TaxTMI 
TaxTMI 
2023 (7) TMI 1196
X X X X Extracts X X X X
X X X X Extracts X X X X
....ar ending 31.03.1994. 4. The Appellate Commissioner ought not to have confirmed the order of the A.O, who has taken a narrow view of the term "Transfer" and should have referred to other provisions of the definition of the word "Transfer". 5. The Appellate Commissioner ought not to have confirmed the order of the A.O, who relied on explanation 2 to sec.2 (47) and restricting himself to the definition of the word "Agreement" to mean only written agreement. 6. Without prejudice to the above submission, the Appellate Commissioner ought not to have confirmed the order of the A.O, who erred in adopting the consideration as per the SRO rate in the order." 2. The brief facts of the case are that assessee has not filed his return of income for the Asst Year 2004-05. Consequent to Search & seizure operations conducted in the Janapriya Group cases, the issue of Long Term Capital Gain on sale of land came to notice of I.T. Department and a notice u/s 148 was issued to the assessee on 31.03.2011 calling for the return of income for the Asst. year 2004-05. Thereafter, assessment was completed u/s. 143(3) r.w.s.147 of Income Tax Act, 1961 on 30.12.2011 by assessing the income of the asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....u/s. 143(3) rws 254 of the I.T. Act on 23-12¬2016 rejecting the claim of the appellant and taxing the capital gain in the A.Y.2004-05. The Assessing Officer taxed the capital gains on the ground that the sale of the property actually took place in the previous year 2003-04 relevant to asst. year 2004-05 and rejected the oral agreement claiming to have transferred of the property in the year 1995-96. The Assessing Officer held that oral agreement cannot be treated as a valid agreement as it is revocable and no proof produced by the assessee to show that the construction activity has started after the said oral agreement. During the course of appellate proceedings, the AR of the appellant relied upon the confirmation given by Janapriya Projects stating that possession was given to them in the year 1994 under oral agreement. The confirmation given by Janapriaya Projects is reproduced below: "To Asst. Commissioner of Income Tax Circle 11 (1) Hyderabad. Madam Sub: Confirmation of possession of lands - Regd. With respect to above subject we are hereby confirm that we have purchased A. 29.13G and taken possession of the lands by irrevocable General power of Attorney cum Ag....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h contract in writing entered into in the previous year 1994-1995 in respect of land in Survey Nos.668 and 671 singed by the assessees from which the terms necessary to constitute the transfer could be ascertained with reasonable certainty and the oral agreements stated to be entered into by the assessees, in our opinion, cannot be said to have resulted in transfer of the land as envisaged in the provisions of section 2(47)(v) of the Income Tax Act read with section 53A of Transfer of Property Act even though it is accepted that the possession of the said land was taken by the transferee in that year. At the time of hearing before us, Ld. Counsel for the asses see has net been able to raise any material contention to dispute this position. He however has sought to raise altogether new issues by filing the following additional grounds with an application under Rule 27 of the Appellate Tribunal Rules, 1963 seeking admission thereof. 1. "The respondent prays that, on the facts and circumstances of the case, the Hon'ble Tribunal may be pleased to hold that the transfer of the impugned property has taken place in the previous year 1994-95 Itqevant to A.Y. 1995-96 within the meanin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....land for total sale consideration of Rs. 15,50,000/- (Rupees Fifteen Lakhs and Fifty Thousand Only)." Considering the factual matrix of the case, I am fully in agreement with the view of the Assessing Officer that there was no transfer in the year 1994-95 and uphold the findings that transfer took place in the year 2003-04 only. Therefore, I confirm the addition made by the Assessing Officer. However, I find from the assessment order dated 30-12-2011 that the Assessing Officer had computed the cost of acquisition at Rs. 2,87,235/- as on 1-4-1981 for the impugned property as well as other property. The proportional cost of the impugned land sold comes to Rs. 93,775/-. The Assessing Officer is directed to grant relief by Rs. 93,775/-. These grounds of appeal are allowed partly. 5. In the result, the appeal is treated as PARTLY ALLOWED." 5. Feeling aggrieved by the order passed by the Ld. CIT(A), the assessee is in appeal before us on the grounds mentioned herein above. 6. Before us, ld. AR had submitted that the transfer of the land had taken place in favour of Janapriya Engineers Syndicate, falls within the meaning of the term "transfer" as contained in the provisions of asses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ock-in-trade of a business carried on by him, such conversion or treatment 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-For the purposes of sub-clauses (v) and (vi), "immovable property" shall have the same meaning as in clause (d) of section 269UA 30. The Assessee submits that the Assessee has handed over the property to the purchaser on 31.12.1994 itself, i.e., on the same day that the Agreement of Sale/ irrevocable Power of Attorney has been executed pf the other properties. 31. This fact has been confirmed by the purchaser vide their letter filed during the original assessment proceedings and copy of which is given in the Paper Book at Page 17 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aring the litigation on the lands 43. The Assessees pray to place reliance on the decision of the Hon'ble Supreme Court in the case of Anarkali Sarabhai v. Commissioner of Income Tax, 224 ITR 422 (SC) wherein the Hon'ble Apex Court commented as under: Clause (47) of section 2 gives an inclusive definition to 'transfer'. This is not an exhaustive definition. Sub-clause (i) of clause (47) of section 2 speaks of 'sale, exchange or relinquishment of the asset'. This implies parting with any capital asset for gain which will be taxable under section 45. 44. Though the said decision of the Apex Court has been rendered in connection with equity shares and rights shares, the principle of relinquishment applies to "any capital" asset that is parted with for a gain 45. From the facts and circumstances of the Assessee's case and also from the judicial principles laid down by the Hon'ble Apex Court it is seen clearly that the Assessees case falls within the ambit of relinquishment of the asset under section 2(47)(i) and as such the Assessee submits that the transfer within the meaning of section 2(47)(i) has taken place in the year 1994-95 itself. 46. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ty to the purchaser. 52. Further the purchasers have been put in enjoyment of the property and have been enjoying the property since 1994. 53. The Assessee submits in the overall scheme of the definition of the term "transfer" contained in section 2(47) of the Act from Which it can be seen that amendments from time to time have been made to incorporate transfers that need not be registered under the Transfer of Property Act to be Covered under the ambit of the definition. It is settled law that the intention of the parties and the action taken by the purchaser (transferee) in furtherance of the purchase play an important and crucial role in determining whether E transfer of property has in fact taken place. 54. In the instant case the action of the seller and purchaser clearly point out the intention of transfer is expressed in the year 1994 for a consideration and physical possession handed over in the said year itself. Further the purchaser from his side has taken possession and paid the full consideration over a period of time from 1995-2002 55. In result the property has been put in the enjoyment of the purchaser in the year 1994 and the same is continued to be enjoyed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d deciding the new issue raised by the assessee for the first time before the Tribunal". 9. The assessee in the remand proceedings before the Assessing Officer had not produced any written contract/ document for proving the transfer of land from the assessee to M/s. Janapriya Engineers Syndicate. The assessee further relied upon the sections 2(47) (i), (ii), (iii) or (vi) of the I.T.Act, 1961. The Assessing Officer after relying upon the Explanation 2 to section 2(47) had made the addition in the hands of the assessee. The assessee, repeat the same contention before the ld. CIT(A) and the ld. CIT(A) had dismissed the appeal of the assessee. 10. For the purposes of proving the case, the assessee had submitted that the case of the assessee falls under section 2(47) of the Act. For the sake of clarity, we are reproducing herein below the relevant portion of section 2(47), which is to the following effect : 47) ["transfer", in relation to a capital asset, includes,- (i) the sale, 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 convert....