9911796707
TMI Blog2018 (9) TMI 1841X X X X Extracts X X X X X X X X Extracts X X X X ..... various incorrect observations and not drawing correct inferences from the various documents available before her. 2. The assessee craves to amend, alter and modify any of the grounds of appeal. 3. The appropriate cost be awarded to the assessee." 2. The assessee is individual and filed her return of income on 16/01/2014 through e-filing declaring total income of Rs. 1,79,240/- after calming deduction U/s 54B of the Income Tax Act, 1961 (in short the Act). During the year under consideration, the assessee sold an agricultural land at village Tatiawas, Tehsil-Ajmer. The assessee claimed that the agricultural land in question was sold vide agreement to sell dated 22/11/2012 for a consideration of Rs. 3,14,77,440/- and subsequently a sale deed was executed on 28/01/2013. Thereafter a correction deed was also executed on 15/2/2013. The assessee purchased new agricultural lands vide sale deed dated 29/11/2012 for a consideration of Rs. 2,47,60,900/-, sale deed dated 29/3/2013 for a consideration of Rs. 9,30,550/-, sale deed dated 13/3/2013 for a consideration of Rs. 13,89,450/- and sale deed dated 10/04/2013 for a consideration of Rs. 15,80,000/-. Thus, the assessee purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has effect of transferring or enabling the enjoyment of any immovable property. The assessee has handed over the possession of agricultural land to the purchaser at the time of entering into the agreement to sell dated 22/11/2012. The sale consideration was agreed upon between the parties at the time of agreement which was received by the assessee by way of post dated cheques. Accordingly, the sale deed was executed on 28/1/2013 but certain factual mistakes occurred in the sale deed, therefore, a correction deed was executed on 15/2/2013 in which the fact of handing over the possession of land as per the agreement dated 22/11/2012 is also mentioned. The ld AR has submitted that in the first sale deed dated 28/01/2013 and correction deed dated 15/02/2013, the cheque details are mentioned, which are same as mentioned in the sale agreement dated 22/11/2012. The assessee filed an affidavit of Smt. Amita Kedia, the purchaser of the land, who has stated that she received the possession of land on the date of sale agreement dated 22/01/2012. The evidence produced by the assessee has not been controverted by the Assessing Officer, therefore when the purchaser of the land has accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing the agricultural land prior to the date of sale of the existing agricultural land. Hence, as per the statutory provision, the assessee is entitled to the deduction U/s 54B of the Act only when investment is made after transfer of the existing capital asset. The Assessing Officer has already allowed the claim of deduction U/s 54B of the Act to the extent of Rs. 39.00 lacs as the assessee purchased the agricultural land after the sale of the existing land. When no actual consideration has passed on to the assessee on the date of agreement to sell then the transfer of the existing land was not completed on the date of agreement when the subsequent sale deed dated 28/01/2013 clearly states that possession has been handed over to the buyer on the date of registration. The ld DR has thus, submitted that the intent of the legislature for allowing deduction U/s 54B of the Act is to purchase the land after the sale of the existing land. 6. We have considered the rival submissions as well as the relevant material on record. The Assessing Officer denied the deduction U/s 54B of the Act on the ground that the new agricultural land was purchased by the assessee to the extent of Rs. 2,47, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheques were also handed over to the assessee by the purchaser much prior to the date of sale deed dated 28/01/2013. Once the parties have the prior agreement regarding the sale consideration of the existing agricultural land then the agreement to sell dated 22/11/2012 cannot be an afterthought self serving document. It is apparent from the record that the assessee received the consideration through the post dated cheques on the date of agreement and since the assessee was simultaneously purchasing the new agricultural land, therefore, the assessee has also paid the purchase consideration of the new agricultural land through post dated cheques. We note that the entire purchase consideration was paid by the assessee through the cheques which were encashed after the sale deed dated 29/11/2012. We find from the bank statement that the first part of the purchase consideration was paid on 12/12/2012, the second part of the consideration was paid on 21/12/2012 and the third part of the consideration was paid on 16/01/2013. Thus, the encashment of the cheques of sale consideration as well as purchase consideration clearly shows that the assessee received the sale consideration through po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he tax burden on transfer of agricultural land subject to the condition that such agricultural land was being used by the assessee or parents for agricultural purposes and the assessee has, within a period of two years after the date of sale, has acquired new agricultural land. Thus the amount of capital gain which is not exceeding the cost of acquisition of new land shall not be chargeable to tax. The concession/benefit given in Section 54B will be forfeited if the assessee transfers the fresh land acquired by him within a period of three years from the date of its purchase. Thus the objection and scheme