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TMI Blog2015 (7) TMI 839X X X X Extracts X X X X X X X X Extracts X X X X ..... which is not clearly applicable to stock-in-trade. Therefore, the law applicable to the immovable property is to be considered to determine whether there is a sale or not. The Hon’ble Apex Court in the cases of CIT vs. Bhurangya Coal Co. [1958 (9) TMI 2 - SUPREME Court] and Alapati Venkatramiah [1965 (3) TMI 21 - SUPREME Court] laid down that the transfer of immovable property was considered to have taken place upon conveyancing and not the date of agreement of sale. In the case on hand, undisputedly it was only an agreement of sale, which was entered into between the Respondent-Assessee Company and M/s. Leo Edibles & Fats Limited. No Sale Deed was either executed or registered. Therefore, applying the law laid down by the Hon’ble Supreme Court in the above cases supra, it cannot be said that there is a sale of lands pursuant to the Agreement of Sale. Therefore, we concur with the order of the learned Commissioner of Income Tax (Appeals) and we do not want to interfere with the order of Commissioner of Income Tax (Appeals). Decided against revenue. - I.T.A. No. 838/Hyd/2013 - - - Dated:- 15-7-2015 - Shri Saktijit Dey and Shri Inturi Rama Rao, JJ. For the Petitioner : S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Extent Value in Rs. 01 Sale Deed dated 03.11.05 vide document No.6938/2005 15AC- 33Gts/Sy.No.332 3,45,55,650 02 Sale Deed dated 03.11.2005 videdocumentNo.6939/2005 06AC- 39Gts/Sy.No.328 76,37,525 03 Sale Deed dated 18.11.05 vide document No.0981/2005/ 01 AC- 19Gts/Sy.No.337 16,15,025 04 Sale Deed dt. 18.11.2005, vide document No.7050/2005 01 AC-37 Gts Sy.No.332, 333, 331 25,29,350 05 Sale Deed dated 18.12.05, Vide document No.7835/2005 01 AC- 19Gts/Sy.No.337 4,84,440 Total 4,68,21,990 3. The Respondent-Assessee Company had entered into an Agreement of Sale dated 02.11.2005 with M/s. Leo Edibles and Fats Limited to sell the land to the extent of Ac.22.32 Gts. out of the above lands for a consideration of ₹ 5,01,60,000/- at the rate of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is on further appeal before the Hon ble High Court on this order or not. Thus, the order of the revision passed by the Hon ble Commissioner of Income Tax had attained the finality. Consequent to the order passed u/s. 263 of the Act, the Assessing Officer had passed consequential order after affording an opportunity of being heard to the Respondent-Assessee company vide order dated 27.12.2011 treating the transaction as a sale and brought to tax the excess of sale consideration over the purchased price of ₹ 79,27,913/-. Aggrieved by this order, an appeal was filed before the learned Commissioner of Income Tax (Appeals)-V, Hyderabad, who, vide order dated 13.02.2013, allowed the appeal, vide para 5.3 of his order, which is extracted below:- 5.3 I have gone through the order under section 263, assessment order and the entire submissions of the appellant. In the order under section 263 of the Act, the Commissioner of Income-tax had directed the Assessing Officer to make in-depth and specific enquiries on he transaction with the transacting parties, and analyze the material submitted by the appellant and, in case, of positive and cumulative findings, the transaction shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove discussion, I am not inclined to sustain the addition so made and direct the Assessing Officer to delete the addition. 5. Aggrieved by this Order, the Revenue had come up with the present appeal before us. There are five grounds of appeal out of which, grounds Nos.1 and 5 are general in nature and thus, does not require any adjudication. Ground No.4 is dismissed as infructuous. Therefore, the effective grounds of appeal are only 2 and 3, which relate to deletion of addition of ₹ 79,27,913/- arising out of treating the agreement for sale of land as sales. The learned Senior Departmental Representative vehemently argued that the Commissioner of Income (Appeals) ought not to have deleted the addition, inasmuch as, the Respondent-Assessee Company was following the mercantile system of accounting and the possession of the property was given as per terms of the agreement, substantial amount of consideration was received. The Agreement of Sale which was stated to have been cancelled was never produced before the Assessing Officer. Further, he had drawn our attention to clause (3) of the Agreement of Sale, which reads as under:- 3. The Vendee has paid the following adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng followed by the Respondent-Assessee Company. The genuineness of the agreement of sale is not doubted by the Assessing Officer. Admittedly, the Respondent-Assessee Company is in the business of real estate. Therefore, the lands which were proposed to be sold were shown / treated as stock-in-trade in the books of the Respondent- Assessee company. Therefore, the definition of term transfer as given in the provisions of sub-section (47) of Section 2 of the Act, has no application, because the definition is given in relation to capital asset, which is not clearly applicable to stock-in-trade. Therefore, the law applicable to the immovable property is to be considered to determine whether there is a sale or not. The Hon ble Apex Court in the cases of CIT vs. Bhurangya Coal Co. 34 ITR 802 and Alapati Venkatramiah 57 ITR 185 laid down that the transfer of immovable property was considered to have taken place upon conveyancing and not the date of agreement of sale. 7. In the case on hand, undisputedly it was only an agreement of sale, which was entered into between the Respondent-Assessee Company and M/s. Leo Edibles Fats Limited. No Sale Deed was either executed or registered. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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