TaxTMI 
TaxTMI 
2015 (7) TMI 878
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.... 356 to 358 and 361 of 2013, 10 to 16, 25, 26, 73, 74, 90, 110, 136, 191, 192, 253, 254, 278 and 398 of 2014, as learned counsel for the parties are agreed that common substantial questions of law are involved therein in all these appeals. However, the facts are being extracted from ITA No.200 of 2013. 2. ITA No.200 of 2013 has been preferred by the appellantassessee under Section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 29.7.2013 passed under Section 254(1) of the Act by the Income Tax Appellate Tribunal, Chandigarh 'B' Bench, Chandigarh (in short, "the Tribunal') in ITA No.448/Chd/2011 for the assessment year 2007-08. On 30.5.2014, these appeals were admitted which raise the following substantial questions of law:- i) "Whether the transactions in hand envisage a "transfer" exigible to tax by reference to Section 2(47)(v) of the Income Tax Act, 1961 read with Section 53-A of the Transfer of Property Act, 1882? ii) Whether the Income Tax Appellate Tribunal, has ignored rights emanating from the JDA, legal effect of non registration of JDA, its alleged repudiation etc.? iii) Whether "possession" as envisaged by Section 2(....
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....cution of the JDA against execution of another registered sale deed by the society in favour of THDC for land of equivalent value being 4.62 acres. d) Payment of Rs. 24.75 lacs per plot holder of 500 square yards and Rs. 49.50 lacs per plot holder of 1000 square yards to be made within six months from the date of execution of the JDA or within two months from the date of the approval of the plans/design and drawings and grant of final licence to develop whereupon construction can commence, whichever was later, against execution of another registered sale deed by the society in favour of THDC for land of equivalent value being 6.36 acres. e) Balance payment of Rs. 24.75 lacs per plot holder of 500 square yards and Rs. 49.50 lacs per plot holder of 1000 square yards to be made within two months from the date of payment as per clause (d) above, towards full and final settlement of payments after adjustment of the advance/earnest money against execution of another registered sale deed by the society in favour of THDC for land of equivalent value being 7.14 acres. f) Each member having plot of 500 square yards was entitled to receive one built up apartment having super area of ....
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....l gains of Rs. 27,58,436/-. In the said return, the appellant offered to tax Rs. 30 lacs under the head 'capital gains' received by him during the year under consideration qua that portion of land in respect of which sale deed was registered in favour of the developers. The Assessing Officer, however, treated the revised return filed by the appellant as non est. Copies of the return of income originally filed and revised return for the assessment year 2007-08 are attached as Annexures 4 (colly) with the appeal. According to the appellant, Rs. 36 lacs received in the subsequent year relevant to the assessment year 2008-09 were also offered for tax in the year under the head 'capital gains' (Annexure A.5). 6. The Assessing Officer vide order dated 30.12.2009, Annexure A.6 passed under Section 143(3) of the Act held that since as per the JDA, there was grant and assignment of various rights in the property by the appellant in favour of THDC alongwith handing over physical and vacant possession, the same tantamount to "transfer". The Assessing Officer applied the provisions of Section 2(47)(v) of the Act read with Section 53A of the Transfer of Property Act, 1882 (in....
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.... ii) THDC further failed to discharge their part of obligation by failing to obtain various sanctions like site plan/drawings/designs etc. from appropriate authorities in order to commence and carry out development as stipulated under the agreement; iii) Order dated 20.1.2011 passed by this Court staying the execution of the project under the JDA; iv) Refusal by THDC vide letter dated 4.2.2011 to make payment of third installment. v) Resolution dated 13.6.2011 passed by the society terminating the JDA and revocation of power of attorney on 31.10.2011, Annexure A.8 (Colly). It was further pointed out by the appellant that in the case of Shri Satpal Gosain, one of the co-members of the society, the CIT(A) in his appeal for the assessment year 2007-08 had admitted the aforesaid evidence and after considering the same deleted the addition made by the Assessing Officer on similar grounds. The Tribunal admitted the additional evidence. Vide order dated 29.7.2013, Annexure A.9-A impugned herein upheld the order passed by the Assessing officer bringing to tax the entire consideration receivable under the JDA as liable for tax under the head 'capital gains'. The Tribun....
