2014 (10) TMI 662

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..... 3 and he has transferred the same for a consideration of Rs. 34,08,500/- in favour of M/s.Seamen Aqua Farms Limited, of which he is a Managing Director. It is stated that the profit earned by him in the process cannot be treated as taxable income, since it is in respect of an agricultural land. Similar claim was made in respect of Ac.5.71 cents of land dealt with by a HUF, of which the respondent is the Karta. The Assessing Officer accepted the claim of the respondent and passed an order of assessment. The Commissioner of Income Tax exercised his powers under Section 263 of the Income Tax Act, 1961 (for short the Act) and issued notice to the respondent proposing to pass a revised order. According to him, the Assessing Officer did not take .....

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..... . On his part, the Assessing Officer accepted the facts and figures presented by the respondent and passed an order of assessment under Section 143(3) of the Act. At a later point of time, the Commissioner exercised his powers under Section 263 of the Act and sought to find fault with the order of assessment, with reference to the two items mentioned above. He prima facie took the view that the earning of income by the respondent through the said transaction cannot be said to be through the transfer of capital asset by itself but in relation to rights therein and thereby the theory of the property being agriculture land does not become relevant. In the appeal before the Tribunal, a semblance of objection was taken to the very initiation of .....

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..... reated as transfer. Section 2(47)(v) of the Act reads as under: 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, 1882 In the instant case, the rights were acquired by the respondent through MOU, dated 25.12.1993 vis-a-vis the property. On a perusal of the MOU, the Tribunal found that the possession of the property was delivered in favour of the person, who joined the transaction. Those facts in turn brought about transfer within the meaning of Section 2(47)(v) of the Act. Therefore, the respondent has acquired a right to transfer the same atleast from the point of view of inc .....

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