TaxTMI 
TaxTMI 
2013 (1) TMI 546
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.... paid by the petitioner and the balance amount was to be paid in two installments; the first installment when the layout plan was sanctioned by the competent authority and the second installment at the time of possession of the plot. On 22.05.1998 the petitioner entered into a supplementary MoU by which plot no. A-1 measuring 500 sq mtrs was allotted to the Petitioner. On 27.08.1998 Appropriate Authority, Income Tax Department issued a "No Objection Certificate: in respect of Plot No. A-1, i.e. the said Plot, for an apparent consideration of Rs. 4,28,00,000/. 3. On 28.12.2005 the petitioner relinquished its ownership rights in the said Plot for a total sale consideration of Rs. 5,05,00,000/- (including the Rs. 68,00,000/- paid at the time of entering into the MOU). In terms of the relinquishment agreement the petitioner released and discharged the vendors from all obligations and also relinquished and released all its claims, ownership, right, title and interest in the said plot. On 28.03.2007 it filed its income tax return for the assessment year 2006-2007 and declared capital gain of Rs. 3,94,19,345/- on account of receipt of Rs. 5,05,00,000 for sale of its rights/title in the ....
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.... the order of the Assessing Officer dated 14.12.2010 whereby he held that the income earned by the petitioner fell under the head "income from other sources" instead of "long term capital gains" is absolutely contrary to the well settled principles of law. The term "Capital Asset" and "Transfer" is defined in the Act as follows: "Section 2 - Definitions In this Act, unless the context otherwise requires, - (14) "capital asset" means property of any kind held by an assessee, whether or not connected with his business or profession, but does not include - (i) any stock-in-trade, consumable stores or raw materials held for the purposes of his business or profession; [(ii) personal effects, that is to say, movable property (including wearing apparel and furniture) held for personal use by the assessee or any member of his family dependent on him, but excludes - (a) jewellery; (b) archaeological collections; (c) drawings; (d) paintings; (e) sculptures; or (f) any work of art. Explanation: For the purposes of this sub-clause, "jewellery" includes - (a) ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious me....
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....eferred 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. [Explanation 1].-- For the purposes of sub-clauses (v) and (vi) "immovable property" shall have the same meaning as in clause (d) of section 269UA; [Explanation 2.--For the removal of doubts, it is hereby clarified that "transfer" includes and shall be deemed to have always included disposing of or parting with an asset or any interest therein, or creating any interest in any asset in any manner whatsoever, directly or indirectly, absolutely or conditionally, voluntarily or involuntarily, by way of an agreement (whether entered into in India or outside India) or otherwise, notwithstanding that such transfer of rights has been characterised as being effected or dependent upon or flowing from the transfer of a share or shares of a company registered or incorporated outside Indi....
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.... that the Assessing Officer erred in considering that the agreement dated 03.02.1997 and the two supplementary agreements dated 22.05.1998 and 27.01.2005 entered into did not confer any ownership rights in its favour. The view taken by the Authorities that the right was not capable of being transferred is flawed. The petitioner's argument that had it in fact invested the sum for the purpose of earning interest then it would have had earned 71% interest each year on Rs. 68 lacs to be entitled to the sum of Rs. 5,05,00,000/-; which shows that the inference is baseless. Therefore it was submitted that the amount invested was paid as a part of the consideration for the valuable rights in an immovable property and there is no relationship between the amount of Rs. 68 lacs and interest on it. It was also argued that there had been actual allotment of a property, i.e plot no. A-1, which was allotted to it. The no objection certificate was issued by the authority only after physical inspection for a consideration of Rs. 4.28 Crores. 11. The revenue contended that the there was no sale deed and therefore the petitioners could not have relinquished any rights; there was no ownership right ....
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....ty, has entered into an agreement to purchase the undivided 2/3rd rights and undivided shares of first and second parties for a total consideration of Rs. 2 crores. 17. The assessee has also placed on record copy of his statement recorded in suit No. 2312/90 filed in this Court, which reads as under: "Statement of Mr. J.K. Kashyap, plaintiff on S.A. and of counsel for the parties. The parties have arrived at a settlement and agreement of sale has been entered into M/s FMI Investment (P) Ltd. has today handed over a bankers cheque No. 217252, dt. 22nd Sept., 1995 for a sum of rupees two crores twenty four lakhs to the plaintiff Mr. J.K. Kashyap drawn on 'Banque Nationale Paris'. All the original documents relating to the suit property and in possession of the plaintiff have been handed over to the intending purchaser. The plaintiff has no other document left with him. The claim of the plaintiff stands satisfied. The suit be dismissed as withdrawn leaving the parties to bear their own costs." 18. So, it is clear from the record that by way of first agreement which was entered in the year 1990, the assessee had acquired right in the property and this right he has relinquish....