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2017 (9) TMI 1647
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....with the developer wherein matters of permission from BDA, conditional advance receipt, consideration etc. were mentioned. That the learned Additional Commissioner arbitrarily estimated the consideration to be received on future date on the basis of fair market price fixed by the builder in future. So also the Honourable CIT(Appeals) ignored the submissions made by the appellant and accepted to the value taken by the learned Additional Commissioner." 4. The brief facts of the case are that the assessee is the owner of the land measuring A0.405 decimals of land at Patia, Bhubaneswar. The assessee entered into a development agreement on 9.9.2008 with builder Sri Jitendra Hans. The assessee executed an irrevocable general power of attorney in favour of the said builder on that date. The assessee received a refundable advance of Rs. 20,00,000/- and handed over the possession of the land to the builder. Thereafter, the builder obtained approval from the Bhubaneswar Development Authority in 2009 for construction of 32 dwelling units on a plot of land owned by the assessee. As per the development agreement, the assessee transferred his right of development and ownership of the land to ....
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....received a refundable advance of Rs. 20,00,000/- from the developer. Therefore, considering the overall facts of the case and in the absence of any evidence to the contrary, it is quite clear that the possession of the land was handed over to the builder immediately after signing of the agreement. Accordingly, as correctly held by the AO, the transaction entered into by the appellant shall be a deemed transfer within the meaning of section 2(47). The AO has also correctly relied upon the decision of the Hon'ble Bombay High Court in Charturbhuj Dwarakadas Kapadia vs. CIT (2003) 260ITR 491 (Bom) and of the Rajasthan High Court in CIT vs. Rajasthan Mirror Manufacturing Co. (2003) 260 ITR 503 (Raj). 5.3.1 The appellant in his long written submissions has contested the decision of the AO primarily on the following grounds; (i) that there was actually no transfer of land, (ii) that the sales consideration in the form of 14 flats was not received during the year of agreement, (iii) that the value of the sales consideration is not determinate and (iv) that the signing of the GPA is not a valid transfer of land. The appellant has also referred to some judicial decisions in supp....
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....are several decisions of various High Courts & Tribunals which can be relied upon in support of the decision taken by the AO in the instant case. In Ravinder Singh Arora v. ACIT (2012) 24 Taxmann.com 346 (Hyd), the Hon'ble IT AT held that for purpose of charging capital gain to tax what is needed to be judged is point of time at which transfer took place, either by handing over of possession or by allowing entry into premises or making constructive presence of vendee and not year in which entire sale consideration is received. It was further held that where a land owner has entered into an agreement for development of property and certain rights were assigned to developer who in turn has made substantial payment and, consequently, has entered into property and, thereafter, if transferee (developer) has taken steps in relation to construction of flats, then it is to be considered as transfer under section 2(47)(v) attracting provisions of section 45; and fact that legal ownership continued with owner, which is to be transferred to developer at a future distant date does not affect applicability of section 2(47)(v). Similar view was expressed by the Hon'ble Karnataka....
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.... the date of the agreement and handing over of possession if consideration is not received by the assessee is not acceptable because s. 53A of the Transfer of Property Act, 1882, which is engrafted in the definition of "transfer" in s. 2(47) of the Income-tax Act does not contemplate any payment of consideration. Payment of consideration on the date of agreement of sale is not required. It may be deferred for a future date. The element of factual possession and agreement are contemplated as transfer within the meaning of the aforesaid section. When the transfer is complete, automatically, consideration mentioned in the agreement for sale has to be taken into consideration for the purpose of assessment of income for the assessment year when the agreement was entered into and possession was given. Here, factually it was found that both the aforesaid aspects took place in the previous year relevant to the assessment year 2003-04. Hence, the Tribunal has rightly held that the appellant is liable to pay tax on the capital gain for the assessment year. " (emphasis supplied) 5.3.2 In view of the above discussion and considering the facts on record, I hold that as the development ....
