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TMI Blog1982 (10) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... ck with one Mr. Patel for Rs. 17,151. Full payment was made on the same day, but the truck was registered in the assessee's name by the RTO on 30-4-1974. On 16-5-1976, the assessee entered into an agreement to sell the truck to one Altaf Hussain Syed Karim for Rs. 21,500. Rs. 10,000 was received on the day of the agreement and the balance was to be received in instalments of Rs. 1,000 per month. The truck was put in possession of the purchaser on 16-5-1976. The last instalment was paid on 9-4-1977. The truck was, however, registered in the name of Altaf Hussain by the RTO on 1-2-1977. The contention of the assessee is that the agreement stipulated that the sale receipt was to be issued only after the last instalment of purchase price was pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ITO. He held that the law as on 1-4-1977 was applicable. The law stipulated that any asset held for less than 60 months was to be treated as a short-term capital asset. Thus, he, held that the capital gains received in the sale of the truck was short-term capital gains and no deduction was permissible under section 80T of the Income-tax Act, 1961 ('the Act'). The assessee is in appeal. 3. Shri Mhuskey, the learned counsel for the assessee, argued that in construing whether a sale has taken place or not, the agreement between the parties should not be ignored. In a hire-purchase agreement or any system of payment of instalment, the sale will not take place unless the conditions stipulated in the transfer document are fulfilled. In suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion of the movable property. Transfer was, therefore, completed on 15-5-1976 itself. He relied on the decisions of the Supreme Court in CIT v. Bhurangya Coal Co. [1958] 34 ITR 802 and in Alapati Venkataramiah v. CIT [1965] 57 ITR 185. He further referred to section 110 of the Evidence Act that there was a presumption that the possessor is the owner. He then referred to section 31A of the Motor Vehicles Act, 1939. Sub-section (1) requires that the registering authority shall make an entry in the certificate of registration regarding the existence of the hire-purchase agreement. The person who has taken possession of the vehicle will be known as the 'registered owner'. If there is any breach of the provisions of the hire-purchase agreement, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stered document to a purchaser, but agree to take the consideration over the next 10 years. In such a case, it is to be held that the transfer is complete on the day the deed was registered irrespective of the non-receipt of the consideration. Similarly, in movable properties the hire-transfer is complete on delivery of possession. 6. Judged in the light of the above propostion it is clear that the assessee obtained possession of the truck on 1-3-1974 itself. He handed over the possession on 15-5-1976. He was, therefore, in possession of the capital asset for less than 36 months. Strictly speaking, he should have held on to the asset for at least 60 months if the capital gains were to be assessed as long-term capital gains. The transfer h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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