TaxTMI 
TaxTMI 
2019 (9) TMI 458
X X X X Extracts X X X X
X X X X Extracts X X X X
....al gains as against long term capital gain claimed by appellant in return of income. 2. The Ld. CIT (A) Appeals has erred in law and on facts in confirming short trm capital gain at Rs. 28722950/- as against long term capital gain claimed at Rs. 28464441/- in return of income. 3. The appellant craves to add, alter, amend or withdraw any of the grounds of appeal on or before of the final hearing of appeal. The assessee has also raised the additional ground of appeal vide letter dated NIL which is reproduced as under: 1. The Ld.CIT(A) has erred in law and on facts in not allowing cost of stamp duty and other expenses of Rs. 18,40,850/- incurred for purchasing the land as deduction from the sales consideration. 2. The issue raised by the assessee in ground no. 1 is that the Ld.CIT (A) erred in confirming the action of AO by treating the long term capital gain as short term capital gain. 3. Briefly stated facts are that the assessee is an Individual and engaged in the business of trading in grey, fabrics, and hosiery. The assessee in the year under consideration declared long term capital gain amounting to Rs. 2,86,64,441/- on sale of Land situated a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 4) Merely on the basis of the Banakat dated 15-02-2006 it can't be assumed that the Land was transferred to the assessee within the meaning of the section of 53A of the transfer of property Act. 5) The case M.Syamala Rao Vs. CIT (supra) cited by the assessee is not applicable to the given fact & circumstances. In that case the assessee got the possession of land on the date of Banakat itself. 3.5 The AO based on the above findings reached to a conclusion that the assessee held the land for a period of less than 3 years and accordingly computed short term capital gain of Rs. 3,05,63,800/-(3,11,00,000-5,36,200/-) instead of long term capital gain of Rs. 2,86,64,441/- which was claimed by the assessee. 4. Aggrieved assessee preferred an appeal before the Ld.CIT (A). The assessee before the Ld. CIT (A), besides the submissions made before the AO, tendered that he failed to get the land registered in his name due to non-performance on account of the seller. Therefore, he should not be penalized for the default of the seller. 4.1 However, the Ld.CIT (A) rejected the contention of the assessee and confirmed the order of the AO by observing that the transfer did not t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o the fault of the seller which was resolved in the court of law. Thus, there remains no ambiguity that the assessee was not able to complete the impugned transaction for the purchase of the property due to the circumstances which were beyond his control. Accordingly a question arises, should the assessee be penalized due to the nonperformance of the contract by the other party. 7.4 It is well-settled that an obligation gets discharged due to impossibility of performance. The assessee in the instant case has fulfilled all the conditions specified in the agreement but the seller failed to do so for the reasons best known to him. Accordingly, we conclude that the delay in non-registration of the sale deed and possession of the property has occurred for the reasons beyond the control of the assessee i.e. due to default of the seller of the property. The law of impossibility of performance does not necessarily require absolute impossibility, but also encompass the concept of severe impracticability. In our humble opinion, the doctrine of impossibility of performance applies in this case. Due to uncontrollable circumstances, the performance of the obligation as specified under the ag....
X X X X Extracts X X X X
X X X X Extracts X X X X
....red compulsory acquisition thereof. This order was declared as illegal and ab initio void by the High Court. The sale deed was ordered to be executed in favour of the petitioner. There is no reason for us not to accept the petitioner's contention that the execution of the sale deed by virtue of the judgment of the High Court would relate back to the original agreement to sale. The petitioner was. thus, entitled to claim the benefit of cost indexation from the said date. The entire basis of the department in the reasons recorded in order to dispute the petitioner's computation of the capital gain, therefore, is rendered invalid. In the result, the impugned notice is set aside. In peculiar facts of this case, therefore, we have adopted the logic as was done by the Supreme Court in case of Sanjeev Lal (supra). The petition allowed and disposed of. 7.6 In view of the above we hold that the execution of the sale deed in pursuance to the order of the court would relate back to the original agreement to sale as discussed above. Hence the assessee is entitled for the claim of index cost of acquisition being the holding period more than 36 months. Therefore the ....