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....he agreement of sale to be registered for the purpose of section 53A on transfer of Property Act. In this case, the Court held that the developer was given possession under the joint development agreement and special power of Attorney only in the capacity of a licenses. The ingredients of section 53A of Transfer of Property Act were not fulfilled and, therefore, there was no transfer in terms of section 2(47) (v) for the purpose of levying capital gains tax. 8. On the other hand, ld D.R. supported the orders of lower authorities. He relied on the decision of Hyderabad Benches of the Tribunal in the case of Mrs Durdana Khatoon vs ACIT, 24 ITR (T) 55, wherein, it was held that the transfer of possession of property to the developer for construction of flats under Joint Development Agreement as per which assessee was entitled to 50% built up area, is 'transfer' as per section 2(47) and is taxable in the year in which agreement giving vacant and peaceful possession to developer, was entered into by the assessee. 9. We have heard the rival submissions, perused the orders of lower authorities and materials available on record. The undisputed facts giving rise to this appeal is that....
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.... 1882 Act ; (iii) meaning to be assigned to the term "possession" ? (iv) whether, in the facts and in the circumstances, any taxable capital gains arises from the transaction entered by the assessee ? 10. Taking up the first issue, it may be noticed 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,- . . . (ii) the extinguishment of any rights therein ; or . . . (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 ....
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....atever nature), not being a transaction by way of sale, exchange or lease of such land, building or part of a building ; (e) and (f) . . ." 11. The Finance Act, 1987, introduced clauses (v) and (vi) in section 2(47) of the Act with effect from April 1, 1988. It provides 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 ind....
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....in section 2(47) to prevent avoidance of capital gains liability by recourse to transfer of rights in the manner referred to above. 11.2 The newly inserted sub-clause (vi) of section 2(47) has brought into the ambit of 'transfer', the practice of enjoyment of property rights through what is commonly known as power of 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 April 1, 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 the assessment year 1988-89 as discernible from the Central Board of Direct Taxes circular is to embrace within its ambit those transactions of sale of property where the assessee enters into agreements for developing properties with builders and ....
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.... possession provided it is in the nature as contemplated in section 53A of the Transfer of Property Act, would be enough to bring the transaction into the mischief of the word 'transfer'. The argument is undoubtedly correct. Section 2(47)(v) has probably been introduced to meet the law laid down in this judgment, wherein there used to be a transfer for all the practical purposes, but the 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 con templated under section 53A of the Transfer of Property Act, the transaction would be covered as a transfer. By necessary logic then, that transaction would be coverable in that particular assessment year as has been held 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. How....
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....s of ownership without executing conveyance and to plug that loophole, section 2(47)(v) came to be introduced in the Act. It was argued on behalf of the assessee that there was no effective transfer till grant of irrevocable licence. In this connection, the judgments of the Supreme Court were cited on behalf of the assessee, but all those judgments were prior to introduction of the concept of deemed transfer under 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 perio 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 co....
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....e Tribunal so as to warrant interference." 17. Adverting to clause (vi) of section 2(47) of the Act, it may be noticed that the scope and ambit of this clause as explained by the Central Board of Direct Taxes in its circular No. 495, dated September 22, 1987, has already been reproduced above. On a perusal of this clause, it would be clear that it was intended to cover those cases of transfer of ownership where the prospective buyer becomes owner of the property by becoming a member of a company, co-operative society, etc. In the present case, JDA was executed between the society and the developers and there was no transaction involving the developer becoming a member of a cooperative society/ company, etc., in terms of section 2(47)(vi) of the Act. The surrender of right to obtain a 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 inasmuch as there was no extinguishment of any rights of the assessee in the capital asset at the time of execution of the JD....
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....erformance of the contract, he had taken possession of the property even if the limitation to bring a suit for specific performance had expired. But there are certain conditions which are required to be fulfilled if a transferee wants to defend or protect his possession under section 53A of the 1882 Act. The Supreme Court in Shrimant Shamrao Suryavanshi v. Pralhad Bhairoba Suryavanshi, AIR 2002 SC 960, had reiterated the following to be necessary conditions for applicability of section 53A of 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 neces sary 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, th....
