TaxTMI 
TaxTMI 
2011 (6) TMI 463
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.... A.O. and the CIT(A) erred in concluding that the appellant sold the property being 1/3rd share in a plot of land situated at 115A/1 Netaji Subhash Chandra Bose Road, Tollygunge, Kolkata - 700 040 to M/s. Gold Moon Agencies Pvt. Ltd. in A.Y. 2005-06. 2. That the Ld. A.O. and the CIT(A) further erred in ignoring the fact that the appellant had already entered into an agreement for sale with M/s. Consolidated Commercial Enterprises Limited and handed over the possession after receiving substantial part of the consideration in A.Y. 2001-02 thereby effected the transfer within the meaning of section 2(47)(v) of the Income Tax Act, 1961. 3. That the transfer having taken place in terms of section 2(47) on account of part performance of the contract and handing over of the possession, the Ld. A.O. and the CIT(A) erred in holding that the appellant sold the said property during the relevant year under consideration. 4. That the Ld. CIT(A) further erred in denying exemption u/s.54F for purchase of flat No. 3A, in Goutam Enclave, 7/5, Burdwan Road, Alipore, Kolkata against the sale consideration received from 115A/1 Netaji Subhash Chandra Bose Road, To....
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....l consideration of Rs. 23,50,000/- vide Deed of Agreement for sale dated 23.03.2001 in the F.Y. 2000-01 relevant to the A.Y. 2001-02. The possession of the said property was delivered to assessee on 27.04.2001. (Copies of the agreement of sale dated 23.03.2001 and possession letter are attached at Pages 56- 99 of the assessee's paper book). The receipt of the amount by Sankar Promoters is evidenced by receipt attached at Pages 99-101 of the assessee's Paper book. 4. The assessee filed its return of income for the assessment year 2005-06, i.e., the relevant assessment year, disclosing long term capital gain from sale of the above plot of land of her share of 1/3rd and claimed exemption u/s.54F of the Act in respect of investment of this capital gain in residential flat as stated above. The AO during assessment proceedings noted that the assessee has sold the property i.e., undivided 1/3rd share in the landed premises no. 115A/1, Netaji Subhash Chandra Bose Road, Tollygunge, Kolkata-700 040 in the financial year 2004-05 relating to AY 2005-06. According to AO, the assessee has claimed to have sold the property at Rs. 24.10 lac and derived capital gain of Rs. 15,31,285/-, but as per ....
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....ns of section 50C in the case of the appellant. The AO has correctly disallowed the claim of deduction u/s. 54F. The views taken by the AO are upheld. Ground nos. 1, 2 & 3 are dismissed." Aggrieved, now assessee is in appeal before us. 5. We have heard rival contentions and gone through facts and circumstances of the case. We find that for relevant assessment year 2005-06, return of income was filed on 25.07.2005 declaring a total income of Rs. 1,64,162/-, which was assessed at Rs. 36,61,430/- vide order under section 143(3) dated 25.10.2007. The addition was made under the head "Long Term Capital Gain" by invoking the provisions of section 50C of the Act and by denying benefit of exemption u/s 54F of the Act. We find that the assessee sold 1/3rd undivided share in a plot of land for total consideration of Rs. 24,10,000/- by virtue of an agreement of sale dated 28.12.2000 entered into with the purchaser M/s Consolidated Commercial Enterprises Ltd. in part performance of the contract and handed over possession of the land to the purchaser on 28.12.2000 vide a possession letter on that very date addressed to M/s. Kamala Properties Ltd., SVM Cera Tea Build Ltd. and M/s. Consolidated....
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....lready entered into an agreement for sale with Consolidated Commercial Enterprises Ltd., and also handed over the possession of the property after receiving substantial part of the consideration in that very year, thereby effecting the transfer within the meaning of section 2(47)(v) of the Act and further denying exemption u/s. 54 F of the Act for the purchase of flat against the sale consideration received from the sale of the landed property. Whether the provisions of section 2(47) of the Act r.w.s. the provisions of section 53A of the Transfer of Property Act, 1882 authorises assessee to make such transfer and whether that will be considered as transfer, we have to go to the provisions of section 2(47) of the Act. The relevant provision of Section 2(47) reads as under: "2(47) transfer, in relation to a capital asset, includes,- "(i) the sale, exchange or relinquishment of the asset; or (ii) the extinguishment of any rights therein; or (iii) the compulsory acquisition thereof under any law, or (iv) in a case where the asset is converted by the owner thereof into, or is treated by him as, stock-in-trade of a business carried on by him, such conversion or treatment, or (iva) ....
