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TMI Blog2023 (6) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... en as without doubt there could be issues leading to the project being delayed. In fact, the ld. CIT(A) clearly states, unrebutted before us, of the project being nearly complete in October, 2018. No material contradicting the same has been brought on record, or otherwise to our notice. We, yet, in the interest of justice, restore the matter back to the file of the first appellate authority for the assessee to exhibit the non-transfer u/s. 2(47)(vi) r/w s. 2(47)(i) in the undisputed facts and circumstances of the case. Reference to s. 2(47)(i) is made so as to highlight that the rights to the buyers of the apartments would stand to arise thereunder, if not u/c.(vi). Further, we say undisputed with a view to clarify of no dispute qua facts being either observed or brought to our notice. And, further, to eliminate any scope for the said remittance leading to expanding the scope of controversy, or fresh facts or disputes being raised. No application for admission of additional evidence, it may be noted, stands made either at the first appellate stage, or even before us u/r. 29 of the Income Tax (Appellate Tribunal) Rules, 1963. All the material on record, including before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... came to be owned by seven persons, related thus, with the assessee s share therein being 4.422 cents. A joint venture (JV) agreement for construction of building/s at the subject land was entered into by the seven co-owners with the Developer on 04/02/2011, per which the co-owners were to retain 26.09% of their undivided share in land, while the balance 73.91%, valued at Rs. 243.66 lacs, was transferred to the Developer, who was obliged to construct, spanning the entire land. The residential housing project, given the name Rain Tree Heights , was to be completed within a period of 30 months, i.e., by August, 2013, though time was not of essence. The value of share of each co-owner, i.e., in proportion, was also determined, the assessee s share being Rs. 26.11 lacs. Both the GPA and the JV agreement were not registered. Facts to the extent stated are not in dispute, and admitted. 3. In the view of the Assessing Officer (AO), the JVA dated 04/2/2011 amounted to a transfer u/s. 2(47)(v) of the Act in view of part-performance, as defined u/s. 53A of the Transfer of Property Act, 1882 (TP Act). Reliance was placed by him on Chaturbhuj Dwarakadas Kapadia v. CIT [2003] 260 ITR 49 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereof into, or is treated by him as, stock-in trade of a business carried on by him, such conversion or treatment; (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 (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. 4.2 Without doubt, the JVA dated 04/02/2011 being not a registered document, transfer u/s. 2(47)(v) cannot hold in view of the changed legal position consequent to amendments to sections 17 49 of the Registration Act and s. 53A of the TP Act by the Amendment Act of 2001, even as explained in Balbir Singh Maini (supra). The legal recognition to part-performance of a contract u/s. 53A of the TP Act, co-opted in s. 2(4)(v), is no longer available where it is not in pursuance to a registered document, removi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the facts and circumstances of the case, and we find ourselves in agreement and, accordingly, have no hesitation in endorsing the impugned order in this respect. On the Bench observing so during hearing, Sh. Veeramani, the ld. counsel for the assessee, would submit that the ld. CIT(A) did not extend any opportunity to the assessee before applying sec. 2(47)(vi) which found favour with him, to the instant case, which was confined to the non-application of s. 2(47)(v). Though, surely the ld. CIT(A) should have extended opportunity to the assessee-appellant before applying s. 2(47)(vi), the objection on that basis is without merit. This is as, being a legal issue, involving no fresh facts, with rather all the primary facts being undisputed, it could well be invoked for the first time, by either side, before us. That is, though surely in order, the same would not detain us; the assessee being free to contest the same before us, as it indeed does ( Hukumchand Mills Ltd. v. CIT [1967] 63 ITR 232 (SC)). 4.3 Continuing further, non-delivery of consideration cannot be by itself regarded as a project failure, as where the necessary permissions, which are the responsibility of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... project completion, we find an Agreement dated 01/9/2018 between the Developer and the Raintree Heights Apartment Owners Association on record (PB pgs. 55-70). Per the same it is the Members of the Association, and not, as stated, the land-owners, who were handed-over the project on, as-is-where-is basis, and who are to complete the project. We are in agreement with Sh. Veeramani that the same would need to be taken into account, particularly considering that the matter is yet to attain finality, with the appellate proceedings being only in continuation of the assessment proceedings. The same, we may though clarify, would only impact the quantum of the capital gains inasmuch as it denotes construction, which is only consideration in kind, is not discharged to that extent. The same in fact itself exhibits, if that was necessary, that the project was completed, albeit through a different agency, and there is no project failure, contradicting the claim in its respect. Further, the handing-over, as it appears, is only for the limited purpose of completing the project, though may have a bearing on the quantum of the consideration, which could therefore be reckoned with reference to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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