9911796707
TMI Blog1977 (3) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Yacob or any person he directs. For the previous year relevant to asst. yr. 1972-73, sale deeds executed by the assessee in favour of the nominees of Shri Yacob covered an extent of 84 cents and 38 sq. Ft. And the consideration received was Rs. 67,650. Taking the sale price of the land as on 1st Jan., 1954 at Rs. 650 per cent, the capital gains computed was Rs. 32,500. The assessee purchased agricultural lands for Rs. 1,87,600 as per the sale deed, dt. 2nd Sept., 1971. Before the IT Officer it was contended that the transfer of the lands originally owned by the assessee took place on 29th July, 1971, the date of agreement of sale and as the assessee purchased new agricultural lands within two years from that date and the capital gain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee is that under s. 2(47), `transfer' included extinguishment of any rights in the property and the agreement of sale, dt. 29th July, 1971, constitutes transfer, as it has resulted is extinguishment of some of the rights of the assessee over the land in question. 5. The contention of the Revenue is that under s. 54 of the Transfer of Property Act a contract of sale of immovable property does not of itself create any interest or charge on the property and as the agreement of sale brings about no transfer of interest, there can be no question of any extinguishment of rights of the assessee over the property in question. 6. The short question for consideration is whether the agreement of sale constitutes a transfer within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion whether by entering into an agreement of sale, there is extinguishment of any right of the assessee in the property held by her. If there is extinguishment of any right of the seller in the property, then there must be a corresponding creation of rights in favour of the purchaser. An agreement of sale confers the following legal rights on the purchaser: (1) What is the obligation created by an agreement of sale was pointed out by the Madras High Court in Anthinarayana Konar and another vs. V. Subramania Ayyar (AIR 1942 Madras 67) in the following words: "Though a contract to sell does not, having regard to the term of s. 54 of the Act, create any interest in or charge on the property, it does give rise to an obligation which lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to illustration (g) to s. 3 of the Specific Relief Act. (4) s. 19(B) of the Specific Relief Act provides that though a contract of sale does not create an interest in land, it creates a personal obligation of a fiduciary character which is enforciable by a suit for specific performance against the vendor except a bona fide transferee for value without notice of the contract. 8. The agreement of sale, dt. 29th July, 1971, confers the following contractual rights in favours of the purchaser Shri Yacob : (1) As and when the purchaser Shri Yacob pays the amount for the sale of land or part of it, the assessee is bound to execute the necessary documents in favour of Shri Yacob or any other person he directs. (2) Shri Yacob should arran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and that alienation too can be only in favour of Shri Yacob or his nominee. By conferring on Shri Yacob unfettered right to prepare blue prints, subdivide the property into plots for building sites, obtain municipal sanction for the same and construct roads and provide for lighting and water arrangements, over-head tanks, etc. and also conferring the right to shri Yacob to enter into the land, assume possession thereof for carrying out the various objects mentioned in the agreement, the assessee s right to absolute possession and enjoyment of the property is lost considerably. By parting with the right to receive compensation in case the land was acquired by the Government, there is considerable erosion of right of the assessee in the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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