TaxTMI 
TaxTMI 
2018 (10) TMI 128
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....n shown in documents of transfer of land by the assessee dated 20/03/2009, being agreement to sale, under which possession was granted to buyer from time to time. 1.2 The learned A.O. has erred in treating Cost of Acquisition of land to be Rs. 27,580/-, for the purpose of computation of long term Capital gains. 1.3 The Learned CIT(A) has erred on facts and in law, in treating appellant as seller of land, ignoring the fact that the appellant sold the land to Shri R.K Lalwani, who has taken the possession of land and thereafter he sold the land to various customers in small pieces. Also ignored the fact that transaction between appellant and Shri R.K. Lalwani was on the stamp value determined by stamp value authority. 2. The learned A.O. has erred in denying the exemption u/s 54B to the appellant for land purchased in name of his dependent son and daughter." 3. The appellant reserves the right to add, amend or alter grounds of appeal at any time before the appeal is decided. 3. The brief facts of the case are that the appellant is an individual earning income from other sources and agricultural income. The appellant had filed his return of income for ....
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....ces regarding fair market value of his land as on 01.04.1981 adopted at Rs. 5,00,000/- per hectare as claimed by the appellant. The appellant was also asked to substantiate his claim regarding deduction u/s 54B of the Act. The appellant submitted copy of agreement dated 20.03.2009 with Shri R.K. Lalwani, K-4/4, Windsor Hills, Chuna Bhatti, Bhopal. It was stated that the appellant had agreed to sell his land admeasuring 1.647 hectares for a total consideration of Rs. 1,68,90,500/- to Shri R.K. Lalwani. It was claimed that the appellant, after receiving the total consideration gave the possession of the land to Shri R.K. Lalwani on 20.3.10. It was, thus, contended before the A.O. that the appellant had transferred the land to Shri R.K. Lalwani for Rs. 1,68,90,500/- and in view of provisions of Section 2(47)(v) of the Act, there was transfer of the land in favour of Shri R.K. Lalwani on 20.03.2010. It was also informed that Shri Lalwani had sold the land into smaller pieces to various persons during the F.Yrs. 2009- 10 & 2010-11 relevant to the A.Yrs. 2010-11 & 2011-12. In the registered sale deeds, the appellant had signed the documents as agreed with Shri R.K. Lalwani. But the Ld. A....
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....the period relevant to the A. Y. 20 I 0-11 and the fair market value as determined by the Stamp Valuation Authority was Rs. 3,97,79,240/-, as against the sale consideration shown in the registered sale deeds at Rs.I,26,81,000/-. The appellant was asked to explain why the transfer of such pieces of land should not be treated as sale by the assessee in view of registered sale deed signed by assessee in favour of these persons and why not the full value of consideration should be adopted in view of Section 50C of the Act as per fair market value determined by the Stamp Valuation Authority. 5. The appellant contended that the land was sold by the 'agreement of sale' executed between the appellant and Shri R.K. Lalwani on 20.03.2009 @ Rs. 41,50,000/- per acre for a total consideration of Rs. 1,68,90,500/- and the consideration was received by the appellant in cash/post dated cheques. As per guidelines of the Collector (Zila Panjiyak and Sanyojak), the prevailing rates at that time were Rs. 40,48,582/- per acre. The appellant also furnished a copy of guidelines issued by the Zila Moolyankan Samiti, Bhopal for F.Y. 2009-10. It was, thus, contended that the sale consideration of....
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....im only, which Was not discharged by him. The A.O. noticed that there were two registered sale deeds in respect of sale of agricultural land situated in Village Raslakhcdi as under:- (1) Smt. Mewa Bai and Shri Kamta Prasad have sold agricultural land admeasuring 22.86 acres to Shri Babu Lal Agrawal through registered sale deed dated 25.07.1985 for a total consideration of Rs. 2,26,9001-. The land has been sold at the rate of less than Rs. 10,000/- per acre. (2) Sh. Aizaz Ahmed and Sh. Ashfaq Ahmed have sold agricultural land admeasuring 3.87 acres to Shri Babu Lal Agrawal through registered sale deed dated 31.07.1985 for a total consideration of Rs. 40,0001-. The land has been sold at the rate of slightly more than Rs. 10,000/- per acre. 8. The A.O stated that sale instances of the land mentioned above were not in respect of the land which was in the same village where the land of the appellant was situated but they show a fair rate of sale of the land in the vicinity of Bhopal city prevailing in the financial year 1985-86. Even if it is accepted that the land sold by the appellant was situated at a place having a higher value, such an increase in rate will hav....
