TaxTMI 
TaxTMI 
2021 (2) TMI 215
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.... not been complied with and consequently, the order of re-assessment requires to be cancelled. 3. The learned CIT[A] is not justified in upholding the assessment of the long term Capital Gains of Rs. 2,68,25,802/- on the alleged transfer of property during the year invoking the provisions of sec. 50C of the Act under the facts and in the circumstances of the appellant's case. 3.1 The learned CIT[A] failed to appreciate that there was no transfer of the property during the year under appeal and hence, the computation of the Capital Gains for the year under appeal is opposed to law and facts of the appellant's case and therefore, the capital gains assessed ought to have b deleted. 4. Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies itself liable to be charged to interest u/s 234-A, 234-6 and 234-C of the Act, which under the facts and in the circumstances of the appellant's case deserves to be cancelled. 5. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant....
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....d or assessed by any authority of a State Government (hereafter in this section referred to as the "stamp valuation authority") for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer. (2) Without prejudice to the provisions of sub-section (1), where- (a) the assessee claims before any Assessing Officer that the value adopted or assessed by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer; (b) the value so adopted or assessed by the stamp valuation authority under sub-section (1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court, the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clause (i) of sub-section (1) and sub-sections (6) and (7) of section 23A, sub-sec....
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....e the execution of sale deed, the assessee was only an allottee (agreement holder) of the aforesaid site. Thus, it was clear that the assessee himself was in part performance of the contract u/s. 53A of the Transfer of Property Act. Therefore, it was not clear how he transferred the site to Shri R.K. Sipani in 1993,when he himself got the sale deed executed in his favour in 1995 by the BDA. Further, according to the CIT(A), the ownership of property was transferred to Shri R.K. Sipani in 1993, then the sale deed executed by the BDA in 1995 should have been made in favour of Shri R.K. Sipani and not the assessee. According to the Assessing Officer, if the property had been transferred to Shri R.K. Sipani in 1993 itself, then the assessee should not have executed the sale deed in favour of M/s. Suraj Properties in 2007 as the same was not required from his side. As per the agreement dated 08.03.1993, the aforesaid site was transferred to Shri R.K. Sipani but in the sale deed dated 09.03.2007, it was transferred to M/s. Suraj Properties. Further, vide sale deed dated 09.03.2007 transfer of site as well as building took place; but vide sale agreement dated 08.03.1993, only the site was....
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....3A and 54 of the Transfer of Property Act, relied on the judgment of the Supreme Court in the case of Narandas Karsondas vs. SA Kamtam and Rambhau Namdeo Gajre vs. Narayan Bapuji Dhotra wherein it was observed that a transfer of immovable property by way of sale can be effected only by a deed of conveyance. In the absence of a deed of conveyance (which must be duly stamped and registered as required by law), no right, title or interest in an immovable property can be transferred. Reliance was also placed on the judgment of the Supreme Court in the case of CIT vs. Balbir Singh Maini (2017) 86 taxmann.com 94 (SC) wherein it was held that no rights are transferred in respect of an immovable property, if the document purportedly conveying such a transfer is not registered. 10. The relevant sections that are necessary for us to decide the present matter are as under:- "53A. Part performance. - Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract....
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....y: (i) expenditure incurred wholly and exclusively in connection with such transfer; (ii) the cost of acquisition of the asset and the cost of any improvement thereto:" 11. Section 53A, as is well known, was inserted by the Transfer of Property Amendment Act, 1929 to import into India the equitable doctrine of part performance. This Court has in Shrimant Shamrao Suryavanshi & Anr. v. Pralhad Bhairoba Suryavanshi (D) by LRs. & Ors., (2002) 3 SCC 676 at 682 stated as follows:- "16. But there are certain conditions which are required to be fulfilled if a transferee wants to defend or protect his possession under Section 53- A of the Act. The necessary conditions are: (1) there must be a contract to transfer for consideration of any immovable property; (2) the contract must be in writing, signed by the transferor, or by someone on his behalf; (3) the writing must be in such words from which the terms necessary to construe the transfer can be ascertained; (4) the transferee must in part-performance of the contract take possession of the property, or of any part thereof; (5) the transferee must have done some act ....
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....istered 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 II of the Specific Relief Act, 1887 (1 of 1877) or as evidence of any collateral transaction not required to be effected by registered instrument." "20. The effect of the aforesaid amendment is that, on and after the commencement of the Amendment Act of 2001, if an agreement, like the JDA 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 asset under Section 2(47)(v) of the Act, there must be a "contract" which can be enforced in law under Section 53A of the Transfer of Property Act. A reading of Section 17(1A) and Section 49 of the Registration Act shows that in the eyes of law, there is no contract which can be taken cognizance of, fo....