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....oses of the said section 53A." "49. Effect of non-registration of documents required to be regis tered.-No document required by section 17 or by any provision of the Transfer of Property Act, 1882 (4 of 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 pro perty 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 (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 pur poses 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 admiss....
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....fect for the purposes of the said section 53A. 9. Section 17(1A) of the 1908 Act declares in no uncertain terms if a contract executed in part performance of an agreement is unregistered, it shall have no effect for the purpose of section 53A of the 1882 Act. Section 17(1A) does not refer to much less prohibit the filing of a suit for specific performance or leading of such a contract into evidence. 10. The Amendment Act also introduced a proviso to section 49 of the Indian Registration Act to clarify the effect of non-registration of a contract executed in terms of section 53A of the Transfer of Property Act. Section 49 of the Registration Act 1908, 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 (4 of 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....
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....o sell that contains a clause recording part performance of the contract by delivery of possession or has been executed with a person, who is already in possession shall not be dis missed for want of registration of the contract/agreement ; (b) the proviso to section 49 of the Registration Act, legitimises such a contract to the extent that, even though unregistered, it can form the basis of a suit for specific performance and be led into evidence as proof of the agreement or part performance of a contract." In Sukhwinder Kaur v. Amarjit Singh [2012] ILR 2 P&H 718, a single Bench of this court observed as follows : "8. Section 53A of the Transfer of Property Act before amendment prescribed that where in pursuance to part performance of the con tract, the transferee has taken possession 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....
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....or after the commencement of the Registration and other Related Laws (Amendment) Act, 2001, and if such documents are not registered on or after such commencement, then, they shall have no effect for the purposes of the said section 53A.' Once a person cannot even protect the possession, which he is holding, in absence of an unregistered agreement to sell, then how such a person can seek possession on the basis of such a document. In Sunil Kapoor v. Himmat Singh [2010] 167 Delhi Law Times 806, a single judge of this court has held thus 'a mere agreement to sell of immovable property does not create any right in the property save the right to enforce the said agreement. Thus, even if the respondents/ plaintiffs are found to have agreed to sell the property, the petitioner/ defendant would not get any right to occupy that property as an agreement purchaser. This court in Jiwan Das v. 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 legislativ....
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....and parcel of the later Act as if they had been "bodily transposed into it". The effect of incorporation is admirably stated by Lord Esher M. R. "If a subsequent Act brings into itself by reference some of the clauses of a former Act, the legal effect of that, as has often been held, is to write those sections into the new Act as if they had been actually written in it with the pen, or printed in it.' (page 233) 'Even though only particular sections of an earlier Act are inco porated into later, in construing the incorporated sections it may be at times necessary and permissible to refer to other parts of the earlier statute which are not incorporated. As was stated by Lord Blackburn : "When a single section of an Act of Parliament is introduced into another Act. I think it must be read in the sense it bore in the original Act from which it was taken, and that consequently it is perfectly legitimate to refer to all the rest of that Act in 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 P. Ltd.'s case (supra), the Gauhat....
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....provisions of section 2(47)(v) of the Act. 25. Examining the question of possession, one of the essential conditions for enforceability of section 53A of the 1882 Act is that the transferee must in part performance of the contract take possession of the property or any part thereof. There is a serious dispute with regard to the nature of possession contemplated by section 53A of the 1882 Act. It was contended on behalf of the appellantassessee that reference to the possession of the transferee as postulated under section 53A of the 1882 Act is that it must have been delivered in furtherance to the contract and should be sole, exclusive and cannot be concurrent. The possession is not to be in any other capacity to invoke section 53A of the 1882 Act. On the other hand, learned counsel for the Revenue, drawing support from the judgment delivered by the Authority for Advance Rulings (AAR) in Jasbir Singh Sarkaria, In re [2007] 294 ITR 196 (AAR) submitted that there can be concurrent possession of the transferor as well 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 effective....
