TaxTMI 
TaxTMI 
2018 (10) TMI 1345
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.... the assessee would get 30% of the built-up area and proportionate undivided share of land and the builder would be entitled to 70% of built-up area and proportionate undivided share of land. The builder would incur all costs of construction of the built-up area. 4. Clause 1 of the JDA provides as follows: "1) PERMISSION FOR DEVELOPMENT: 1.1) The Owner is in possession and enjoyment of the Schedule Property. The Owner hereby authorize the Promoter for the purpose of development, to enter upon the Schedule Property and develop the same, however the authority so granted does not in any manner be construed as delivery of possession by the Owner in part performance of this agreement under Section 53-A of the Transfer of Property Act or under Section 2(47)(iv) of the Income Tax Act, 1961. 1.2) The Owner hereby agrees not to interfere or interrupt in the course of construction and development of the Schedule Property and/or commit any act or omission having the effect of delaying or stopping the work that has to be done under this Agreement. However, the Owner shall always be entitled to inspect the progress of the work and type of work which is bei....
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....A dated 29.3.2006. The following were the relevant observations of the CIT(A):- "6.7 It is clear that clause (v) of section 2 (47) of the Income tax Act in referred in such a manner that transactions of the nature referred to in section 53A of transfer of property will be considered as deemed transfer to levy tax on it. It also mean that capital gain tax would be levied on the deemed transfers particularly with reference to the provisions when registration of documents in support of transfer of legal title of immovable properties from transferor to transferee has taken place. The underlying principle which emerged from section 53A of Transfer of property Act is that the transferor shall be debarred from enforcing against the transferee any right in respect of the property of which the transferee has taken or continued in possession ,and hence we may infer that provision contained in section 53A of transfer of property is mainly to protect the interest of the transferee who has already performed his right to perform his part of job as per the terms of contract greed and not to decide about the validity and taxability of deemed transfer under the income tax Act. Hence the in....
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....ctures which would enable to put up construction. 7. In the case of Appellant, the JDA does not indicate that the possession was not given later on. Even the MOU produced by the Appellant shows that the possession was given to the builder and the amount of consideration was to be agreed upon by both the parties. 7.1 In view of the above it is held that although the Appellant has disclosed the capital gains, as per her own calculations in the A.Y 2007-08 but it was liable to be taxed in the current A.Y i.e. 2006-07 because the JDA was executed in the F.Y. 2005-06 relevant to A.Y 2006-07." 8. Aggrieved by the order of the CIT(A), the Assessee is in appeal before the Tribunal. The learned counsel for the Assessee reiterated submissions made before the CIT(A). He also submitted that even in the decision of the Hon'ble Karnataka High Court in the case of Dr. T.K. Dayalu in ITA No.3209/2015 judgment dated 20.6.2011, the Hon'ble Court has observed that it is the date on which legal possession is handed over that a transfer u/s.2(47)(v) of the Act can be said to have taken place. It was pointed out by him that in the light of the confirmation of the builder that posses....
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....place only by a registered deed. If no registered deed is executed in respect of such property, legal title or ownership is not effectively conveyed to the transferee although transferee might have paid entire consideration and/or obtained possession from the transferor in pursuance of contract of sale. "Transfer" in section 2(47) also envisaged execution of registered deed in such circumstances. Capital gains become liable to be charged to tax only if they arise as a result of "transfer" of capital asset and the date on which they arise is date of "transfer". If as a result of mutual arrangement by parties or otherwise, no registered deed is executed even after transaction is completed by delivery of possession and receipt of consideration, capital gains tax would escape assessment altogether or if such execution of registered sale-deed is postponed, the capital gains tax would also be postponed. In several cases it suited the parties to complete such transactions without execution of registered deed and thereby evade payment of tax on capital gains. It is in order to plug this loophole that cl. (v) was inserted in section 2(47) to lay down that transfer would include any transact....