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TMI Blog2002 (3) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... imits. Obviously, the whole idea was to develop the property. The total area of the property was about 36,837 sq. ft and the total consideration agreed was Rs.57 lakhs. The purchaser (hereinafter referred to as "developer") paid a sum of Rs.2 lakhs as advance on the date of the agreement and agreed to pay a sum of Rs.15 lakhs within two months from the date of the agreement and a further sum of Rs.10 lakhs within a further period of six months. It seems that the developer could not keep up the schedule. Therefore, some modifications were effected with the mutual understanding in the terms of the agreement. As per the modified agreement, the assessee parted with the possession of approximately 1/3rd of the total property on or about June 15, 1991. He also agreed that he would purchase a residential apartment bearing the area of 4,400 sq. ft., which would be eventually put up on the sold property at the consideration of Rs.15,47,000. He also agreed that the developer/purchaser would construct a separate building in an area of 5,600 sq. ft. at the cost of Rs.8 lakhs and this sum of Rs.15,40,000 plus Rs.8 lakhs totalling to Rs.23,40,000 was to be adjusted out of the total consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty, it was only appropriate that the sale proceeds be allocated pro rata for the possession handed over and the capital gains computed. Accordingly, the Assessing Officer was directed to recompute the capital gains in the light of the observations made. It is this judgment of the Tribunal, which has been called in question at the instance of the Revenue before us by way of the aforementioned reference. Learned senior counsel for the Department urged that even if there was a transfer of 1/3rd of the property by way of handing over possession thereof to the purchaser, the capital gains on the same have to be calculated on the basis as if the whole property was transferred and therefore the total consideration in the transaction would be the basis for calculation of capital gains. Learned counsel invites our attention to the language of section 2(47)(v) and points out that thereunder, if possession is parted with in terms of section 53A of the Transfer of Property Act, 1882, then also such transfer of possession amounts to a transfer within the meaning of section 45 of the Income-tax Act. The section is as under: "2. (47) 'transfer' in relation to a capital asset, includes,-.. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not part with possession of the property and therefore there was no transfer within the meaning of section 45 in those assessment years. He further points out that in the year 1995-96, the assessee parted with the other 1/3rd part of the property and put the developer in possession and had actually not received even a single farthing, but he was later on assessed as if he had received 1/3rd consideration, i.e., Rs.19 lakhs. The same story was repeated for the assessment year 1997-98 also, where the remaining 1/3rd of the property was put in possession of the developer/purchaser. Again, the assessee had not received a single farthing and yet he offered Rs.19 lakhs for the purpose of calculating capital gains. Therefore, the contention of learned counsel is that in the years 1995-96 and 1997-98, when he parted with 1/3rd of the property in each year, ne had offered to pay the capital gains on the moneys which he had never received for those years. Ultimately, learned counsel argues that all this will show that there is no escaping of any income, because the assessee had offered Rs.22 lakhs in the year 1992-93 and Rs.19 lakhs in the year 1995-96 and Rs.19 lakhs in the year 1997-98 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the capital gains would be calculated only on the transfer having been effected. Even if there is one transaction and only part of the property is transferred in a particular assessment year, then the capital gains would be calculated on the basis of such part transfer and also of the part consideration received by the transferee. This decision was given when section 2(47) was not amended. Therefore, their Lordships obviously went by the word "transfer" in the strict sense thereof and since there were completed four sale deeds, their Lordships accepted the four transfers to have taken place in four years and therefore eventually held that the capital gains could not be calculated on the basis of the whole transaction or the whole consideration involved therein. The only difference, which is to be perceived today is that the definition of "transfer" itself has undergone a change. Therefore, what applies to a completed transfer in the aforementioned Delhi High Court judgment would also apply if the transaction in the present case can be covered under section 2(47) and our finding is, that it can be so covered. In this case, possession was parted with whereas the assessee/vend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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