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TMI Blog2019 (1) TMI 1196X X X X Extracts X X X X X X X X Extracts X X X X ..... ulfilled. Accordingly, order of CIT(A) is reversed in this regard and hold that no income from long term capital gains is to be assessed in the hands of assessee. - ITA No.737/PUN/2017 - - - Dated:- 17-1-2019 - MS. SUSHMA CHOWLA, JM For The Appellant : Shri Pramod Jadhav For The Respondent : Shri M.K. Verma ORDER PER SUSHMA CHOWLA, JM: The appeal filed by assessee is against the order of CIT(A)-2, Aurangabad, dated 02.01.2017 relating to assessment year 2008-09 against order passed under section 144 r.w.s. 147 of the Income-tax Act, 1961 (in short the Act ). 2. The assessee has raised the following grounds of appeal:- Ground No.1: The learned CIT(A) has failed to appreciating that the impugned assessment order passed by the AO under section 144 r.w.s. 147 by the learned AO is bad in law. Ground No.2: Without prejudice to the above Ground No.1, the learned CIT(A) has erred in confirming the action of the learned AO in assessing the long-term capital gain in the hands of the Appellant without appreciating the fact that there is no transfer of the property in the subject assessment year. Ground No.3: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not appear nor responded to any of the notices and hence, the Assessing Officer issued show cause notice as to why assessment should not be completed under section 144 of the Act. The Assessing Officer noted that the assessee had sold an immovable property for consideration of ₹ 38 lakhs and had failed to offer capital gain on the sale of said property. The Assessing Officer further noted that cost of property was not available on record, hence total consideration of ₹ 38 lakhs was treated as long term capital gain and was added in the hands of assessee. 6. Before the CIT(A), first objection raised by assessee was against initiation of proceedings under section 147 of the Act, wherein the CIT(A) upheld the order of Assessing Officer. The second objection was against ex-parte assessment made under section 144 of the Act, which was also upheld by the CIT(A). The third issue which was raised was against computation of income arising from long term capital gains. The plea of assessee was that there was no transfer of property as he had only executed the Deed of Assignment in favour of one M/s. Joshaba Self Employment Training Services Co-op Ltd. (in short Joshaba ), N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidences were filed before the CIT(A) and request was made to admit the same under Rule 46A of Income Tax Rules, 1962 (in short the Rules ). 7. The CIT(A) forwarded the said documents to the Assessing Officer, who in turn, furnished remand report and the assessee filed rejoinder to the remand report, before the CIT(A). The assessee pleaded in the remand proceedings that since the plot was in the possession of assessee, hence no transfer had taken place and thus it could not be stated that property was ever transferred in the name of Joshaba. It was also explained that the said plot was purchased in the year 2002 for consideration of ₹ 19,22,660/-. The Assessing Officer in remand proceedings issued notice under section 133(6) of the Act to CIDCO and asked for details of assignment / ownership of the said property. In reply, CIDCO stated that the property was assigned to Joshaba on 11.12.2007 and it has been again sold by Joshaba to Smt. Soniya Makrand Khadke and Shri Makrand Khadke on 12.03.2015. Hence, the claim of assessee that the transaction was cancelled by both the parties was incorrect. The Assessing Officer thus, in the remand report stated that the additional evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly in February, 2013 that Joshaba entered into an alleged cancellation of the sale and filed the letter before CIDCO on 05.06.2014 stating that they had cancelled sale deed dated 11.12.2007. 9. With regard to possession of property, the CIT(A) observed that possession of property under section 53A of the Transfer of Property Act, merely disentitles the transferor from disturbing the possession of transferee who was put in possession of a particular immovable property subsequent to any agreement as the same has nothing to do with the ownership of property. He thus, held that where the property legally conveyed by way of execution of a registered sale deed i.e. assignment deed, then the fact that the possession of property remained with the transferor does not disentitle the transferee from its rights of ownership in the said property. He was of the view that transfer by possession was one of the methods of transfer of property and unilateral averments made by Joshaba that the possession of property remained with the assessee could not affect the transfer made on 11.12.2007, when Joshaba became the legal owner of property. The CIT(A) thus, held that transfer by sale was effected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by Joshaba to Smt. Soniya Makrand Khadke and Shri Makrand Khadke for consideration of ₹ 1 crore on 18.02.2015 and also the cancellation of that agreement by them and willingness of Joshaba to handover the property back to the assessee. 13. Without going into all those transactions, I limit myself to the position as in financial year 2007-08 i.e. the date on which the deed of assignment was entered into between assessee and Joshaba. In this regard, when there is transfer of rights in property for a price and the conveyance has been executed, then the provisions of section 2(47)(v) of the Act becomes material, which provides transfer in relation to capital asset includes, (v) any transaction involving the allowing of possession of any immovable property to be taken or retained in part performance of contract of the nature referred to in section 53A of the Transfer of Property Act, 1882. So, the requirement is that the transfer in relation to capital asset which takes cognizance of sale, exchange or relinquishment of any asset or extinguishment of any right, also recognizes any transaction, under which possession of any immovable property is given or retained by the buyer. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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