TaxTMI 
TaxTMI 
2022 (12) TMI 1280
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Act are discussed in brief. During the year under consideration, the assessee has sold 350 shares of M/s. Concord Enviro Systems Pvt. Ltd. and earned long term capital gain of Rs.3.01 Crores. The assessee held a flat along with his mother as co-owner, viz., Flat No.1101, Eber-Ezer, Tagore Road, Santacruz, Mumbai. The assessee purchased the share of his mother by paying Rs.3.00 Crores and he claimed the above said purchase as deduction u/s.54F of the Act. The ld. PCIT noticed that the agreement for purchase has been entered on a notorized stamp paper only and conveyance deed has not been registered till date. The ld. PCIT took the view that the registration of deed is compulsory for availing deduction u/s 54F of the Act. The ld. PCIT of the Act also took the view that Section 53A of the Transfer of Property would not apply in the absence registration of Conveyance Deed for the purpose of Section 2(47)(v) of the Act. Accordingly, he took a view that the assessee would not be entitled for deduction u/s.54F of the Act. Accordingly, ld. PCIT took a view that the Assessing Officer has completed the assessment without enquiring or verifying the claim made by the assessee for deduc....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... decision of the Hon. Supreme Court in McDowell and Co reported in (1985) 3 SCC 230." The assessee is aggrieved by the revision order so passed by Ld PCIT and hence he has filed this appeal before the Tribunal. 5. The Ld A.R submitted that the assessing officer has made due enquiries with regard to the claim made u/s 54F of the Act. He submitted that the assessee has also furnished all the relevant details and the AO was very much aware of the fact that the conveyance deed has not been registered. The Ld A.R took us to various queries raised by the AO and the replies furnished by the assessee. He submitted that, after due application of mind, the AO has accepted the claim of the assessee for deduction u/s 54F of the Act. He submitted that the scope of the amendment made to the provisions of sec.53A of the Transfer of Property Act was examined by the co-ordinate bench in the case of Sureshchandra Agarwal (2011)(15 taxmann.com 115)(Mum) and it was held by the Tribunal that the amended provisions do not provide that the instrument of transfer is necessarily to be registered. Accordingly, the Ld A.R submitted that the Ld PCIT has entertained a different view of the above said mat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ombay High Court, in the case of Grasim Industries Ltd. V CIT (321 ITR 92) by taking into account the law laid down by the Hon'ble Supreme Court. The relevant observations are extracted below: Section 263 of the Income-tax Act, 1961 empowers the Commissioner to call for and examine the record of any proceedings under the Act and, if he considers that any order passed therein, by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the Revenue, to pass an order upon hearing the assessee and after an enquiry as is necessary, enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment. The key words that are used by section 263 are that the order must be considered by the Commissioner to be "erroneous in so far as it is prejudicial to the interests of the Revenue". This provision has been interpreted by the Supreme Court in several judgments to which it is now necessary to turn. In Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83, the Supreme Court held that the provision "cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer" and "it is only when....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... him will be illegal and without jurisdiction. The Commissioner cannot initiate proceedings with a view to start fishing and roving enquiries in matters or orders which are already concluded. 9. We shall now examine the facts prevailing in the instant case. The Ld A.R brought to our notice following documents to support his contention that various queries have been raised by the AO with regard to the claim for deduction u/s 54F of the Act and replies filed by the assessee:- (a) Notice u/s 142(1) dated 03-08-2018 issued by the AO, wherein, vide query no.3, the AO has asked to furnish documentary evidence to show that the deduction from Capital gain has been claimed correctly. (b) The assessee, vide his letter dated 07-08-2018, has furnished the reply (c) Notice u/s 142(1) dated 28-08-2018 issued by the AO, wherein the AO has extracted "computation of capital gains" itself. Further, vide query no.(f), the AO has specifically mentioned that the purchase of new property was through unregistered document and he has also asked as to whether the registration of deed was done subsequently. (d) Reply dated 11.09.2018, wherein it has been specifically s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ale, exchange or relinquishment of the asset ; or (ii) the extinguishment of any rights therein; or (iii) the compulsory acquisition thereof under any law; or (iv) in a case where the asset is converted by the owner thereof into, or is treated by him as, stock-in-trade of a business carried on by him, such conversion or treatment ; or (iva) the maturity or redemption of a zero coupon 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. A plain reading of the above show that this is an inclusive definition. First, we shall deal with clause (v), which has been considered by the AO as well as CIT(A). The AO has r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed 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 therefore 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 nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof." The above clearly shows that paras 1, 2 and 3 remain the same and there is change only in the 4th para by way of omission of the words "the contract, though required to be registered, has not been registered, or, "which, according to the AO, means after 24-09-2001 the provisions of section 53A would not be applied if the document was registered but a reading of the whole provision clearly shows that this provision is basically for the benefit of a buyer and it has been....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nsferring such properties by executing agreement to sell and general power of attorney as well as Will and receiving full consideration, but since the agreement to sell was not registered and though full consideration was received and even possession was given, still the same transactions could not be subjected to tax because the same could not covered by the definition of "transfer". To bring such transactions within the tax net, this amendment was made. It has to be appreciated that clause (v) in section 2(47) does not lift the definition of part performance from section 53A of the Transfer of Property Act, 1882. Rather, it defines any transaction involving allowing of 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. This means such transfer is not required to be exactly similar to the one defined u/s.53A of the Transfer of Property Act, otherwise legislature would have simply stated that transfer would include transactions defined in sec. 53A of the Transfer of Property Act. But the legislature in its wisdom has used the words "of a contract, of the nature refe....