INDRAPRASTH GRIH NIRMAN SHAKARI SANSTHA MRYADIT,GOVINDPURA V. DCIT 3(1) BHOPAL, BITTAN MARKET

ITA 359/IND/2023

AI Insights

The case revolves around the appeal by Indraprasth Grih Nirman Shakari Sanstha Maryadit against the order of the Commissioner of Income Tax-Appeals, which upheld the addition of Rs. 5,14,46,400 as Long Term Capital Gain under section 50C of the Income Tax Act. The primary contention was whether the income from the sale of residential plots, which were later cancelled, should be taxed. The assessee argued that the transactions were cancelled due to non-approval of the revised layout plan and the management takeover by the Co-operative Department of Madhya Pradesh, leading to no actual income being realized from these sales. The Tribunal, after considering the submissions and evidence, including the arbitration award and court orders affirming the cancellation of the sale deeds, ruled in favor of the assessee.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 35857 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-10-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 22-09-2023
• Other Referred Cases: ACIT v/s Ijyaraj Singh 183 ITD 237(Jaipur-Trib.)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM KUMAR YADAV
• Assessee Lawyers: YASHWANT SHARMA
• Keywords: Capital asset; Sale consideration of property below Jantri Value; Cost of acquisition; Reopening of assessment; Capital Gains; Competent authority
• Section: 148; 54; 48; 13; 139; 50C; 55A

Judgement Text

"आयकर अपीलȣय अͬधकरण, इंदौर Ûयायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER ITA No.359/Ind/2023 (Assessment Year: 2011-12) Indraprasth Grih Nirman Shakari Sanstha Maryadit, Minal Residency, J.K. Road, Narela Shankari, Govindpura, Bhopal Vs. DCIT 3(1), Bhopal (Appellant / Assessee) (Respondent/ Revenue) PAN: AAATI3202Q Assessee by Shri Yashwant Sharma, AR Revenue by Shri Ram Kumar Yadav, CIT-DR Date of Hearing 15.10.2024 Date of Pronouncement 18.10.2024 O R D E R Per Vijay Pal Rao, JM: This appeal by the assesse is directed against the order dated 26.08.2023 of Commissioner of Income Tax-Appeals (National Faceless Appeals Centre), Delhi for A.Y.2011-12. ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 2 2. The assessee has raised following grounds of appeal: “1. That, on the facts and circumstances of the case, the order of the Id. CIT(A) is bad in law. 2. That, on the facts and circumstances of the case and in law, the notice u/s,148 is without jurisdiction, bad in law and ab-initio void. 3. That, on the facts and circumstances of the case and in law, the proceedings u/s. 148 are bad and unlawful as No notice was served to assessee and no evidence has been brought on record to rebut objections to this effect by the assessee. Addition has not been made on the ground on which reopening was done. 4. That, on the facts and circumstances of the case and in law, the ld. AO erred in making and Id. CIT(A) in maintaining the addition of Rs. 5,14,46,400 on account of Long Term Capital Gain u/s.50C. 5. That, on the facts and circumstances of the case and in law, the addition was confirmed only on surmises and conjectures on the basis of unsubstantiated unilateral presumptions without affording proper opportunity. 6. That, on the facts and circumstances of the case and in law, the addition of Rs. 5,14,46,400 was uncalled for owing to the reason that the subject transactions have been subsequently cancelled and the honourable Addl. District Judge, Bhopal has affirmed the same and this fact of cancellation has been duly brought to the notice of Asstt. Distt. Registrar, Bhopal (the registering authority of Govt. of M.P). 7. That, the appellant craves your leave to add or amend any grounds of appeal.” 3. The assessee is a Group Housing Co-operative Society and did not file any return of income u/s 139 of the Act. Thereafter the A.O reopened the assessment by issuing the notice u/s 148 of the Act on 28.03.2018 on the reason to belief that the income chargeable to tax on account of sale of residential plots has escaped assessment ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 3 particularly on account of full available consideration u/s 50C of the IT Act as the sale consideration shown in the sale deeds is much less than the notified circular rates for the purpose of stamp duty. In response to the notice u/s 148 of the Act the assessee filed its return of income on 12.09.2018 declaring total income of Rs.2,40,196/-. During the assessment proceedings the A.O noted that for the assessment year under consideration the assessee has sold 3 plots of land for a total consideration of Rs.1,17,00,000/- however, the market value as per stamp duty valuation u/s 50C of the Act was Rs.5,14,46,400/-. In reply to the show cause notice, issued by the A.O, the assessee society stated that the land in question was purchased from the farmers for development of residential colony for its members. The society sold the plots on the basis of proposed layout plans however, the co-operative department of Govt. of Madhya Pradesh took over the management of the society from the year 2011 to 2015 and therefore, the revised layout plan of the society was not approved which has led to certain disputes, owing to this the buyers who paid the cheques for purchase of plots of land asked the assessee society not to present the cheques given for the purchase consideration mentioned in the ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 4 sale deed Thus the assessee society explained that the cheques received against the sale consideration from the buyers were not presented for encashment and assessee took the steps for cancellation of the sale deeds. Accordingly the assessee society contended that there is no income at all earned by the assessee from these transactions of sale of plots during the year as the sale deeds were already in the process of cancellation. The A.O did not accept this contention of the assessee and called for the information from the District Registrar regarding the cancellation of the sale deeds. In response the District Registrar has filed the reply and submitted that the registration authority has no power