TaxTMI 
TaxTMI 
2018 (9) TMI 111
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.... any order as to costs. Two issues are canvassed by the Revenue in this appeal against an order of June 9, 2015 passed by the Income Tax Appellate Tribunal. According to the Revenue, since possession of the land owned by the assessee was made over to a developer pursuant to an agreement of February 7, 2007 for construction being undertaken thereon, in view of amended Section 2(47)(v) of the Income Tax Act, 1961 read with Section 45 of the Act, capital gains tax ought to have been paid in assessment year 2007-08. The second issue is as to the treatment of the part of the construction that is owned by the assessee. The Revenue seeks to support the view taken by the Commissioner in course of proceedings under Section 263 of the Act that the ....
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....nt introduced, inter alia, by clauses (v) and (vi) being inserted in Section 2(47) of the Act. It may be profitable to notice the reason for introducing such amendment: "The existing definition of the word "transfer" in section 2(47) does not include transfer of certain rights accruing to a purchaser, by way of becoming a member of or acquiring shares in a co-operative society, company, or association of persons or by way of any agreement or any arrangement whereby such person acquires any right in any building which is either being constructed or which is to be constructed. Transactions of the nature referred to above are not required to be registered under the Registration Act, 1908. Such arrangements confer the privileges of owners....
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....e order of assessment passed under Section 143(3) of the Act read with Section 147 thereof, was in favour of the assessee. The Revenue asserts that such final order passed by the Assessing Officer was void, as it was contrary to the order passed on the pending petition in this Court. Such argument is of no effect since whether or not such order was bad or void or otherwise, the authority of the Commissioner to invoke his power under Section 263 of the Act remained unaffected by the making of such final order by the Assessing officer. There appears to be some needless discussion on this aspect of the matter in the order impugned passed by the Tribunal. The relevant Commissioner assumed jurisdiction under Section 263 of the Act on his perc....
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....n 53A of the Act of 1882 which is to be regarded as transfer and the mere handing over of possession of an immovable property for any other purpose may not fall within the scope of the word "transfer" in Section 2(47)(v) of the Act. There could be myriad situations. There could be an agreement between a developer and a prospective purchaser of a flat under which the purchaser would make some payment or even the full payment and the developer would promise to construct and make over a flat at a future date. Merely because the consideration is paid and the agreement is executed, it would not imply that a transfer would take place. The transfer in such a situation would take place upon the possession of the relevant flat being made over to th....
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....facto possession under the de jure possession of the owner and only for the purpose of undertaking the construction at the land in question. In terms of the agreement of February 7, 2007, the developer was to get 61% of the land and the proportionate share in the constructed area whereas the assessee was to get the balance 39% of the land and the proportionate constructed area thereupon. Till such time that the construction came up and 39% of the constructed area was made over to the assessee, it could not be said that possession of the balance land, in the sense that the expression carries in Section 2(47)(v) of the Act, had been made over by the assessee to the developer. It is the undeniable position that under the agreement of Februar....
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....f 1961 being given some effect while reading such provision. In terms of Section 45(1) of the Act, the expression "chargeable to income tax under the head 'Capital gains'", operates on "Any profits or gains arising from the transfer of a capital asset ...". There can be no tax payable unless there is any profit or gain that has arisen. It could never have been the Revenue's case that there was any monitory profit or gain that accrued to the assessee at the time of the execution of the agreement of February 7, 2007. In the light of the discussion above, the first ground urged by the Revenue does not appeal and the order of the Appellate Tribunal does not call for any interference as it set aside the erroneous view taken by the Commissioner ....