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TMI Blog2017 (1) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... aluer’s report cannot be brushed aside. We find that the ld CITA had rightly observed that the transfer within the meaning of section 2(47) of the Act had already happened in the year 1997 itself and the execution of the sale deeds in the financial year 2006-07 is only the culmination of the transfer that took place pursuant to development agreement dated 16.7.97. We also find lot of force in the alternative argument of the assessee, without prejudice, that as per the computation placed on record by the assssee, there is no resultant capital gains that could be taxed in the year under appeal. Hence we hold that the ld CITA had rightly deleted the levy of capital gains and had rightly held that the transfer had not taken place in the year under appeal both on law as well as on facts. - Decided in favour of assessee - ITA No. 2854/Kol/2013, ITA No. 2810/Kol/2013 - - - Dated:- 21-12-2016 - Shri M. Balaganesh, AM And Shri S. S. Viswanethra Ravi, JM For the Appellant : Shri Sallong Yaden, Addl. CIT For the Respondent : Shri I.Banerjee, FCA ORDER Per Shri M. Balaganesh, AM These appeals of the revenue arise out of the order of the Learned CIT(A) in Appeal No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d building would be the property of Mr Ikbal Singh after their demise. 5. The assessee submitted that the assessee and her daughter in law (other co-owner) entered into an agreement on 16.7.97 with the developer Mr Ikbal Singh for development and construction of the property for the consideration that the said developer shall incur the cost of construction and the assessee and her daughter in law shall be entitled to get 50% of the constructed area in lieu of their parting with the land to the said developer. The plant by the Delhi Municipal Authority was already sanctioned on 27.3.97. The construction was completed in Feb 1998. The assessee and her daughter in law received their share in the property on construction in Feb 1998 itself and the 2nd floor was sold in the financial year 2006-07 relevant to asst Year 2007-08 for a consideration of ₹ 1,25,00,000/-. The assessee s share in the said consideration was ₹ 62,50,000/-. The ld AO treating the same as consideration received, computed capital gain on the sale of flat by the assessee. Similarly the ld AO also assessed capital gains in the hands of the assessee for the Asst Year 2007-08 in respect of another flat in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the evidentiary value of the said collaboration agreement dated 16.7.97 since it is as much as page 1 of the collaboration agreement comprising in ₹ 10 cartridge paper purchased from the stamp vendor, Shri Davinder Kumar on 5.7.1997. He further observed that the ld AO had accepted part of the narration in the said collaboration agreement with respect to the registration of the conveyance of the Plot No. A-79 , Nizamuddin East. The ld AO was also wrong in both accepting and rejecting the evidentiary value of the collaboration agreement dated 16.7.97. He finally concluded that the transfer took place on 16.7.97 and the said transaction was completed on Feb 1998 when the assessee and her co-owner received the consideration in the shape of 1st and 2nd floor of the newly constructed building. Hence the property that had been sold by the assessee in this year was virtually received in Feb 1998 as a culmination of the transfer that took place by virtue of collaboration agreement dated 16.7.97. Based on these observations, the ld CITA deleted the levy of capital gains both on facts as well as on law. Aggrieved, the revenue is in appeal before us on the following grounds :- Smt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egistered power of attorney executed on the same day by the assessee and her co-owner in favour of the developer. He placed reliance on the decision of Hon ble Punjab Haryana High Court in the case of C.S.Atwal vs CIT reported in 378 ITR 244 (P H) and decision of Hon ble Bombay High Court in the case of Bertha T Almeida vs ITO reported in (2015) 53 taxmann.com 522 (Bom) dated 10.7.2014 in support of his arguments. 9. We have heard the rival submissions and perused the materials available on record including the paper book filed by the assessee comprising of Collaboration / Development Agreement dated 16.7.97 (pages 1 to 19 of PB) ; Application for approval of construction of additional floor (page 11 of PB) ; Valuation report from registered valuer as on 31.3.98 (Pages 12 to 16 of PB) ; Revised computation statement with explanation (Pages 17 to 20 of PB) ; Deed of conveyance jointly executed by the assessee and other co-owner (Pages 21 to 45 of PB) and General Power of Attorney jointly executed in favour of the developer (Pages 46 to 50 of PB). We find from the General Power of Attorney jointly executed in favour of the developer by the assessee along with her co-owner vide C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment which have the effect of transferring or enabling the enjoyment of such immovable property. 9.1. We also find that the provisions of section 2(47)(v) of the Act read with section 53A of Transfer of Property Act are very clear in this regard. In the instant case, the assessee had executed a development agreement followed by registered power of attorney in favour of the developer and possession of the property was also handed over to the developer. The construction of the 1st and 2nd floor was also completed and handed over to the assessee and her co-owner in Feb 1998. We also find that the Hon ble Calcutta High Court in the case of DIT (IT) vs Sri Bidhan Chandra Banerjee in ITA No. 786 of 2008 dated 20.11.2008 had approved the following findings of the ld CITA in that case as below :- The fact cannot be denied that Chapter XXC of the Income Tax Act defines transfer and only in the case of transfer this Chapter (now abolished) comes in operation. As per Sec. 269UA(f) of Income Tax Act, Exchange is also transfer. In the instant case the assessee along with other co-owners has exchanged their 50% right on the old property with the 50% of the Constructed Area. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evelopment agreement as simultaneously an irrevocable General Power of Attorney dt 16.7.97 was duly executed and registered with Sub-Registrar of Assurance, New Delhi in favour of the developer. We find that the ld AR had rightly relied on the amendment in the Registration Act, 1908 with effect from 24.9.2001, wherein , in order to fall within the ambit of section 53A of Transfer of Property Act, 1882, all possessory rights could be validly parted with only by means of registered document. As a result, all development agreements, in order to be capable of being eligible for transfer , u/s 2(47)(v) of the Income Tax Act must be by way of registered documents. However, this amendment in Registration Act, 1908 was only with effect from 24.9.2001 and hence would be applicable only for development agreements entered into on or after 24.9.2001 mandating registration of the same in order to fall within the ambit of section 53A of Transfer of Property Act read with section 2(47)(v) of the Income Tax Act. The assessee and her co-owner in the instant case had entered into a unregistered development agreement dated 16.7.97 and hence the amendment with effect from 24.9.2001 in Registration Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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