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....ed that Section 2(14) of the Act defines "capital asset" whereas Section 45 of the Act is the charging section in regard to capital gains. Section 48 of the Act provides for mode of computation of capital gains. Before delving into the controversy involved in the present case, it would be advantageous to refer to the relevant portion of Section 2(47) of the Act defining 'transfer', which reads thus:- Section 2(47) of Income Tax Act, 1961 - Definition of Transfer In this Act, unless the context otherwise requires- "transfer", in relation to a capital asset, includes,- (i) xx xx xx xx xx xx x (ii) the extinguishment of any rights therein ; or (iii), (iv) & (iva) x xx xx xx xx xx (v) any transaction involving the allowing of the 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, 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 ....
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....rovides that 'transfer' includes (i) any transaction which allows possession to be taken/retained in part performance of a contract of the nature referred to in Section 53A of the 1882 Act and (ii) any transaction entered into in any manner which has the effect of transferring or enabling the enjoyment of any immovable property. Therefore, in these two eventualities, profits on account of capital gains would be taxable in the year in which such transactions are entered into, even if the transfer of the immovable property is not effective or complete under the general law. Under Section 2(47) (v) of the Act, any transaction involving allowing of possession referred to in Section 53A of the 1882 Act would come within the ambit of 'transfer'. Even arrangements confirming privileges of ownership without transfer of title could fall under Section 2 (47)(v) of the Act. Section 2(47)(v) read with Section 45 of the Act indicates that capital gains is taxable in the year in which such transactions are entered into even if the transfer of immovable property is not effective or complete under the general law. The purpose of introducing clause (v) in conjunction with clause (vi....
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....f Attorney arrangements. The practice in such cases is adopted normally where transfer of ownership is legally not permitted. A person holding the power of attorney is authorised the powers of owner, including that of making construction. The legal ownership in such cases continues to be with the transferor. 11.3 These amendments shall come into force with effect from Ist April 1988 and will accordingly apply to the assessment year 1988-89 and subsequent years (Section 3(g) of the Finance Act, 1987)." 13. The legislative intent behind incorporating clause (v) to Section 2(47) of the Act from assessment year 1988-89 as discernible from CBDT circular is to embrace within its ambit those transactions of sale of property where assessee enters into agreements for developing properties with builders and the seller confers the rights and privileges of ownership to the buyer without executing/registering a formal conveyance deed in order to avoid capital gains tax. In order to thwart such tendencies, transactions where the possession is given or allowed to be retained in part performance of contract of the nature referred to in Section 53A of 1882 Act is held to be "transfer" by fict....
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.... tax could be avoided only on the sole ground that the transaction was not completed by way of a sale deed. Now, the law having undergone the change, it would be clear that where there would be a transfer of possession in the nature as contemplated under section 53A of the Transfer of Property Act, the transaction would be covered as a transfer. By the necessary logic then, that transaction would be coverable in that particular assessment year as has been done by the Delhi High Court. The only question was as to whether a transaction could be considered for the purpose of calculation of capital gains in parts. The position in law has been indicated by the Delhi High Court that it can be so treated in parts, we respectfully agree with the Delhi High Court judgment. However, the only conditions would be that (1) such a delivery of possession should be in the nature of a doctrine of part-performance under section 53A for which there should be an agreement between the parties, (2) such agreement should be in writing, (3) a completed contract has to be spelt out from that agreement, and the most important (4) the transfer of possession of the property in pursuance of the said agreement.....
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....section 2 (47)(v). In this matter, the agreement in question is a development agreement. Such development agreements do not constitute transfer in general law. They are spread over a period of time. They contemplate various stages. The Bombay High Court in various judgments has taken the view in several matters that the object of entering into a development agreement is to enable a professional builder/contractor to make profits by completing the building and selling the flats at a profit. That the aim of these professional contractors was only to make profits by completing the building and, therefore, no interest in the land stands created in their favour under such agreements. That such agreements are only a mode of remunerating the builder for his services of constructing the building (see Gurudev Developers v. Kurla Konkan Niwas Co-operative Housing Society [2000] 3 Mah LJ 131). It is precisely for this reason that the Legislature has introduced Section 2(47)(v) read with Section 45 which indicates that capital gains is taxable in the year in which such transactions are entered into even if the transfer of immovable property is not effective or complete under the general law. I....
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....coming a member of a company, cooperative society etc. In the present case, JDA was executed between the society and the developers and there was no transaction involving the developer becoming member of a cooperative society/company etc. in terms of Section 2(47) (vi) of the Act. The surrender of right to obtain plot by the members was for facilitating the society to enter into the JDA with the developers. There was no change in the membership of the society as contemplated under Section 2 (47)(vi) of the Act. Equally Clause (ii) of Section 2(47) of the Act has no applicability in as much as there was no extinguishment of any rights of the assessee in the capital asset at the time of execution of JDA in the absence of any registered conveyance deed in favour of the transferee in view of judgments in Alapati Venkataramiah vs. CIT, (1965) 57 ITR 185 (SC) and Additional CIT vs. Mercury General Corporation (P) Limited, (1982) 133 ITR 525 (Delhi). 18. For determining the ingredients for applicability of Section 53A of 1882 Act, it would be essential to reproduce the relevant provision which reads as under:- Section 53A of Transfer of Property Act, 1882 "53A. Part performance.-....