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....ormance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882, ownership without transfer of title falls under the definition transfer in relation to any capital asset u/s. 2(47)(v) of the Act. In the present case before us, the assessee has categorically transferred the land sold vide agreement dated 28.12.2000 for a total consideration of her 1/3rd share for a sum of Rs. 24.10 lac to Consolidate Commercial Enterprise Ltd. in part performance of a contract after handing over the possession of the land on 28.12.2000 vide possession letter addressed to purchaser. The AO as well as CIT(A) got confused in the subsequent transactions entered into by the purchase of the property i.e., Consolidated Commercial Enterprises Ltd., which was subsequently amalgamated with Kamla Properties Ltd. under an order of Hon'ble Calcutta High Court, with Gold Moon Agencies Pvt. Ltd. during the previous year relevant to assessment year 2005-06. However, it is to be mentioned that only act done by the assessee on request of Kamla Properties Ltd. that a conveyance deed was executed in favour of the nominee of Kamla Properties Ltd. i.e., Gold Moon Agencies Pvt. Ltd. bu....
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....t facts discussed by Hon'ble High Court reads as under: "The assessee, an individual, had an undivided share in a property. By agreement dated August 18, 1994, the assessee herein agreed to sell to a builder his share of the immovable property for a total consideration of Rs. 1,85,63,220/- with a right to the building to develop the property in accordance with the rules and regulations framed under the Maharashtra Housing and Area Development Act. For that purpose, the assessee agreed under clause 8 to execute a limited power of attorney, authorizing the builder to deal with the property and also obtain permissions and approvals from the Urban Land Ceiling Authority, Bombay Municipal Corporation and CRZ authorities. Under clause 9 of the agreement it was, inter alia, provided that on the builder obtaining all necessary permissions and approvals and upon receipt of no-objection certificate under Chapter XXC of the Income-tax Act, the assessee shall grant an irrevocable licence to enter upon the assessee's share of the property. Under clause 14 of the agreement, the assessee was entitled to receive proportionate rent till the payment of the last instalment and till that time, the as....
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.... year 1996-97. " 8. Similarly, the case law referred by Ld. Counsel for the assessee of this Tribunal, Mumbai Bench (3rd Member) in the case of Ms. Rubab M. Kazerani v. Jt. CIT [2004] 91 ITD 429 wherein it is held as under: "On reading the various clauses of the MoU, it is clear that the lady had entered into an agreement with SA to dispose of the said property for a total consideration of Rs. 5.5 crores. Thus, from the terms of MoU, it is clear that the lady signed the MoU through her general power of attorney holder for Rs. 5.5 crores. The possession of the property was handed over to the builder, and original documents were also given to him on that day with an understanding that he will obtain all necessary clearance certificates under the provisions of Urban Land (Ceiling & Regulation) Act, 1976, and certificate under s.269UC of the IT Act, 1961. Therefore, it is clear that the MoU entered into between the parties was not for the purpose of simply identifying the prospective buyer or the consideration received by the assessee was only a security deposit. On reading the contents it will be clear that it was a transaction by which the assessee transferred the property in quest....
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.... acts of management, control and supervision of property being explicitly mentioned. The general power of attorney was not a mere licence to enter the land for doing some preliminary acts in relation to the development work; the power of control of the land, which was an incidence of possession, was conferred to the developers under the general power of attorney. The developers, armed with the general power of attorney, could not be regarded merely as a licensee or an agent ; their possession could not be characterised as precarious or of tentative nature. The owners' limited right to enter the land and oversee the development work was not incompatible with the developers' right of control over the land which they derived from the general power of attorney. Therefore, the irrevocable power of attorney executed by the owners in favour of the developers had to be regarded as a transaction in the eye of law which allowed possession to be taken in part performance of the contract of transfer. The transfer within the meaning of section 2(47)(v) took place during the financial year 2006-07 corresponding to the assessment year 2007-08 and the entire capital gains including that attributab....
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....facts, we find that the assessee being an individual transferred a long term capital asset i.e. land as on 28.12.2000 and acquired a flat against the sale consideration of that land as on 23.3.2001, it means the long term capital gain arising out of sale of land, was invested in the residential house. The assessee claimed exemption u/s. 54F and for that now we have to appreciate the main ingredients of section 54F of the Act, which are as under: (i) Capital gain arises to an appellant being an individual or a Hindu undivided family. (ii) The asset transferred must be a long term capital asset. (iii) The asset transferred can be any capital asset other than a residential house. (iv) The appellant purchases within a period of one year before or two years after the date on which the transfer took place, or constructs within a period of three years after the date of transfer, a residential house. (v) The appellant does not own more than one residential house on the date of transfer of the original asset exclusive of one purchased for claiming exemption under section 54F. We find from the above that the net consideration on account of transfer of land had been utilised in acquirin....