TaxTMI 
TaxTMI 
2023 (1) TMI 476
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....016 accepting the same. In the revisionary proceedings u/s. 263, the competent authority held that the provision of s.56(2)(vii)(b)(ii) was applicable inasmuch as the market value of the subject property, as per it's stamp value, as on the date of transfer, was rs. 127.56 lacs. The assessment, made de hors the said provision of law, applicable w.e.f. AY 2014-15, was, thus, per incuriam and, accordingly, set it aside, directing fresh assessment considering the said provision after hearing the assessee. This was upheld by the Tribunal in appeal (in ITA Nos.22 & 23/JAB/2019) vide order dated 29/7/2022. The assessee's challenge, relying on the decision by the Tribunal in Rakhi Agrawal (ITA No.94/JAB/2018, dated 27/10/2020 / copy on record), was on the basis that the sale deed had been presented for registration with the office of the Sub- Registrar, Jabalpur in the preceding year, i.e., on 30/3/2013. The transaction between the parties stood closed on that date for all intents and purposes. The non-registration of the sale deed, a document compulsorily registrable u/s. 17 of the Registration Act, 1908, was only on account of deficiency in stamp duty, which was met in the following year....
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....him for being requisitioned by us from the assessee-appellant. The genuineness of the transaction is, as opposed to Rakhi Agrawal (supra), thus in serious doubt. In rejoinder, Shri Purohit would submit that no sale agreement had been executed. The objection by the stamp authority was also oral, and that no order had been received therefrom. The sale is complete even on a part payment and promise to pay the balance part of the agreed sale consideration, where accompanied by delivery of possession, for which he would refer to s.54 of the Transfer of Property Act, 1882, being only in terms of the agreement, which could be oral, between the two parties, a private contract, which was legal, violating no law. It is common place, he would add, to find Builders allowing extended time for payment of the sale consideration to the buyers, which spreads over the period of construction, i.e., for years, or even for periods beyond the same. The payment of the sale consideration subsequent to the sale deed could not therefore be a valid reason to doubt the genuineness of the arrangement. At this stage, it was, on inquiry, confirmed by Shri Purohit that the seller/s of the subject property, bein....
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....bsp; (emphasis, ours) 4.2 The assessee-appellant relying before us on the decision in Rakhi Agrawal (supra), we delineate the same with a view to see if the factual difference pointed out by Shri Kumar in the instant case, also noted by the ld. CIT(A), is material. That is, would it have a legal effect, i.e., in terms of the applicability of 'transfer', defined u/s. 2(47), or would it be on the same footing and at par with the case in Rakhi Agrawal (supra), for the said decision to cover the instant case as well. The Tribunal in Rakhi Agrawal (supra) opined that inasmuch as both the parties had discharged their respective obligations under the contract by the date of execution of the sale deed, signified by the presentation thereof for registration on 30/3/2013, so that all that remained (for the sale under law to be complete as on that date) was registration thereof, the subject property could be said to be transferred u/s. 2(47)(vi) of the Act - which provides for any transaction which has the effect of transferring or enabling the enjoyment of any immovable property, thereat, i.e., i....
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....of genuineness, also raised, and indeed arising, in the instant case, making the said decision further distinguishable. 4.3 True, it could be argued, as indeed has been, that inasmuch as the non-registration in Rakhi Agrawal (supra) was also for the reason of shortfall in the payment of stamp duty, the two cases are at par irrespective of the payment made by the buyer to the seller, which is something between the parties - one allowing credit to the other, and with which therefore the law of transfer ought not to be, and is not, concerned about, which is in essence Sh. Purohit's argument before us, making reference to s.54 of the TP Act. However, the argument, miss as it does the essential point, is misplaced. Non-payment of the agreed consideration, as aforenoted, means a lack of performance by the parties of their respective parts of the contract. As afore-stated (para 4.2), it is this that was noted for its completion by the Tribunal in Rakhi Agrawal (supra), and the consequent satisfaction of the ingredients of sec. 2(47)(vi), which thus does not obtain in the facts and circumstances of the instant case, failing the said argument. Rather, the same raises, further, the aspect o....