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.... 1882 Act : "1) there must be a contract to transfer for consideration any immovable property; 2) the contract must be in writing, signed by the transferor, or by someone on his behalf; 3) the writing must be in such words from which the terms necessary to construe the transfer can be ascertained; 4) the transferee must in part performance of the contract take possession of the property, or of any part thereof; 5) the transferee must have done some act in furtherance of the contract; and 6) the transferee must have performed or be willing to perform his part of the contract." 20. Following the aforesaid pronouncement, the Apex Court in Rambhau Namdeo Gajre vs. Narayan Bapuji Dhgotra (dead) through Lrs, (2004) 8 SCC 614 observed as under:- "Protection provided under Section 53-A of the Act to the proposed transferee is a shield only against the transferor. It disentitles the transferor from disturbing the possession of the proposed transferee who is put in possession in pursuance to such an agreement. It has nothing to do with the ownership of the proposed transferor who remains full owner of the property till it is legally conveyed by executing a registered ....
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....2 (4 of 1882), to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877 (1 of 1877) or as evidence of any collateral transaction not required to be effected by registered instrument." The words "or as evidence of part performance of a contract for the purposes of Section 53A of the Transfer of Property Act, 1882" have been omitted from the Proviso to Section 49. 22. Section 17(1A) of the 1908 Act introduced by the 2001 Act provides that no benefit would be admissible on the basis of unregistered contract for the purposes of Section 53A of 1882 Act. Equally, deletion of the words "or as evidence of part performance of a contract for the purposes of Section 53A of the Transfer of Property Act" from Proviso to Section 49 of 1908 Act clarifies the effect of non-registration of a contract executed in terms of Section 53A of 1882 Act. A Division Bench of this Court interpreting the aforesaid provisions in Ram Kishan and another vs. Bijender Mann alias Vijender Mann and others, (2013) 1 PLR 195 had succinctly laid down as under:- "7. A contract/agreement that satisfies the ingredients of Sectio....
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...., reads as follows:- "49. Effect of non-registration of documents required to be registered.-- No document required by Section 17 or by any provision of the Transfer of Property Act, 1882 to be registered shall- (a) affect any immovable property comprised therein, or (b) confer any power to adopt, or (c) be received as evidence of any transaction affecting such property or conferring such power; unless it has been registered: Provided that an unregistered document affecting immovable property and required by this Act or the Transfer of Property Act, 1882, to be registered may be received as evidence of a contract in a suit for specific performance under Chapter II of the Specific Relief Act, 1877, or as evidence of part performance of a contract for the purposes of Section 53A of the Transfer of Property or as evidence of any collateral transaction not required to be effected by registered instrument." 11. A conjoint appraisal of Sections 53A of the Transfer of Property Act, 1882, Sections 17(1A) and 49 of the Indian Registration Act, 1908, particularly the proviso to Section 49 of the Indian Registration Act, in our considered opinion, leaves no ambiguity that, t....
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....ossession of the property and has done some act in furtherance of the contract, and the transferor has performed or is will to perform his part of the contact then despite the fact that the contract was required to be registered and has not been registered, the transferrer shall be debarred from enforcing against the transferee any right other than a right expressly provided by the contract. Meaning thereby, Section 53-A of the TPA recognized part performance of the contract even though the contract used to be unregistered and the transferee's rights to remain in possession was protected. By the amendment Act No.48 of 2001 (w.e.f. 24.9.2001), the words "the contract, though required to be registered, has not been registered, or" have been omitted from the provision. The effect of the amendment is that now if any person takes possession in pursuance to a contract which is required to be registered but has not been registered, the transferee has no right to remain in possession of the property. To give effect to this principle,Section 17(1A) has accordingly been inserted in the Act which mandates that such contract is now required to be registered. If such a contract entered into....
