9911796707
TMI Blog2014 (12) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... t no capital gain accrued or arose to the assessee in A.Y. 2006-07 as the transfer did not take place on 30.04.2005 without properly appreciating the facts narrated by the A.O. which wee clearly born out from records?" The brief facts of the case are that the assessee is an individual and running Excel Hospital Limited. On 13.09.2007, a survey, under Section 133(A) was carried out at the business premises of the assessee. The assessee was examined under Section 131 of the Act as per notice dated 22.09.2007 and his submissions were recorded on 03.08.2007. The assessee was served with a notice under Section 148 on 20.03.2008. In response, the assessee has furnished the necessary documents. On 11.7.2008, the A.O. has intimated the assessee about the reasons recorded for initiating the proceedings under Section 148 of the Act. Finally, on 22.12.2008, the assessment was completed under Section 143(3)/147 of the Act where the capital gain was levied. The assessee has assailed the assessment order pertaining to the capital gain in an appeal before the CIT(A), which was dismissed. Being aggrieved, the assessee filed an appeal before the Tribunal, who has granted the relief by observing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that he hand transferred land on 24.06.1999 is not tenable in any way because even the assessee himself did not paid any tax on transfer of land in A.Y. 2000-01 relevant to this period. Thus, the intention of the assessee is very clear that the assesse did not desires to pay any capital gain tax. In this case, the assessee has given a license to the developer i.e. M/s. Shilpi Builders for development of a residential cum commercial complex on its land within a period of three years from the date of possession or from the date of obtaining sanctioned map from KDA whichever is later. The assessee did not surrender any of his right of ownership to the developer till completion of the project. The assesse has filed copy of three agreements dated 24.06.1999 [agreement], 29.04.2002 [supplementary agreement] and 30.04.2005 [completion agreement]. The perusal of the above three agreements makes it abundantly clear that the rights of ownership in respect of the share of developers were transferable to the developer only on completion of the project as discussed above in the gist of agreements given above. Learned counsel for the Department also read over the Para-1 of page-4 of the compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1882 (4 of 1882). Learned counsel has also read out Section 53A of transfer of property Act, 1882 which is as under :- "Where any person contract 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 as, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract. And the transferee has performed or is willing to perform his part of the contract, Then notwithstanding that where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefore by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the mere fact that the owner has also the right to enter the property to oversee the development work or to ensure performance of the terms of the agreement does not introduce incompatibility. The concurrent purpose of the owner who can exercise possessory rights to a limited extent and for a limited purpose and that of the buyer/developer who has a general control and custody of the land can very well be reconciled. Clause(v) will have its full play even in such a situation. There is no warrant to postpone the operation of clause(v) and the resultant accrual of capital gains to a point of time when the concurrent possession will become exclusive possession of the developer/transferee after he pays full consideration. Possession given to the developer need not ripen into exclusive possession on payment of the instalments in entirety for the purpose of determining the date of transfer. It is enough if the transferee has, by virtue of that transaction, a right to enter upon and exercise acts of possession effectively pursuant to the covenants in the contract. That amounts to legal possession." Similarly, he relied upon the ratio laid down in the case of Chaturbhuj Dwarkadas Kapadi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power of attorney in favour of builder and having received substantial amount in consequence of the original agreement, the assessee had transferred almost all the rights in the land, except title, to the transferee and therefore, capital gain had not accrued or earned during period relevant to assessment year 2006-07. He also read out the clause 2 of the agreement, which is as under : "......the words used in this clause are "has delivered" and not "is being delivered" or "is delivered" which confirms the assessee's claim that this agreement was only to confirm the acts having been done in the past and not acts doe in the present. He, therefore, submitted that possession of land covered by plot No. 14/138 and part of land covered by plot No. 14/143 had been transferred to the builder on 24.6.1999...." To support his arguments, he relied upon the ratio in the case of Sanjeev Lal vs. CIT and Another [2014] 365 ITR 389(SC), where it was observed that : "Date of agreement to sell to be taken as date of transfer of original asset" He further relied upon the ratio in the case of Sunil Siddharthbhai vs. CIT [1985] 156 ITR 155 (SC), where it was observed that : "....In its gene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, whereby the builder had been vested with extensive powers by execution of power of attorney executed on same day i.e. on 24.06.1999 to deal with property for the purpose of development as stipulated by principal development agreement. So far as Plot No. 14/143 is concerned, it did not provide any transfer of land, but this plot was in the name of the brother of the assessee. This aspect is supported by the fact that the builder had launched its scheme of booking of flats by advertising in various well know newspaper on 20.04.2002 from 1.4.2002. This evidence has also remained uncontroverted by the Revenue before us and therefore, explanation of assessee being plausible, we are of the opinion that had the possession not been given prior to a 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 here we are further of the opinion that 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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