TaxTMI 
TaxTMI 
2024 (2) TMI 221
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....965/Ahd/2017 is taken as the lead case and the brief facts is that the assessee is an individual and Proprietor of Shailja Buildcon engaged in the business of construction. Assessee filed his Return of Income for the Assessment Year 2013-14 on 27.03.2014 declaring total income of Rs. 80,50,300/- which is inclusive of Long Term Capital Gain on sale of immovable property through Banakhat rights as a Confirming Party of Rs. 69,37,813 and also claimed exemption u/s. 54B of Rs. 1,79,59,304/-. The Ld. Assessing Officer held that the Banakhat (Agreement of Sale) was entered by the assessee on 29.04.2005 for a consideration of Rs. 15.50 lakhs and an advance of Rs. 2 lakhs only paid, balance was not by the assessee and the Banakhat was also unregistered, but only a notarized agreement. As per the section 17 of the Registration Act, the assessee does not get right over the property by merely entering into an agreement (Banakhat). Therefore the sale consideration received by the assessee in 2011 through registered Sale Deed as Confirming Party cannot be treated as a transfer and not a capital asset in the hands of the assessee. Therefore the entire transaction "income from other sources" and ....
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....tion 1) LGH22(Gujarat) & followed in the case of Nitin Kumar Laxmidas Vis. Savitaben 351 GLR 560. In these cases, it has been held that registration of agreement to sale is not required as per the Registration Act, 1871, Looking to provisions of the Registration Act, 1871 and the judgments of Hon'ble High Court of Gujarat, Ahmedabad in above cases, the reason given by the A.O. that the 'Banakhat' was not registered, hence it was not enforceable, is found unjustified, hence this argument of the A.O. is not found acceptable. Moreover, the A.O. considered the 'Banakaht dated 29.04.2005 as null & void stating that the consideration of Rs. 15,50 lakh was fixed in the 'Banakhat', out of which Rs. 2 lakh were paid by the appellant & partner. Remaining Rs. 13.50 lakh were to be paid within one year from the date of 'Banakhat' but this condition of the Banakhat was not complied with. Further payment of Rs. 13:50 lakh was made on 20.12.2011 for which no Banakhat was made The AO held that as the conditions of Banakhat for making remaining payment of Rs. 13.50 lakh was not compiled with, therefore, this Banakhat dated 29.04.2005 has become null & void. But while....
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....s in his own name, for which exemption us 54EC/F have been claimed. The detail of investment made in the house and bonds are mentioned in the return of income itself. These facts also prove that the appellant and his partner are genuine confirming party 5.6 One more reason for making additions by the A.O. is that as the Banakhat dated 29.04.2005 has been held as null & void. Therefore, the appellant was neither the owner of the capital asset nor had any interest in capital asset as defined u/s 2(14) of the Act. From the discussion in para above, it has been established beyond doubt that the appellant is a genuine confirming party to the transaction under consideration. Therefore the appellant had right in the said property. It is a fact that no buyer will pay crores of rupees to any one through amount payee cheques, if someone has no right in the property. The name of confirming parties are mentioned in the sale deed to make title absolute clear, so confirming party should not raise any claim over the property in future. It a person has no right in the property, the buyer will not agree to include his/her name in the sale deed. Therefore, making of payment of huge amount b....
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....therwise allowable as per the provisions of the Act. This ground of appeal is allowed with the direction." 5. Aggrieved against the same, the Revenue is in appeal before us raising the following Grounds of Appeal: 1. The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 2,67,25,000/- made by the AO by considering the income of the assessee under the head of "Long Term Capital Gain" in place of "Income from other sources" and in allowing deduction under sections 54B/54D/54G" (actually 54EC and 54F). 2. The Ld. CIT (A) has erred in holding that registration of the Bunakhat was not necessary even though as per clause (aa) inserted in sub-section (1) of the section 17 of the Registration Act, 1908 by the Registration (Gujarat Amendment) Act, 1982, instruments which purport or operate to affect any contracts for transfer of any immovable property are required to be rgistered. (Refer Gohil Amarsing Govindbhai... Vs. Shah Mansukhlal Chhaganlal AIR 2003 Guj 78). 3. The Ld CIT(A) has erred in law and on facts in holding that a right had been created in favour of the assessee by virtue of the Banakhat even though it was held by the Hon'....
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.... the necessary papers for the same. The executor herein is bound to get all kinds of documents such as writings, documents, affidavits, acceptance, assurances, indemnity bonds, etc. from all the concerned persons at his own cost and risk. The executor herein shall also be bound to obtain the title clear certificate and the N.A. permission in respect of the said land and provide it to the executee. If the first party fails to obtain the non-agricultural permission and title clearance certificate as mentioned herein above, then, the tenure of this agreement to sale shall be deemed to have automatically extended." 6.1. From reading of clause 4 of the Banakhat makes it clear that the seller is to obtain title clearance certificate and non-agricultural permission in respect of the land to the seller namely the assessee herein, failure of the same, the tenure of the Banakhat shall deem to have extended automatically. Thus it is clear that the Civil disputes over the land was cleared between the parties in Civil Suit No. 95/2006 vide Decree dated 11.03.2010 by Principal Sr. Civil Judge withdrawing the suit unconditionally and N.A. permission in respect of the land was obtained from the....