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TMI Blog2018 (6) TMI 1542X X X X Extracts X X X X X X X X Extracts X X X X ..... r continues to be the owner throughout the agreement, and has at no stage purported to transfer rights akin to ownership to the developer. At the highest, possession alone is given under the agreement, and that too for a specific purpose -the purpose being to develop the property, as envisaged by all the parties. We are, therefore, of the view that this clause will also not rope in the present transaction. The income from capital gain on a transaction which never materialized is, at best, a hypothetical income. It is admitted that, for want of permissions, the entire transaction of development envisaged in the JDA fell through. In point of fact, income did not result at all for the aforesaid reason. This being the case, it is clear that there is no profit or gain which arises from the transfer of a capital asset, which could be brought to tax under Section 45 read with Section 48 of the Income Tax Act. The assessee did not acquire any right to receive income, inasmuch as such alleged right was dependent upon the necessary permissions being obtained. This being the case, in the circumstances, there was no debt owed to the assessee by the developers and therefore, the assessees have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a search operation was conducted and ₹ 2.48 crores was seized from Shri Mohit Mittal. 4. Pursuant to search and seizure of the cash, a dispute arose between the co-owners and Shri Mohit Mittal which led to filing of petition before the Hon'ble High Court by Shri Mohit Mittal. To bring to an end a prolonged litigation, dispute was settled by entering into cancellation of the agreement on 17.01.2013. As per cancellation agreement, the co-owners paid back a sum of ₹ 1.20 crore to Shri Mohit Mittal and balance amount was forfeited. The main contention of the assessee is that there was no sale of any property during the year under consideration. The Assessing Officer was of the firm belief that the co-owners were to receive balance amount of ₹ 1.17 crores after adjusting 2.48 crores seized from Shri Mohit Mittal. Accordingly, the Assessing Officer computed the assessee Shri Shailender Gautam's share @ 30% and made an addition of ₹ 35.10 lakhs. 5. The assessee carried the matter before the ld. CIT(A) and pleaded that the amount of ₹ 1.17 crores was never received by the assessee. The ld. CIT(A) was convinced with the contention of the assessee and dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1,80,00,000/-by cash 4. 20.01.2012 Payment made by transferee ₹ 60,00,000/- by cheque 5. Exact date not known, but entered in Date, of completion of agreement extended to 30.01.2012. 6 27.01.2012 Payment of ₹ 2,48,00,000/- in cash to be given to the owners, but transaction interrupted due to search 11. From the above chart, the ld. CIT(A) found that the assessee has received part payment. Further, on analyzing the statement of Shri Mohit Mittal recorded u/s 132(4) of the Act, the ld. CIT(A) noted that Shri Mohit Mittal has taken possession of ground floor of the property and a room on the first floor. The ld. CIT(A) concluded by holding that the transferee has also taken part possession of the property. On finding that part payment was following by part possession, therefore, transfer has taken place in the light of provisions of section 53A of the Transfer of Property Act, 1882. 12. We do not find any force in the conclusion of the ld. CIT(A) because in our understanding of law qua the facts in issues, provisions of section 2(47)(v) of the Act the r.w.s 53A of the Transfer of Property Act 1882 are not applicable because this issue is now well settl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ument. Since we are deciding this case on this legal ground, it is unnecessary for us to go into the other questions decided by the High Court, namely, whether under the JDA possession was or was not taken; whether only a licence was granted to develop the property; and whether the developers were or were not ready and willing to carry out their part of the bargain. " 13. The ld. DR has strongly objected to the reliance of the aforesaid judgment by the Hon'ble Supreme Court by stating that this decision was in the context of development agreement where part of the property was to be returned to the buyer after construction. The ld. DR continued by stating that in the case in hand, the handing over of the possession to the buyer was permanent and the assessee had no right over the property once it was handed over. 14. Before proceeding further, let us examine the provisions of section 53A of the Transfer of Property Act, 1882 relating to part performance and the same read as under: "Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascerta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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