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TMI Blog2017 (2) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Income-tax (Appeals)-37, Mumbai against the assessment order dated 20-03-2013 u/s 143(3) of the Act for AY. 2010-11 on the following grounds:- 1. "The Hon'ble Commissioner of Income Tax (Appeal) has erred in confirming the made by the learned assessing officer with regards to the addition of Long Term Capital gains of Rs. 40,00,000/- by alleging sale of property alongwith co-owner Nirmala Seth during F.Y. 2009-10 based on agreement registered and part payment received against such agreement instead of the being accrued on handing over of the possession of said flat being handed over in F.Y. 2011-12 to the concerned buyer and based on which capital gain has been offered for tax in A.Y. 2012-13 by the appellant. It is therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore us i.e. AY 2010-11. 4. The brief background of the facts of the case is that assessee was coowner along with his wife, Smt. Nimala Seth of a residential Flat, viz. Flat 2201, Earth Castle, V.P. Road, Mumbai. The assessee along with his wife entered into agreement, for sale of the said Flat with Shri Jaywant Hastimal Shah and Mrs. Sapna J Shah. The assessee received advance of Rs. 40 lakhs towards his share against the total sale consideration of Rs. 85 lakhs. The sale agreement was also registered during the year. However, possession of the Flat was given in AY 2011-12 and other formalities were completed in AY 2011-12, therefore, assessee offered to tax the resultant capital gain in AY 2011-12. On the other hand, AO was of the opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is complete:- (1) There should be passing on of the sale consideration; (2) Handing over of the possession by the seller to the buyer; and (3) There should be conveyance deed, which should be registered. It was submitted that all the conditions are cumulative and all of them must be fulfilled before a transaction of sale of property could be said to be complete. He placed reliance upon the judgement of Hon'ble Patna High Court in the case of Raj Rani Devi Ramna vs CIT 210 ITR 1032 (Pat) wherein it was held that true test for completion of sale is the intention of the parties and registration is only a prima facie proof of an intention of transfer, but it is no proof of an operative transfer if there was a condition precedent as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard, we have analysed the facts of the case. Ld. Counsel has submitted before us chronology of events which reads as under:- S.No. Description Date Paper book reference 1 Date of Purchase of Flat 13/06/2008 - 2 Advance of Rs. 40,00,000 received by each co-owner against the sale of Flat 28/05/2009 18 to 23 3 NOC applied to the Society 02/07/2009 35 4 Sales agreement registered 03/07/2009 24 to 39 5 Balance sale proceeds received 16/06/2011 18 to 23 6 Possession given 26/06/2011 17 7 Buyers write to the society for Transfer of the Flat June 2011 16 8 Maintenance charges of Rs. 77,344/- paid on 01/08/2011 13 to 14 8. We have gone through the documents shown to us by the Ld. Counsel. Undoubtedly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd also clarifying in the said letter that from this date onwards, i.e. June, 2011 maintenance charges shall be borne by the Shah Family and not by the assessee. 9. Thus, the documents on record duly establish that during this period, i.e. between the date of registration of sale agreement on 03-07-2009 and till the date of handing over of possession on 26th June, 2011, the Flat was in the exclusive possession, enjoyment and custody of assessee only. Though sale agreement was executed and registered, but neither complete consideration was received by the assessee nor did all the legal formalities were complete. Further, the obligation about the maintenance of the property was also retained by the assessee till the Flat was transferred by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment is registered, for the true test is the intention of the parties. Registration is prima facie proof of an intention to transfer, but it is no proof of an operative transfer if there is a condition precedent as to the payment of consideration or delivery of the deed. Thus the seller may retain the deed pending payment of price and, in that case, there is no transfer until the price is paid and the deed is delivered. In the present case, from the statement of case itself as drawn up by the Tribunal, it is apparent that the parties had clearly intended that despite the execution and registration of sale deeds, transfer by way of sale will become effective only on payment of the entire consideration amount and in this background of facts, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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