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....v) of, the Act on 20.03.2010 or the transfer of land had taken place on the dates of sale deed registered in the name of purchasers. 3.4.1 It would be fruitful to reproduce the provisions of Section 2(47)(v) of the Act, which read as under: - "(47) "transfer", in relation to a capital asset. includes.- (i)...... (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" From the above provisions, it can be seen that two conditions should be fulfilled to hold that the transfer of the capital asset has taken place i.e.: The following of the possession of 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 3.4.2 Now, in this case, on verification of the facts, it is noticed that the appellant had directly given possession of the pieces of land to the various purchasers on the date of registration of the sale deeds. This fact is clearly ment....
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....gistration Act, 1908, by the Registration &other Related laws (Amendment Act, 2001) w.e.f. 24.01.2001, which reads as under: "(1A) The documents containing contracts to transfer for consideration, any immovable property for the purpose of section 53A of the Transfer of Property Act, 1882 shall be registered if they have been executed on 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, they shall have no effect for the purposes of the said section 53A. " Thus, as per the plain and unambiguous provision of Section 17(1A) of the Registration Act, 1908, if after 24.01.2001 an agreement for transfer of immovable property for consideration is not registered under the Registration Act, it shall have no effect for the purpose of Section 53A of the Transfer of Property Act. In the instant case, the agreement to sale dated 20.03.2009 entered with Shri R.K. Lalwani was not registered under the Registration Act, 1908. Hence, in view of Section 17(1A) of the Registration Act, the transaction was not of the nature referred to in Section 53A of the Transfer of Proper....
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....cifically provided that the Developer (i.e. GPL) was granted mere 'licence' to enter upon the property and that by itself should not be construed as part performance of an agreement under Transfer of Property Act, 1882 or u1s 2(47)(v) of Income-tax Act, 1961. The DA also provides under Clause 14 (b) that the Owners (i.e. assessee) shall continue to be in possession of entire property to be developed In this respect, reliance can be placed on the order of the Tribunal, Chennai Bench, in the case of R. Gopinath (HUF) v ACIT 133 TTJ 595. We also find that the A.O. has wrongly invoked provisions of section 2(47))v) of the Act because it deals with contracts of part performance referred to in section 53A of the Transfer of Property Act. 20. Section 53A of the TOPA prescribes following cumulative conditions to be satisfied/or application of doctrine of 'part performance':- a) there should be a written contract for consideration,. the contract should be signed by the transferor; b) the contract should pertain to transfer of immoveable property; c) the transferee should have taken possession of the property; d) as per clause no 1 4 (b) po....
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....ion 53A of the TOPA were satisfied. Hence, the judgment Was delivered qua the law prevailing in the year of the transaction. Accordingly, the Hon'ble Bombay High Court has discussed al/ the conditions required to be complied under Section 53A of the TOP A, other than the condition of registration, since the law provided only five conditions at the time. Thus the case of Chaturbhuj Dwarkadas Kapadia (supra) is of no help to Revenue to bring the transaction within the purview of section 53A of the Act. As provisions of section 53A was amended in 2001 by which additional condition of registration of the written agreement was introduced and since in the instant case the agreement was not registered, the decision rendered by Hon'ble Bombay High Court in the case of Chaturbhuj Dwarkadas Kapadia (supra) with respect to relevant provisions of section 53A' applicable in A. Y. 1996-97 will not he applicable to the facts of instant case. We can therefore safely conclude that the conditions stipulated in section 53A of TOPA are not satisfied the case of assessee as discussed above, there is no transfer as per the provisions of section 2(47) of the Act." 3.4.5 Therefore, co....
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....opt the same as on 01.04.1981 at Rs. 5,00,000/- per hectare, whereas the A.O. had based the estimation of fair market value as on 01.04.1981 on the two instances of sale deeds to the nearby villages in F. Y. 1985-86. There, no interference is warranted in the action of the A.O. adopting the fair market value of the land sold by the appellant as or 01.04.1981 at Rs. 10,000/- per acre. 3.4.8 However, the alternate submission of the appellant, without prejudice, that the amount retained by Shri R.K. Lalwani was cost incurred by the appellant for transfer of capital assets is reasonable and acceptable. It is an admitted fact that Shri R.K Lalwani had made payment to the appellant. He had found the customers and received the payments from the customers. Therefore, the difference in the sale price given to the appellant by ShriK R.K. Lalwani and the sale consideration received from various customers by Shri R.K. Lalwani was retained by him, which was nothing but service charges for the services rendered by him and is to be considered as cost of transfer. Therefore, the A.O. is directed to allow the cost of transfer of Rs. 12,25,9I5/- in A.Y. 20 10-11, the amount paid/retained by....