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....s v/s Narain Das, AIR 1981 Delhi 291 has held that in fact no right inure to the agreement purchaser, not even after the passing of a decree for specific performance and till conveyance in accordance with law and in pursuance thereto is executed." 23. Having elaborated the scope and legislative intent of Section 2 (47)(ii), (v) and (vi) of the Act and also the mandatory ingredients for applicability of Section 53A of 1882 Act, it would be essential to notice that the provisions of section 53A of 1882 Act have been introduced in Section 2 (47)(v) of the Act by incorporation. The concept of inclusion of a provision of another statute by incorporation has been dealt with by the Apex Court in detail in Surana Steels Pvt. Limited vs. DCIT, (1999) 237 ITR 777. The issue before the Apex Court in Surana Steels Pvt. Limited's case (supra) was relating to computation of book profit under Section 115J of the Income Tax Act, 1961. Section 205 of the Companies Act, 1956 provided that past losses or unabsorbed depreciation, whichever is loss shall be allowed as set off against the book profits of the current year for determining profits for the purpose of declaring dividend. Explanation c....
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....n order to ascertain what the sections meant, though those other sections are not incorporated in the new Act". 24. Similarly, following the Apex Court judgment in Surana Steels Pvt. Limited's case (supra), the Gauhati High Court in Assam Bengal Carriers Limited vs. CIT, (1999) 239 ITR 862 (Gauhati), observed that when a legal fiction is created for an obvious purpose, full effect of it is to be given. The relevant observations read thus:- "xxxxxx When a legal fiction is created for an obvious purpose full effect of it is to be given--there is no half way house, In this regard it would be advantageous to rehearse the following passage from Lord Asquith in East End Dwellings Co. Ltd. v. Finsbury Borough Council, [1951] 2 All ER 587 (HL) "If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real, the consequences and incidents which if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it. ... The statute says that you must imagine a certain state of affairs, it does not say that having done so, you must cause or permit your imagination to boggle wh....
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....ll as of the transferee and it would be enough if the transferee has, by virtue of the transaction, a right to enter upon and exercise acts of possession effectively pursuant to the covenants in the contract. Reliance was placed upon following observations for meaning of possession and how should it be understood in the context of clause (v) of Section 2(47) of the Act:- "24. The next question is, in what sense we have to understand the term 'possession' in the context of clause (v) of section 2 (47). Should it only mean the right to exclusive possession - which the transferee can maintain in his own right to the exclusion of everyone including the transferor from whom he derived the possession? Such a criterion will be satisfied only after the entire sale consideration is paid and the transferor has forfeited his right to exercise acts of possession over the land or to resume possession. In our view, there is no warrant to place such a restricted interpretation on the word 'possession' occurring in clause (v) of section 2(47). Possession is an abstract concept. It has different shades of meaning. It is variously described as "a polymorphous term having different....
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....at the same time. As a general proposition this is true : for exclusiveness is of the essence of possession. Two adverse claims of exclusive use cannot both be effectually realized at the same time. Claims, however, which are not adverse, and which are not, therefore, mutually destructive, admit of concurrent realization. Hence, there are several possible cases of duplicate possession. 1. Mediate and immediate possession coexist in respect of the same thing as already explained. 2. Two or more persons may posses the same thing in common, just as they may owe it in common.... 26. On a fair and reasonable interpretation and on adopting the principle of purposive construction, it must be held that possession contemplated by clause (v) need not necessarily be sole and exclusive possession. So long as the transferee is, by virtue of the possession given, enabled to exercise general control over the property and to make use of it for the intended purpose, the mere fact that the owner has also the right to enter the property to oversee the development work or to ensure performance of the terms of agreement does not introduce any incompatibility. The concurrent possession of the o....
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....pect. What is spoken to in clause (v) of section 2 (47) is the 'transaction' which involves allowing the possession to be taken. By means of such transaction, a transferee like a developer is allowed to undertake development work on the land by assuming general control over the property in part performance of the contract. The date of that transaction determines the date of transfer. The actual date of taking physical possession or the instances of possessory acts exercised is not very relevant. The ascertainment of such date, if called for, leads to complicated inquiries, which may frustrate the objective of the legislative provision. It is enough if the transferee has, by virtue of that transaction, a right to enter upon and exercise acts of possession effectively pursuant to the covenants in the contract. That tantamounts to legal possession. We are referring to this aspect because the authorized representative has submitted when he appeared before us in the last week of May, 2007 that even by that date the development work could not be commenced for want of certain approvals, and therefore, the developer was " not willing to take possession of the land". Such an unsubst....