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....al concept but also a matter of fact, Salmond (12th Ed., 52) describes possession, in fact, as a relationship between a person and a thing. According to the learned author, the test for determining 'whether a person is in possession of anything is whether he is in general control of it'. In Salmond's Jurisprudence, at paragraph 54, we find an illuminating discussion on 'immediate' and 'mediate possession'. The learned author states "in law one person may possess a thing for and on account of some one else. In such a case the latter is in possession by the agency of him who so holds the thing on his behalf. The possession thus held by one man through another may be termed mediate, while that which is acquired or retained directly or person ally may be distinguished as 'immediate or direct'." Salmond makes reference to three types of mediate possession. In all cases of "mediate possession", two persons are in possession of the same thing at the same time. An allied concept of concurrent possession has also been explained in paragraph 55 of Salmond's Jurisprudence in the following words : 'It was a maxim of the civil law th....
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....t of a small amount to a distant date, may be, when the entire building complex gets ready. Even if some amount, say 10 per cent., remains to be paid and the developer/transferee fails to pay, leading to a dispute between the parties, the right to exclusive and indefeasible possession may be in jeopardy. In this state of affairs, the transaction within the meaning of sub-clause (v) cannot be said to have been effected and the liability to pay capital gains may be indefinitely postponed. True, it may not be profitable for the developer to allow this situation to linger for long as the process of transfer of flats to the prospective purchasers will get delayed. At the same time, the other side of the picture cannot be over looked. There is a possibility of the owner with the connivance of the transferee postponing the payment of capital gains tax on the ostensible ground that the entire consideration has not been received and some balance is left. The mischief sought to be remedied, will then perpetuate. We are, there fore, of the view that possession given to the developers need not ripen itself into exclusive possession on payment of all the instalments in entirety for the....
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....ned by the person sought to be bound by it and from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty. These are pre-requisites to invoke the equitable doctrine of part performance. After establishing the aforementioned circumstances it must be further shown that a transferee had in part performance of the contract either 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. The acts claimed to be in part performance must be unequivocally referable to the pre-existing contract and the acts of part performance must unequivocally point in the direction of the existence of contract and evidencing implementation or performance of contract. There must be a real nexus between the contract and the acts done in pursuance of the contract or in furtherance of the contract and must be unequivocally referable to the contract. When series of acts are done in part performance, one such may be payment of consideration. Any one act by itself may or may not be of such a conclusive nature as to c....
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....agreement to purchase, i.e., by mutual agreement between the parties his possession as lessee ceased and commenced as that of a transferee under the contract. On the contrary, there is a finding recorded in the earlier suit that in spite of his having entered into a contract to purchase the property he had not disowned his character as lessee and he was treated as such by the parties. The judgment dated September 1, 1999, in the civil suit notes the conduct of the plaintiff inconsistent with his conduct as vendee in possession. When a person already in possession of the property in some other capacity enters into a contract to purchase the property, to confer the benefit of protecting possession under the plea of part performance, his act effective from that day must be consistent with the contract alleged and also such as cannot be referred to the preceding title. The High Court of Madhya Pradesh had an occasion to deal with the facts very near to the facts before us in Bhagwandas Parsadilal v. Surajmal, AIR 1961 MP 237. A tenant in possession entered into an agreement to purchase the house forming subject matter of tenancy. However, he failed to show his nature of possession havi....