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....tention or a fresh claim can be made at an appellate stage are vexed questions and have occupied the minds of the Courts in numerous occasions. 31. In the case of Jute Corpn. of India Ltd. v. CIT /1991J 187 ITR 688 the Supreme Court noted with approval observation of the Court in the case of CIT v. Kanpur Coal Syndicate [1964) 53 ITR 225 to the effect that "The Appellate Assistant Commissioner, therefore, has plenary powers in disposing of appeal. The scope of his power is co-terminus with that of the Income-tax Officer. He can do what the Income-tax Officer can do and also direct him to do what he has failed to do. It was observed that there was no reason why the appellate authority cannot modify the assessment order on an additional ground even if not raised before the Income-tax Officer. The Act does not place any restriction or limitation on the exercise of appellate power. It was observed that:- "The above observations are squarely applicable to the interpretation of section 251 (l)(a) of the Act. The declaration of law is clear that the power of the Appellate Assistant Commissioner is co-terminus with that of the Income-tax Officer, if that be so, there appe....
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....that:- "4 ... However, we make it clear that the issue in this case is limited to the power of the assessing authority and does not impinge on the power of the Income-tax Appellate Tribunal under section 254 of the Income-tax Act, 1961. There shall be no order as to costs" 34. In the case of CIT v. Jai Parabolic Springs Ltd. /2008J 306 ITR 421172 Taxman 258 (Delhi), the Delhi High Court held that there is no prohibition on the powers of the Tribunal to entertain an additional ground which according to the Tribunal arose in the matter and for just decision of the case. 35. In case of CIT v. Pruthvi Brokers &Shareholders (P.) Ltd. [2012] 349 ITR 336/208 Taxman 498/23 taxmann.com 23 (Bom.) the Bombay High Court considered the issue at considerable length and held that Commissioner (Appeals) as well as the Tribunal have the jurisdiction to consider the additional claim and not merely additional legal submissions. The appellate authorities have discretion to permit such additional claims. Such claims need not be those which became available on account of change of circumstances of law but which were even available when the return was filed. 36. The De....
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.... claim cannot be shut out for all times to come, merely because it is raised for the first time before the appellate authority without resorting to revising the return before the assessing officer. 40. Therefore, any ground, legal contention or even a claim would be permissible to be raised for the first time before the appellate authority or the Tribunal when facts necessary to examine such ground, contention or claim are already on record. In such a case the situation would be akin to allowing a pure question of law to be raised at any stage of the proceedings. This is precisely what has happened in the present case. The Appellate Commissioner and the Tribunal did not need to nor did they travel beyond the materials already on record, in order to examine the claims of the assessees for deductions under sections 80-IB and 80HHC of the Act. 41. In the decisions that we have noted above, the Courts have considered such questions when a legal contention or a claim was based on material already on record but raised at an appellate stage. On such premise we wholeheartedly agree that the appellate authority and the Tribunal would have the power to entertain any such ne....
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....er F.Y Date of registration Area Cost of Purchase (Rs.) Stamp Value (Rs.) Registration Fee (Rs.) Total Cost Rs.) Smt. LalithaPatidar 2009- 10 09.03.2010 8.932 963240 0 0 963240 Smt. LalithaPatidar 2010- 11 09.08.2010 9.732 1931220 0 0 1931220 Total 2894460 0 0 2894460 (c) In the name of the appellant's son, Shri Umesh Patidar S. No. Name of Purchaser F.Y Date of registration Area Cost of Purchase (Rs.) Stamp Value (Rs.) Registration Fee (Rs.) Total Cost Rs.) Shri Umesh Patidar 2009- 10 03.12.2010 0.677 125000 11100 1175 137275 Shri Umesh Patidar 2009- 10 06.01.2010 11.74 2133385 0 0 2133385 Shri Umesh Patidar 2009- 10 06.01.2010 3.08 413025 0 0 413025 Shri Umesh Patidar 2009- 10 13.01.2010 2.366 432115 0 0 432115 Shri Umesh Patidar 2009- 10 13.01.2010 1.549 172065 0 0 172065 Shri Umesh Patidar 2009- 10 13.01.2010 2.329 ....
