TaxTMI 
TaxTMI 
2022 (8) TMI 581
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....ilash Dedraj Mali alias Sainik/Saini, entered into sale Cum Development Agreement on 21.10.2010 with the Developer cum Purchasers, viz. Bhupatbhai Ravjibhai Lukhi and Shri rameshhai Ravjibhai Lukhi, for transfer of their ancestral property being Plot No. 135, bearing CTS No. 97-A-29/1 and 97A-29 of village Chincholi, admeasuring 1053 square yards equivalent to 880.31 square meters together with the construction existing there on. And that all the three brothers had equal undivided share in the said property. And as consideration for transfer of his share in the aforesaid property, Shri Kailash Dedraj Mali alias sainik/Saini agreed to transfer/sell his 1/3rd right, title and interest in the said property for a consideration of Rs. 1,90,00,000/-. However, for transfer of their respective rights, title, the assessee and Shri Tormal Dedraj Mali alias Sainik Saini jointly received Rs. 70 Lac and a right in the house property of 5000 sq. feet built up area wall to wall cost fully developed constructed flats without any obligation in the projects to be constructed by the developer at the Plot No. 135, mentioned above. Accordingly, consideration received by the assessee for transfer of his....
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....n of the said transfer of the share of the assessee comes to Rs.1,21,00,000/-. Accordingly, long term capital gains arisen out of transfer of the 1/3 right title of the share of the assessee in the property covered in the Sale-Cum -Development Agreement is computed as under: Sr. No. Description Amounting in Rs. 1 Deemed consideration as computed above 1,21,00,000 2 Fair Market Value as on 01.04.1981 as per Regd. Valuer Report dated 12.02.2016 6,17,725 3 Indexed cost of acquisition (i) Year of indexation allowable to the assessee, as discussed above: 1995-96 Cost Inflation Index: 281 (ii) Year in which right title was transferred: 2010-11 Cost inflation index: 711 Indexed Cost:6,17,725 x 711/281 15,62,998 4 Long term capital gains (1-3) 1,05,37,002/- 4.7. In view of the above discussion, tong term capital gains arising out of transfer of right title of the share of the assessee in the property mentioned in the Sale - Cum - Development Agreement dated 21.10.2010, is computed at 1,05,37,002/-. In the return of income, the assessee has not reported any capital gains in respect of the transfer of right title in the immovable pr....
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....efore not acceptable. 5.3 Further, in this case, the appellant has transferred the right in land and house property vide sale-cum-development agreement dated 21.10.2010 and therefore the new house property should have been constructed on or before 21.10.2013. Moreover, as per the Development Agreement dated 21.10.2010 the appellant will get 3 flats in his name having combined built up area of 2270 sq ft. As per provisions of section 54, the deduction of LTCG can be allowed only in respect of purchase / construction of only one house property within the specified time frame. Therefore, in my considered view, the AO has rightly computed the LTCG at Rs 1,05,37,002/and also rejected the claim of the appellant for deduction u/s 54. Accordingly, ground Nos 1 to 3 are dismissed." 6. Aggrieved by the aforesaid action of the Ld. CIT(A), the assessee is before us. 7. We have heard both the parties and perused the records. The short point to be decided is whether in the facts and circumstances of the case whether the incident of tax [i.e, transfer of immovable property] for charging capital gain has arisen in this year (AY. 2011-12) against the assessee or not. The AO's case is....
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....of the Transfer of Property Act, 1882. 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, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract: Provided that noth....
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....riated by the Vendors towards the claim for damage including cost, charges and expenses of and incidental to this agreement." 10. In the light of the above agreement and the relevant law (supra), we have to examine the impugned action of Ld. CIT(A). According to AO/Ld. CIT(A) since the possession of land has been handed over by the assessee to the developer on execution of the agreement dated 20.10.2010, the transfer of property have taken place in view of the Section 2(47) (v) of the Act r.w. Section 53A of the Transfer of Property Act, 1882 (4 of 1882) (referred hereinafter in short as "TOPA"). In this regard, the Ld. Counsel for the assessee contended that on perusal of the agreement executed by the assessee with the developer would reveal that there was no transfer of a capital assets in view of the provisions of Section 2(47) (v) of the Act r.w. Section 53A of the TOPA. According to him, in order to attract provisions of Section 53A of the TOPA, first and foremost, the transferee must, in part performance of the contract, have taken possession of the property or any part thereof. Secondly, the transferee (developer) must have performed or be willing to perform his part of t....