TaxTMI 
TaxTMI 
2020 (10) TMI 1115
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....tered on 24.4.2013. As per the Assessing Officer (AO), the transfer, therefore, took place on 24.4.2013, attracting section 56(2)(vii)(b)(ii), which reads as under: Chapter IV-F - Income from other sources '56. (1) Income of every kind which is not to be excluded from the total income under this Act shall be chargeable to income-tax under the head "Income from other sources, if it is not chargeable to income-tax under any of the heads specified in section 14, items A to E. (2) In particular and without prejudice to the generality of the provisions of subsection (1), the following income shall be chargeable to income-tax under the head "Income from other sources, namely:- (i) - (vi); (vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009, - (a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum; (b) any immovable property,- (i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stam....
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.... such property;' The stated difference could, therefore, not be taxed inasmuch as the amendment bringing the short consideration (with reference to stamp duty value) to tax came in force only from the following assessment year, i.e., beginning 01.4.2014. The ld. CIT(A) allowing relief to the assessee on that basis, the Revenue is in appeal, raising the following grounds: (i). Whether on the facts and the circumstances of the case, the ld. CIT(A) erred in deleting the addition of Rs. 2,30,67,500/- u/s. 56(2)(vii)(b) of the Income Tax Act, 1961 without appreciating the fact that the deed was registered on 24.04.2013 and transfer of immovable property as per provisions of section 2(47) of the Act will be considered on the date the deed is registered. (ii). Any other ground that may be adduced at the time of hearing. 3. Before us, the case of either side was principally the same. As per the Revenue, it is well-settled that the title to or ownership of an immovable property (in excess of rupees one hundred) could not be conveyed by an unregistered document, which is not a valid document in law. The same becomes a legally valid document, which could be enforced in....
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.... bond; or (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 (vi) any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immovable property. Explanation 1.-For the purposes of sub-clauses (v) and (vi), "immovable property" shall have the same meaning as in clause (d) of section 269UA. Explanation 2.-For the removal of doubts, it is hereby clarified that "transfer" includes and shall be deemed to have always included disposing of or parting with an asset or any interest therein, or creating any interest in any asset in any manner whatsoever, directly or indirectly, absolutely or conditionally, voluntarily or involuntarily, by way of an agreement (whether entered into in India or outside India) or otherwise, notwithstanding....
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....e Act. This was due to a conflict of view between different High Courts, i.e., as between a 'legal owner' and 'beneficial owner', in whose hands the income from a house property is to be taxed inasmuch as a property cannot have two owners at the same time. The section, it had earlier explained in Jodha Mal Kuthiala (supra), brings to tax the income from house property and not the interest in the property. The owner u/s. 22 is thus the person who can exercise the rights of an owner, not on behalf of other, but in his own right. Thus, the person who receives the rent in his own right, appropriates the usufructs for his own purposes, having no interference at the instance of the vendor, i.e., the de facto owner, was to be regarded as the owner for the purposes of section 22, having regard to ground realities as well as the object of the Act, i.e., to tax the income. Strength was also drawn by it from the fact of insertion of clause (iiia) to section 27, deeming the person allowed to take or retain possession of any building or part thereof in part performance of a contract of the nature referred in section 53A of the TP Act, by Finance Act, 1987 w.e.f. 1.4.1988, which it regarded as d....
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...., inasmuch as there had been delivery of its' possession by the society (and its members), attracting sec. 53A of the TP Act. This was repelled by the Hon'ble Court, among others, on the basis that the requirement of registration extended to a contract to transfer, i.e., after coming into force of the 2001 Act, whereby amendments were made to s.17 (by way of insertion of sub-section (1A)) and s.49 of the 1908 Act, as also s. 53A of the 1882 Act. The joint development agreement having not been registered under the Registration Act, no protection u/s. 53A of the TP Act was available to the transferee-developer, so there was no transfer u/s.2(47)(v) of the Act. Discussion 4.4 We may now view the transaction with reference to the defining clauses of 'transfer' u/s. 2(47), which allows it a wide amplitude, whereby, rather, any arrangement which has the effect of transferring or enabling the enjoyment of any immovable property is regarded as transfer under its residuary clause (vi). It is for such like reasons that the Hon'ble Courts, as in Mormasji Mancharji Vaid (supra), have held that the term 'transfer' is to be, given the object of the Act, given a simple meaning. True, the wo....
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....a part of the sale consideration has been paid in cash (legal tender), the provision, in substance, seeks to give primacy to the date of the agreement, where it is, as in the instant case, subsequently registered. This also sums up the assessee's case. The argument, impressive at first blush, is, however, inadmissible. This is for the reason that this aspect has been clarified on more than one occasion by the Apex Court. Per its' constitution bench (comprising 7 judges) decision in Ram Saran Lall vs. Mst. Domini Kuer, AIR 1961 SC 1747, it was explained that the object of section 47 (of the Registration Act, 1908) is to decide which of the two (or more) registered instruments in respect of the same property shall have effect. It was observed that the said section does not say when the sale would be deemed to be complete. It only permits a document, when registered, to operate from a certain date which may be earlier than the date when it was registered. In sum, a sale which was required to be registered was not complete until the registration of the deed was completed. The court thus read the section with reference to the object of the provision. How could, then, one wonders, ....
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....r s. 17(1A) of the Registration Act. The amendments to sections 17 (way of insertion of sub section (1A)) and 49 of the said Act and section 53A of the TP Act, only place section 2(47)(v), in-so-far as it relates to transfer of immovable property per the modes defined u/s. 17 of the 1908 Act, and section 2(47)(i) of the Act, at par, i.e., on the same footing. 4.4.3 We may next examine the transaction from the stand-point of section 2(47)(vi) (refer para 4.3.1). The parties have executed the instrument of transfer on 30/3/2013, performing their respective promises, so that the contract is complete between them, i.e., except its registration, and toward which the same was submitted with the office of Sub-Registrar on 30/3/2013 itself. Though it is not clear as to how it was so as 30/3/2013 happens to be a Saturday (whereat the Government offices are generally closed) and, besides, at 6:45 p.m., while the Government offices generally close earlier, i.e., latest by 6 p.m. However, the said date and time, manifest on the document (PB pgs. 39-58), are not in dispute. Could it, therefore, on the basis thereof, be said that the assessee-buyer is the de facto owner of the subject propert....
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.... Property Act; the Registration Act, etc., in the context of section 22 of the Act, having regard to the ground realities and, further, the object of the Act, namely to tax the income, the owner is the person who is entitled to receive the income in his own right. The requirement of registration of the sale deed is, in the context of section 22, not warranted, and affirmed its' decision in Jodha Mal Kuthiala (supra). Earlier, in CIT (Addl.) vs. Sahay Properties Investment Co. P. Ltd. [1983] 144 ITR 357 (Pat), the Hon'ble Court held as under, which was noted with approval in Podar Cement Pvt. Ltd. (supra): (pg. 364) "The juristic principle from the view-point of each one is to determine the true connotation of the term 'owner' within the meaning of section 22 of the Act in its practical sense, leaving the husk of the legal title beyond the domain of ownership for the purpose of this statutory provision. The reason is obvious. After all, who is to be taxed or assessed to be taxed more accurately - a person in receipt of money having actual control over the property with no person having better right to defeat his claim of possession or a person in legal parlance who may r....