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....hat the capital gains had arisen on the transfer of agricultural land, which was used by the appellant for agricultural purposes for many years preceding the date of transfer and, thus, conditions (a) &(b) were satisfied. However, the issue involved is regarding condition (c) as to whether the appellant was entitled to claim the benefit of Section 54B of the Act in respect of agricultural land purchased in other names, other than himself. It may be noted that the courts have held that in a case where agricultural land (new asset) is purchased in the name of the wife, the assessee is entitled for deduction uls54 B or u/s54 F of the Act. This issue came up for consideration initially before Hon'ble Madras High Court in the case of CIT Vs. Natarajan (2006) 287ITR 271 (Mad). In this case, the assessee owned a house property at Bangalore and he purchased a property at Madras in the name of his wife, KSmt Meera, out of money obtained by him by sale of the property at Bangalore. The Hon 'ble High Court observed that the assessee had purchased a house in the name of his wife. But the same was assessed in the hands of the assessee. Hence, he was entitled to exemption uls 54....
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....house in name of assessee only and not in name of any other person - Held, yes - Whether investment of sale proceeds of agricultural land by assessee in purchasing plot and constructing residential house thereon in name of his only adopted son would qualify for exemption under section 54F _ Held, no" 4.6.3 The Hon'ble Punjab and Haryana High Court had an occasion to examine this issue in the case of JAI NARAYAN v. INCOME-TAX OFFICER/2008] 306 ITR 335 (P&H). The High court observed that the following conditions are to be satisfied for an assessee to claim the benefit of section 54B of the Income-tax Act, 1961 : (i) a capital gain arises from the transfer of a capital asset being land by the assessee, (ii) such land was being used by the assessee or a parent of his for agricultural purposes in the two years immediately preceding the date of the transfer, and the assessee has within a period of two years after the date of transfer, purchased any other land for being used for agricultural purposes. The word "assessee" occurring in section 54B of the Act must be interpreted in such a manner as to accord with the context and subject of its usage. A....
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....he Hon'ble High Court of Andhra Pradesh observed that the assessee will not be entitled to capital gains exemption under sections 54B and 54F on properties purchased in name of assessee's married daughters. It is held in this case as under (head notes): "Section 54B, read with section 54F of the Income-tax Act, 1961 - Capital gain - Transfer of land used for agricultural purposes not to be charged in certain cases (Assessee, connotation oj) - Assessment year 2008-09 - Whether language of sections 54B and 54F is very clear that it relates to unmarried daughters - Held, yes - Whether where properties were acquired in name of assessee's married daughters, would not be entitled to capital gains exemptions under sections 54F and 54B - Held, yes [Para 4] [In favour of revenue} " 4.6.6 The facts in the case of CIT Vs. Gurnam Singh (2008) 170 Taxman 160 (P&H) relied upon by the appellant, were different than the facts involved in the appellant's case. In this case, the land was purchased by the assessee in the name of his son as co-owner and not independently. Further, there was a peculiar fact that the assessee was an old illiterate person, not having any oth....
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....s own name and in his wife's name for purchase of agricultural land aggregating to Rs. 91, 18, 190/- (Rs.62,23,730 + Rs. 28,94,460). Hence, the A.O. is directed to allow benefit of Section 54B of the Act to the appellant at Rs. 91,18,190/-. 11. Now the assessee is in appeal before the Tribunal raising following grounds of appeal; 1. The Learned C.LT. (Appeal) has erred on fact and in law in confirming the addition of Rs. 3,83,79,019/- on account of long term Capital gains. 1.1 The Learned C.LT. (Appeal) has erred in confirming the consideration for sale of land as Rs. 3,97,79,240/- to arrive at capital gain of Rs. 3,83,79,019/-, ignoring the consideration shown in documents of transfer of land by the assessee dated 20/03/2009, being agreement to sale, under which possession was granted to buyer from time to time. 1.2. The learned A.O. has erred in treating Cost of Acquisition of land to be Rs. 27,580/- , for the purpose of computation of long term Capital gains. 1.3. The Learned CIT(A) has erred on facts and in law, in treating appellant as seller of land, ignoring the fact that the appellant sold the land to Shri R.K Lalwani, who has take....
