TaxTMI 
TaxTMI 
TaxTMI 
2014 (5) TMI 819
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....y the assessee for rectification of the order dated 28th December, 2004. The first three appeals have been admitted on following question of law :- "Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in holding that the agreement to sell dated 7.9.1991 amounts to transfer by virtue of Section 2 (47)(v) and (vi) of the Income Tax Act". The last three appeals being Income Tax Appeal Nos. 97 of 2007, 452 of 2007 and 453 of 2007 have been admitted on following question of law :- "WHETHER on the facts and in the circumstances of the case the Appellate Tribunal, having recorded a categorical finding of fact that possession has not been delivered to the buyers as per agreement dated 7.9.1991 was legally justified in making out an altogether new case with reference to section 2(47)(vi) of the I.T. Act for the first time in favour of Revenue without allowing an opportunity to the appellant to meet it and thus holding contrary to the settled law by the Apex Court on the point and thereby illegally rejecting the Miscellaneous Application under section 254(2) of the Act with reference to the order in ITA No. 703/Del/1997?" The facts ....
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....ong with other appeals of the assessee. We, however, in the present appeals are concerned only with I.T.A. Nos. 698 of 1997, 700 of 1997 and 703 of 1997 as registered before the Income Tax Appellate Tribunal. The department assailed the order of the Commissioner of Income Tax (Appeal) and contended that the Assessing Officer has rightly charged capital gain tax in the assessment year 1992-93. The tribunal vide its judgement and order dated 28th December, 2004 allowed the appeal and set aside the order of the C.I.T. (A). The tribunal held that Assessing Officer was fully justified in levying the capital gain in the assessment year 1992-93. Aggrieved by the said judgement dated 28th December, 2004, first three appeals have been filed by the assessee. The miscellaneous application was preferred by the assessee Chandra Prakash Jain against the Tribunal's consolidated order 28th December, 2004 praying for rectification of the order dated 28th December, 2004. The application for rectification filed under Section 254(2) of the Act, was rejected with slight modification in the Assessing Officer's order. The order was passed by Tribunal on 20th January, 2006 against which order In....
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....nd of appeal. It is further submitted by Sri Shukla that there being apparent mistake in the order of the Tribunal and the Tribunal had jurisdiction under Section 254 (2) of the Act to correct the mistake and miscellaneous application filed by the assessee has wrongly been rejected. Sri Shambhu Chopra, learned counsel for the revenue refuting the submissions of counsel for the appellant supported the order passed by the Income Tax Appellate Tribunal. He submitted that the definition of transfer of capital assets as given under Section 2(47) is very wide definition which has to be given a wide meaning. He submitted that tribunal has rightly relied on Section 2(47) (vi) of the Act for holding that transaction was covered by above provisions. He submitted that before the tribunal there was very much ground based on Section 2(47) and the submission of learned counsel for the appellant that tribunal made out a new case is wholly incorrect. He submitted that the owners i.e. assessee would be deemed to be in constructive possession and by transaction the purchasers were in constructive possession. Learned counsel for the parties have placed reliance on various judgements of this Court, ....
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.... this sub-clause, "land, building, part of a building, machinery, plant, furniture, fittings and other things" include any rights therein; (ii) any rights in or with respect to any land or any building or a part of a building (whether or not including any machinery, plant, furniture, fittings or other things therein) which has been constructed or which is to be constructed, accruing or arising from 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 of whatever nature), not being a transaction by way of sale, exchange or lease of such land, building or part of a building; The issue which has arisen in this appeal is as to whether by agreement dated 7.9.1991 there is a transfer of capital asset within the meaning of Section 2(47) read with Section 269 U A (d). Section 2(47) is definition clause pertaining to transfer in relation to capital asset. The Income Tax Act being a Special Act which consists specific definition clause in context of capital assets the general principals of transfer as contained in transfer of property Act, 1882 shall not....
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....have a right to transfer and sale and there is no legal defect in this. Now first party have made this agreement to sale with second party for whole of the above property for a consideration of Rs. 55,00,000/- (Rs. Fifty Five Lac only) and total consideration of Rs. 55,00,000/- is received by the first party from second party as per details below before the Sub-Registrar at the time of execution of this agreement. Now both the parties shall be bound by the terms and conditions details below :-" After mentioning the above, 15 conditions have been agreed between the parties. Details of the amount paid in cash, by cheque and by post dated cheque have also been mentioned in the agreement. The tribunal referring to material on record has found the possession of the premises was with 1974 purchasers and the said possession was handed over after the arbitration award which was given in the year, 1998. The tribunal has rightly observed that CIT Appeal has miss-directed himself in invoking the provisions of Section 2(47) (v) of the Income Tax Act, since possession was not delivered in pursuance of the agreement. In the present case, there is no applicability of Section 2(47) (v). Sub-sect....