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....ted by deeming the market value as the full value of the consideration arising on the transfer (s.50C r/w s. 48). Only a moron could be expected to do that! Sure, there could be circumstances justifying selling at a discount, or delivering possession without receiving full consideration. As where, for example, a Builder being allowed possession by the seller selling a constructed unit and not a piece of land, and which would only be at a defined time in future. The possession to the Builder, even as observed by the Bench during hearing, as indeed by the Apex Court in many a case, as in CIT v. Balbir Singh Maini [2017] 398 ITR 531 (SC), discussed in Rakhi Agrawal (supra), is in such a case only for the purpose of construction and not qua an owner. The seller either partakes a part of the profit arising on the sale, or otherwise receives the sale consideration, in whole or in part, which is of the developed property, or both, and which explains the manner of the transaction. The same is inapplicable in the instant case. Such a contract is rather generally in the form of a tripartite agreement between the land owner, the builder and the buyer (of the developed property), so that the s....
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....been, but for the registration, completed on 30/3/2013 itself. Nothing more and nothing less. The proposition of it, on being registered on 07/6/2013, being deemed to be registered on 30/3/2013, was not accepted by the Tribunal in Rakhi Agrawal (supra), as indeed in the assessee's own case u/s. 263. As explained therein, though a document on registration would relate back to the date on which the transaction was otherwise complete, i.e., but for the requirement of the registration, the fact of the matter is that a property cannot be in the vacuum, and can have only one owner/s at a time, i.e., either the buyer or the seller, at any given point of time. Thus, it cannot be that the seller is the owner of the subject property from 30/3/2013 to 06/6/2013, i.e., going by the example of the instant case, but the assessee-buyer becomes the owner of the said property for the period comprised within the said dates on the payment of the stamp duty, and concomitant registration, on 07/06/2013. The assessee's reliance on the decision in CIT v. Mormasji Mancharji Vaid [2001] 250 ITR 542 (Guj)(FB), was met by reliance, inter alia, on the Constitution Bench decision in Ram Saran Lall v. Mst. Domi....
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....and cannot be oral. The unregistered sale deed cannot thus also be received in evidence even as an agreement of sale. To the same effect would be the effect of s. 35 of the Indian Stamp Act, 1899, excluding a document not properly stamped from being received in evidence, even as we may hasten to add that this would be so only for the reason that a sale agreement becomes, in view of the amendment to sec. 17 by the State Legislature w.e.f. 14/01/2010, a compulsorily registrable document. Sh. Purohit was during hearing specifically required by the Bench to respond to the legal effect of the non/inadequate payment of stamp duty, and the consequent non-registration of the sale deed as on 31/3/2013, and which he chose not to. Reference to the sale deed being not a valid agreement to sell, i.e., in law, has, as we discern, two aspects to it. One, as in the case of s. 50C, which similarly deems the stamp valuation, unless contested, as the full value of the consideration arising on the transfer of an IP for the purpose of computing capital gain u/s. 48, draws an exception for the stamp valuation as on the date of agreement for transfer where accompanied or preceded by payment of considera....
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....54 ITR 148 (SC), the question in every such case to ask is not if there has been an infringement of law, which we have found it as so, but if it is an arrangement to which the judicial process can grant approval. The answer to which is clearly in the negative in the instant case. There is no answer or explanation to any of the questions set out earlier, also posed during hearing, nor forthcoming from the material on record, all of which irresistibly lead to the conclusion that the transaction under reference is not a genuine transaction, i.e., both was regards the date of possession as well as the disclosed sale consideration, even as the latter is rendered of little moment as the same is, where - as in the instant case, not protected by an agreement, deemed by law as the stamp value as on the date of possession, which we have found both factually and legally to be during the previous year relevant to the current assessment year. Why, we have no manner of any doubt that the stated sale consideration is not the actual sale consideration and, therefore, the deeming of sec. 56(2)(vii)(b) shall apply. We say so, as afore-noted, in the conspectus of the case, on an examination of the en....