of granting the benefit U/s 54B is to relieve the genuine assessee from the burden of capital gain tax on transfer of agricultural land if the assessee has purchased new agricultural asset by investing the capital gain and as such the purpose was to substitute the existing agricultural land by new agricultural land. Therefore, in order to determine the eligibility of benefit of Section 54B of the Act, the predominant and substantial condition of substituting the agricultural land has to be satisfied. The date of actual transfer of existing land or even the purchase of new agricult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s after the agreement to sell dated 22/11/2012 and much prior to the sale deed dated 28/01/2013 whereas the entire purchase consideration was paid out from the bank account of the assessee only after the sale deed dated 29/11/2012. These facts clearly established that the receipt as well as payment are through post dated cheques and therefore, the assessee has established the existence of the agreement to sell dated 22/11/2012 under which the purchase consideration was received by the assessee. The subsequent documents consist of correction deed as well as the affidavit of the purchaser has supported the fact that the consideration for sale of the existing land was received at the time of the agreement to sell dated 22/11/2012 and possession was also handed over on the said date of agreement. Hence when the agreement was subsequently acted upon and in performance of the said agreement, the parties have finally executed the sale deed then the transaction will be considered as transferred as on the date of the agreement. An identical issue was considered by the Coordinate Bench of this Tribunal in the case of M/s Rajasthan Agencies Pvt. Ltd. Vs ITO (supra) in para 6 and 7 as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed executed subsequently. It is not a case of transfer based only on unregistered documents but in this case the parties to the agreement have executed sale deed in performance of the agreement. Therefore, the transfer of immovable property would be considered as a combined act of agreement to sale and sale deed as a single transaction of transfer with effect from the date on which such transaction was intended and conceived by the parties to the transaction. Hence, agreement to sale dated 11/04/2007 conversion of land use by JDA on 03.02.2010 and 05.02.2010 and execution sale deed dated 13.04.2010 are interlinked and inseparable chain of events necessary for transaction of transfer. The contents of the sale deed dated 13.04.2010 clearly show that it is in furtherance of agreement dated 11.04.2007. The sale deed clearly states that made of payment of consideration as per the details given in the agreement dated 11.04.2007. Therefore, the possession was handed over and consideration was received prior to the date of sale deed. The sale deed in fact ratify the transaction of transfer vide agreement dated 11.04.2007. The parties were very much aware about the need of conversion of la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .....................' 21 Now in the light of definition of "transfer" as defined under Section 2(47) of the Act, it is clear that when any right in respect of any capital asset is extinguished and that right is transferred to someone, it would amount to transfer of a capital asset. In the light of the aforestated definition, let us look at the facts of the present case where an agreement to sell in respect of a capital asset had been executed on 27th December, 2002for transferring the residential house/original asset in question and a sum of Rs. 15 lakhs had been received by way of earnest money. It is also not in dispute that the sale deed could not be executed because of pendency of the litigation between Shri Ranjeet Lal on one hand and the appellants on the other as Shri Ranjeet Lal had challenged the validity of the Will under which the property had devolved upon the appellants. By virtue of an order passed in the suit filed by Shri Ranjeet Lal, the appellants were restrained from dealing with the said residential house and a law- abiding citizen cannot be expected to violate the direction of a court by executing a sale deed in favour of a third party while being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so said that equity and tax are strangers to each other, still this Court has often observed that purposive interpretation should be given to the provisions of the Act. In the case of Oxford University Press v. CIT [2001] 247 ITR 658/115 Taxman 69 this Court has observed that a purposive interpretation of the provisions of the Act should be given while considering a claim for exemption from tax. It has also been said that harmonious construction of the provisions which subserve the object and purpose should also be made while construing any of the provisions of the Act and more particularly when one is concerned with exemption from payment of tax. Considering the aforestated observations and the principles with regard to the interpretation of Statute pertaining to the tax laws, one can very well interpret the provisions of Section 54 read with Section 2(47) of the Act, i.e. definition of "transfer", which would enable the appellants to get the benefit under Section 54 of the Act. 23 Consequences of execution of the agreement to sell are also very clear and they are to the effect that the appellants could not have sold the property to someone else. In practical life, there are ev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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