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TMI Blog1985 (9) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... lat and agreed to relinquish in favour of Shri Yogendra Kumar Modi, all the right, title and interest in the flat along with the qualifying shares in the 'Shreyas' Co-operative Housing Society Ltd. 3. The assessee, however, had not declared any capital gains for taxation in his return of income. It was contended that the co-operative society had still not accepted the application of the transferee for being recognised as a member and, therefore, the sale had not become effective and complete. Since the society had not agreed to transfer the ownership of the flat to the purchaser and the matter was under litigation, the assessee claimed that the transfer had not been effected. The ITO held that the form duly signed by the parties was lodge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or an office in the residential building and so far as Shri Yogendra Kumar Modi was concerned, he already owned a flat in a residential building in Bombay. 5. Before the Commissioner (Appeals), it was argued that the assessee, in law, continued to be the owner of the flat because the society had not recognised the membership of Shri Yogendra Kumar Modi. Therefore, capital gain was not attracted unless the transfer of the capital asset was completed. Reliance was placed on certain authorities for the proposition that for assessing the income from house property, ownership would not be transferred by mere agreement to sell till the sale deed is registered. The Commissioner (Appeals) has referred to the definition of the transfer in section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T [1977] 110 ITR 644. 6. The assessee is aggrieved by this order and is in appeal. We have heard the learned counsel for the assessee and the departmental representative. The arguments proceeded on the same lines as before the Commissioner (Appeals). The contention urged on behalf of the assessee was that the transfer was not complete till the co-operative society agreed to accept the purchaser as a member and that the society had refused to do. The assessee, it was urged was still liable to refund the price because the purchaser had not become the owner of this flat. The learned departmental representative supported the orders of the authorities below because so far as the definition of transfer under section 2(47) is concerned, the tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flats by a tortuous process of reasoning. The prohibition, if intended by the Legislature, must be in express terms [1974] 76 Bom. LR 375 reversed. There is no absolute prohibition in the Act or in the Rules or in the Bye-laws against transfer of interest of a member in the property belonging to the society. The only transfer which is void under the Act is one made in contravention of sub-section (2) of section 47." The Supreme Court further held that in section 29, there was not even a provision of prior consent for transfer of shares or interest in such property. Section 29 read with rule 24 of the Maharashtra Co-operative Societies Rules, 1961, shows that there is no prohibition as such against transfer of a share to a member or even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s documents for a consideration to make the transfer effective. He cannot, in law, be required to refund the consideration because if the transferee cannot obtain membership of the society, it will be for no fault of the assessee and unless the purchaser can prove, which is nobody's case, that the assessee have a defective title, the assessee cannot be made to refund the consideration received for the transfer. Therefore, so far as the assessee is concerned, the transfer was complete and effective because no registered deed of conveyance is required under section 47. The rulings on which reliance was placed before the Commissioner (Appeals) pertain to those immovable properties in respect of which registration of the sale deed is compulsory ..... X X X X Extracts X X X X X X X X Extracts X X X X
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