9911796707
TMI Blog2013 (8) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the order of the Income Tax Appellate Tribunal, Chennai 'B' Bench dated 18.09.2009 passed in ITA.No.1115/Mds/2009 for the assessment year 2006-07. "1. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee became a owner of the 3 plots as per the agreement dated 10.10.95 that was entered into between the assessee and the original owners and the assessee had possessed the plots as a capital asset and had sold it to the purchaser ? 2. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the amount of Rs.90 lakhs received being the value of the 3 grounds of plot, to be assessed as income from profession and to be assessed to capital gains ?" 2. The assessee entered into an agreement with one Chakravarthy and E.Umapathy on 10th October, 1995 in respect of the property situate in Puliyur village, Kodambakkam. The said Chakravarthy was the absolute owner of 3 grounds of land measuring about 7,200 sq.ft. The said Umpathy was the absolute owner of 2 grounds measuring about 4,800 sq.ft in the same property. At the time of registration of the document in favour of the above two pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Office of Sub-Registrar, Anna Nagar empowering the assessee herein to apply for patta in the owners' name and sell 3 grounds of land and that the remaining 2 grounds should be handed-over to the owners viz., Chakravarthy and Umapathy after fencing for their enjoyment. Accordingly, the original title itself was handed-over to the assessee as their Power of Attorney and the said Deed of Document was executed on 21.08.1996. 7. It is further found that there was a sale agreement entered into between the owners of the property viz., Chakravarthy and Umapathy as Vendors 1 and 2 and the assessee herein as a confirming party and M/s.Indu Projects Ltd., as Purchaser on 28th December 2005. 8. Referring to the Deed of General Power of Attorney dated 21.08.1996, giving the assessee full power to sell three grounds of property, an agreement was executed to transfer the property of an extent of 3 grounds to the purchaser on a sale consideration of Rs.1,50,00,000/- (Rupees One Crore and fifty lakhs only). The said amount was to be paid by the purchaser to the Vendors and Confirming Party (the assessee herein) at Rs.30,00,000/- (Rupees Thirty Lakhs only) in favour of Chakravarthy, Rs.30,00,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atta and the layout. 12. The Income Tax Appellate Tribunal held that once the patta was obtained and the plots were properly identified, the original owners were to transfer title to the assessee. In terms of the agreement, possession was immediately handed over to the assessee. It is important to note that the power to sell the land does not find place in the agreement dated 10.10.1995 and the assessee did not act in the capacity of a professional Advocate to render the services. Considering the above said circumstances and going by the definition of 'transfer' as per Section 2(47) of the Income Tax Act, 1961, the Income Tax Appellate Tribunal held that the receipts at the hands of the assessee could only be treated as income available for capital gains. The Income Tax Appellate Tribunal further pointed out that even though the assessee was put in possession of 5 grounds of land, what was offered in the agreement as towards his services was only 3 grounds. The General Power of Attorney executed in favour of the assessee also pointed out that out of 5 grounds, only 2 grounds were to be retained for the benefit of the owners and 3 grounds was given to the assessee. Thus, the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a business carried on by him, such conversion or treatment ; or (iva) the maturity or redemption of a zero coupon bond; or (v) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1881 (4 of 1882) ; or (vi) any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever)which has the effect of transferring, or enabling the enjoyment of, any immovable property." 16. Section 53A of the Transfer of Property Act defines "Part performance" in the following manner:- " 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 in possession, continues ..... X X X X Extracts X X X X X X X X Extracts X X X X
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