to cancel the registered document. Based on that reply of the District Registrar the AO made an addition of Long Term Capital Gain at Rs.5,14,46,400/-. The assessee challenged the action of the A.O before CIT(A) and reiterated its contention that there is no income when the cheques given by the buyers to the assessee were not presented for encashment as there was a dispute regarding the approval of the revised plan and the management of the society was taken over by the Co-operative Department of the Government. The CIT(A) confirmed the addition made by the AO on the same ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 5 reasoning that the registered document cannot be cancelled by any authority except by court of law. 4. Before the Tribunal the Ld. AR of the assessee has submitted that due to the subsequent development of suspension of the governing body of the society by the Co-operative Department and taking over the administration by the Government as well as no approval of the revised plan, the buyers of the plots requested the assessee not to encash the cheques and therefore, both the parties decided to get the sale deed cancelled in the mutual interest of the parties. Ld. AR has submitted that initially a Memorandum of Understanding dated 05.02.2011 was entered into between the parties under which advance cheques shall be given by the buyers but it shall be presented only after the revised layout plan is got approved. Possession of the plots shall be handed over to the buyers only after the revised layout plan is approved and cheques are encashed. In view of the development of dissolution of the governing body of the society by the office of the Registrar, Cooperative, Govt. of Madhya Pradesh the activity of the society came to the stand still and lead to the delay in approval of the revised layout plan therefore, a second Memorandum of ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 6 Understanding dated 08.09.2016 was entered into between the parties and the transactions were decided to be rescinded/abandoned. Thereafter the non encashed cheques were returned by the seller to the buyers and a settlement agreement dated 05.09.2019 was also entered into between the parties. Ld. AR has submitted that since neither the possession of the land was handed over to the buyers nor the payment was received by the seller and the sale deeds would stand void and resulted no transfer of the plots of land. This settlement agreement contains an arbitration clause and consequently the dispute was referred to the Arbitrator who has passed an award dated 12.02.2022 and resolved the disputes by awarding compensation to the buyers with interest @12% w.e.f 01.04.2011. The assessee society challenged the arbitration award before the Court of Additional District Judge, Bhopal in respect of the payment of interest @12% from 01.04.2011. The said petition of the assessee was finally disposed by the Court of Additional District Judge, Bhopal in the Lok Adalat vide order dated 14.05.2022 by revising the rate of interest to 9% from August 2019 to May, 2022. Now the dispute is finally settled by the order of Additional District Judge, Bhopal and ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 7 accordingly the assessee has paid the compensation along with the interest @9% to the buyers. Thus in view of the said arbitration award and order of the Additional District Judge, Bhopal the sale transactions stands cancelled and there would be no income on this account The Ld. AR has thus submitted that when there is no real income arising from the said transactions on transfer of plots by the assessee group housing cooperative society to the buyers then the addition made by the A.O is not justified and same is liable to be deleted. He has relied upon the decision of the Jaipur Bench Tribunal in case of ACIT v/s Ijyaraj Singh 183 ITD 237(Jaipur-Trib.). 5. On the other hand the Ld. DR has submitted that the assessee could not produce any documentary evidence to show that the transaction of sale of plots vide registered sale deeds got cancelled. He has further contended that the assessee initially filed the application to the District Registrar for cancellation of the sale deeds however, the District Registrar has expressed his inability to cancel the registered sale deeds on the application made by the assessee. The reply of the District Registrar has been reproduced by the A.O in the assessment order and therefore when the District ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 8 Registrar was not having the power to cancel the said registered sale deed then the stand of the assesee cannot the accepted. He has relied on the orders of A.O as well as CIT(A). 6. We have considered the rival submissions and relevant material on record. The A.O has issued notice u/s 148 of the Act based on the information regarding the sale of 3 plots by the assessee during the year, the details of which are given by the A.O in the assessment order as under: S.No. Name of the party Date of transaction Sale consideration of the property (Rs.) Market Value (Rs.) 1 Sh. Sanjay Mehta 31.03.2011 40,00,000 1,82,32,900 2 Smt.Priya Mehta 31.03.2011 37,00,000 1,44,64,300 3 Smt. Sandhya Sahlot 31.03.2011 40,00,000 1,87,49,200 Total 1,17,00,000 5,14,46,400 6.1 In response to the notice issued u/s 148 of the Act the assessee filed return of income and declared total income of Rs.2,40196/-. In response to show cause notice the assessee filed ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 9 the reply and explained that due to the reason of dissolution of the governing body of the assessee society and taking over the administration by the Office of the Registrar of Co-operative Societies, Govt. of Madhya Pradesh the revised layout plan could not be approved which is an essential condition as per the Memorandum of Understanding between the parties as well as the condition of the sale deeds. The assessee also explained the fact that due to non approval of the revised layout plan the assessee could not handover the possession of the plots of land to the buyers and therefore, the buyers asked the assessee society not to present the cheques given for purchase consideration. The assessee produced the copies of Memorandum of Understanding between the parties dated 05.02.2011, 08.09.2016 wherein the parties have mutually agreed initially that the possession of the plots will be handed over to the buyers only after the revised layout is approved by the competent authority. When the revised layout plan could not be approved due to the dissolution of the governing body of the society a second Memorandum of Understanding dated 08.09.2016 was entered into between the parties whereby the buyers decided to abandon the deal and sale deed to be treated as void abinitio. ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 10 Thereafter the settlement agreement dated 05.09.2019 was entered into between the parties placed at page 59 to 60 of the paper book as under: समझौता अनुबंध पğ इÛġĤèथ गृह Ǔनमा[ण सहकारȣ सͧमǓत ɮवारा उपाÚय¢ Įी जयदȣप मेहता पंजीक ृत काया[लय- ͧमनाल रेसीडɅसी, जे.जे.रोड, नरेला शंकरȣ, भोपाल ........... प¢कार Đ ं.1 एवं 1. Įीमती संÚया सहलोत प×नी Įी अǾण सहलोत अͬधक ृत हèता¢रकता[- मैसस[ राज होàस Ĥा.ͧल. पंजीक ृत काया[लय -21, एम.पी.नगर, जोन 2, भोपाल 2. Įी आशीष मेहता पुğ Įी सुरेÛġ मेहता क ेयर ऑफ- राज इवɅट एÖड एंटरटेनमɅट Ĥा.ͧल. पंजीक ृत काया[लय- 21, एम.पी.नगर, जोन 2, भोपाल 3. Įी घीसूलाल मेहता पुğ Įी Éयालȣलाल मेहता क ेयर ऑफ- मैसस[ राज होàस Ĥा.ͧल. 4. Įी संजय मेहता पुğ Įी जी.एल.मेहता डायरेÈटर मैसस[ राज होàस Ĥा.ͧल. 5. Įीमती ͪĤया मेहता प×नी Įी संदȣप मेहता क ेयर ऑफ- मैसस[ राज होàस Ĥा.ͧल ..........प¢कार Đ ं.2 1. यह ͩक प¢कारɉ क े मÚय Ǒदनांक 05.02.2011 एवं Ǒदनांक 08.09.2016 को दो ͪवͧभÛन मेमोरेÖडम ऑफ अंडरèटेͫडंग संपाǑदत हुए थे परंतु एम.ओ.यू का पालन नहȣं हो सका िजसक े फलèवǾप प¢कार Đ ं.1 ने एक वाद Ûयायलय मɅ Ĥèतुत ͩकया था । ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 11 2. यह ͩक प¢कार Đ ं. 1 ने प¢कार Đ.2 क े प¢ मɅ ͪवͧभÛन ͪवĐय पğ Ǒदनांक 31.03.2011 को संपाǑदत करवाये थे परंतु ना तो प¢कार Đ. 1 ने प¢कार Đ ं. 2 को आͬधप×य सɋपा था और ना हȣ प¢कार Đ.2 ने प¢कार Đ. 1 को ͪवĐय ĤǓतफल हȣ अदा ͩकया था । प¢कारɉ मɅ आपस मɅ तय हुआ था ͩक ले -आउट ǐरवाईज होने क े उपरांत हȣ ͪवĐय ĤǓतफल क े Ǿप मɅ Ǒदये गये अͬĒम चैÈस का नकदȣकरण ͩकया जाएगा । चूँͩक ले-आउट प¢कारɉ मɅ हुये अनुबंध क े अनुसार अनुमोǑदत नहȣं हो पाया इसͧलए ĤǓतफल क े Ǿप मɅ Ǒदये गये चैÈस का इनक ेशमɅट नहȣं हुआ और ना हȣ ͪवĐय पğ मɅ वͨण[त भूͧम उसी èवǾप मɅ िजस èवǾप मɅ ͪवĐय पğ मɅ उिãलͨखत है, प¢कार Đ.2 को ĤाÜत हो सकती थी तथा प¢कार Đ.2 क े प¢ मɅ हुये ͪवĐय पğ ǒबना ĤǓतफल और ǒबना आͬधप×य क े थे जो ͩक अपने आप मɅ हȣ शूÛय एवं ǓनçĤभावी है इसͧलये प¢कारɉ मɅ आपस मɅ यह समझौता हुआ था ͩक प¢कार Đ. 2 ने ͪवĐय पğ पंजीक ृत करने मɅ जो क ुल राͧश 73,19,000/- Ǿपये (Ǔतहƣर लाख उÛनीस हजार माğ) åयय कȧ थी, िजसका ͪववरण Ǔनàनानुसार है तथा प¢कार Đ. 2 को Ǔनàनानुसार प¢कार Đ.1 अदा करɅगे – सरल Đ. Đ ेता का नाम भूखंड Đमांक राͧश प¢कार Đ. 1, प¢कार Đ. 2 को दȣ जाने वालȣ राͧश का ͪववरण 1 घीसूलाल मेहता ए 9,11,500 5,10,000 2 ͪĤया मेहता बी 15,44,500 8,55,000 3 आशीष मेहता सी 9,14,000 2,90,000 4 संÚया सहलोत डी 20,02,000 9,22,500 5 संजय मेहता ई 19,47,000 9,22,500 क ुल राͧश 73,19,000 35,00,000 जो ͪवĐय पğ प¢कार Đ. 2 क े प¢ मɅ संपाǑदत हुये हɇ उसमɅ जो åयय हुआ है उसे प¢कार Đ. 1 व 2 आपस मɅ ͧमलकर वहन करɅगे, उसमɅ से 35,00,000/- Ǿपये (पɇतीस लाखा माğ) राͧश प¢कार Đ.1, प¢कार Đ.2 को अदा करेगा । ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 12 3. यह ͩक प¢कारɉ मɅ अब आपस मɅ यह तय हुआ है ͩक प¢कार Đ. 1, प¢कार Đ. 2 को स समझौता अनुबंध क े 12 माह क े अंदर अथा[त अगèत 2020 तक क ुल राͧश 35,00,000/- ǽपये (पɇतीस लाख माğ) अदा कर देगा िजस पर माह अगèत 2019 से 9 ĤǓतशत ĤǓतवष[ कȧ दर से भुगतान Ǒदनांक तक Þयाज अदा करेगा । 4. यह ͩक भुगतान कȧ समयावͬध ͩकसी भी िèथǓत मɅ नहȣं बढ़ाई जाएगी और प¢कार Đ ं. 1, प¢कार Đ. 2 को उपरोÈत राͧश आवæयक Ǿप से अदा कर देगा । 5. यह ͩक प¢कारɉ मɅ ͩकसी भी तरह का ͪववाद उ×पÛन होता है तो उसका Ǔनराकरण आǒब[Ěेटर Įी अजमल Ǔतरͧमिज क े ɮवारा ͩकया जायेगा िजनका Ǔनण[य दोनɉ प¢कारɉ को माÛय होगा । अतः यह समझौता अनुबंध पğ आज Ǒदनांक 5.9.2019 को उभयप¢ कȧ èवतंğ सहमǓत, ǒबना ͩकसी दबाव क े èवेÍछा से सम¢ गवाहɉ क े ǓनçपाǑदत ͩकया गया ताͩक सनद रहे एवं वÈत जǾरत काम आये । गवाह हèता/- प¢कार Đ.1 1. हèता/- हèता/- प¢कार Đ.2(1) 2. हèता/- हèता/- प¢कार Đ.2(2) हèता/- प¢कार Đ.2(3) हèता/- प¢कार Đ.2(4) हèता/- प¢कार Đ.2(5) ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 13 6.2 As per this settlement agreement the assessee society agreed to pay the compensation of Rs.35 lakhs to the 5 buyers. However when the assessee did not honour this settlement the buyers approached the Arbitrator who has passed the award dated 12.02.2022 directing the assessee to pay compensation of Rs.35 lakhs to the buyers along with the interest @12% from 01.04.2011. The concluding part of the award in para 9 is reproduced as under: “9. यह ͩक Ĥकरण कȧ पǐरिèथǓतयɉ को देखते हुये यह èपçट है ͩक िजन शतɟ प ͪवĐय पğ संपाǑदत हुये थे उसका पालन संèथा/अनावेदक ने नहȣं ͩकया है िजसक े फलèवǾप आवेदकगणɉ को हाǓन हुयी है तथा संèथा/अनावेदकने समझौता अनुबंध का भी पालन नहȣं ͩकया है ऐसी िèथǓत मɅ यह उͬचत होगा ͩक आवेदकगण समझौता राͧश 35,00,000/- Ǿपये पर Ǒदनांक 01.04.2011 से 12 ĤǓतशत कȧ दर से Þयाज पाने क े अͬधकारȣ है । उपरोक ेत Ĥकरण कȧ पǐरिèथǓतयɉ एवं ÛयायǺçटांतɉ को देखते हुए यह घोͪषत ͩकया जाता है ͩक आवेदकगण क े प¢ मɅ संपाǑदत ͪवĐय पğ Ǒदनांͩकत 31.03.2011 शूÛय एवं Ĥभावहȣन है Èयोͩक उन पर संͪवदा अͬधǓनयम क े अनुसार कोई काय[वाहȣ नहȣं हुयी । अतः अनावेदक को यह आदेͧशत ͩकया जाता है ͩक वह 35,00,000/- Ǿपये (पɇतीस लाख Ǿपये) एवं उस पर Ǒदनांक 01.04.2011 से 12 ĤǓतशत कȧ दर से Þयाज तीन मɅ आवेदकगण को अदा करɅ । “ ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 14 6.3 The assessee being aggrieved by the award in respect of the payment of interest @12% from 01.04.2011 challenged the same in the court of Additional District Judge, Bhopal who has modified the award vide order dated 14.05.2022 as under: ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 15 6.4 Thus the dispute was finally resolved between the parties as per the order of Additional District Judge, Bhopal dated 14.05.2022. The assessee has satisfied the decree while making the payments and also made a mutual joint request to the District Registrar Bhopal for taking on record that the earlier sale deed registered in favour of the buyers stands cancelled and to be treated as null and void having no legal effect. The assessee has also filed the bank account statement whereby the payment of the award amount as modified by the Additional District Judge, Bhopal is made to all these buyers along with the receipts of acknowledgement of the payment by the buyers. Once the dispute between the parties were mutually settled and the parties have agreed to mutually cancel the earlier sale deeds it goes to the root of the matter and the result would be that there is no transfer of these 3 plots of land and consequently there will be no income when the alleged transfer itself finally stands cancelled mutually by the parties through arbitration award and decree order of the Additional District Judge, Bhopal. ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 16 6.5 It is pertinent to note that the mere registration of sale deed cannot be a valid title in favour of the buyer if the intentions of the parties is not to pass on the title immediately but subject to satisfaction of certain conditions. Normally the registered sale deed is a good evidence to prove the transfer of an immoveable property however, the intention of the parties cannot be ignored to treat the transfer as an effective one on satisfaction of the conditions only. The Jaipur Bench of the Tribunal in case of ACIT V/s Ijyaraj Singh (supra) while considering the issue of transfer of immoveable property has held in para 19 to 29 as under: “19. We now refer to the decision of the Hon'ble Punjab & Haryana High Court in case of Hira Lal Ram Dayal v. CIT [1979] 2 Taxman 579/[1980] 122 ITR 461 wherein the question for consideration before the Hon'ble High Court was \"whether it is open to the assessee to prove that the sale transaction evidenced by the registered sale deed was sham transaction and no sale in fact took place.\" The Hon'ble High Court while answering the said question held that the Tribunal fell in legal error where it says that it cannot ignore a document which is duly executed and registered with the Sub-Registrar and the findings of Hon'ble High Court read as under: \"It is no doubt true that the evidentiary value has to be attached to a registered document but the said document cannot be a final word in the matter. It has to be remembered that capital gains accrue only if there is a sale or any other transfer of the capital asset and if the assessee is able to prove that in fact no sale took place in that case no capital gain accrued which could be assessed to income-tax. If the assessee, even in the face of the registered sale deed, is able to ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 17 prove by cogent evidence and satisfy the Tribunal that no sale in fact took place, in that case, the Tribunal has to come to the conclusion that there was no capital gain. As is apparent from the observations made in the order of the Tribunal, the Tribunal was under the misapprehension that the registered sale deed was final and, therefore, refused to look into the other material produced by the assessee with a view to prove its case that the sale transaction was a sham transaction. It is, however, a different matter that the Tribunal may not feel convinced that the sale transaction was a sham transaction and refuse to rely on the material produced by the assessee for good reasons, but the said material had to be taken into consideration and could not be ignored. As already observed, the enquiry before the Tribunal was to be directed to find out whether there had been a sale and if the Tribunal comes to the conclusion that the sale had taken place, in that case, the capital gains tax would become payable. The matter can be viewed from another angle. It is a matter of daily happening that people, who want to avoid payment of tax, would sell the property by getting the sale deeds registered at an under-estimated value. If it is held that the sale deed is final, in that case, the Income-tax authorities will be debarred from looking into as to how much sale consideration passed under the transaction, which is not the law. The factum of sale and the sale proceeds are the real questions to be determined by the Income-tax authorities. From what has been stated above, it is clear that the Tribunal fell into an error in refusing to examine the material put forth by the assessee to prove that the sale was a sham transaction.\" 20. We refer to the decision of the Hon'ble Patna High Court in case of Smt. Raj Rani Devi Ramna (supra) where the questions framed for consideration before the Hon'ble High Court read as under: “(1)Whether, on the facts and in the circumstances of the case, the learned Income-tax Officer was justified in including the sum of Rs. 42,000 pertaining to three deeds of sale in the gross receipts for the purposes of computation of capital gains? (2)Whether, on the facts and in the circumstances of the case, the learned Income-tax Officer was legally correct in coming to a finding that once the sale deed was registered, the transfer was ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 18 complete and any stipulation in the deed of sale to the contrary was irrelevant ? (3)Whether by mere execution of a deed of sale and registration thereof, there could be transfer of an immovable property without effective conveyance of the same to the transferee ? (4)Whether, 'transfer' according to section 2(47) of the Income-tax Act, 1961, must mean effective conveyance of the capital asset to the transferee ?\" And the findings of the Hon'ble High Court read as under: \"After hearing learned counsel for the parties, I have no hesitation in holding that the properties do not necessarily pass as soon as the instrument is registered, for the true test is the intention of the parties. Registration is prima facie proof of an intention to transfer, but it is no proof of an operative transfer if there is a condition precedent as to the payment of consideration or delivery of the deed. Thus the seller may retain the deed pending payment of price and, in that case, there is no transfer until the price is paid and the deed is delivered. To substantiate my above view, I may first refer to a Bench decision of the Calcutta High Court in the case of Nitai Chandra Naskar v. Smt. Champaklata Debi reported in [1919] 29 CLJ 250, wherein while referring to section 54 of the Transfer of Property Act, it has been held that, \"sale is a transfer of ownership in exchange for a price paid or promised or part paid and part-promised. The true test is, what is the intention of the parties to the transaction. If the intention is that title should pass immediately, even though the consideration has not been paid, title passes, that is, failure to pay the consideration for a conveyance does not defeat the conveyance except where there is an agreement that it should take effect only if the consideration is first paid.