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.... of section 53A of the Act is that the person claiming the benefit under it, must be in possession of the property, which is the subject-matter of the con templated transfer. By its very nature, possession is a fluid concept, and is not susceptible to any precise definition. For the most part of it, possession was treated as a question of fact, and was held to depend upon the purpose, as well as the connection with which it arises. Shartel, in his article Meanings of Possession [1932] 16 Minnesota Law Review 611, observed as under : 'I want to make the point that there are many meanings of the word "possession" ; that possession can only be usefully defined with reference to the purpose in hand ; and that possession may have one meaning in one connection and another meaning in another.' 32. Jurists hailing from various legal systems have pointed out that possession, as a legal concept, has two components, viz., corpus possessions, physical possession of the property and animus possidendi, i.e., the intention to hold it as of right. Their difference of approach was only as to the emphasis on these ingredients, to constitute a position in law. In his treatis....
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....more co- owners of immovable property legally competent in that behalf trans fers his share of such property or any interest therein, the transferee acquires, as to such share or interest, and so far as is necessary to give effect to the transfer, the transferor's right to joint possession or other common or part enjoyment of the property, and to enforce a partition of the same, but subject to the conditions and liabilities affecting, at the date of the transfer, the share or interest so transferred. Where the transferee of a share of a dwelling-house belonging to an undivided family is not a member of the family, nothing in this section shall be deemed to entitle him to joint possession or other common or part enjoyment of the house.' It mandates that, what a transferee, from a co-owner of an undi vided property, gets, is a right, to enforce a partition, that too, subject to conditions and liabilities, in relation to the property, by the date of transfer. 36. The phenomena of co-ownership of an undivided property, on the one hand, and delivering of physical or symbolical possession thereof do not co-exist. In fact, they are mutually exclusive. In Saleem, ....
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.... are taken, an implied symbolic, delivery of possession can be culled out, if the transferee is able to prove to the satisfaction of the court, that he is started receiving the rents of the property, subsequent to the agreement, as of right. 39. In the absence of any of the circumstances referred to above, the court cannot infer delivery of possession in favour of a transferee. Taking of possession, being one of the most important ingredients of section 53A, the plaintiff cannot derive the benefit of that provision, once he failed to prove that he has taken possession of the suit schedule property." 29. Similarly, the Delhi High Court in R. K. Apartments Pvt. Ltd. v. Smt. Aruna Bahree [1998] 2 ILR 727 (Delhi), delving into the issue of possession under section 53A of the 1882 Act had recorded as under : "14. From the aforesaid statements made in both the Articles it is manifest that the legal position enunciated in Hounslow London Borough's case (supra), is no more a good law. Possession of the suit land delivered to defendants 1 and 2 at the time of the execution of the agreements dated March 1/11, 1985, was only by way of temporary measure for undertaking th....
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....ion need not be probed into. It is enough if the transferee has by virtue of that transaction a right to enter upon and exercise the acts of possession effectively. It was further held in that case that the capital gains which arose during the financial year 2006-07 shall be subjected to tax for the assessment year 2007-08. The aforesaid observations were recorded in that context on the facts involved therein. It would have to be ascertained in each case independently whether a transferee has been delivered possession in furtherance of the contract in order to fall under section 53A of the 1882 Act and, thus, amenable to tax by virtue of section 2(47)(v) read with section 45 of the Act. 31. Lastly, both the parties had hotly and with great vehemence contested the question of delivery of possession under the JDA dated February 25, 2007, and also the registered special power of attorney dated February 26, 2007. It would be expedient to notice the respective submissions of the learned counsel for the parties. Firstly, noting the arguments of the assessee, reliance was placed on section 52 of the Indian Easements Act, 1882, which defines "licence" in the following terms : ....
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.... and enforce the rights and to register the same with the revenue/competent authorities and to appear on our behalf before all authorities, statutory or otherwise, and before any court of law (the Development Rights). The owner hereby hands over the original title deeds of the property as mentioned in the list annexed hereto and marked as annexure IV and physical, vacant possession of the property has been handed over to THDC simultaneous to the execution and registration of this agreement to develop the same as set out herein. It is hereby agreed and confirmed that what is stated in the recitals hereinabove, shall be deemed to be declarations and representations on the part of the owner as if the same were set out herein in verbatim and forming an integral part of this agreement. 4. Consideration 4.1. It is specifically understood and agreed amongst the parties that THDC shall use its expertise and its brand name and/or any other brand name at its discretion to develop the property into the premises as per applicable building bye-laws of the competent authority and the owner shall have no objection to the same in whatsoever manner. In consideration of the owner g....
