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TMI Blog2015 (11) TMI 745X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax (Appeals) has taken a view that the capital gain does not arise in the impugned assessment year, as it arise in the financial year 2004-05 relevant to the assessment year 2005-06 and the Assessing Officer may consider computation of capital gains in that assessment year. Since it has been established that the transfer took place as per the provisions of section 2(47)(vi) of the Act, no capital gain can be computed in the impugned assessment year. We, therefore, find no infirmity in the order of the learned Commissioner of Income-tax (Appeals) and we confirm the same. - Decided against revenue - I. T. A. No. 359 /LKW/ 2013andC. O. No. 6 /LKW/ 2014(assessment year 2008-09). - - - Dated:- 5-6-2015 - SUNIL KUMAR YADAV (Judicial Member) and A. K. GARODIA (Accountant Member) Smt. Pinki Mahavar for the Appellant Rakesh Garg for the Respondent ORDER The order of the Bench was delivered by 1. Sunil Kumar Yadav (Judicial Member).-This appeal is preferred by the Revenue against the order of the learned Commissioner of Income-tax (Appeals), inter alia, on the following grounds : 1. That the learned Commissioner of Income-tax (Appeals)-II, Kanpur has erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim being in the manner of computation of capital gains filed along with the return of income and by way of separate submissions/letters before the Commissioner of Income-tax (Appeals). 3. It has been pointed out that the cross-objection is filed late by 272 days, for which no application for condonation of delay has been moved on behalf of the assessee. In the absence of proper application for condonation of delay in filing of the cross-objection, we are of the view that the assessee has no reasonable cause for the delay in filing of the cross-objection. We accordingly hold that the cross-objection filed by the assessee is time barred and dismiss the same being not admitted. 4. Now we are left with the Revenue's appeal, in which the issue of capital gain in the impugned assessment year has been raised. In this regard, the facts culled out from the orders of the lower authorities are that during the course of the assessment proceedings, the Assessing Officer has noticed that the assessee has sold a property bearing No. 75/6, Halsey Road, Kanpur. The assessee was required to furnish complete details wherefrom the Assessing Officer has observed that the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e written submissions placed by the learned author ised representative. The assessee Pt. Ranglal Trust, is a private trust, established by Late Pt. Ranglal by trust deed dated January 27, 1930. The trust was created by settling property No. 75/6, Nai Sarak, Halsey Road, Kanpur with the object of providing scholarships to meritorious and needy students out of the rental income from the said property. The property is situated on 832.76 sq.mtrs. and is double storeyed structure which construction was completed prior to 1910. The prop erty was let out to different tenants who were paying very meager rent. The total rent received from the said property was ₹ 50 per month only. The trust was assessed to Income-tax. The income and expenditure account of the trust has also been seen. The only source of income is income from interest from bank. There is no income from property. This further substantiate that the trust ceased to enjoy income from property after giving possession of the same. The authorised representative has placed the arguments that due to meager rent the trust was not in a position to achieve its objects and fulfil the purpose for which it was created. The tenants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ledged by the assessee. The assessee handed over the possession of the said prop erty to the purchaser. The purchaser acknowledged the same vide let ter dated March 31, 2005 itself. The learned authorised representative has submitted that since the entire consideration was paid and the possession of the property was handed over to the purchaser, the assessee ceased to have any right, title or interest or any lien of any nature whatsoever over the said property. The obligation cast on the assessee stood discharged. In terms of section 2(47)(v) of the Income- tax Act, 1961, wherein 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 (4 of 1882) or as per sub-clause (vi) any transaction (. . . by way of any agreement or any arrange ment or in any other manner whatsoever), which has the effect of transferring, or enabling the enjoyment of, any immovable property, in view of the above, it has been argued that since the assessee has received the entire consideration and has parted with the property, the transfer stood co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, 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 the contract, though required to be registered, has not been registered, or, where there is an instru ment of transfer, that the transfer has not been completed in the manner prescribed therefor 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 : Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n contrary. The Assistant Commissioner of Income-tax-I vide his report dated February 19, 2013, has submitted, that the possession of the said property was given to the purchaser at the time of execution of the sale deed on May 15, 2007 and not when the entire sale consideration was paid on March 31, 2005. For this purpose, the Assistant Commissioner of Income-tax-I enclosed a copy of the letter dated April 14, 2009 addressed to the Deputy Commissioner of Income-tax, Range-I, Kanpur (the then Assessing Officer) wherein it has been mentioned by the assessee in para 4, 'that the sale deed against the transfer of property has been executed on May 15, 2007 and possession was handed over to the party during this year'. Copy of the remand report dated February 19, 2013 was forwarded to the assessee for his comments. In response to the remand report dated February 19, 2013, the authorised representative has filed detailed submissions dated February 21, 2013 as under : 'With reference to the above, we beg to submit that we are in receipt of the remand report dated February 19, 2013 and beg to submit as under : That the letter dated April 14, 2009, referred to by the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. Submitted Date : February 21, 2013 explaining that the possession was given on March 31, 2005 itself, as was evident from the letter dated March 31, 2005 itself, wherein the details of the balance sale consideration have been acknowledged mentioning specifically Portion in vernacular not printed here.-Ed. In order to resolve the issue of date of possession, the authorised representative is asked to file a confirmation from M/s. Mayur Infra structure Ltd., the buyer of the property. Accordingly, the authorised representative on February 26, 2013 filed a confirmation letter dated February 25, 2013 regarding receipt of payments and taking over possession of the property on March 31, 2005. In view of the confirmatory letter of M/s. Mayur Infrastructure Ltd., dated February 25, 2013 it is clear, that the possession of the property was delivered to the buyer on March 31, 2005 itself. Even otherwise as submitted by the authorised representative when the entire sale consideration was paid, which was duly acknowledged by the seller, the assessee ceased to have any right, title or interest in the property. The buyer was fully aware that the property in question is fully te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year 2005-06. The payment of ₹ 51 lakhs was made in two instalments-the first instalment of ₹ 21 lakhs was paid on January 10, 2005 and the second instalment of ₹ 30 lakhs was paid on March 31, 2005. The possession was also given to the buyer during the said financial year. Therefore, transfer was complete during the financial year 2004-05 and not in the impugned assessment year. Therefore, no capital gain was accrued in the impugned assessment year. 6. Having carefully examined the orders of the lower authorities in the light of the rival submissions, we find that the assessee has placed ample evidence on record to establish that the sale agreement was executed on January 27, 2005 and the sale consideration was paid on two occasions- one is on January 10, 2005 and the other is on March 31, 2005. The possession was also handed over to the buyer. The sale agreement is a registered document. Therefore, in the learned Commissioner of Income- tax (Appeals) of these documents, the transfer is complete as per the provisions of section 2(47)(vi) of the Act. The learned Commissioner of Income-tax (Appeals) has examined this issue in the light of the provisions ..... 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