\" In the case of Panchoo Sahu v. Janki Mandar, reported in AIR 1952 Patna 263, it has been held that title does not pass on the mere execution and registration of the sale deed and the answer to the question regarding passing of the title lies in the intention of the parties, which is to be gathered from the sale deed itself. A similar view has been taken in the case of Shiva Narayan Sah v. Baidya Nath Prasad Tiwary, reported in AIR 1973 ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 19 Patna 386. There is a catena of decisions of this court as well as of other High Courts taking a similar view. The relevant provisions under the Act for the present purpose are sections 45 and 2(47). Section 45, inter alia, provides that any profits or gains arising from the transfer of a capital asset effected in the previous year shall, subject to certain exceptions, be chargeable to income-tax under the head \"Capital gains\" and shall be deemed to be the income of the previous year in which the transfer took place. The word \"transfer\" has been defined under section 2(47) of the Act which provides that, in relation to a capital asset, transfer includes the sale, exchange or relinquishment of the asset or the extinguishment of any rights therein or the compulsory acquisition thereof under any law. In the present case, we are concerned with the transfer of an immovable property by way of sale. In the absence of any provision to the contrary, the concept of sale of an immovable property which is included in the expression \"capital asset\" as defined under section 2(14) of the Act, has to be gathered from section 54 of the Transfer of Property Act, 1882. In the present case, from the statement of case itself as drawn up and sent to this court by the Tribunal, it is apparent that the parties had clearly intended that despite the execution and registration of sale deeds, transfer by way of sale will become effective only on payment of the entire consideration amount and in this background of facts, it has to be held that there was no transfer of land covered by the three sale deeds in question during the period under consideration making the assessee liable for capital gains tax under section 45 of the Act. Keeping in view the discussions made above, question No. 4 is answered in the affirmative, that is to say, the transfer under section 2(47) of the Act must mean an effective conveyance of the capital assets to the transferee. Questions Nos. 1, 2 and 3 are answered in the negative and in favour of the assessee. In the facts and circumstances of this case, there shall be no order as to costs.\" 21. The legal proposition which emerges from reading of aforesaid decisions is that that a registered sale deed does carry an evidentiary value. At the same time, where the assessee is able to prove by cogent evidence brought on record that no sale has in fact taken place, then, in such a scenario, the taxing and appellate authorities should consider these ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 20 evidences brought on record by the assessee and basis examination thereof, decide as to whether sale has taken place or not in the given case. Further, it has been held that the title in the property does not necessarily pass as soon as instrument of transfer is registered and the answer to the question regarding passing of title lies is the intention of the parties executing such an instrument. The Registration is no proof of an operative transfer and where the parties had intended that despite execution and registration of sale deed, transfer by way of sale will become effective only on payment of the entire consideration amount, then in such a scenario, the transfer will be effected only on payment and receipt of full sale consideration and not at the time of execution and registration of sale deed. 22. Applying the above legal proposition in the facts of the present case, we find that the first sale deed dated 24-12-2012 is for transfer of 3.71 hectares of land situated at village Rampura, Tehsil Ladpura, Kota district, Rajasthan for a sale consideration of Rs. 4.63 crores. The sale consideration has been stated to be discharged by issue of cheque no. 912806 for Rs. 63 lacs, cheque no. 912807 dated 2-1-2013 for Rs. 2 crores and cheque no. 912808 dated 2-1-2013 for Rs. 2 crores drawn on Punjab National Bank. The assessee received the first payment of Rs. 63 lacs through RTGS on 31-12-2012. However, the other two cheques were returned unpaid by the bank on 25-3-2013 stating that the payment has been stopped by the issuer of the cheque i.e, Shri Rajeev Singh and basis his instructions of stop-payment, the cheques have not been cleared and returned unpaid to the assessee. What is therefore relevant to note is that out of total consideration of Rs. 4.63 crores as stated in the aforesaid sale deed, no payment has been actually made to or received by the assessee either prior to or at the time of execution of the sale deed. What has been apparently done at the time of execution of the sale deed is thus, the handing over the three cheques to the assessee and that too, post dated cheques which could not have been encashed at the time of execution of the sale deed. The intention of the parties which is therefore gathered and is clearly discernable from the reading of the sale deed and the conduct of the parties is that the operative transfer of the property shall happen only on encashment of all the three post-dated cheques and not at the time of execution and registration of the sale deed. Out of three cheques, one cheque has been cleared through RTGS on 31-12-2012 and other two cheques have however been returned back unpaid by the bank on 25-3- 2013. Therefore, mere handing over the post dated cheques which have ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 21 been subsequently dishonored and returned unpaid to the assessee cannot be held to be discharge of full sale consideration as intended and agreed upon between the parties and there is clearly a violation of the terms of sale deed by Shri Rajeev Singh where he has failed to discharge the full sale consideration so agreed and stated in the sale deed. Further, the matter has been contested under the Negotiable Instruments Act for dishonor of cheques and separately before the Civil Court for cancellation of sale deed due to breach of contract which further proves that at the time of entering into the sale deed, the intention was that the transfer of title in the land will be effective only on receipt of the full sale consideration. 