9911796707
TMI Blog2014 (12) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... reasonable period, then the date of launching of the scheme, the builder could not have been in a position to launch the scheme on 21.4.2002 and demolition of old building and acquiring of the land for construction being not a childish job, was to take sufficient time and therefore, the assessee's plea is that the possession of the land was handed over latest by 23.11.2001 is liable to be accepted - the land was transferred in all manner except title to the builder by the assessee. The Tribunal rightly observed that as per terms and conditions of the agreement date 24.06.1999 the transfer was effective from that very day and not in the year of 2005 as wrongly observed by the AO - the capital gain is applicable in the year when the possession was handed over by the assessee - the assessee's all other rights, except title, stood transferred and the capital gain was to be computed on the basis of transfer and in the year of the transfer - the partial possession was given in the year 1999 - The title was transferred on 30.04.2005, so no capital gain could have been accrued on 30.04.2005 for the AY 2006-07, as wrongly claimed by the revenue - the transfer of the land under reference ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment year under consideration. Being not satisfied, the Department has filed the appeal. The assessee has also filed the cross appeal to assail the validity of the proceedings under Section 147 of the Act. With this background Shri Shambhu Chopra, the learned counsel for the revenue-appellant relied on the order of the A.O. He submits that assessee was the owner of the Plot Nos. 14/138 and 14/143 Chunniganj, Kanpur measuring 3569 sq. yards and 277 sq. yards. The assessee had entered into an agreement with M/s. Shilpi Builders Limited for the development/construction of a Nursing Home/residential complex and commercial complex without forfeiting his title rights. The land of his brother was also included in the development of entire project called Ratan Esquire and Excel Nursing Hospital. The agreement was entered in the year 1999, while supplementary agreement was also entered in the year 2002 with the brother. He further submits that since, on the basis of the said agreements, the conditions of chargeability of capital gains tax were found to be attracted on the basis of completion agreement dated 30.04.2005, so the capital gain was charged during the assessment year un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is as under : AND WHEREAS since the Building is completed and in order to make a proper utilization of shares in the Building Complex has been reallocated and accordingly the possession of the portion fallen into the share of First Party has been delivered to him in the same manner the area fallen into the share of the Second Party is with the Second Party, hence this COMPLETION AGREEMENT. Learned counsel for the Department submits that from the above, it is very clear that the possession was handed over and taken over by the First and Second Party respectively on 30.04.2005 i.e. the date of completion agreement. According to the learned counsel, the chargeability of capital gain tax require three basic ingredients : 1.Ownership of capital asset. Here the assesse is in owenership of plot no. 14/138 and 14/143 Chunniganj, Kanpur. 2.Transfer of capital asset. The assessee sold/transferred part of his land to M/s. Shilpi Builders as per its completion agreement dated 30.04.2005 as discussed above. 3.Receipt of consideration. The assesse also received consideration in the form of constructed area on 30.04.2005 as per the completion agreement discussed above. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Shambhu Chopra, learned counsel further submits that these two provisions relate to transfer of immovable property without execution and registration of conveyance deed. On conjoint reading of above 2 provisions 2(47)(v) of IT Act and 53A of TP Act (transfer or Property Act), it transpires that for an act of transfer resulting in the capital gain under the deeming provision of Section 2(47) (v), the transaction leading to the transfer of capital asset shall:- (i) allow the transfer of possession of the capital asset to the transferee (ii) of if the transferee is already in the possession of capital asset, it must be retained by him in part performance of contract of transfer. In the instant case, the transaction is principal agreement, which was executed on 24.06.1999 followed by power of attorney simultaneously executed on same date which together constitute the principal documents of transfer. The terms of these documents allowed the builder to take the possession of capital asset by conferring upon builder the substantial control over the land to be developed including the transferred land. The builder had undertaken the various activities which tantamount to deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adas Kapadia vs. CIT (260) ITR 491 (Bom), where it was observed that : ....Section 2(47)(v) read with section 45 indicates that capital gains was taxable in the year in which such transactions were entered into even if the transfer of immovable property is not effective or complete under the general law... Lastly, he justified the order passed by the CIT(A). On the other hand, Sri S.K. Garg assisted by Shri A. Bansal, learned counsel for the assessee has produced the copy of the agreement, where it was shown that the total area was transferred in the year 1999. The learned counsel submits that the possession of the property was given in the year 1999 as per the agreement. To this effect, the CIT(A) has asked the remand report from the Assessment Officer. The Assessment Officer has filed contradictory remand report where the admissiblility of additional evidence adduced under Income Tax Rule 46A was discussed. Section 156(A). The A.O. has not contradicted the written submission adduced by the assessee despite opportunity given by him by the CIT(A). Nevertheless the CIT(A) upheld the addition, but the Tribunal has examined the material on record and rightly deleted the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved that : ....In its general sense, the expression transfer of property connotes, the passing of rights in property from one person to another. In one case, there may be a passing of the entire bundle of rights from the transferor to the transferee. In another case, the transfer may consist of one of the estates only out of all the estates comprising the totality of rights in the property. In a third case, there may be a reduction of the exclusive interest in the totality of rights of the original owner into a joint or shared interest with other persons. An exclusive interest in property is a larger interest that a share in that property. To the extent to which the exclusive interest is reduced to a shared interest, it would seem that there is a transfer of interest.... Lastly, he justified the impugned order passed by the Tribunal. We have heard both the parties at length and perused the material available on record. From the record, it appears that there was a succession on death of assessee's father Late Khaliluddin Ahmad thereafter by partition with his brother became the owner of following two immovable properties 14/138 and 14/143 Chunniganj, Kanpur, having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23.11.2001 is liable to be accepted. From the record, it also appears that the land was transferred in all manner except title to the builder by the assessee. The word transfer has been defined in Section 2(47) of the Income Tax Act. The clause (v) and (vi) were introduced in Section 2(47) of the Income Tax Act, 1961, with effect from April 1, 1988. They provided that transfer includes (i) any transaction which allows possession to be taken/retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882. The Tribunal in its impugned order has observed that as per terms and conditions of the agreement date 24.06.1999 the transfer was effective from that very day and not in the year of 2005 as wrongly observed by the A.O. We are of the view that the capital gain is applicable in the year when the possession was handed over by the assessee. In the present case, the assessee's all other rights, except title, stood transferred and therefore, the capital gain was to be computed on the basis of transfer and in the year of the transfer. It is evident in the present case that the partial possession was given in the yea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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