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....Shri R.K. Lalwani. Even the affidavit given by Shri R.K. Lalwani confirms that he has sold these properties to the ultimate customers (Page No. 21 of Paper Book). Appellant was merely a signatory to the sale deed and this was an arrangement to avoid two transfers for one land and nothing more, therefore, tax has to be assessed in the hands of the person to whom the income accrued. The purpose of the Income Tax Act is to tax real income in the hands of the person who has earned, and the income cannot be taxed simply on the basis of technical reasons, particularly when there are enough evidences that income was not accruing to the appellant and it is also evident that appellant has sold 4.07 acres of land during the relevant year and later on, Shri R.K. Lalwani (the buyer of 4.07 acres of agriculture land) has further sold that land in small pieces. Therefore, two transactions of sale cannot be merged together on technical grounds to tax the appellant. Your kind attention is drawn to the following citations, where the Honourable Supreme Court has held that the real income is to be taxed, not the hypothetical income Godhra Electricity Co.Ltd. v. Commissioner of Income Tax (19....
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....i R.K. Lalwani issued Affidavit to confirm the facts, which is enclosed herewith. 10) The appellant, while entering into agreement, has clearly stated that, registration of property should be done in acres only (not in sq .ft.) and if the buyer of the property Shri R.K. Lalwani sells such land in small pieces, then the responsibility of any difference in value shall be that of Shri R.K. Lalwani, for the purposes of taxes including Income Tax. 11) Therefore, in a nutshell, it is a case where the real owner of the land having possession of property after the sale of such land by the appellant, was not taxed and till the conclusion of assessment proceedings or proceedings before CIT (Appeals), no effort was made by the Department to tax the income in the hands of Shri R.K. Lalwani, which was earned by him. On the contrary, Department has literally invoked sec. 50C, ignoring the substance and ignoring the fact, that it involved two transactions, but Department tried to ignore the intervening transaction, evidences on record and statement of Shri R.K. Lalwani, in which he has confirmed the ownership, possession and sale of the property. 12) It is a settled pos....
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.... 1,44,23,000/- per acre. The value, even if adopted for A.Y. 2010-11, shall be much less than this valuation. 16)The sole reason for which CIT (Appeals) has not accepted the "Sale Agreement" as a document of transfer is that, the agreement was not a Registered Agreement. He has referred to sec. 17(1A) of the Registration Act, 1908, which says that, "if agreement for transfer of immovable property for consideration is not registered under the Registration Act, it shall have no effect for the purposes of sec. 53A of the Transfer of Property Act, 1882". CIT (Appeals) has erred in law in assuming that, the transfers which are referred to in sec. 2( 47)( v) are the transfers to which sec. 53A applies. However, the Income Tax Act being a separate independent act, only refers to "part performance of contracts of the nature referred to in sec. 53A of the Transfer of Property Act", it does not specify the contracts to which sec. 53A "applies". There is a difference between application of sec. 53A to the contract and contracts of the nature referred to in sec. 53A, both the phrases have different meanings. Sec. 17(1A) of the Registration Act, 1908 shall apply to the contracts to whi....
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....rom the assessee) framed u/s 144/147 r.w.s. 143(3) of the Act wherein undisclosed income of Rs. 6,46,82,000/- has been assessed in the hands of Shri R.K. Lalwani. 14. We have heard rival contentions, perused the records placed before us and carefully gone through the judgments referred and relied by Ld. Counsel for the assessee as well as those mentioned by both the lower authorities. 15. In the instant appeal the issue is raised on account on the following facts; (1) The assessed owned 4.07 acres of agriculture land (2) On 20.03.2009 assessee entered into an agreement with Shri R.K. Lalwani for sale of agriculture land @ Rs. 41,50,000 per acre for total consideration of Rs. 1,68,90,500/- (3) On the date of agreement the prevailing rate as per the guidelines of Collector (Zila Panjiyak and Sanyojak) was Rs. 40,48,552/- (4) The assessee received aggrieved consideration from Shri R.K. Lalwani through account payee cheques except a cash of Rs. 5,40,500/-. (5) During the financial year 2009-10 Shri R.K. Lalwani got the agriculture land converted into the residential purposes, divided into plots and sold 13 plots during the financial ye....
