TaxTMI 
TaxTMI 
2002 (2) TMI 59
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.... it was specifically mentioned that there was a sale of the concerned property for Rs.2,00,000 on June 11, 1981, and since the assessee herein had requested to resell the aforesaid property for the aforesaid amount, the vendee D. Narmada consented and agreed to sell on the following conditions. In those conditions, it was stated that the sale deed shall be got registered at the instance of the assessee after the payment of the balance amount of sale consideration of Rs.1,99,500 as the amount of Rs.500 was received by the assessee by way of an earnest. It was then agreed by the said vendee D. Narmada that in default of the payment of the sale consideration of Rs.1,99,500, the resale agreement would be rendered invalid. It was also agreed that this sale deed was to be got executed after a period of two years, i.e., after June 21, 1983, but within a period of three years, i.e., before June 21, 1984. It is also agreed that if the vendee Narmada failed to execute the sale deed, the assessee shall be at liberty to file a suit in the court and obtain the resale. Both the documents were got registered on June 22, 1981. On this basis, the Revenue authorities, treating this to be a transa....
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....for capital gains tax. The Revenue, therefore, approached this court and ultimately a reference came to be made of the question referred by us earlier. Learned counsel for the Department, Mrs. Chitra Venkataraman, pointed out that here was a case where there was a complete transfer of the concerned immovable property for which there was a registered sale deed. She further pointed out that not only was the sale deed executed between the parties on June 11, 1981, but on that date itself the possession of the said immovable property was also transferred. Learned counsel further pointed out that the subsequent agreement dated June 22, 1981, wherein the vendee Narmada had agreed to sell back the property to the assessee was of no consequence, as it could not efface the effect of the transfer which had already taken place on June 11, 1981. Learned counsel invites our attention to section 47 of the Indian Registration Act and points out that it is settled law that even if there is an unregistered sale deed earlier, the transfer would take effect from the date on which it has been executed, provided there is a subsequent registration of that document under the required provisions. Learn....
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....n to the principles of ownership and suggests that the ownership would suggest, (1) Right to possession, (2) Right to enjoy the property, and (3) Right to dispose of the property. According to learned counsel, since the assessee had not parted with or at any rate had controlled the rights of the vendee in disposing of the property, it could not be said to be an out and out sale within the meaning of section 54 of the Transfer of Property Act. Learned counsel wants to read the word "ownership" with a specific stress on that word, and wants to contend that in this case the ownership was not intended to be transferred which was apparent from the agreement dated June 22, 1981. The other argument is that the agreement dated June 22, 1981, was registered along with the earlier document dated June 11, 1981, on that day itself. Learned counsel further suggests a clearest possible intention on the part of the assessee not to part with the ownership. Learned counsel further argues that the transaction could, at the most, be called as a "conditional sale". Learned counsel was fair enough to suggest that he did not want to contend that this was a transaction under section 58(c) of ....
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....y date back to the date of the execution of the instrument. There is no dearth of case law for this proposition. The proposition is settled. Learned counsel, however, contends that till such time the sale deed dated June 11, 1981, was not registered, the ownership continued to be with the assessee. In support of his contention, learned counsel sought to rely on the reported decisions in, 1. G. Srinivasalu Naidu v. Raju Naicker, AIR 1955 Mad 635; 2. Lalta Prashad v. Jagdish Narain, AIR 1927 All 137; 3. Sital Chandra Kolley v. Heirs of Mihilal Kolley, AIR 1955 Cal 21; and 4. Bai Dosabai v. Mathurdas Govinddas, AIR 1980 SC 1334. From this, learned counsel sought to argue that the ownership till the date of registration continued with the assessee and, therefore, if the vendee agreed to sell back the property on the date when the instrument was got registered and if the said agreement of sale was also registered along with the sale deed, then it was clear that the assessee did not intend to sell the property or did not intend to transfer the property in favour of the vendee. In the first place, in tax jurisprudence "intention" would be irrelevant. If therefore any ....
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.... compact or composite agreement for such purposes and the two may be interdependent in the sense that the agreement upon one part of the bargain may well have promoted agreement as to the rest. The court's observation therein was as follows: " 'The determining factor lies in the ultimate shape of the agreement rather than in the process by which it is reached', and, although the agreement for sale and re-sale may have been entered into at one and the same time and being interdependent, as stated above, may be broadly looked at as forming parts of the same transaction, if the sale and the re-sale can be separated and can be held to have been intended to be effected separately or as separate and independent transactions, namely, an outright sale to be followed by a reconveyance, there is no bar to the agreement for reconveyance, whether oral or written or registered or unregistered, having full effect in law." We have absolutely no difficulty with the liberty of the assessee to enter into an agreement of sale, but the question really is as to whether such sale is a transfer of ownership. We do not find in this decision anything to suggest that a transaction of sale which is als....
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....was presented for registration and got registered. That apart, even if there was any such intention to recovery, it cannot take the transaction out of the clutches of section 45 because there is no finding even in this case that the earlier sale was not a transfer. The decision is, therefore, of no consequence. Learned counsel for the respondent also invited our attention to the decision in Thakur Raghunath Ji Maharaj v. Ramesh Chandra, AIR 2001 SC 2340 and suggested that there were two instruments, one a gift and another an agreement binding the donee with a condition that the donee would construct a particular house within a particular time. We have no quarrel with this proposition also. The Supreme Court ultimately held that the two documents could be read together and though the condition was in a different document than the instrument of transfer, yet it could be imposed upon the transferee. We have no difficulty in this case that the condition of resale could be imposed upon the transferee, but that does not stop the earlier sale deed from being a sale deed. This is particularly because in the present sale deed, not only is there a clear mention about the valuable consider....