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....tiated and agreed terms between the owner and HASH. HASH expressly undertakes to make timely payments of the payment to the owner and/or the respective members of the owner (as the case may be) as under :" (The schedule of payment referred in clause 4.1 herein has already been reproduced in the earlier part of the judgment). 9. Transfer of ownership/rights 9.1. The owner shall simultaneously on receipt of payment as set out in clause 4.1 above, execute an irrevocable special power of attorney in favour of THDC for development of the property, authorizing THDC to do all lawful acts, deeds, matters and things pertaining to the development of the property for the project along with inter alia right to mortgage the property and/or premises, sell, lease, licence the premises and receive/collect monies in its name in respect of the same and approach, interact, communicate with the competent authorities and for doing all acts, deeds, matters and things to be done or incurred by THDC in that behalf as also to sign all letters, applications, agreements and register the same if necessary, documents, court proceedings, affidavits and such other papers conta....
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....ty for approval, then THDC may at its sole discretion either decide that it does not desire to undertake and complete the project and hence terminate this agreement after giving thirty (30) days written notice in this regard or decide to wait for any further time as deemed fit by THDC for the grant of the aforesaid approvals and licences. 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 up to 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 event of failure of the owner to refund the said amount, the owner hereby agrees to execute a registered sale deed for land of equivalent value in favour of THDC. (iii) In the event THDC is unable to develop the property due to refusal/non grant of approvals, consents, permissions, licenses or revocation of the same by the appropriate statutory authorit....
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...., hurri canes, storms, tidal waves, earthquake, landslides, lightning, explo sions, and other natural calamities, prolonged failure of energy, court orders/injunctions, change of laws, action and/or order by statutory and/or government authority, third party actions affecting the deve lopment of the project, acquisition/requisition of the property or any part thereof by the government or any other statutory authority and such other circumstances affecting the development of the project (Event of force majeure). (iii) Any party claiming restriction on the performance of any of its obligations under this agreement due to the happening or arising of an event of force majeure hereof shall notify the other party of the happening or arising and the ending or ceasing of such event or circumstance within three (3) days of determining that an event of force majeure has occurred. In the event any party anticipates the happening of an event of force majeure, such party shall promptly notify the other party. (iv) The party claiming event of force majeure conditions shall, in all instances and to the extent it is capable of doing so, use its best efforts to remove or remedy th....
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....r referred to as the "project"). Further the S . . . to execute an irrevocable special power of attorney in favour of THDC authorised nominee . . . (D). Under the terms and conditions of the joint development agreement, the owner is required to execute and register an irrevo cable special power of attorney (Irrevocable special power of attorney) in favour of THDC and/or its authorised nominee to facilitate THDC to carry out its duties and obligations for the execution, co-ordination and implementation of the project under the joint development agreement. In pursuance thereof, the owner hereby nominates and appoints THDC and/or its authorized nominee to act for and in the name of and on the behalf of the owner and to do all acts and things relating to the property. Now, know all and these presents witness that the owner hereby nominates, constitutes and appoints THDC Limited and/or its authorised nominees (the attorneys) to be the owner's true and lawful attorneys and to do the following acts, deeds, matters and things on behalf of and in the name of the owner in relation to the property that is to say. 1. To make, sign, execute, file, do, perform and/or get re....
