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TMI Blog2015 (5) TMI 571X X X X Extracts X X X X X X X X Extracts X X X X ..... aw, the learned CIT(A) has erred to ignore the fact that no possession was given to the assessee which is as per Point '0' of the Development Agreement dated 18.01.1996. 4. As per the Development Agreement, 1996, only right given was to permit technicians, architects and engineers to enter and verify the property. 5. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in not observing page No.30 of Sale Deed dated 31.08.2000, wherein it is clearly written that the possession of the said property was given on 31.08.2000, i.e., on the same day of the agreement. 6. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in not observing the 7/12 extract wherein the name of the assessee is reflected in the name "others" which do not prove the ownership in the name of the assessee. 3. The only issue raised in the present appeal is in relation to the treatment of gain arising on sale of rights in the property. 4. The brief facts of the case are that Survey under section 133A of the Act was carried out at the premises of assessee on 21.03.2006. During the course of Survey, statement of assessee was reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e agreement also reflected that the expenses towards development of land had to be borne by the assessee including the expenses incurred for permission of NA, architecture, labour, masons, etc. The original Development Agreement was not a registered document, but the Power of Attorney even dated was registered with Sub- Registrar, Solapur North. Another supplementary Development Agreement dated 17.07.1999 was executed before the Tahsildar and Executive Magistrate, Solapur North, under which development of plots was intended. The said agreement stated that property was in the possession of second party i.e. the purchaser and the entire property along with easement rights was given in possession to the first party by the second party on 18.01.1996 by executing the Development Agreement and Power of Attorney, which agreement was still in existence. The CIT(A) was of the view that the assessee had acquired certain rights vide the Development Agreement and had also shown that assessee had part possession of the property although the vendors still retains his ownership or other rights. The CIT(A) further observed that no doubt, the sale deed dated 31.08.2000 mentioned that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale deed talks about absolute ownership and the perpetual ownership were given to the assessee. Further, reference was made to the terms of supplementary Development Agreement dated 26.07.1999, wherein it has been mentioned that the assessee was to take possession from MHADA. Further, the name of assessee was recorded in other relevant documents i.e. 7/12 extracts. The award for payment of compensation is placed at page 7 of the Paper Book and the award has been given to the Power of Attorney holder and even cheque was issued to the said person i.e. the assessee. Our attention was also drawn to the wealth tax orders placed at page 15 of the Paper Book. Reliance was placed on the ratios laid down in the following cases:- a) Chaturbhuj Dwarkadas Kapadia Vs. CIT, (2003) 260 ITR 491 (Bom) b) ICI Ltd. Vs. DCIT (2002) 80 ITD 58 (Cal) c) Jasbir Singh Sarkaria, In Re (2007) 294 ITR 196 (AAR) d) Charanjit Singh Atwal Vs. ITO (2013) 36 taxmann.com 10 (Chandigarh - Trib) 9. We have heard the rival contentions and perused the record. The assessee in the present case had acquired the development rights of land in question from one Shri Suresh S Bhaiyya in terms of an agreement dated 18.01 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the expenses towards development of the land are to be borne by the appellant. Para 3 of the irrevocable POA, which is a registered document clearly mentions that the executee (namely, the appellant) has to bear entire expenses for development of the property. The development agreement also clearly states that expenses for permission of N.A (Clause F), architecture, engineer, labour, masons, etc. (Clause G) agreement, POA, sale deed of plots/flats, stamp duty, registration fee, etc (Clause M) have to be borne by the appellant. It is also seen from the record that, although the development agreement dated 18.1.1996 is not a registered document, the POA of even date has been registered with Sub Registrar (Solapur North) vide registration No. 1/96 dated 18.1.1996. I have also examined the supplementary development agreement dated 17.7.1999 which has been executed before the Tahsildar and Executive Magistrate, (Solapur North) and by which the development of plots has been intended. This agreement really clinches the issue that the property is under the possession of the first party to the document viz. the appellant. It is mentioned therein "The said property is in my possession (sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r decision of ITAT Mumbai in the case of Rubab M Kazerani vs JCIT reported in 91 ITD 429. Subsequently, this view has been endorsed by the Bombay High Court in the case of Chaturbhuj Dwarkadas Kapadia reported in 260 ITR 491B and Pune ITAT in Dynaneshwar M Mulik vs DCIT reported in 98 TTJ 179. This view is also supported by the decision of the Authority for Advance Ruling in the case of Jasbir Singh Sarkanya cited supra which held that "the actual date of taking physical possession or the instances of possession acts exercised is not very relevant. The ascertainment of such date, if called for, leads to complicated inquiries which may frustrate the objective of the legislative provision 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 tantamounts to legal possession." The court further held that "A developer armed with GPA cannot be regarded merely as a licensee or an agent subject to the control of the owners. His possession cannot be characterized as precarious or tentative in nature. The fact that the agreement describes the GPA as irrevocable and an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abilitation Act or similar legislations the same shall be recorded. 12. In view thereof, where the name of the assessee is recorded in other rights pursuant to signing of Development Agreement and the registration of Irrevocable Power of Attorney, it implies that the assessee had acquired the rights in the said property and since possession had already been given to the assessee, in view of the provisions of section 2(47)(v) of the Act, there was part performance of the contract under section 53A of the Transfer of Property Act and thus, where the assessee had acquired rights in the said property and also received possession, the ownership in the said property starts from 18.01.1996. 13. In the facts of the present case, where the possession of land had been given to the assessee in line with the terms agreed upon between the parties consequent to which an irrevocable Power of Attorney was executed, which has not been cancelled till date and also where the land was mutated in 7/12 records in the name of assessee by way of entry No.1777, dated. 04.11.1996 establishes the case of assessee of having acquired rights over the land as per section 53A of the Transfer of Property Act. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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