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TMI Blog2019 (12) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... ration of Rs. 5,50,00,000/-(Rupees Five Crores Fifty Lakhs only) will be paid directly by the nominees/members on behalf of PARTY OF THE SECOND PART or by the PARTY OF THE SECOND PART, whichever is earlier. The property shall be free of all encumbrances at the time of registration. 2. It is agreed that the total extent of the property is 100 grounds approximately including the areas allotted for road and other amenities, plus the actual extent available for flats. 12. THE PARTY OF THE FIRST PART has already handed over to the PARTY OF THE SECOND PART Xerox copies of all land documents of the schedule mentioned property for their legal counsel's scrutiny and opinion. THE PARTY OF THE SECOND PART have also satisfied themselves about the title deeds. The PARTY OF THE FIRST PART agree to show the original title deed which are kept with them to the nominees of the second part as and when required after fixing prior appointment. 14. Both the parties are entitled to specific performance of this agreement. 16. THE PARTY OF THE FIRST PART hereby gives permission to the PARTY OF THE SECOND PART to start advertising, selling, construction on the land herein mentioned. Advertisemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the I.T. Act dated 31.12.2009. Vide this Order, the entire sale consideration was treated as a capital gain and brought to tax. An appeal was preferred against this Order. The Commissioner of Income Tax (Appeals) (hereinafter referred to as 'CIT (A)' for brevity) by Order dated 28.10.2010 examined the three documents in question and ultimately dismissed the appeal. The Income Tax Appellate Tribunal (hereinafter referred to as 'ITAT' for brevity) by Order dated 24.06.2011 agreed with the CIT(A) and found that on or about the date of the agreement to sell, the conditions mentioned in Section 2(47)(v) of the I.T. Act could not be stated to have been complied with, in that, the very fact that the compromise deed was entered into on 19.07.2003 would show that the obligations under the agreement to sell were not carried out in their true letter and spirit. As a result of this, Section 53A of the Transfer of Property Act, 1882, (hereinafter referred to as 'T.P. Act' for brevity) could not possibly be said to be attracted. What was then referred to was the Memo of Compromise dated 19.07.2003 under which various amounts had to be paid by the Builder to the owner so that a complete extin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first set out the statutory provisions: Section 2(47) of the Income Tax Act, 1961: 2. In this Act, unless the context otherwise requires,- ............................................................................... ............................................................................... (47) "transfer", in relation to a capital asset, includes,- ............................................................................... ............................................................................... (v) 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, 1882 1 (4 of 1882 ); or (vi) any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immovable property. Explanation 1.- For the purposes of sub- clauses (v) and (vi), "immovable property" sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... others, are satisfied that the provisions of Section 53A can be said to be attracted on the facts of a given case. On a reading of the agreement to sell dated 15.05.1998, what is clear is that both the parties are entitled to specific performance. (See Clause 14) Clause 16 is crucial, and the expression used in Clause 16 is that the party of the first part hereby gives 'permission' to the party of the second part to start construction on the land. Clause 16 would, therefore, lead to the position that a license was given to another upon the land for the purpose of developing the land into flats and selling the same. Such license cannot be said to be 'possession' within the meaning of Section 53A, which is a legal concept, and which denotes control over the land and not actual physical occupation of the land. This being the case, Section 53A of the T.P. Act cannot possibly be attracted to the facts of this case for this reason alone. We now turn to the argument of the learned senior counsel appearing on behalf of the assessee based on Section 2(47)(vi) of the Income Tax Act. This Court in Commissioner of Income Tax v. Balbir Singh Maini (2018) 12 SCC 354 adverted to the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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