9911796707
TMI Blog1999 (12) TMI 861X X X X Extracts X X X X X X X X Extracts X X X X ..... the agreement the assessee agreed to sell the aforementioned immovable property in consideration of ₹ 9,60,000 which was to be received as per the schedule of payments given in Clause 2 of the agreement reproduced hereunder : - 2. The schedule of payment of the sale consideration by the Purchaser to the Vendor shall be detailed hereunder, namely : - (a)Rs. 1,25,000 is paid alongwith the agreement (b)Rs. 1,75,000 will be paid before 31-8-1988 (c)Rs. 2,50,000 will be paid before 30-11-1988 (d)Rs. 1,25,000 will be paid before 31-1-1989 (e)Rs. 1,60,000 will be paid before 30-6-1989 (f)Final payment of ₹ 1,25,000 before the registration of the full property. 3. The purchaser of the property is a builder. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Assessing Officer has relied upon various factors such as a substantial portion of the sale consideration had been received by the assessee and that the bungalow had been allowed to be demolished during the year under appeal. The assessee had also allowed the builder to receive advances from the prospective buyers of flats to be constructed on the land sold by the assessee. The assessee on the other hand has relied upon a letter dated 27th of March 1989 addressed by the appellant to the builder giving consent for possession. Another letter dated 7-4-1989 from the purchaser builder to the appellant stating that they will take possession of the property on 10-4-1989 is also relied upon in support of the claim that possession of the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e previous year relevant to the assessment year under appeal. The vendees had undertaken to pay all outgoing in respect of the scheduled property and the building that was to be constructed thereon (Clause 7 of the Power of Attorney). The vendees had also been authorized to apply for water connection, electricity supply and other incidental requirements, which may be required for the purpose of constructing such building. It was further contended that the letters exchanged between the assessee and the builder have no evidentiary value as the facts and circumstances establish that the possession of the property was handed over to the vendees in the year under appeal. It was also contended that substantial amount of money received by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demolition of the bungalow. In the case of breach of the terms and conditions of the agreement, the assessee was having a right to forfeit the money paid by the purchaser. The assessee had undertaken to execute sale deeds in the name of purchasers or the nominees of purchasers and admit execution of documents for purposes of registration of the documents. In the absence of any clause in the agreement for possession of the property, we are left with no alternative but to consider the circumstantial evidence in order to arrive at a fair conclusion. 10. The department is relying upon the power of attorney, which authorizes the purchasers to approach the Government for obtaining licences in connection with the construction of the building. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the property. This fact may not have the effect of transfer of property. But an important factor that has been taken note of by the CIT(A) is the demolition of the bungalow. The CIT(A) in his order has recorded that the fact of demolition of bungalow in the year under appeal has not been disputed. If it is stated that the possession of the property was not handed over to the vendees, how could it be possible for them to demolish the building? It was contended before us that allowing the demolition of the building should be taken as a licence from the vendor to the vendees to do so and not as an act of handing over possession to them. This contention advanced on behalf of the assessee is not well founded. As per the sale agreement the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant to the year under appeal. The fact that the assessee had agreed to execute sale deeds in the name of the purchasers or their nominees after the completion of the construction of flats is a facility provided to the builders. But for this facility the sale deed would have been registered in the name of the builder for which the stamp duty and registration charges would be payable by the builder. The builder or his purchasers would be required again to pay stamp duty and registration charges when the builder would transfer the property in the name of the purchasers. The assessee by agreeing to execute the sale deeds in the name of the builder or his nominees has the effect of saving of stamp duty and registration charges and this factor do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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