TaxTMI 
TaxTMI 
2023 (10) TMI 26
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....hile doing so, the AO observed that the assessee sold a land/plot to M/s Swami Vivekanand Institute of Neurology Neurosurgery & Spine and M/s Sagauya Mediservices Pvt. Ltd. ["M/s Swami"] for Rs. 4,70,06,136/- and M/s Swami deducted TDS of Rs. 4,70,061/- u/s 194-IA for which the assessee claimed credit but the assessee declared turnover of Rs. 1,20,00,000/- only and not Rs. 4,70,06,136/-. The AO confronted the assessee qua this difference. In reply, the assessee claimed to have sold the impugned land to M/s Shri Govind Reality Pvt. Ltd. ["M/s Govind"] through agreement dated 26.02.2011, (without executing any sale-deed) for Rs. 1,20,00,000/- and received a sum of Rs. 10,00,000/- by cheque No. 616557 dated 21.02.2011. M/s Govind agreed to pay balance consideration of Rs. 1,10,00,000/- on receipt of building permission or 40 months of the agreement i.e. by 25.06.2014. The period can be further extended for 9 months with interest @ 12% per annum. Ultimately, the land was sold on 19.03.2015 to M/s Swami for Rs. 4,70,06,136/- but since the assessee was registered-owner of land, the saledeed was executed by assessee in favour of M/s Swami in terms of Clause No. 12 of aforesaid agreement d....
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....ee was not registered and hence, the same was not valid. (ii) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) is correct in law in ignoring the decision Hon'ble Supreme Court in the case of CIT vs. Balbir Singh Maini (2017) 86 taxmann.com 94 (SC) wherein it was observed that there is no contract in the eye of aw in force u/s 53A after 2001 unless the said contract is registered (as per amendments in Section 17(1A) and Section 49 of the Registration Act, 1908). (iii) Whether on the facts and in the circumstances of the case, the Ld. CIT(A) is correct in law in not appreciating the fact that in absence of any valid agreement as well as registered sale deed executed between the appellant and M/s. Govind Reality Pvt. Ltd., the sale consideration of Rs. 4,70,06,136/- will be treated in the hands of appellant who is the registered owner of the property as per Government record as the registered sale deed was also by the appellant in favour of the purchaser M/s. Swami Vivekanand Institute of Neurology Neurosurgery & Spine and M/s. Sagauya Medi Services Pvt. Ltd. (iv) Whether on the facts and in the circumstances of the case, the Ld.....
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....gauya Mediservices and Private Limited for an amount of Rs. 4,70,06,136/- and before advancing money to the assessee for the year under consideration, the purchaser has deducted TDS u/s 194IA amounting to Rs. 4,70,061/- which was claimed by the assessee for the relevant year. 8. The assessee vide his reply dt 30.11.2017 in para no.2 has submitted that out of total receipts of Rs. 4,70,06,136/-, Rs. 3,45,06,136/- has been received in bank account of the assessee and of the balance amount of Rs. 1,25,00,000/- has been made directly to Bank of India on behalf of Globus Housing Pvt. Ltd. This amount was necessarily to be paid to Bank of India to get the NOC from Bank of India for transferring such plot. 9. Further, the assessee has also submitted in para 3 of reply dated 30.11.2017, that the amount of sale consideration in books of M/s. Rishi is not in proportion to sales reflected in Form 26AS because the only share of sale consideration of M/s. Rishi Construction is Rs. 1,20,00,000/- and balance Rs. 3,50,06,138/-is of Shri Govind Reality Pvt. Ltd. As per the agreement of leaving their right of property. 10. Further in para 6 of the assessee on the similar d....
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....reement and affidavit, cannot become the ground for the assessee to prove that Rs. 3,50,06,136/- belonged to Shri Govind Reality Pvt.Ltd., when actually no transaction of sale deed existed nor executed between the assessee and Shri Govind Reality for the relevant year. It is also not justified on the part of the assessee to present the issue on a unrealistic platform that income has been shown in the books of accounts of Shri Govind Reality Private Limited for the relevant year does not hold water when sale deed has been executed between the assessee and Swami Vivekanand Institute of Neurology Neurosurgery & Spine and Sagauya Mediservices and Private Limited for an amount of Rs. 4,70,06,136/- and credit of TDS u/s 194IA has been claimed by the assessee. 14. Thus the assessee's contention and the matter deliberated on the foregoing paras clarify reflects that the assessee was trying to swindle the amount of Rs. 3,50,06,136/- as income of Shri Govind Reality and eventually trying to evade the tax net by presenting an unrealistic picture of financial accounting. Hence, on the facts and circumstances of the case, I have no alternative, but to add the difference of Rs. 3,50,06,....
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.... Reality Pvt.Ltd., which states that the buyer i.e. M/s. Govind Reality Pvt.Ltd. shall have vested rights to enter into an agreement for sale/transfer of the said property in the name of itself or in the name of any third party person/trust. Further, the seller i.e. the appellant, shall not raise any objection or create any hindrance on such transfer. Further, the transfer of such property has occurred on conditional consent from the buyer i.e. M/s.Govind Reality Pvt.Ltd. Therefore, the appellant could not sell the said property to any person without having any consent from M/s. M/s. Govind Reality Pvt.Ltd. The appellant has also filed copy of affidavit dt. 23.10.2014 issued by Shri Om Prakash Kriplani, Director of M/s. Govind Reality Pvt.Ltd. giving authority to the appellant to sell the plot to M/s. Swami Vivekanand Institute of Neurology Neurosurgery & Spine and M/s. Sagauya Mediservices Pt.Ltd. with a condition that the appellant shall receive its share of Rs. 1,10,00,000/- and shall pay balance amount to M/s. Govind Reality Pvt.Ltd. The appellant in compliance, vide sale deed dt. 19.03.2015 sold the said plot to M/s. Swami Vivekanand Institute of Neurology Neurosurgery & Spine....