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....isition of land. 17. Now coming the findings of Ld.CIT(A) can be bifurcated into following points; 1. Ld. CIT(A) confirmed the action of the Ld.A.O to the extent of computing the Long Term Capital Gain on sale of plots of lands made before the date of handing over the possession by the assessee to Shri R.K. Lalwani on 20.03.2010, as a result directions were given to calculate Long Term Capital Gain in relation to 11 plots of lands for which registered sale deeds were executed up to 15.2.2010. 2. Ld.CIT(A) allowed the benefit of section 54B of the Act after accepting the revised return filed by the assessee and gave benefit of investment in agriculture land in the name of assessee and his wife. 3. He also deleted the addition for unexplained cash credit u/s 68 of the Act at Rs. 55,00,000/-. 18. From going through the above series of facts and findings of Ld.A.O, Ld.CIT(A) and as accepted by both the parties that the revenue is not in appeal before the Tribunal against the relief given by Ld.CIT(A), we find that following issues needs to be adjudicated. (i) Whether the agreement for sale entered by the assessee and Shri R.K.Lalwani dated 20.0....
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....alidity of transaction entered into between two persons through "agreement of sale" which was not registered under the Registration Act and whether the same can be accepted to be a genuine document because as per the contract Act both the parties have signed the document and in case any one of the two parties do not comply to the conditions mentioned in the contract Act, the other party is at liberty to sue him in the court of law, came up before Co-ordinate Bench of Ahmedabad in the case of Smt. Sapnaben Dipakbhai Patel V ITO, Ahmedabad in I.T.A No. 2414/Ahd/2013 order dated 13.1.2016 which was co-authored by the author of the instant appeal and while dealing with this issue of the requirement of registration of "agreement to sale" following finding was given; "23. The first reason assigned by the ld.First Appellate Authority for ignoring the agreement dated 4.4.2008 and 2.3.2009 for holding them invalid and non-genuine is that for harbouring any "transfer" within the meaning of clause (v) of section 2(47), there must be a transaction under which the possession of immovable property is allowed to be taken or allowed to be retained. There is no dispute with regard to the a....
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....100/- can only be completed by way of registered sale deed, as contemplated in section 17 of the Registration Act. This judgment deals with the concept of power of attorney, lease, licence etc. Definition of expression "transfer" provided in section 2(47) is more wider than in the general law. As observed earlier, while dealing with the issue no.(ii), the expression "transfer" employed in section 2(47) includes (a) 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 TPA, and (b) any transaction entered into in any manner which has the effect of transferring, or enabling the enjoyment of, any immovable property. In these two eventualities, profits on account of capital gains would be taxable in the year ITA No.2414/Ahd/2013 in which such transactions are entered into, even if a transfer of immovable property is not effective or completed under the general law. In the present case, there is a fine distinction which remained un-noticed at the end of the ld. CIT(A). According to the assessee, the rights which have been alienated by her by virtue of agreement dated 4.4.2008 are the rights of capit....
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....produced as evidence in suit for specific performance. It can be made basis of suit for specific performance. The finding recorded by the Hon'ble Punjab & Haryana High Court in this case reported in (2013) 1 PLR 195 as under: "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, though, a contract accompanied by delivery of possession or executed in favour of a per- son in possession, is compulsorily registrable under section 17(1A) of the Registration Act, 1908, but the failure to register such a contract would only deprive the person in possession of any benefit conferred by section 53A of the 1882 Act. The proviso to section 49 of the Indian Registration Act clearly postulates that non-registration of such a contract would not prohibit the filing of a suit for specific performance based upon such an agreement or the leading of such an unregistered agreement into evidence. 12. A suit for specific performance based upon an unregistered agreement to se....
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....ation she would get the amounts only agreed upon by way of agreement dated 4.4.2008. She could be charged for capital gain on this amount only. Even for argument's sake, the reasons of the Revenue authorities are being accepted that the agreements dated 4.4.2008 and 2.3.2009 are unregistered, therefore, ITA No.2414/Ahd/2013 they shall not goad the adjudicator to construe part performance of the contract u/s.53A of T.P. Act and no transfer of the land could be construed within the meaning of section2(47)(v) of the Act. In that situation, only the year of taxability could be shifted i.e. effective date for transfer of capital asset could be taken to 27.1.2010. How the AO can bring the amount for taxation in the hands of the assessee ? Under issue No.(i), we have discussed the nature of right acquired by SDS by virtue of agreement dated 4.4.2008. Suppose the agreement was not honored and suit for specific performance was filed by the assessee for persuading the SDS to purchase the land in dispute. During the pendency of the Civil Suit SDS assigned his right to a third party and ultimately that third party agreed for purchase of suit land. A settlement is arrived. The assessee woul....
