2016 (12) TMI 1668 - AT - Income Tax

Capital gain from transfer of capital asset - reversionary/relinquishment rights - date of transfer of the assessee s right in the property, situated at Kurla, is to be taken 09/03/2016 i.e. the date of signing of development agreement OR 09/07/2007, on which date the given agreement was registered - whether as per the Transfer of Property Act says that immovable property cannot be transferred otherwise, then by a registered document Held that - If the language used in the section 2(14) is analyzed, it clearly says that, except for some exceptions, even the reversionary/relinquishment rights is a capital asset. In this case Bombay High Court clearly states that u/s.2(4 7(v) of the I. T. Act even a part performance without even payment of consideration or signing of an agreement if even privilege or right is confirmed to the transfer without any clause or forfeiture or termination of agreement that right or arrangement may be considered as transfer The main clauses of the agreement and payment of 7.5 crores were duly considered by the Ld. Commissioner of Income Tax (Appeal) as the amount were duly mentioned in the receipt column of the last page of the agreement and Dr. Prabhakar T. Bhandary along with Shri Birmu Bhandary, BMCL and BPCL duly confirmed the agreement. This factual matrix was not disputed by the Revenue. The objection of the Assessing Officer of non-registration of the agreement has been duly replied/considered by Hon ble jurisdictional High Court in the case of Chaturbhuj Dwarikadas Kapadia (2003 (2) TMI 62 - BOMBAY High Court). We are in agreement with the finding of the Ld. Commissioner of Income Tax (Appeal) that there cannot be any double taxation of the same income on the same persons in two different years, which is otherwise not permissible under the Act. no infirmity in the conclusion of the Ld. Commissioner of Income Tax (Appeal). It is affirmed, thus, the appeal of the Revenue is dismissed. Reopening of assessment u/s 147 - Held that - On the reasoning and the factual matrix considered by the First Appellate Authority, we find no infirmity in the same. The ld. counsel for the assessee, during hearing, also agreed to the reasoning contained in the impugned order with respect to the reopening of assessment, thus, the cross objection of the assessee is dismissed

Summary

Issues:
1. Date of transfer of property rights
2. Granting of deduction u/s 54
3. Reopening of assessment u/s 147

Analysis:
1. The first issue pertains to the date of transfer of property rights, specifically whether it should be considered as the date of signing the development agreement or the date of registration. The Tribunal analyzed the facts, including the development agreement, reversionary rights, and capital gains computation. The Assessing Officer's denial of deduction u/s 54 was also challenged. The Tribunal considered the legal definition of a capital asset and relevant case laws like Chaturbhuj Dwarikadas Kapadia vs CIT. Ultimately, the Tribunal dismissed the Revenue's appeal, affirming the Commissioner's decision.

2. The second issue involved the denial of deduction u/s 54 by the Assessing Officer. The Tribunal examined the factual matrix, including the agreement clauses and payment details. It referenced case laws to address the issue of double taxation and concluded that there was no infirmity in the Commissioner's decision. The Tribunal dismissed the Revenue's appeal, upholding the Commissioner's findings.

3. The third issue revolved around the reopening of assessment u/s 147, challenged by the assessee. The Tribunal reviewed the reasoning and factual considerations by the First Appellate Authority, finding no infirmity in the decision. The assessee's cross objection was dismissed, and both the Revenue's appeal and the assessee's cross objection were ultimately dismissed by the Tribunal.

In conclusion, the Tribunal's detailed analysis and consideration of legal provisions and precedents led to the dismissal of both the Revenue's appeal and the assessee's cross objection. The judgment emphasized the importance of factual accuracy, legal definitions, and adherence to tax laws in determining property rights transfer dates, deduction eligibility, and assessment reopening under relevant sections of the Income Tax Act.