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TMI Blog2018 (2) TMI 1154X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Commissioner and while reversing the order of the Commissioner, it has correctly appreciated the facts and law and there is no illegality or perversity in the order of the Tribunal warranting interference. Appeal dismissed. - INCOME TAX APPEAL NO. 05 OF 2012, INCOME TAX APPEAL NO. 06 OF 2012 - - - Dated:- 17-1-2018 - SHANTANU KEMKAR AND NUTAN D. SARDESSAI, JJ. For The Appellant : Mr. R. Srinivasan a/w. Mr. P. Karpe, Advocate For The Respondent : Ms. Amira Razzaq, Advocate JUDGMENT (Per Shantanu Kemkar, J.) These Appeals are filed under Section 260A of the Income Tax Act, 1961 (for short the Act ) challenging the common order dated 29th June, 2011 passed by the Income Tax Appellate Tribunal (for short the Tribunal ), Panaji Bench in Income Tax Appeal Nos. 185 and 186/PNJ/2007. Vishal 2. Both these Appeals were admitted on following substantial questions of law. (i) Whether on the facts and in the circumstances of the case, the Appellate Tribunal is right in reversing the order of the Commissioner (Appeals) and holding that the transfer within the meaning of Section 2(47)(v) had taken place only in 2002-03 assessment year ignoring the developm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said common order passed by the A.O. on 11th March, 2004 under Section 148 of Act, the Appellants filed Appeals before the Commissioner of the Income Tax Appeals (for short the Commissioner ), Panaji, Goa. The case of the Appellants was that no transfer was effected in the Assessment Year 2002-03. The same was effected in the Vishal financial year 1993-94 when the two Power of Attorneys dated 14th March, 1993 and 29th April, 1994 were executed into by the Appellants in favour of M/s. Braganza Construction. It was also the case of the Appellants that the consideration was also received out of the agreed sum of ₹ 80 lacs in terms of the said two Power of Attorneys which according to the assessee are the Development Agreements. 5. The Commissioner accepted the contention of the Appellants and set aside the order of the A.O. vide order dated 10th August, 2007. The said order of the Commissioner was challenged by the Revenue by filing Appeals before the Tribunal. The Tribunal vide impugned order dated 29th June, 2011 allowed the Appeals filed by the Revenue and rejected the cross objections filed by the Appellants/assessees. Feeling aggrieved, the assessees have filed these Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ants to the notice issued by the Respondent-Revenue stating therein that the Power of Attorneys were executed only for the purpose of empowering the holder of Power of Attorney to do the necessary acts for constructing the buildings, shops and garriages and for furtherance of the same. She read over the Power of Attorney to demonstrate that there was specific mention that the Appellants are in possession of the property and that it nowhere records that the possession has been handed over to the Developer. By pointing out to the reply filed by the Appellants to the notice as extracted at page 7 of the order passed by the A.O, Ms. Amira Razzaq, learned counsel has argued that the specific case of the Appellants before the A.O was to the effect that they have not given possession of the property to the Developer but only an access to do survey on their behalf was given and that they continued to be the owner of the property and that there is no transfer of property under the liberalized Vishal definition of transfer under Section 2(47)(v) of the Act. Thus according to her, in view the aforesaid specific mention in the Power of Attorney about the possession being not handed over and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nza constructions on 30th April, 2001, but this is to be examined in the light of the earlier documents regarding power of attorney etc. The agreement if read, fairly would show that, I have not given up any of my rights in the impugned land. I have given a power of attorney of the same type as I did earlier i.e. revocable in case of breach. The power of attorney dated 30th April, 2001 is exactly on par and as the conditions imposed on Braganza have not been fulfilled particularly regarding payments of ₹ 80 lacs, actual receipts till to date being only Vishal 56.75 lacs, the agreement dated 30th April, 2001 cannot be said to have resulted in transfer of any of my rights even after considering the impact of section 2(47)(v) of the Income Tax Act, 1961. Kindly note that I have not given possession to the contractee, but only an access to enable him to do certain jobs on my behalf. In spite of the agreement, I continued to be the owner even deriving income from the land, which I have shown in the respective returns. The first condition for applying section 2(47)(v) is not fulfilled (possession). The second condition of the said section is that the agreement should be in the na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income Tax Act, 1961 was issued. As I have already filed the return, I request you to kindly supply me the reasons recorded in terms of section 148(2) of the Income Tax Act, 1961 so as to enable me to make further submissions, if necessary. Further it is urged that not to change any capital gain in the accounting period for which notice u/s. 148 was issued. 10. On a close scrutiny of the Power of Attorneys, agreement and the reply, the A.O recorded a finding that only the agreement dated 30th April, 2001 gives rise to the transfer within the meaning of Section 2(47)(v) of the Act, attracting the capital gain arising out of the said transfer. This finding of fact though set aside by the Commissioner but upheld by the Tribunal after elaborate discussion. 11. The agreement dated 30th April, 2001 no doubt refers to some oral agreement and Power of Attorneys executed between the Appellants and the Developer but the fact remains that the agreement dated 30th April, 2001 in clear terms records that the Appellants are the owner and in possession of the property. The Power of Attorney of the year 1993-94 does not disclose Vishal that the possession has been given to the Develope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with Section 45 which indicates that capital gains is taxable in the year in which such transactions are entered into even if the transfer of immovable property is not effective or complete under the general law. In this case that test has not been applied by the Department. No reason has been given why that test has not been applied, particularly when the agreement in question, read as a whole, shows that it is a development agreement. There is a difference between the contract on the one hand and the performance on the other hand. In this case, the Tribunal as well as the Department have come to the conclusion that the transfer took place during the accounting year ending March 31, 1996, as substantial payments were effected during that year and substantial permissions were obtained. In such cases of development agreements, one cannot go by substantial performance of a contract. In such cases, the year of chargeability is the year in which the contract is executed. This is in view of Section 2(47)(v) of the Act. In the case of Dr. Arvind Phake (supra) the Division Bench of this Court in Paragraph 6 has observed thus: We have carefully considered the submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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