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....sideration may as well be shown to be in furtherance of contract. The correct approach would be what Lord Reid said in Steadman's case that one must not first took at the oral contract and then see whether the alleged acts of part performance are consistent with it. One must first look at the alleged acts of part performance and see whether they prove that there must have been a contract and it is only if they do so prove that one can bring in the oral contract. This view may not be wholly applicable to the situation in India because an oral contract is not envisaged by section 53A. Even for invoking the equitable doctrine of part performance there has to be a contract in writing from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty. Therefore, the correct view in India would be, look at that writing that is offered as a contract for transfer for consideration of any immovable property and then examine the acts said to have been done in furtherance of the contract and find out whether there is a real nexus between the contract and the acts pleaded as in part performance so that to refuse relief would be perpetuating the fraud of ....
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....e plea of part performance as against subsequent purchaser of the property. Referring to Section 91 of Indian Trust Act, the High Court held that a subsequent purchaser of the property with notice of an existing contract affecting that property must hold the property for the benefit of the person in whose favour the prior agreement to sell has been executed to the extent it is necessary to give effect to that contract. But that does not mean that till a final decision has been reached the contract creates a right in the person in possession, i.e. the tenant, to refuse to surrender possession of the premises even if such possession was obtained by him not in part performance of the contract but in his capacity as a tenant. Having entered into possession as a tenant and having continued to remain in possession in that capacity he cannot be heard to say that by reason of the agreement to sell his possession was no longer that of a tenant. (Also see Dakshinamurthi Mudaliar (Dead) & Ors. Vs. Dhanakoti Ammal, AIR 1925 Madras 965 and A.M.A. Sultan (deceased by LRs) & Ors. Vs. Seydu Zohra Beevi, AIR 1990 Kerala 186) In our opinion the law has been correctly stated by the High Court of Madh....
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....ect and to the rest of the world, and must have a certain intent. These relations and this intent are the facts of which we are in search". 33. Opinions drastically varied, as to whether possession is a question of fact, or of law. While some jurists treated it as a pure question of fact, others held it to be matter of law. Dias, in his treatise on 'Jurisprudence', struck a balance and observed, as under (Dias Jurisprudence Fifth Edition Page- 290): "Possession has three aspects: firstly, the relation between a person and a thing is a fact. Secondly, the advantages attached by law to that relation is a matter of law. Thirdly, these advantages are also attributed to a person when certain other facts exist. What they are in any given type of case is a matter of law". 34. Where the possession of a property, movable or immovable, is physically delivered to another, it is not difficult to discern, as to who exactly is in possession of such property. Difficulty, however, arises, where the delivery is implied or symbolical. It is only an examination of a bunch of facts, that would yield an answer to this. In the instant case, the plaintiff pleaded that symbolical delivery....
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....is the judgment of the Supreme Court in Dorab Cawasji Warden v. Coomi Sorab Warden, . Though they related to the second limb of Section 44, by and large, the principle remains the same. 37. In Smt. Lalita James v. Ajit Kumar, and Ashim Ranjandas v. Smt. Bimala Ghosh, , it was held that a transferee from a co-owner of a portion of undivided property is not entitled to right of exclusive possession, and that he can, at the best, enforce a partition of joint estate. The Himachal Pradesh High Court in its judgment in Paldev Singh v. Smt. Darshani Devi, , observed that a co-owner cannot be said to be in actual physical or exclusive possession of any parcel, till a partition takes place, and the question of his delivering the possession of such an undivided share does not arise. Authorities can be multiplied on this aspect. The gist is that the transferee from a co-owner of an undivided property gets nothing more than a right to seek partition, and thereafter, secure possession of the share of property purchased by him, and he cannot claim any exclusive possession, on the basis of such transfer till the partitions takes place. Resultantly, such a transferee cannot claim the benefit of....
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....s an enormous task to be precisely elaborated. "Possession" is a word of open texture. It is an abstract notion. It implies a right to enjoy which is attached to the right to property. It is not purely a legal concept but is a matter of fact. The issue of ownership depends on rule of law whereas possession is a question dependent upon fact without reference to law. To put it differently, ownership is strictly a legal concept and possession is both a legal and a non-legal or pre-legal concept. The test for determining whether any person is in possession of anything is to see whether it is under his general control. He should be actually holding, using and enjoying it, without interference on the part of others. The AAR in Jasbir Singh Sarkaria's case (supra) had observed that there can be concurrent possession of the owner who can exercise possessory rights to a limited extent and for a limited purpose and that of the buyer/developer who has general control and custody of the land. It was also noticed that possession contemplated by clause (v) of Section 2 (47) of the Act need not necessarily be sole and exclusive possession. The legality of these conclusions was, however questi....