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.... the agreement dated 2.3.2009, the land was already converted into a non-agriculture land. Thus, this section has no bearing as a corroborative piece of evidence to goad any authority to conclude that agreements were not genuine. 29. Next reasoning given by the ld.First Appellate Authority is that there is a huge change in the price of land between a short span of time. When the assessee acquired the land, she incurred a cost of Rs. 67,96,432/-. She had acquired the land in between 18.12.2007 utpo 4.3.2008. She had agreed to sell this land on 4.4.2008 to SDS for consideration of Rs. 76,75,413/-. The rate of land upto this stage was Rs. 62.03 per sq.meters, whereas, when the agreement dated 2.9.2009 was executed, it was at the rate of Rs. 860/- per sq.meter. According to the ld.CIT(A) appreciation in the price of real estate does take place over a period of time. However, it is also a fact that such ITA No.2414/Ahd/2013 appreciation also happens in slow process, and in any case, it does not happen in such a manner. The ld.CIT(A) further observed that nothing has prevented the assessee from retracting the contract entered into with SDS so as to earn this gain by herself. ....
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....orities for appreciating the genuineness and veracity of the agreement is guided by the tax liability. According to the Revenue authorities, since tax liability has been avoided by the parties, therefore, their agreements are not genuine. In our opinion, genuineness of any agreement is not depended upon the actual payment of tax resulted on account of execution of these agreements. It is other way round. First genuineness of the agreements has to be ascertained, and then, in consequence of these agreements, if any tax liability has arisen, it is to be fastened upon the right persons. According to the AO, SDS has shown Rs. 9,87,33,247/- on account of profit on sale of land, and against this, he claimed loss of Rs. 9,17,78,957/- from his business of trading of shares and securities. These losses have been allowed to SDS in a scrutiny assessment order passed in his case u/s.143(3) of the I.T.Act. The department did not raise any objection in his assessment proceedings and did not doubt the transactions. Now, the stand of the Revenue is, since if it is taxable in the hands of the SDS, then no taxes would be collected on these transactions, because gain would be set off against brought ....
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....t. Revenue placed reliance on McDowell . Both the learned Judges of the Bench of this Court gave separate opinions. Chief Justice Pathak, in his opinion said (at p.486): "Reliance was also placed by learned counsel for the Revenue on McDowell and Company Ltd. v. CTO (1985) 154 ITR 148(SC). That decision cannot advance the case of the Revenue because the language of the deeds of settlement is plain and admits of no ambiguity." Justice S. Mukherjee said, after noticing McDowell's case, (at page 487): "Where the true effect on the construction of the deeds is clear, as in this case, the appeal to discourage tax avoidance is not a relevant consideration. But since it was made, it has to be noted and rejected." In Mathuram Agrawal v. State of Madhya Pradesh another Constitution Bench had occasion to consider the issue. The Bench observed: "The intention of the legislature in a taxation statute is to be gathered from the language of the provisions particularly where the language is plain and unambiguous. In a taxing Act it is not possible to assume any intention or governing purpose of the statute more than what is stated in the p....
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....n from Tarang Reality Pvt. Ltd. of Rs. 66,55,000/- and on receipt of sale consideration of Rs. 73,75,413/-, she had repaid the loan to Tarang Reality Pvt. Ltd. In the case of the assessee, no phenomenal rise in the value of the land has arisen. She has purchased at Rs. 67,96,342/- for the period starting from 18.12.2007 upto 4.3.2008. She had agreed to sell this property on 4.4.2008, just in a span of 3-4 months. She has earned small amount of capital gain which has been offered for taxation. An analysis of all the facts ITA No.2414/Ahd/2013 and circumstances, discussed by the ld.Revenue authorities, we are of the view that setting of surrounding facts and circumstances, even as a whole, does not suggest that agreement dated 4.4.2008 or 2.3.2009 are sham or bogus. Their enforceability in the law cannot be ignored. The alleged gains on sale of property calculated in the hands of the assessee are not sustainable. We allow the appeal of the assessee and delete the addition of Rs. 6,83,09,792/- from the hands of the assessee." 22. Perusal of the above findings by the Co-ordinate Bench, Ahmedabad and examining the facts of the instant appeal we find that the "agreement to sale" was e....