23. Similar fact pattern is observed in respect of second sale deed dated 2-1-2013 for transfer of 2.57 hectares of land situated at village Rampura, Tehsil Ladpura, Kota district, Rajasthan for sale consideration of Rs. 3.40 crores. The sale consideration has been stated to be discharged by issue of cheque no. 912809 dated 2-1-2013 for Rs. 40 lacs and cheque no. 912810 dated 2-1-2013 for Rs. 3 crores drawn on Punjab National Bank. Both these cheques were presented for clearing by the assessee and returned unpaid by the bank on 25-3-2013 stating that the payment has been stopped by the issuer of the cheque i.e, Shri Rajeev Singh and basis his instructions of stop-payment, the cheques have not been cleared and returned unpaid to the assessee. What is therefore relevant to note is that out of total consideration of Rs. 3.40 crores as stated in the aforesaid sale deed, no payment has been actually made to or received by the assessee either prior to or at the time of execution of the sale deed. What has been apparently done at the time of execution of the sale deed is thus, the handing over the two cheques to the assessee which have been returned back unpaid by the bank on 25-3-2013. The intention of the parties which can therefore be gathered from the reading of the sale deed and the conduct of the parties is that the effective transfer of title in the land shall happen only on encashment and clearance of both the cheques and not at the time of execution and registration of the sale deed. Therefore, mere handing over the cheques which have been subsequently dishonored and returned unpaid to the assessee cannot be held to be discharge of full sale consideration at the time of execution of the sale deed and there is clearly a violation of the terms of sale deed by Shri Rajeev Singh where he has failed to discharge the full sale consideration so agreed and stated in the sale deed. Further, the matter has again been contested under the Negotiable Instruments Act for dishonor of cheques and separately before the Civil Court for cancellation of sale deed due to breach of contract which ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 22 further proves that at the time of entering into the sale deed, the intention was that the transfer will be effective only on receipt of the full sale consideration. 24. We are therefore of the considered view that though the sale deed has been registered, given that the terms of the sale deed and the intention of the parties at the time of entering into the said sale deed have not be adhered to whereby full sale consideration has not been discharged, there is no transfer of the impugned land and no income accrues and consequently, no liability towards capital gains tax arises in the hands of the assessee. This brings us to the concept of real income which can only be brought to tax and there cannot be any levy of tax on hypothetical income which has neither accrued/arisen or received by the assessee and useful reference can be drawn to the decision of the Hon'ble Supreme Court decision in case of CIT v. Shoorji Vallabhdas & Co. [1962] 46 ITR 144 (SC) wherein it was held as follows: \"Income-tax is a levy on income. No doubt, the Income-tax Act takes into account two points of time at which the liability to tax is attracted, viz., the accrual of the income or its receipt; but the substance of the matter is the income. If income does not result at a l, there cannot be a tax, even though in book-keeping, an entry is made about a 'hypothetical income, which does not materialise. Where income has, in fact, been received and is subsequently given up in such circumstances that it remains the income of the recipient, even though given up, the tax may be payable. Where, however, the income can be said not to have resulted at a l, there is obviously neither accrual nor receipt of income, even though an entry to that effect might, in certain circumstances, have been made in the books of account.\" 25. And the latter decision of Hon'ble Supreme Court in case of CIT v. Balbir Singh Maini [2017] 86 taxmann.com 94/251 Taxman 202/398 ITR 531 where the Hon'ble Supreme Court has reiterated the principle of real income in context of section 45 and 48 and has held as under:- \"24. The matter can also be viewed from a slightly different angle. Shri Vohra is right when he has referred to Sections 45 and 48 of the Income-tax Act and has then argued that some real income must \"arise\" on the assumption that there is transfer of a capital asset. This income must have been received or have \"accrued\" under section 48 as a result of the transfer of the capital asset. ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 23 25. This Court in E.D. Sassoon & Co. Ltd. v. CIT AIR 1954 SC 470 at 343 held: \"It is clear therefore that income may accrue to an assessee without the actual receipt of the same. If the assessee acquires a right to receive the income, the income can be said to have accrued to him though it may be received later on its being ascertained. The basic conception is that he must have acquired a right to receive the income. There must be a debt owed to him by somebody. There must be as is otherwise expressed debitum in presenti, solvendum in futuro; See W.S. Try Ltd. v. Johnson (Inspector of Taxes) [(1946) 1 AER 532 at p. 539], and Webb v. Stenton, Garnishees [11 QBD 518 at p. 522 and 527]. Unless and until there is created in favour of the assessee a debt due by somebody it cannot be said that he has acquired a right to receive the income or that income has accrued to him.