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....velopment of the property. No possession was ever given by the transferor to the transferee in part performance of the JDA dated 25.2.2007. JDA had not conferred any right to own the property on the transferee but only to develop it. Even registered irrevocable special power of attorney nowhere specified granting possession in part performance of JDA dated 25.2.2007 as required under Section 53A of the 1882 Act. 32. Further, in order to demonstrate that no absolute possession as required under section 53A of the 1882 Act had been delivered by the transferor to the transferee, learned counsel for the assessee-appellant extensively drew the attention of the court to various relevant clauses of the JDA dated 25.2.2007 and also the registered special power of attorney dated 26.2.2007 as under:- (I) Clauses of JDA dated 25.2.2007 2. Project 2.1. The owner hereby irrevocably and unequivocally grants and assigns in perpetuity all its rights to develop, construct, mortgage, lease, licence, sell and transfer the property alongwith any and all the construction, premises, hereditaments, easements, trees thereon in favour of THDC for the purpose of development, construction, mortga....
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....y thousand only) calculated @ Rs. 82,50,000/- (Rupees eighty two lacs fifty thousand only) payable to 65 members having plot of 500 square yards each, Rs. 1,654,00,000/- (Rupees one crore sixty five lacs only) payable to 30 members having plot of 1000 square yards each and Rs. 3,33,00,000/- (Rupees three crores thirty lacs only) payable to the owner for the 4 plots of 500 square yards each which shall tantamount to the full and final payment to the owner and/or the respective members of the owner (as the cas may be) in a manner set out herein below (Payment). Further, the transfer, sale and conveyance of 21.2 acres of land of the property shall be made by the owner in favour of THDC pro rata to the payment received by the owner and/or the respective members of the owner (as the case may be) from HASH by executing sale deeds and registering the same. It is expressly provided that as resolved by the owner, the total amount payable by HASH to the owner and/or the respective members of the owner (as the cas may be) for assignment of the Development rights and for transfer and sale of 21.2 acres of land of the property shall be Rs. 106,42,50,000/- (Rupees one hundred six crores forty tw....
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....pt the sale transaction made by the owner in favour of THDC as set out in Clause 4.1 above. THDC hereby undertake and assure the owner that they shall use the title deeds only for the purpose of furtherance of the project in the manner that it does not adversely effect the owner/allottee in any manner whatsoever. 14. Termination (i) Save and except the provisions of clause 26, THDC shall at all times have the right to terminate this agreement in the event there is any material breach of the representations, warranties, undertakings, declarations, covenants and/or obligations given by the owner under this agreement after giving thirty(30) days written notice for rectification of such breach. In the event the agreement is terminated by THDC, all the lands registered in the name of THDC as per the terms of this agreement upto the date of the termination shall remain with THDC and the balance lands to be transferred to THDC as per the terms of this agreement shall not be transferred by the owner in favour of THDC. Upon the termination, the owner shall refund to THDC the adjustable advance/earnest money mentioned in clause 4.1(i) above within one month of such termination. In the ....
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....registered sale deed for land of equivalent value in favour of THDC. (iv) The owner shall have the right to terminate the agreement only in the event of default by the developers for making the payment in accordance with the terms of this agreement and the allotment of flats within the time period as mentioned in this agreement after giving thirty (30) days written notice for rectification of such breach or any further time as may be desired by the owner. In the event the agreement is terminated by owner, all the lands registered in the name of THDC as per the terms of this agreement upto the date of the termination shall remain with THDC and the balance lands to be transferred to THDC as per the terms of this agreement shall not be transferred by the owner in favour of THDC. Upon the termination, the owner shall forfeit the adjustable advance/earnest money mentioned in clause 4(i). 26. Force Majeure (i)None of the parties shall be liable to the other party or be deemed to be in breach of this agreement by reason of any delay in performing, or any failure to perform, any of its own obligations in relation to the agreement, if the delay or failure is due to any event of for....
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....istrar Majri, District Rupnagar (now within District Mohali) and more particularly described in the Schedule A hereunder written and delineated in green colour boundary line in the plan attached hereto, annexed as Annexure I (hereinafter referred to as the 'Property'). B). The owner is the absolute and undisputed owner of the property and has assigned and transferred all its righst to plan, develop, construct, sell, lease, mortgage the property as more particularly set out in the Joint Development Agreement dated 25.2.2007 (Joint Development Agreement) entered into by the owner with Hash Builders Private Limited having its registered office at SCO No.311-12, 2nd Floor, Sector 40-D, Chandigarh, hereinafter referred to as "Hash" and THDC Limited having their registered office at Eruchshaw Building, Fourth Floor, 249, Dr. D.N.Road, Mumbai 400 001, hereinafter referred to as "THDC" wherein the owner assigned its development rights (as defined in the Joint Development Agreement in favour of THDC, who possesses the relevant and required skills and other expertise for developing the property by constructing thereupon buildings and/or structure to be used for inter alia resident....