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.... above which are at Ground No.1, 1.1, 1.2 and 1.3 are decided in favour of the assessee. 23. Now we take up the third issue that whether the Ld.CIT(A) is justified in denying the benefit of exemption u/s 54B of the Act for investment in agriculture land in the name of son and daughter of the assessee. 24. Brief facts relating to this issue are that the assessee applied the sale consideration from sale of agriculture land for purchasing the agriculture land in order to claim exemption u/s 54B of the Act. The Ld.A.O denied the benefit because the assessee filed the belated revised return. The Ld.CIT(A) accepted the revised return in view of the judicial pronouncements. The Ld.CIT(A) gave the benefit of exemption u/s 54B of the Act for the purchase of land in the name of assessee at Rs. 64,70,890/- and in the name of his wife at Rs. 28,94,460/-. The Ld. CIT(A) did not allow the benefit u/s 54B for investment in purchase of agriculture land in the name of assessee's son Shri Umesh Patidar at Rs. 49,86,085/- and in the name of his daughter Ms. Seema Patidar at Rs.,12,50,175/-. Revenue has not appealed against the benefits given by the Ld.CIT(A) for allowing exemption u/s 54B of th....
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....ctive owner of the house. In CIT Vs. Podar Cements (P) Ltd. & Ors., (1997) 226 ITR 625 (SC), the Supreme Court has also accepted the theory of constructive ownership. Moreover, Section 54F mandates that the house should be purchased by the assessee and it does not stipulate that the house should be purchased in the name of the assessee only. Here is a case where the house was purchased by the assessee and that too in his name and wife's name was also included additionally. Such inclusion of the name of the wife for the above-stated peculiar. factual reason should not stand in the way of the deduction legitimately accruing to the assessee. Objective of Section 54F and the like provision such as Section 54 is to provide impetus to the house construction and so long as the purpose of house construction is achieved, such hyper technicality should not impede the way of deduction which the legislature has allowed. Purposive construction is to be preferred as against the literal construction, more so when even literal construction also does not say that the house should be purchased in the name of the assessee only. Section 54F of the Act is the beneficial provision which should be interp....
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....d by this Court. It noted that the entire purchase consideration was paid only by the assessee and not a single penny was contributed by the. assessee's wife. It also noted that a purposive construction is to be preferred as against a literal construction, more so when even applying the literal construction, there is nothing in the section to show that the house should be in the name of the assessee only. As a matter of fact, Section 54F in terms does not require the new residential property shall be purchased in the name of the assessee; it merely says that the assessee should have purchased/constructed "a residential house". 8. This court in the decision cited alone also noticed the judgment of the Madras High Court (supra) and agreed with the same, observing that though the Madras case was decided in relation to Section 54 of the Act, that Section was in pari materia with Section 54F. The judgment of the Punjab and Haryana High Court in the case of CIT V s. Gurnam Singh , (2014) 327 ITI{ 278 in which the same view was taken with reference to Section 54F was also noticed by this Court. 9. It thus appears to us that the predominant judicial view, including th....
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....be dealt with in accordance with the following provisions of this section, that is to say,- (i) if the amount of the capital gain is greater than the cost of the land so purchased (hereinafter referred to as the new asset), the difference between the amount of the capital gain and the shall be charged under section 45 as the income of the previous year, and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be nil; or (ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be reduced, by the amount of the capital gain] (2) The amount of the capital gain which is not utilised by the assessee for the purchase of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due da....
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....th the lower authorities and direct the Ld. Assessing Officer to give the benefit of exemption u/s 54B of the Act to the assessee at Rs. 62,36,260/- which is over and above the benefit of Rs. 91,18,190/- already allowed by Ld.CIT(A) u/s 54B of the Act. In the result the issue No.3 raised by the assessee under Ground No.2 of the appeal is allowed. 29. Now we are left with Ground No. 1.2 of the assessee's appeal relating to cost of acquisition of land sold by the assessee. The assessee adopted it at Rs. 5 lakhs per hectare whereas the Assessing Officer took it at Rs. 27,580/-. The Ld.CIT(A) confirmed the view taken by the Ld.A.O which was based on the rate of agriculture land situated in the vicinity of the impugned agriculture land. Now the assessee is aggrieved with the findings of Ld.CIT(A) confirming the action of Ld.A.O. of assessing the cost of acquisition at Rs. 27,580/-. 30. We have heard rival contentions and perused the records placed before us. We find that there was sale of agriculture land measuring 1.647 hectare. The cost of acquisition on 1.04.1981 was taken at Rs. 5 lakhs per hectare thereby computing the cost of acquisition at Rs. 8,23,500/-. The onus to prove ....
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