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....are not relevant or not valid for transfer of immovable property after amendment in 2001. Therefore, the CIT(A) held that the sale agreement does not create any title in favour of the assessee and the sale agreement was not a valid document for transfer of property. Considering that the transfer had taken place on 09.03.2007, the CIT(A) held that provisions of section 50C of the Act are applicable in the present case, the transfer agreement dated 09.03.2007 was through a registered document and the guidance value of the property as on that date has to be considered as the sale consideration received by the assessee and taxed accordingly. Thus, the CIT(A) upheld the order of AO. 14. Against this, the assessee is in appeal before us. 15. With regard to the reopening of the assessment, the ld. counsel for the assessee firstly submitted that the reasons recorded furnished by the AO in the letter dated 30/11/2011 contains only the purported extract of the reasons recorded. However, it is submitted that the reasons to be recorded u/s. 148[2] of the Act are required to be done in the order sheet of the assessee's file with the date of recording the reasons and the signature of the A....
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....ital gains tax as the possession of the property sold under the sale deed dated 09.03.2007 was given long back. It was submitted that in fact, this aspect of the matter is clear from the materials found in course of survey itself and hence, according to the assessee, there could not be a bonafide belief that income has escaped assessment for the year under appeal. The reopening of the assessment has to be bonafide. It cannot be a mere pretense and when facts that are relevant for arriving at a proper conclusion are ignored and not considered the reopening of the assessment is not bonafide. Hence, it is submitted that the reopening of the assessment is unjustified and the consequent assessment order passed requires to be cancelled. 18. On the other hand, the ld. DR submitted that time for completion of the Sale Deed is only 1 year 6 months from the date of 08.03.1993 and Absolute Sale Deed was not executed within that period, therefore agreement to sell is not valid. He further submitted that even capital gain was not offered to tax consequent to this sale agreement also in the AY 1993-94. Accordingly he submitted that reopening of assessment is to be held as valid. 19. We hav....
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....ed in a BDA auction for purchase of property. The assessee was in possession of the site on 29/08/1984 pursuant to the auction site agreement dated 24/07/1984 entered into between the assessee and the BDA. It was submitted that Shri R.K. Sipani purchased the aforesaid site to construct his residential house through M/s. K. Prakashchand Bethala Properties Pvt. Ltd (M/s. KPCBPPL for short) floated earlier by him along with the assessee. After the incorporation of M/s. KPCBPPL, the assessee and Shri R.K. Sipani entered into an oral agreement in the month of September, 1989 whereby the assessee sold the aforesaid site to Shri R.K. Sipani for a consideration of Rs. 9,80,500/- and a sum of Rs. 9,79,455/- was received by the assessee by way of various cheques. It was submitted that the assessee gave possession to Shri R.K. Sipani of the aforesaid site on 24/10/1989 itself. Thereafter, the assessee entered into an unregistered agreement dated 08/03/1993 to sell the aforesaid site. 23. As already submitted by Ld. AR, Shri R.K. Sipani purchased the aforesaid site to construct his residential house through M/s. KPCBPPL. Thus, it was submitted that the land came to be owned by Shri R.K. ....
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....nd it cannot be considered as a valid conveyance deed so as to transfer the impugned property and the actual sale took place vide Sale Deed dated 9.3.2007. According to the ld. DR, the sale took place only on 9.3.2007, as such the provisions of section 50C of the Act as it stood on that date should be applied. He supported the order of the lower authorities. 26. We have considered the rival submissions. Section 48 of the Act provides the mode of computation of capital gain. It contemplates the income arising under the head 'capital gain' so as to compute by deducting from the full value of consideration received or accruing as a result of transfer of capital asset the following amounts viz., (a) expenditure incurred wholly and exclusively in connection with such transfer; (b) cost of acquisition of asset and cost of any improvement made thereto. 27. Section 50C provides that where the consideration received or accruing as a result of transfer by an assessee of a capital asset being rent or building or both is less than the value adopted or assessed by any authority for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or ....
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....nything more than the value mentioned in the Sale Agreement. Further by way of Agreement dated 8.3.1993 right over the property has been transferred from the Vendor to Purchaser. The only pending was actual registration of the Sale Deed. In other words, at time of Agreement of Sale in respect of this immovable property on 8.3.1993, a right in persona is created in favour of the Purchaser. When such a right is created in favour of the Purchaser and the Vendor is restrained from selling such property to someone else because the Purchaser, in whose favour right in persona is created, has legitimate right to enforce such specific performance of the agreement if the Vendor for some reason or other has not executed the Sale Deed. Thus by virtue of Agreement of Sale, some right is given to the Vendee by the Vendor. It is encumbrance on the property. At this stage, it is appropriate to mention that the provisions of section 50C(1) of the Act, according to which, if there is a gap between the date of execution of Sale Agreement and the Sale Deed and if the guidance value changes, the guidance value as on the date of Agreement has to be considered as the full consideration of the capital ass....