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....ities to the property for the construction of the premises or any party thereof and in connection therewith to make all deposits as shall or may be necessary and to do all other acts, deeds, matters and things which the owner can do. (n) to enter upon the property either alone or with others for the purpose of development, coordination, execution, implementation of the project and commercialization of the property/premises. (o) to (s) xxxx xx xx xx xx (t) To amalgamate the property with any other contiguous, adjacent and adjoining lands and properties wherein developmental and/or other rights, benefits and interests are acquired and/or proposed to be acquired and developed or proposed to be developed by THDC and/or their associate and/or group concern/s and/or utilize the FSI, FAR, DR and TDR of the contiguous, adjacent and adjoining lands for the purpose of constructing buildings and/or structures thereon and/or on the property or utilize such lands and properties for making provision of parking spaces thereon, and/or may utilize the same for any other lawful purpose, as THDC and/or their associate and/or group concern/s may in their sale, absolute and unfettered discreti....
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....the transaction is contained in more than one document between the same parties they must be read and interpreted together and they have the same legal effect for all purposes as if they are one document. In Manks v. Whiteley,(1) Moulton, L.J. stated: "Where several deeds form part of one transaction and are contemporaneously executed they have the same effect for all purposes such as are relevant to this case as if they were one deed. Each is executed on the faith of all the others being executed also and is intended to speak only as part of the one transaction, and if one is seeking to make equities apply to the parties they must be equities arising out of the transaction as a whole." 34. It was contended that irrevocable power of attorney had been registered wherein power to sell the property as owners to third parties had been given to the developers and thus, it partakes the colour of contract under Section 202 of Indian Contract Act, 1872. Therefore, termination of agency in the present case could not be effected by the transferor in view of Section 202 of the Indian Contract Act, 1872 which is in the following terms:- "202. Termination of agency, where agent has an ....
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....rceable right and interest in enforcing the contract of sale by the execution of a sale deed and in getting possession of the property agreed to be sold under the provisions of the Specific Relief Act. In the English Common Law, the specific performance of contracts was a part of the law of contract. This is why Chapter Iv of the Contract Act deals with the performance of contracts which includes the performance of contracts relating to immovable property also. In fact, section 4 of the Transfer of Property Act says that the chapters and sections of that Act which relate to contracts shall be taken as part of the Indian Contract Act, 1872. Therefore, the respondent in whose favor the appellant had executed an agreement for the sale of an immovable property had an interest in the subject-matter of the contract, namely, the shop, turn the purposes of section 202 of the Contract Act if not for the purposes of the Transfer of Property and the Registration Acts." 35. Principle of law enunciated in Haydon's case was pressed into service to urge that while interpreting a statute, the mischief and the defect which was sought to be removed by the enactment, full meaning should be ass....
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.... Hiray vs. Mr. Justice B.Lentin and another, (1988) 176 ITR 1, wherein following the Bengal Immunity's case (supra), it was observed as under:- "No rule is more firmly established than the principles enunciated in Heydon's case. which have been continually cited with approval not only by the English Courts but also by the Privy Council as well as this Court. The principles laid down in Heydon's case have been enunciated in Craies on Statute Law, 6th edn. at p. 96 as follows: "That for the sure and true interpretation of all statutes in general (be they penal or beneficial restrictive or enlarging of the common law), four things are to be discerned and considered: (1) what was the common law before the making of the Act (2) What was the mischief and defect for which the common law did not provide (3) What remedy the Parliament hath resolved and appointed to cure the disease of the commonwealth (4) The true reason of the remedy. And then the office of all the judges is always to make such construction as shall suppress the mischief and advance the remedy, and to suppress subtle inventions and evasions for the continuance of the mischief and pro privato commodo, and ....
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.... xx xx xx xx xx xx xx x 26. We have merely drawn attention to and reiterated the wellsettled legal position that SA/GPA/WILL transactions are not Rstransfers' or Rssales' and that such transactions cannot be treated as completed transfers or conveyances. They can continue to be treated as existing agreement of sale. Nothing prevents affected parties from getting registered Deeds of Conveyance to complete their title. The said RsSA/GPA/WILL transactions' may also be used to obtain specific performance or to defend possession under section 53A of TP Act. If they are entered before this day, they may be relied upon to apply for regularization of allotments/leases by Development Authorities. We make it clear that if the documents relating to SA/GPA/WILL transactions' has been accepted acted upon by DDA or other developmental authorities or by the Municipal or revenue authorities to effect mutation, they need not be disturbed, merely on account of this decision. 27. We make it clear that our observations are not intended to in any way affect the validity of sale agreements and powers of attorney executed in genuine transactions. For example, a person may give a pow....