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.... 33. Conversely, learned counsel for the Revenue, argued that where the intention and facts are contained in more than one document between the same parties, they are required to be read and interpreted together by taking them to be one document. To garner support, reliance was placed on the following observations in the judgment of the Supreme Court in S. Chattanatha Karayalar v. Central Bank of India Limited, AIR 1965 SC 1856 : "The first question presented for determination in this case is whether the status of the third defendant in regard to the transaction of overdraft account is that of a surety or of a co-obligant. It was argued by Mr. Desai on behalf of the appellant that the High Court has misconstrued the contents of exhibits A and B in holding that the 3rd defendant has undertaken the liability as a co-obligant. It was submitted that there was an integrated transaction constituted by the various documents-exhibits A, B and G executed between the par ties on the same day and the legal effect of the documents was to confer on the third defendant the status of a surety and not of a co- obligant. In our opinion, the argument put forward on behalf of the ap....
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.... revoke this authority, nor can it be terminated by his insanity or death. (b) A consigns 1,000 bales of cotton to B, who has made advances to him on such cotton, and desires B to sell the cotton, and to repay himself, out of the price the amount of his own advances. A cannot revoke this authority, nor is it terminated by his insanity or death." To buttress her submissions, support was gathered from following observations in the judgment rendered by Delhi High Court in Harbas Singh v. Shanti Devi [1977] 13 DLT 369 : "(7) For the purposes of the Law of Contract, therefore, it would not be useful to restrict the meaning of the word 'interest' by the nar row compass in which this world is used at times in relation to immovable property. For instance, the last sentence of section 54 of the Transfer of Property Act states that a contract for sale of itself does not create any interest in or charge on immovable property. Similarly, section 17(1)(b) of the Registration Act makes only those documents compulsorily registrable which create, declare, assign, limit or extin guish any right, title or interest, whether vested or contingent, of the value of one ....
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....#39;s case [1584] 3 Co. Rep 7a (V) was decided 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 : 1st. What was the common law before the making of the Act. 2nd. What was the mischief and defect for which the common law did not provide. 3rd. What remedy the Parliament hath resolved and appointed to cure the disease of the Commonwealth, and 4th. The true reason of the remedy ; and then the office of all the judges is always to make such construction as shall suppress the mis chief, and advance the remedy, and to suppress subtle inventions and evasions for continuance of the mischief, and "pro privato com modo", and to add force and life to the cure and remedy, according to the true intent of the makers of the Act, "pro bono publico".' In In re Mayfair Property Co. [1896] 2 Ch 28, at page 35 (W) Lind ley, M. R. in 1898 found the rule 'as necessary now as it was when Lord Coke reported Heydon's case'. In (v) Eastman Photographic Material Company v. Comptroller Gener....
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....v. State of Haryana [2012] 340 ITR 1 (SC) by urging that while interpreting sections 54, 55, 53A of the 1882 Act, the apex court held that transfer of immovable property by way of sale can only be by a deed of conveyance (sale deed). In the absence of a deed of conveyance duly stamped and registered as required by law, no right, title or interest in an immovable property can be transferred. Any contract of sale which is not a registered deed of conveyance would fall short of the requirements of sections 54 and 55 of the 1882 Act and will not confer any title nor transfer any interest in an immovable property except to the limited right granted under section 53A of the 1882 Act. The following observations were referred to (page 12) : "24. We therefore, reiterate that immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance. Transactions of the nature of 'GPA sales' or 'SA/GPA/WILL transfers' do not convey title and do not amount to transfer, nor can they be recognized or valid mode of transfer of immovable property. The courts will not treat such transactions as completed or concluded transfers or as conveya....
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....partments in favour of prospective purchasers. In several States, the execution of such development agreements and powers of attorney are already regulated by law and subjected to specific stamp duty. Our observations regarding 'SA/GPA/WILL transactions' are not intended to apply to such bona fide/genuine transactions." 38. In so far as enunciation of legal principles in various pronouncements relied upon by learned counsel for the Revenue are concerned, they are well recognised but their applicability has to be judged in the facts and circumstances of the present case. 39. It would be apt to notice undisputed facts as discernible from the record of the case. The assessee is a member of Punjabi Co-operative House Building Society Ltd. who owned 21.2 acres of land in Village Kansal, District Mohali. Certain members were owning plots measuring 500 square yards whereas others were holding plots of 1,000 square yards. On advertisement having been floated by the society to develop a group housing commercial project and do development as per the municipal building bye- laws, HASH âEUR" a developer approached them with proposal for the development of the pr....
