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TMI Blog2019 (3) TMI 1067X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Property Act. As per section 53A of the Transfer of Property Act, as applicable in the year 1991, an agreement to sell need not be registered if the transferee has, in part performance of the contract, taken possession of the property and continues in possession of the same. In the present case, the transferee has taken possession in the year 1991 and has continued to be in possession of the property and hence, transfer was complete in the year 1991 in view of clause (v) of section 2(47) of the Income Tax Act. In the sale deed the total consideration has been stated at ₹ 4,50,000/- and the details of the cheque and mode of payment is stated in this sale deed at internal page 8 Paper Book page 24. This fact supports the case of the assessee that the assessee had sold this property way back in the year 1991. In view of these facts, the AO and the Ld. CIT (A), both, were not justified in drawing an adverse inference merely on the ground that the assessee had failed to produce the bank statement for the year 1991. From the assessment order, it is also evident that the assessing officer has made a direct inquiry from the buyer Smt. Santosh Sareen and she also has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of Income. The assessee was asked to explain the same. It was submitted by the assessee before the AO that he had purchased the a vacant plot in the year 1987 through a General Power of Attorney (GPA) from the original allottee Smt. Lilavati Kapur for ₹ 1,35,000/- on which the assessee had constructed the ground floor and sold the house on 03.08.1991 to Smt. Santosh Sareen for a consideration of ₹ 4,55,000/- under a registered Agreement to Sell along with the possession of property. However, as per the AO, there was no proof of valid sale on 03.08.1991. Therefore, the AO proceeded to hold that the transaction in the assessment year under consideration attracted Long Term Capital Gains (LTCG) on the sale of property and was taxable u/s 50C of the Income Tax Act, 1961 (hereinafter called the Act ). The LTCG was computed at ₹ 78,40,062/- after allowing the benefit of indexation to the assessee. 2.1 The Ld. CIT (A) confirmed the action of the assessing officer. 2.2 Now, the assessee has approached the ITAT and has raised the following grounds of appeal: 1. (A) On the facts and in the circumstances of the case the Ld. CIT(A) has grossly erred in con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reen in 1991, as the plot was on leasehold. The Ld. AR further submitted that subsequently in 2009, the Noida authority accorder the approval for transfer and consequent to such approval for transfer, Smt. Santosh Sareen, the buyer, approached the assessee to get the Sale Deed executed in her favour on the basis of the General Power of Attorney held by the assessee from the original allottee Smt. Lilawati Kapur. Thus, the sale deed executed on 23.06.2009 in favour of Smt. Santosh Sareen was in the capacity of the GPA Holder and, thus, it was not appropriate for the AO to consider the sale of this property in the hands of the assessee in 2009. 3.1 The Ld. AR further submitted that during the course of assessment proceedings, the assessee requested the AO to issue notice u/s 133(6) of the Act to Smt. Santosh Sareen, and the address of the party was also provided by the assessee to the AO. It was submitted that in response to the notice issued by the AO u/s 133 (6) of the Act, Smt. Santosh Sareen had filed a reply dated 12.03.2013 (placed at Paper Book page 66), whereby she confirmed that she had purchased the property and had taken the possession of the property on 03.08. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the sale deed was executed in the year 2009 only for the reason that the Smt. Santosh Sareen had to further sell the property and for that purpose she wanted to convert the leasehold property into freehold property. 3.4 As regards the application of Section 50C of the Act by the AO, which has been upheld by the Ld. CIT (A), it was submitted by the Ld. AR that the provisions of the said section were introduced in the Act by Finance Act, 2002 with effect from 01.04.2003. Since, in the case of assessee, the property was transferred in the year 1991, the provisions of the said section will also not be applicable. As regards the adverse observations made by the AO in the assessment order as well as the in the remand report and the by the Ld. CIT (A), it was submitted by the Ld. AR that the said observations are contrary to the facts prevailing in assessee s case. The Ld. AR contended that the findings of the AO as well as the Ld. CIT (A) were based on incorrect facts and findings and, thus, were liable to be reversed. 4.0 In reply, the Ld. Senior Departmental Representative (Sr. DR) supported the orders passed by the Authorities below. It was contended that the Sale Deed having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o capital assets includes any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act. As per section 53A of the Transfer of Property Act, as applicable in the year 1991, an agreement to sell need not be registered if the transferee has, in part performance of the contract, taken possession of the property and continues in possession of the same. In the present case, the transferee has taken possession in the year 1991 and has continued to be in possession of the property and hence, transfer was complete in the year 1991 in view of clause (v) of section 2(47) of the Income Tax Act. 5.1 We also note that in the sale deed the total consideration has been stated at ₹ 4,50,000/- and the details of the cheque and mode of payment is stated in this sale deed at internal page 8 Paper Book page 24. This fact supports the case of the assessee that the assessee had sold this property way back in the year 1991. In view of these facts, the AO and the Ld. CIT (A), both, were not justified in drawing an adverse inference merely on the g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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