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....o agreed to be executed for this purpose. The resolution of the Executive Committee was ratified in the General Body meeting held on 25.2.2007 pursuant to which tripartite JDA was executed on the same day. The possession of the owners on land measuring 21.2 acres was recognized vide this JDA. HASH was responsible to make the payment failing which it was the responsibility of THDC. A copy of JDA dated 25.2.2007 has been annexed as Annexure A.2 with ITA No.200 of 2013. It may be advantageous to broadly refer to various clauses of JDA dated 25.2.2007 and irrevocable special power of attorney dated 26.2.2007. A plain reading of JDA dated 25.2.2007 spells out that clause 1 thereof has defined various expressions. Clause 2 enumerates the description of the project. Clause 3 describes the obligations of the developers for getting building plans, designs, drawings etc. sanctioned from competent authority. Clause 4 deals with consideration whereas Clauses 5 to 8 are relating to various aspects of project and obligations of Society and Developers. Under Clause 9 of JDA, the method of transfer of ownership and rights have been prescribed. Clause 10 speaks about consent given by the society to....
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.... the special power of attorney, the developer was given power to raise finance by mortgaging the property and for the purpose of registration of the charge thereon. If at all, it is to be held that possession was delivered to the developers then it would be as a licencee only. The developer was authorized to amalgamate the project and in the event of termination of JDA, provisions of Clause 6 thereof were agreed to be surviving. The environmental clearance was the responsibility of the developer THDC/HASH out of its own sources. The Tribunal had sought to raise presumption of delivery of possession which on the basis of preceding analysis of factual matrix involved herein was legally not permissible. The JDA dated 25.2.2007 to be covered under Section 53A of 1882 Act was required to be a registered instrument even for purposes of enforcing civil law rights. Once it was embodied in Section 2(47)(v) of the Act by incorporation, all the legal requirements of Section 53A of 1882 Act had to be complied with. In the absence of registration of such an agreement, the same was not enforceable under general law keeping in view the provisions of Sections 17(1A) and 49 of the 1908 Act and at t....
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....onstruction should be undertaken in the area and stayed demolition of the existing structure. The developers who were not party in CWP No.18253 of 2009 were also impleaded therein. The Society in the meantime issued letter dated 28.1.2011 to HASH for payment of third instalment as per clause 4.1(iv) of the JDA. Vide letter dated 4.2.2011, HASH stated that the third installment would become due only after obtaining permission to commence construction which was still pending with the Ministry of Environment and Forests. The High Court vide order dated 28.1.2011 had already restrained the developers to start construction. The Society not satisfied with the stand taken by the developers sent legal notice dated 11.5.2011 to them stating therein that time was the essence of JDA and there was delay on their part to obtain necessary approval from the competent authority. The society gave 30 days time to the developers to make payment of the third instalment failing which the JDA was liable to be terminated. On failure of the developers to pay the instalment, the society decided to terminate the JDA vide resolution dated 13.6.2011 and cancelled the special power of attorney on 31.10.2011 wh....
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....come can be said not to have resulted at all, there is obviously neither accrual nor receipt of income, even though an entry to that, effect might, incineration circumstances, have been made in the books of account." This pronouncement was applied by the Supreme Court in Godhra Electricity Co. Limited vs. CIT, (1997) 225 ITR 746 (SC) and followed by the Calcutta High Court in CIT vs. Balarampur Commercial Enterprises Limited, (2003) 262 ITR 439 (Cal.). 45. Relying upon decision in Messrs Shoorji Vallabhdas & Co.'s case (supra), the Supreme Court in CIT vs. Excel Industries Limited (2013) 358 ITR 295 (SC) held that income tax cannot be levied on hypothetical income. Income accrues when it becomes due but it must also be accompanied by a corresponding liability of the other party to pay the amount. Only then can it be said that for the purposes of taxability, the income is not hypothetical and it has really accrued to the assessee. It was observed as under:- "17. First of all, it is now well settled that income tax cannot be levied on hypothetical income. In Commissioner of Income Tax v. Shoorji Vallabhdas and Co., [1962] 46 ITR 144 (SC) it was held as follows:- "Inco....