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.... to the JDA dated February 25, 2007, irrevocable registered special power of attorney dated February 26, 2007, had also been executed by the society in favour of THDC. Various relevant clauses A, B, D and other conditions relied upon by the parties have already been reproduced in the earlier part of the judgment. 40. Under clause 2.1 of the JDA, the possession of the property was to be handed over simultaneously with the execution and registration of the said agreement. The JDA dated February 25, 2007, was never registered and, therefore, the presumption of delivery of possession to the developers cannot be assumed. The delivery of title deeds would not necessarily raise the presumption of delivery of possession as these are two distinct actions. Further, the irrevocable registered special power of attorney also records that on February 26, 2007 (i.e., the date of its execution and registration), the possession continued to be with the members of the society. Still further, even the two sale deeds executed between the parties on March 2, 2007, and April 25, 2007, in respect of 3.08 acres and 4.62 acres, respectively, clearly stipulates that possession was delivered under t....
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....he competent authority which was to be within the prescribed time. The costs for necessary approvals were also to be borne by them. It was also the obligation of the developers to make timely payment of the consideration in the manner set out therein which was an essence of the JDA. Additionally, it was the responsibility of the developers to obtain requisite government and statutory approvals, sanctions of all drawings and plans required for development of the project and also to undertake the project within six months of the handing over of the final plans, designs and drawings to the developer for submission of the same to the competent authority for obtaining the approval which was to be done by HASH and THDC within the prescribed time schedule. The external development charges, licence fee, CLU charges and any other related charges were the liability of THDC. 42. Apart from the above, HASH/THDC had made payment of adjustable advance of Rs. 3 lakhs to the plot holder of 500 square yards besides making payment of Rs. 12 lakhs and Rs. 18 lakhs as first and second instalments respectively. THDC defaulted in making payment of third instalment of Rs. 24.75 lakhs as required....
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.... them which was one of the condition precedents for applying section 53A of the 1882 Act. Under clause 26 of the JDA dated February 25, 2007, the principle of force majeure had been provided for, which would be applicable with full vigour in the circumstances noticed earlier. However, the Heydon's rule, in the facts as narrated hereinbefore, would not be attracted. 43. In view of preceding analysis, it is reiterated that from the cumulative effect of covenants contained in the JDA dated February 25, 2007, read with the registered special power of attorney dated February 26, 2007, it cannot be held that the mandatory requirements of section 53A of the 1882 Act were complied with which stood incorporated in section 2(47)(v) of the Act. Once that was so, it could not be said that the assessee-appellants were liable to capital gains tax in respect of the remaining land which was not transferred by them to the developer/builder because of supervening event not on account of any volition on their part. 44. Viewed from another angle, it cannot be said that any income chargeable to capital gains tax in respect of the remaining land had accrued or arisen to the appella....
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....acted, viz., the accrual of the income or its receipt ; but the sub stance of the matter is the income. If income does not result at all, there cannot be a tax, even though in book-keeping, an entry is made about a "hypothetical income", which does not materialise. Where income has, in fact, been received and is subsequently given up in such circumstances that it remains the income of the recipient, even though given up, the tax may be payable. Where, however, the income 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, in certain circumstances, have been made in the books of account.' The above passage was cited with approval in Morvi Industries Ltd. v. CIT [1971] 82 ITR 835 (SC) in which this court also considered the dictionary meaning of the word 'accrue' and held that income can be said to accrue when it becomes due. It was then observed that (page 840) : '. . . the date of payment . . . does not affect the accrual of income. The moment the income accrues, the assessee gets vested with the right to claim that amount even though it may not be immediately'. ....