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TMI Blog2019 (8) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... Dated:- 31-7-2019 - Shri Arun Kumar Garodia, Accountant Member And Shri Pavan Kumar Gadale, Judicial Member For the Assessee : Shri B.S. Balachandran, Advocate For the Revenue : Dr. P.V. Pradeep Kumar, Addl. CIT (DR) ORDER PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER This appeal is filed by the assessee and the same is directed against the order of ld. CIT(A)-9, Bangalore dated 18.01.2019 for Assessment Year 2013-14. 2. The grounds raised by the assessee are as under. 1) The order of the lower authority is erroneous in law and on facts in so far as claim for deduction under section 54/54F has been denied. 2)The learned CIT(A) erred in confirming the disallowance of section 54/54F. on the ground that there is no registered conveyance by purported following the decisions of the Hon S.C. cited in the appellate order. to the effect that there is no transfer . 3)The learned CIT(A) failed to appreciate that those decisions are not directly on the point and on the contrary the decision cited by the appellant is direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f two pages. He submitted that the issue may be decided after considering written submissions and also after considering the judgment of Hon ble Delhi High Court cited by him. The ld. DR of revenue supported the orders of authorities below. He also placed reliance on the same judgment of Hon ble Apex Court rendered in the case of CIT Vs. Balbir Singh Maini (supra) and in particular our attention was drawn to para nos. 19 and 20 of this judgment. 4. We have considered the rival submissions. First of all, we reproduce the provisions of section 54F of the IT Act. The same are as under. Capital gain on transfer of certain capital assets not to be charged in case of investment in residential house. 54F. (1) Subject to the provisions of sub-section (4), where, in the case of an assessee being an individual or a Hindu undivided family, the capital gain arises from the transfer of any long-term capital asset, not being a residential house (hereafter in this section referred to as the original asset), and the assessee has, within a period of one year before or two years after the date on which the transfer took place pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of the cost of such new asset as provided in clause (a), or, as the case may be, clause (b), of sub-section (1), shall be deemed to be income chargeable under the head Capital gains relating to longterm capital assets of the previous year in which such residential house is purchased or constructed. (3) Where the new asset is transferred within a period of three years from the date of its purchase or, as the case may be, its construction, the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of such new asset as provided in clause (a) or, as the case may be, clause (b), of sub-section (1) shall be deemed to be income chargeable under the head Capital gains relating to long-term capital assets of the previous year in which such new asset is transferred. (4) The amount of the net consideration which is not appropriated by the assessee towards the purchase of the new asset made within one year before the date on which the transfer of the original asset took place, or which is not utilised by him for the purchase or construction of the new asset before the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the form of sale agreement which is a registered sale agreement. Now under these facts, we have to decide as to whether it can be said that assessee has purchased a residential house within the prescribed time period. As per the judgment of Hon ble Apex Court rendered in the case of CIT Vs. Balbir Singh Maini (supra), it was held that after the commencement of the Amendment Act of 2001, if an agreement, like the JDA in that case is not registered, then it shall have no effect in law for the purposes of section 53A of the Transfer of Property Act, 1882. In that case, the issue in dispute was this as to whether as per the unregistered JDA, any transfer has taken place and any income has accrued to the assessee. Whereas in the present case, the dispute is this as to whether the assessee has purchased a house property or not for claiming deduction u/s. 54F of the IT Act. 6. At this juncture, we now examine the applicability of judgment of Hon ble Delhi High Court rendered in the case of Balraj Vs. CIT (supra) on which reliance has been placed by ld. AR of assessee. As per the facts noted in this case in para no. 2 of the judgment, it is noted that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Apex Court rendered in the case of CIT Vs. Balbir Singh Maini (supra) does not change the situation regarding applicability of this judgment of Hon ble Delhi High Court cited by ld. AR of assessee. Now we reproduce para nos. 19 and 20 of this judgment of Hon ble Apex Court rendered in the case of CIT Vs. Balbir Singh Maini (supra). The same are as under. 19. It is also well-settled by this Court that the protection provided under Section 53A is only a shield, and can only be resorted to as a right of defence. See Rambhau Namdeo Gajre v. Narayan Bapuji Dhgotra (Dead) through LRs. (2004) 8 SCC 614 at 619, para 10. An agreement of sale which fulfilled the ingredients of Section 53A was not required to be executed through a registered instrument. This position was changed by the Registration and Other Related Laws (Amendment) Act, 2001. Amendments were made simultaneously in Section 53A of the Transfer of Property Act and Sections 17 and 49 of the Indian Registration Act. By the aforesaid amendment, the words the contract, though required to be registered, has not been registered, or in Section 53A of the 1882 Act have been omitted. Simultaneou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... qualify as a transfer of a capital asset under Section 2(47)(v) of the Act, there must be a contract which can be enforced in law under Section 53A of the Transfer of Property Act. A reading of Section 17(1A) and Section 49 of the Registration Act shows that in the eyes of law, there is no contract which can be taken cognizance of, for the purpose specified in Section 53A. The ITAT was not correct in referring to the expression of the nature referred to in Section 53A in Section 2(47)(v) in order to arrive at the opposite conclusion. This expression was used by the legislature ever since sub-section (v) was inserted by the Act of 1987 w.e.f. 01.04.1988. All that is meant by this expression is to refer to the ingredients of applicability of Section 53A to the contracts mentioned therein. It is only where the contract contains all the six features mentioned in Shrimant Shamrao Suryavanshi (supra), that the Section applies, and this is what is meant by the expression of the nature referred to in Section 53A . This expression cannot be stretched to refer to an amendment that was made years later in 2001, so as to then say that though registration of a contract is required by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he agreement took possession of the property to safe guard his interests and since then he has been using it as a rest house. It is also stated in the affidavit that in terms of the agreement, both the parties are entitled to specific performance of the obligations under the agreement dated 28.03.2013. It is also stated in the same affidavit that he is peacefully holding the possession even though the time for the balance payment of ₹ 1.5 Crores has been extended by mutual consent as provided in the agreement. The ld. CIT(A) has also reproduced the confirmation from B.Z. Zameer Ahmed Khan dated 26.12.2018 as per which it is stated by the vendor that he had entered into an agreement for sale of a property for ₹ 2.5 Crores by an indenture dated 28.03.2013. He has also stated that he has delivered possession of the property on the date of agreement as an assurance that the interest of the said purchaser B. Noorulla Khan are safe guarded in view of clause 13 of the agreement which entitles both the parties to a specific performance of the respective obligations. He has also stated in his confirmation that B. Noorulla Khan is entitled to the property in question and he is en ..... X X X X Extracts X X X X X X X X Extracts X X X X
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