9911796707
TMI Blog2019 (10) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... The issue in this appeal is the determination of the correct amount of capital gain arisen to the assessee on the sale of his land to Punjab Alkali Chemicals Ltd. (PACL). 3. The facts of the case are that the assessee and his two brothers, Chand Singh and Kaur Singh, entered into an agreement with PACL for sale of 232 Marlas of land at Village Gill Pati thereto on 08.8.2006 at a consideration of Rs. 1 crore per acre, receiving an advance of Rs. 92.50 lacs, i.e., proportionate to his share (148 Marlas) in the said 232 Marlas. The subject land was itself a part of 75 Kanals of land being sold to PACL, the balance belonging to the assessee's cousins. Sale deed in pursuance to the agreement dated 08/8/2006 was executed on 04.12.2006 in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gain had not arisen, which income is subject to tax on the basis of the accrual, i.e., irrespective of the non-receipt of the consideration. This is as once the income has accrued, which is only on the basis of transfer of the relevant capital asset, the only recourse in law in case of non-recovery is the enforcement of the relevant contract under law. The assessee during hearing rebutted this on the basis of the decision in CIT v. Balbir Singh Maini [2017] 398 ITR 531 (SC), wherein it stands clarified that section 53A of the Transfer of the Property Act, 1882 and, thus, section 2(47)(v) of the Act would not get attracted after the coming into effect of the Registration and Other Related Laws (Amendment) Act, 2001, where the relevant agree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immovable property.' In Balbir Singh Maini (supra) the Apex Court also considered, though did not find clause (vi) attracted as the possession under the Joint Development Agreement (JDA) to the stated transferee was in his capacity as a developer, and not in his own right. In the present case, on the other hand, the delivery of possession to PACL, the transferee, is in its' capacity as the buyer, the purchaser of the subject property. The agreement substantively transfers the property in the subject land to PACL. 4.2 The assessee's next argument is that the sale is conditional, i.e., subject to the resolution of the dispute by the Court by 04.12.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2014 was obtained a few days after the passing of the impugned order, for which in fact the ld. CIT(A) was requested to, in anticipation, defer his order. In fact, the matter has since been resolved and the assessee is found to be the owner of only 20 Marlas of land out of the total 146 Marlas of land subject to the sale agreement, i.e., instead of 62 Marlas ostensibly sold by him (toward which Rs. 19.375 lacs stand received by him). Toward this, he would refer to the relevant orders, which he pleaded being admitted as additional evidences. On being questioned as to how could it be that the assessee, who claimed his share at 62 Marlas, was actually found to be the owner of only 20 Marlas of land, Sh. Arora would explain that the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d (to PACL). At the same time, if sale deed could not be executed qua the land under reference, its' ownership being disputed, till the resolution of the dispute, how could a sale deed qua a part of the said land be executed prior thereto? It may be further clarified that the time allowed under the Agreement for the parties to execute the sale deed (i.e., by 04/12/2007) does not make the sale conditional, being only a term of the contract, to facilitate the maturity of the sale. This is akin to a sale on credit, allowing the buyer (of goods or services) time to make the payment for the same, even as the delivery of possession of goods or of services is immediate. 4.4 The matter, accordingly, is restored back to the file of the assessing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indeed contended, in exchange or in lieu of the right of the assessee in the balance 42 Marlas (i.e., 62 - 20) of land. This is as, where so, the same is only against the release or relinquishment by the assessee of his right in the subject land to that extent (42 M), i.e., in favour of the person/s 'allowing' him the said land. That the transferee is, thus, this person/s, as against PACL, is of no moment. An exception to this being a transfer, though, would be where it is in pursuance of a family settlement; the release of the right in one capital asset in lieu of another being excepted u/s. 47(i). This is being stated as a matter of abundant caution and it does not appear, as contended, that the two transactions are related, only in whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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