TaxTMI 
TaxTMI 
2019 (1) TMI 791
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....or the assessment year under dispute. During the course of assessment proceedings, the AO noted that the assessee received sum of Rs. 1.75,00,000/- from M/s. Improved Realtors (P.) Ltd. by virtue of an unregistered agreement of assignment of the leasehold rights dated 17-08-2007. So, according to AO, the assessee was liable to be taxed on the capital gains, since the transaction for which assessee received the amount fall within the scope and ambit of sec. 48 read with sec. 2(47)(v) of the Act read with sec. 53A of T.P. Act, 1882. The assessee had brought to the knowledge of the AO that the assessee is not the owner and was in possession of the property only in the capacity of a lessee by virtue of a duly executed Indenture of Lease drawn on 14-02-1970, and later in this assessment year by virtue of an unregistered agreement of assignment of the leasehold rights dated 17.08.2007 had handed over its possession of the property to M/s Improved Realtors (P) Ltd. by which the entirety of the interest of the assessee in the property was transferred to it. According to assessee, since it was not the owner of the immovable property and had no power to transfer the right, title and/or inter....
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....ave been brought to tax by AO/Ld. CIT(A) erroneously under section 2(47)(v) of the Act read with sec. 53A of Transfer of Property Act, 1882. For saying so, he relied on the Apex Court judgment wherein the Hon'ble Supreme Court held that after the amendment in Indian Registration Act in year 2001 and corresponding amendment in sec. 53A of Transfer of Property Act, 1882, without registration of the agreement there can be no valid transfer of immovable property in the eyes of law. We note from a perusal of page 18 of paper book that an agreement of assignment of the leasehold rights was executed by the assessee on 17.08.2007 in favour of M/s. Improved Realtors Ltd. and we note that the this agreement was an unregistered document till 31.03.2008. The Ld. AR drew our attention to the fact that since the document (assignment of leasehold right) has not been registered, according to him, in the eyes of law no transfer even by an owner of an immovable property can be legally made by invoking section 53A of TP Act 1882. And consequently the amount received by the assessee cannot be taxed invoking sec. 2(4&)(v) of the Act since the assignment of leasehold right in any case cannot be termed a....
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....2), 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 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 IT 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 effect of the aforesaid amendment is that, on and after the commencement of the Amendment Act of 2001; if an agreement, like the IDA in the present case,is not registered, then it shall have no effect in law for the purposes of section 53A. In short, there is no agreement in the eyes of law which can be enforced under section 53A of the Transfer of Property Act. This being the case, we are of the view that the High Court was right in stating that in order to qualify as a "transfer" of a capital ....
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....question which is an agreement of assignment of property wherein the assessee who had held only the leasehold rights was not registered till 31.03.2008. This being the factual position, we note that the position which existed earlier that an agreement of sale which fulfilled the ingredients of section 53A of T. P. Act, 1882 was not required to be executed through a registered instrument, has changed by the Registration and other related Law (Amendment) Act 2001. We note that Amendments were made simultaneously in sec. 53A of T. P. Act, 1882 and section 17 and 49 of the Indian Registration Act. By the aforesaid amendment the words "the contract, though required to be registered, has not been registered, or" in section 53A of T. P. Act, 1882 have been omitted. Simultaneously, section 17 and 49 of Registration Act, 1908 have been amended, clarifying that unless the documents containing the contract to transfer for consideration any immovable property (for the purpose of sec. 53A of T. P. Act, 1882) is registered, it shall not have any effect in law; other than for being received as evidence of a contract for specific performance or as evidence of any collateral proceedings not require....