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....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...' In the instant case, the contract (agreement dt. 26.2.2011) has been partly executed within the meaning of provisions of section 53A of the Transfer of Property Act. 3.1.4 Now another question which arises out here is that whether the partly executed contract can be treated as de-facto transfer within the provisions of Income-tax Act, 1961. Hon'ble Supreme Court in the case of CIT vs. Balbir Singh Mainy, (2017) 86 taxmann.com 94 by throwing light on the objection of section 2(47)(vi) of the Act has held that 'the object of Section 2(47)(vi) appears to be to bring within the tax net a de facto transfer of any immovable property. The expression "enabling the enjoyment of" takes colour from the earlier expression "transferring", so that it was clear that any transaction which enables the enjoyment of immovable property must be enjoyment as a....
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....fer of property. Therefore, the said transaction can be said to be a transfer within the meaning of section 2(47) of the Act. Hon'ble ITAT Ahmedabad Bench in the cased of Smt. Sapnaben Dipakbhai Patel vs. ITO, (2016) 73 taxmann.com 288 has held that even arrangements conferring privileges of ownerships without transfer of title would come within the ambit of section 2(47)(v) of the Act. Thus, M/s. Govind Reality Pvt.Ltd. was the deemed owner of the said property. 3.1.5 Once, it has been established that M/s. Govind Reality Pvt.Ltd was the deemed owner of the property, the consideration received on sale of the said property would be taxed in the hands of the said party and not in the hands of appellant. Since, the appellant was the title holder of the said property under the Civil Law until the sale deed is executed, therefore, the appellant within the terms and condition of agreement dt. 26.02.2011 read with affidavit dt. 23.10.2014 transferred the said property in the name of M/s. Swami Vivekanand Institute of Neurology Neurosurgery & Spine and M/s. Sagauya Mediservices Pt.Ltd., on 19.03.2015 for sale consideration of Rs. 4,70,06,136/- The appellant after getting his ....
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....nt. This position was changed by the Registration and Other Related Laws (Amendment) Act, 2001. Amendments were made simultaneously in Section 53A of the Transfer of Property Act and Sections 17 and 49 of the Indian Registration Act. By the aforesaid amendment, the words "the contract, though required to be registered, has not been registered, or" in Section 53A of the 1882 Act have been omitted. Simultaneously, Sections 17 and 49 of the 1908 Act have been amended, clarifying that unless the document containing the contract to transfer for consideration any immovable property (for the purpose of Section 53A of 1882 Act) is registered, it shall not have any effect in law, other than being received as evidence of a contract in a suit for specific performance or as evidence of any collateral transaction not required to be effected by a registered instrument. Section 17(1A) and Section 49 of the Registration Act, 1908 Act, as amended, read thus: "17(1A). The documents containing contracts to transfer for consideration, any immovable property for the purpose of Section 53A of the Transfer of Property Act, 1882 (4 of 1882) shall be registered if they have been executed on or aft....
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....where the contract contains all the six features mentioned in Shrimant Shamrao Suryavanshi (supra), that the Section applies, and this is what is meant by the expression "of the nature referred to in Section 53A". This expression cannot be stretched to refer to an amendment that was made years later in 2001, so as to then say that though registration of a contract is required by the Amendment Act of 2001, yet the aforesaid expression "of the nature referred to in Section 53A" would somehow refer only to the nature of contract mentioned in Section 53A, which would then in turn not require registration. As has been stated above, there is no contract in the eye of law in force under Section 53A after 2001 unless the said contract is registered. This being the case, and it being clear that the said JDA was never registered, since the JDA has no efficacy in the eye of law, obviously no "transfer" can be said to have taken place under the aforesaid document. Since we are deciding this case on this legal ground, it is unnecessary for us to go into the other questions decided by the High Court, namely, whether under the JDA possession was or was not taken; whether only a licence was grante....
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.... Govind can be said to be owner of land on the basis of unregistered agreement. In our considered view, the answer is a clear "No" as per decision of Hon'ble Supreme Court decision in Balbir Singh Maini. Although we have confined to what has been wrongly adjudicated by CIT(A), we would like to add here that even for the purpose of Capital Gain head also, after decision of Hon'ble apex court in Balbir Singh Maini, there is no sale or transfer of immovable property by an unregistered agreement. 10. Ld. DR for revenue also emphasised the strong objection made by AO in Para No. 14 of assessment-order that the assessee was trying to swindle the amount of Rs. 3,50,06,136/- as income of M/s Govind and eventually trying to evade the tax by presenting an unrealistic picture of financial accounting. On perusal of documents, we firstly find that the assessee-firm is constituted by 5 partners including (i) Shri Om Prakash Kriplani, and (ii) Shri Vashan Asnani. The unregistered agreement dated 26.02.2011 is executed between assessee-firm and Shri Vishan Asnani and the affidavit dated 23.10.2014 is signed by Shri Om Prakash Kriplani; both of these persons are directors of M/s Govind. Thus, th....