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TMI Blog1986 (7) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... assessable as 'Income from other sources'. According to him, there was no valid transfer of the property by the assessee-vendor and, therefore, the surplus of Rs. 98,000 could not be assessed as capital gains. On an appeal being filed before the Commissioner (Appeals), the latter held that the receipt of Rs. 98,000 fell under the head 'Capital gains'. At the same time he held that since the sale of the property actually took place on 29-3-1979 when the sale deed was executed and registered and not on 25-1-1979 when merely an agreement to sell was executed and registered and since in accordance with the amended provisions of law as contained in Explanation 1(b) to section 54E(1) the net amount of consideration had not been invested in National Rural Development Bonds, the exemption under section 54E was not available. The assessee's case was that on the execution of the sale deed, the sale related back to the date of agreement to sell, i.e., 25-1-1979 and that, therefore, when in accordance with the unamended provisions of Explanation 1(a) to section 54E(1) the net consideration stood invested in deposit with a nationalised bank for a period of three years, the exemption under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions contained in Explanation 1(b) to section 54E(1) applied and that since the net consideration received on sale of the property was not invested in National Rural Development Bonds, the exemption under the provisions of section 54E was not available. Elaborating the point, the learned departmental representative submits that in case the transfer of the asset could be said to have been made on any date prior to 28-2-1979, the assessee would have been entitled to exemption as the net consideration stood invested in one of the categories of specified assets enumerated in Explanation 1(a) of section 54E but since the transfer of the asset had not taken place on a date before 28-2-1979, but on a date which fell after 28-2-1979, and since net consideration was not invested in the National Rural Development Bonds, the exemption was not available. She has further submitted that under the provisions of the Indian Registration Act, 1908, the sale of the property could not be related back to25-1-1979when just an agreement to sell was executed. 5. We have given our very thoughtful consideration to the submissions made on either sides. We have gone through the agreement to sell dated25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale had taken place only when the sale deed in respect of immovable property in question had been executed and registered on29-3-1979. When we hold so we are following the law as laid down by the Hon'ble Delhi High Court in its decisions in CIT v. Meatles Ltd. [1972] 84 ITR 37, CIT v. Hindustan Cold Storage Refrigeration (P.) Ltd. [1976] 103 ITR 455 and Sushil Ansal v. CIT [1986] 25 Taxman 218A. The transfer by way of sale could not thus be said to have been effected on any day before29-3-1979. 6. Even though the learned counsel of the assessee has not referred to us to the definition of the word 'transfer' in relation to a capital asset as contained in section 2(47) of the Act, we have examined the position under that section in order to find out as to whether the transfer of the abovementioned property or interest therein had taken place on 25-1-1979 when agreement to sell was executed. The provisions of section 2(47) as these prevailed in the relevant assessment year provided that 'transfer' in relation to a capital asset includes the sale, exchange or relinquishment of an asset or the extinguishment of any rights therein. At the first blush we thought that the agreement to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7). In other words, the conclusion that we reach is that transfer of the property actually took place on 29-3-1979 when the sale deed was executed and that, therefore, the exemption under section 54E was not available to the assessee as the provisions contained in section 54E(1), Explanation 1(b) were not complied with. The assessee had no doubt deposited the net consideration received on sale of property with a nationalised bank but since the law had been amended, the deposit made could have been withdrawn and invested in the National Rural Development Bonds. Since that was not done and since the amended provisions of law which applied to a transfer made after28-2-1979were not complied with, the assessee was rightly denied exemption under the provisions of section 54E. 7. Being of the above views in the matter and being bound by the law laid down by the Hon'ble jurisdictional High Court and by the Hon'ble Supreme Court we find it difficult to subscribe to the views expressed by the Tribunal, Hyderabad Bench 'B' in the case of Shahzada Begum on which reliance has been placed by the learned authorised counsel of the assessee. The decision of the Hon'ble Bombay High Court in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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