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....Section 269 UA (d), it is clear that the word immovable property includes any right in or with respect to land or any building. The assessee were full owner of the property, since owner-ship was retained by the assessee even after the agreement to sell was executed in 1974 parting of possession in 1974 did not tantamount parting of owner-ship which remained with the assessee. By agreement dated 7.9.1991, the assessee transferred their right of owner-ship in favour of M/s Agarwal's Associates. The tribunal has noted that no further transaction after agreement dated 7.9.1991 took between the assessee and purchasers and that was the only transaction, on the basis of which M/s Agarwal's Associates sold two shops in the year, 1995 and obtained possession in the year, 1998 and carried out all developments. The agreement dated 7.9.1991 was thus, clearly covered by the definition under Section 2(47) (vi). Tribunal in its judgement noted the various conditions as contained in the agreement dated 7.9.1991 and had concluded the transfer of owner-ship by the agreement. It is useful to refer to the observations and facts as noted by the Tribunal in paragraph nos. xi, xii and xiii to th....
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....angements for delivery of the possession and for all other necessary acts under the agreement. Thus, the transfer of rights of ownership by the owners stood concluded by this agreement. From the above, it is clear that the transferors i.e. the co-owners had done everything on their part to convey the title to the transferor. The intention of the parties to the agreement has also to be seen while construing the document. In the present case, clear intention of parties was to change hands over the property. (xiii) So far as the present matter is concerned in view of clause (vi) of section 2(47) read with section 269 UA (d) that capital gain would be taxable in the year in which the transaction is made in any manner which has the effect of transferring or enabling the enjoyment of any immovable property even if the transfer of property is not effected or completed under the general law. As the owners made arrangement by irrevocable agreement and gave the transferees complete control over the title to property to the purchasers, the date of contract between the owner of the purchaser becomes relevant and not the date of delivery of possession." The tribunal had given cogent reasons f....
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.... case was a case where the High Court considered the provisions of Section 2(47)(v). The Madras High Court held following in paragraph 5 which is quoted below : - 5. Heard the counsel. The dispute in this case is regarding the assessment year in which the transfer of land has to be assessed. It is not in dispute that there is no written agreement between the assessee and the builder. A written agreement is a basic requirement for invoking the provision of Section 53A of the Transfer of Property Act. Section 53A of the Transfer of Property Act, reads as under:- "53A. Part performance.- Where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstandi....
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....eceiving the consideration partly or in full. The fact remains that there is no sale agreement between the assessee and the builder and also the assessee had not received the sale consideration. Hence, the Tribunal is right in holding that there is no transfer of property, as contemplated under Section 2(47(v) of the Act. The reasons given by the Tribunal are based on valid materials and evidence and we do not find any error or legal infirmity in the order of the Tribunal so as to warrant interference. The present case is not a case which is covered by Section 2(47), hence the said judgement does not help the counsel for the assessee. Another judgement relied by Sri Shukla is judgement of Bombay High Court reported in (2009) 17 DTR (Bom) 280 COMMISISONER OF INCOME TAX VS. GEETADEVI PASARI. The Division Bench held in the said case that relevant assessment year for the purposes of computation of capital gain will be the assessment in which purchaser was actually physically put in possession. The said case considered the question which has been framed and noted in para 2 of the judgement. Question 2(b) as framed was to the following effect : "2.(b) whether on the facts and the circ....
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....d Single Judge reported in A.I.R. 2004 (Allahabad) 335 Surendra Kumar Vs. Amarjeet Singh and others have been relied by Sri Shukla. In the said judgement learned Single Judge held that a contract for sale in respect of immovable property is compulsorily registered in State of U.P. In the present case, agreement was registered. The said case is also has no relevance. Learned counsel for the appellant has also referred to the CBDT circular dated 22.9.1987. The circular only highlighted certain aspect of clause (v) and (vi) as inserted in Section 2(47), the circular does not fully explain the meaning of sub-clause (v) and (vi) nor can control the interpretation of the said sub-clause. In view of the foregoing discussions, we are of the view that in the facts of the present case, Income Tax Appellate Tribunal was fully justified in holding that agreement of sale dated 7.9.1991 amounts to transfer of capital assets by virtue of Section 2(47) (vi) of the Act. Now we come to the last three appeals which have been filed by the assessee against the order of the Tribunal for rectification. The miscellaneous applications were filed by the assessee praying for rectification in the order dat....