would have simply stated that transfer would include transactions defined in sec. 53A of the Transfer of Property Act. But the legislature in its wisdom has used the words "of a contract, of the nature referred in section 53A". Therefore, it is only the nature which has to be seen. As discussed above, the purpose of insertion of clause (v) was to tax those transactions where properties were being transferred by way of giving possession and receiving full consideration. Therefore, in our humble opinion, in the case of a transfer where possession has been given and full consideration has been received, then such transaction needs to be construed as "transfer". Therefore, the amendment made in section 53A by which the requirement of registration has been indirectly brought on the statute need not be applied whi....
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....1999] 239 ITR 775/106 Taxman 166 (SC), the assessee had purchased for the use of its staff seven low income group houses from a Housing Board. The payment had been made and in turn possession of the houses was taken over by the assessee. The actual conveyance deed was not executed. The assessee claimed depreciation which was denied by the department. After great discussion, it was observed that for all practicable purposes and for the purpose of Income-tax Act, the assessee shall be construed as owner of the property. In fact, it was held as under: "Held, reversing the judgment of the High Court, that the finding of fact arrived at in the case at hand was that though a document of title was not executed by the Housing Board in favour of the assessee, the houses were allotted to the assessee by the Housing Board, part payment received and possession delivered so as to confer dominion over the property on the assessee whereafter the assessee had in its own right allotted the quarters to the staff and they were being actually used by the staff of the assessee. The assessee was entitled to depreciation in respect of the seven houses in respect of which the assessee had not obtain....
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.... (c) Application for transfer of electric meter to the name of the Transferees; (d) The NOC received from the said Society; (e) The original agreement dated 22nd May, 1980 by which the Transferors acquired the said flat and shares and all earlier agreements." Thus, it is clear that both assessees before us not only received the full consideration and handed over the possession of the flat but also handed over the various documents which were necessary for transfer. The transferees vide letter dated 5-5-04 [copy at page 17 of the paper book] made an application to the society for transfer of the said flat in their names. Through this application share certificate as well as copy of the agreement for sale etc. was also enclosed. Thus, it is clear that even the intention of the transferee was to go ahead with the transfer. It was pointed out that since the transfer deed dated 30-4-04 could not be lodged with the Sub-Registrar for stamping till 26-8-04 and when the same was presented for stamping, transferees were informed that some penalty was to be levied for delay in presenting the same. At that juncture the transferees requested th....