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TMI Blog2005 (9) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... or bear expenses towards rent at Rs. 7,000 per month till the built-up area of 3,000 sq. ft. is handed over to the appellant and full consideration is paid to the other co-owner as stipulated in the agreement. It also stipulates that if the above built-up area is not handed over to the appellant within 18 months from the date of delivery of possession of the impugned property to the developer, Rs. 15,000 per month shall be paid by the developer to the appellant till the date of handing over the possession of 3,000 sq. ft. of built up area to the appellant. This is also not a case of transfer by sale or exchange, insofar as the consideration is mentioned in the agreement and receiving possession of the 3,000 sq. ft. of built-up area is only a mode of receiving that consideration in addition to the right to have alternate accommodation during the period specified in the agreement. Transfer can be by any mode as enumerated in section 2(47) of the Act or otherwise. In the present case transfer as per section 2(47)(v) took place earlier to 1-4-2000 as is evidenced by the agreement and surrounding facts. As per the discussion made above, we are of the considered view that transfer as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipt of consideration and not merely handing over of possession and, therefore, erred in holding that capital gains is not assessable in the assessment year 2001-02. 3. Fact of the case is that the appellant together with his brother who were the joint owner of the impugned property entered into a "sale-cum-development agreement" with M/s. Sri Housing Pvt. Ltd. on 22-8-1997. A "supplemental agreement" was also entered into on 15-10-1997. No objection certificate under section 269UL(1) of the Act was issued by the Appropriate Authority on 22-12-1997. Relevant clauses of the agreements which are relevant for the issues to be decided by us are reproduced bellow:- (i) The apparent consideration in respect of the property mentioned in the schedule is fixed at Rs. 119 lakhs. (ii) The part of the second part shall construct a residential portion of a plinth area of 3000 sq. ft. Including the proportionate common area in the first floor for No.1 of the party of the first part viz. Achyuta Rao Tekmalla and the cost of the said 3000 sq. ft. including the proportionate undivided interest of the land is valued at Rs. 60 lakhs and this will be adjusted towards the balance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 97. As per this agreement the cost of 3,000 sq. ft. of built-up area to be constructed by the party of the second part for the appellant together with relatable land area was valued at Rs. 60 lakhs. It was also mentioned that proportionate undivided share of land amounting to 2,000 sq.ft. will be retained by the appellant. 4. The argument of the ld. Counsel of the appellant is summarized below:- (i) That the impugned agreement is not agreement to sale. Therefore, there is no transfer on the date of agreement. (ii) Possession has been given for the limited purpose of developing the property. It is a purposive possession and not possession as envisaged in section 53A of Transfer of Property Act. Therefore, there is no transfer on the date when possession was given. (iii) Undivided share in the land cannot be said to have been transferred prior to the previous year relevant to assessment year under consideration. (iv) As all the terms and conditions mentioned in the agreement were completed during the relevant previous year, capital gains is chargeable in this assessment year only. (v) No consideration in money has been received earlier to the previous year relevant to pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 99. (iv) ITAT order relied on by the appellant is distinguishable on the basis of the above facts as also the fact that registration for development agreement was not required in previous year relevant to assessment year 1990-91 to which the order pertains, but the same was not the case subsequent to amendment made in 1995. There is a common development agreement in the present case and part performance of the contract is quite obvious from the terms of the agreement and surrounding facts. (v) No objection certificate with reference to the agreement has been issued by the Appropriate Authority on 22-12-1997, which falls in financial year 1997-98. By filing the application to the Appropriate Authority, the appellant has accepted that there is a transfer as the definition of transfer given in section 269UA(f) is similar to that of section 2(47) of the Act. (vi) In the above facts and circumstances, it is submitted that transfer as per section 2(47) of the Act, read with section 53A of the Transfer of Property Act took place earlier to assessment year under consideration. (vii) Even otherwise the transaction will be a transfer as per section 2(47)(vi) read with clause (d) of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o revoke it. The developer was ready and willing to perform his part of the contract. No objection certificate from the Appropriate Authority has been obtained during financial year 1997-98. 7.1 Section 45 of the Act clearly stipulates that capital gain is chargeable in the previous year when the transfer of the capital asset takes place. Therefore, what is relevant for determining the year of chargeability is not the receipt of consideration. Consideration automatically accrues as soon as transfer takes place. What is to be seen is whether the impugned property has been transferred or not and whether all relevant figures for computation of capital gains like "full value of consideration" for such transfer etc. is ascertainable or not. 7.2 Section 53A of Transfer of Property Act reads as under:- "Where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich has the effect of transferring, or enabling the enjoyment of, any immovable property. Explanation.-For the purpose of sub-clause (v) or (vi), 'immovable property' shall have the same meaning as in clause (d) of section 269UA." It is quite clear from the facts mentioned above that the transaction comes within the scope of section 2(47)(v) of the Act read with Explanation thereto. As argued by the learned D.R., it can be even be considered as covered under section 2(47)(vi) read with Explanation thereto. 7.4 In the agreement under consideration in page 4 it has been clearly mentioned as under:- "The apparent consideration in respect of the property mentioned in the Schedule is fixed at Rs. 119 lakhs. Out of this sum, the party of the second part shall pay a sum of Rs. 59 lakhs .... to .... Dr. Sarveswara Rao in the following manner:- The party of the second part shall construct a residential portion of a plinth area of 3,000 sq. ft. including the proportionate common area in the first floor for No.1 of the party of the first part viz. Achyuta Rao Tecmalla and the cost of the said 3,000 sq.ft. including the proportionate undivided interest of the land is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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