\" 26. This Court, in CIT v. Excel Industries [2013] 358 ITR 295/219 Taxman 379/38 taxmann.com 100 (SC) at 463-464 referred to various judgments on the expression \"accrues\", and then held: '14. First of a l, it is now well settled that income tax cannot be levied on hypothetical income. In CIT v. Shoorji Vallabhdas and Co. [CIT v. Shoorji Vallabhdas and Co. , (1962) 46 ITR 144 (SC)] it was held as follows: (ITR p. 148) \"… Income-tax is a levy on income. No doubt, the Income-tax Act takes into account two points of time at which the liability to tax is attracted, viz., the accrual of the income or its receipt; but the substance of the matter is the income. If income does not result at a l, there cannot be a tax, even though in bookkeeping, an entry is made about a 'hypothetical income', which does not materialise. Where income has, in fact, been received and is subsequently given up in such circumstances that it remains the income of the recipient, even though given up, the tax may be payable. Where, however, the income can be said not to have resulted at all, there is obviously neither accrual nor receipt of income, even though an entry to that effect might, in certain circumstances, have been made in the books of account.\" 15. The above passage was cited with approval in Morvi Industries Ltd. v. CIT [Morvi Industries Ltd. v. CIT, (1972) 4 SCC 451 : 1974 ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 24 SCC (Tax) 140 : (1971) 82 ITR 835] in which this Court also considered the dictionary meaning of the word \"accrue\" and held that income can be said to accrue when it becomes due. It was then observed that: (SCC p. 454, para 11) \"11. … the date of payment … does not affect the accrual of income. The moment the income accrues, the assessee gets vested with the right to claim that amount even though it may not be immediately.\" 16. This Court further held, and in our opinion more importantly, that income accrues when there \"arises a corresponding liability of the other party from whom the income becomes due to pay that amount\". 17. It follows from these decisions that income accrues when it becomes due but it must also be accompanied by a corresponding liability of the other party to pay the amount. Only then can it be said that for the purposes of taxability that the income is not hypothetical and it has really accrued to the assessee. 18. Insofar as the present case is concerned, even if it is assumed that the assessee was entitled to the benefits under the advance licences as well as under the duty entitlement passbook, there was no corresponding liability on the Customs Authorities to pass on the benefit of duty-free imports to the assessee until the goods are actually imported and made available for clearance. The benefits represent, at best, a hypothetical income which may or may not materialise and its money value is, therefore, not the income of the assessee.' 27. In the facts of the present case, it is clear that the income from capital gain on a transaction which never materialized is, at best, a hypothetical income. It is admitted that, for want of permissions, the entire transaction of development envisaged in the JDA fell through. In point of fact, income did not result at all for the aforesaid reason. This being the case, it is clear that there is no profit or gain which arises from the transfer of a capital asset, which could be brought to tax under section 45 read with Section 48 of the Income-tax Act. 28. In the present case, the assessee did not acquire any right to receive income, inasmuch as such alleged right was dependent upon the necessary permissions being obtained. This being the case, in the circumstances, there was no debt owed to the assessees by the ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 25 developers and therefore, the assessees have not acquired any right to receive income under the JDA. This being so, no profits or gains \"arose\" from the transfer of a capital asset so as to attract Sections 45 and 48 of the Income-tax Act.\" 26. In the instance case, given that the sale transaction fell through in view of non-fulfillment of the terms of sale deed whereby cheques have been dishonored by Sh. Rajeev Singh and he has failed to discharge the full sale consideration, there is no transfer and no income which has accrued or arisen to the assessee besides the fact that there is no receipt of sale consideration, thus no real income in hand of the assessee and in absence thereof, the assessee is not exigible to capital gains tax. Similar view has been taken by the Coordinate Bench in case of Appasaheb Baburao Lonkar v. ITO [2019] 104 taxmann.com 130/176 ITD 115 (Pune - Trib.) and the relevant findings reads as under: \"9. From the perusal of above said facts, it is clear that though an agreement was entered into between the parties on 16-9-2010 which was also registered with the authorities, but admittedly total consideration was not paid to the assessee as the cheques which were handed over by the purchaser, were stopped for payment. The dispute arose between the parties, wherein the sellers i.e. assessee and his family filed an Injunction against the purchaser restraining him from creating any third party interest in the suit property till the decision of suit and an interim order was passed, which was challenged and subsequently, Civil Suit between the parties was decided, under which the suit of assessee and co-owners for cancellation of sale deed was dismissed. The co-owners of the property filed an appeal before the Hon'ble Bombay High Court. In the said appeal, it has been clearly mentioned that the possession of immovable property had not been parted with till the date and also the assessee had not received complete consideration for the purported sale transaction. Though the case of purchasers was that they had entered into sale transaction with the understanding that the assessee would get no objection from the other co-owners and for this reason, sale deed was executed and the cheques were handed over. The claim of purchasers before the Civil Courts was that they were put in possession since they had handed over the cheques, however, the said cheques were stopped for payment by the purchasers only, as it is clear from the communication placed on record by the assessee. ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 26 10. The issue which arises in such circumstances is that in view of the dispute between the parties, can it be said that the assessee has completed sale transaction and hence is eligible for assessability of capital gains in his hands. 11. Section 2(47) of the Act lays down that transfer in relation to capital asset includes various modes of transfer in which under clause (v) it involves a transaction wherein allowing of possession of any immovable property is taken or retained in part performance of the contract of the nature referred to in section 53A of the Transfer of Property Act, 1882. Under section 53A of the Transfer of Property Act, where any person contracts to transfer for consideration any immovable property in writing, from which the terms necessary to constitute the transfer can be ascertained and the transferee has in part performance of the contract, taken possession of the property or any part thereof, and the transferee has performed or is willing to perform his part of contract, then it is called 'Part Performance'. So, in part performance, there has to be willingness to perform his part of contract by the transferee and the transferee should have been put in possession in such part performance of the contract and the transferor has agreed to transfer the property for consideration. However, in the facts of the case before us, though there is a contract in writing between the parties but there is dispute between the parties as to the possession of the said property, wherein the transferor claims that possession has not been given and the transferee claims that the possession has been given but the said possession was subject to encashment of cheques which were issued by the transferee. Since the transferee had stopped payment of cheques issued by him, then the parties approached the Court to decide differences arising between them and the matter is pending before the Hon'ble High Court of Bombay in this regard. In such scenario, it cannot be said that part performance of the contract has been completed. 12. The Hon'ble Apex Court in CIT v. Balbir Singh Maini [2017] 86 taxmann.com 94/251 Taxman 202/398 ITR 531 and bunch of other appeals arising from the order of Hon'ble High Court of Punjab & Haryana CIT v. Balbir Singh Maini [2015] 123 DTR 49 has deliberated upon the relevant sections i.e. section 53A of the Transfer of Property Act and sections 2(47), 45 and 48 of the Income- tax Act and also took note of the provisions of section 2(47)(vi) of the ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 27 Act and vide para 27 held that the income from capital gains on a transaction which never materialized was at best, a hypothetical income. In the facts of the case before the Apex Court, the entire transaction of development envisaged in the JDA fell through because of want of permission and hence, the Apex Court in such circumstances, held that In point of fact, income did not result at all for the aforesaid reason. This being the case, it is clear that there is no profit or gain which arises from the transfer of a capital asset, which could be brought to tax under section 45 read with Section 48 of the Income-tax Act. 13. The assessee in the affidavit explaining the delay in filing the appeal late before the Tribunal has also mentioned the factual aspects and the legal dispute and has stated on oath that sellers had never parted with the possession of said land, for which litigation was pending before the Hon'ble High Court. In such circumstances, where the assessee has not received sale consideration and where the possession of land having not been transferred to the purchasers, provisions of section 45 of the Act are thus, not attracted. 14. Now, applying the ratio laid down by Apex Court to the facts of present case, wherein the initial contract was between the parties on the ground that the assessee would get permission of other co- owners numbering about 13 so as to transfer immovable asset to the purchasers. This was the basic condition of the said agreement between the parties. Admittedly, the said permission could not be obtained by the assessee and though sale deed was registered, transaction could not be culminated. It is further evidenced by the fact that only sum of Rs. 15 lakhs was paid as against total consideration of Rs. 2,75,73,600/-settled between the parties. As per sale deed, sale consideration was to be paid as per Schedule A to the said agreement, for which postdated cheques were issued, which were to be encashed as per the conditions mentioned for encashment of cheques. As per clause 8 of the sale deed, the purchasers had given postdated cheques to sellers and it was their responsibility to see that the postdated cheques get cleared for payment. In view of the said cheques being stopped for payment and the dispute arising between the parties and even the dispute being who is in possession of the said property, reflects that even part performance of the contract has not been settled. In such ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 28 circumstances, we find guidance from the ratio laid down by the Apex Court in Balbir Singh Maini (supra) that where the transaction has not materialized, then no profit or gain which arises from the alleged transfer of capital asset could be brought to tax under section 45 read with section 48 of the Act. We hold so. The grounds of appeal raised by assessee are thus, allowed.\" 27. This brings us to another aspect of the matter as to whether the provisions of Section 2(47)(v) are attracted in the instant case which provides that the transfer includes \"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\" and the latter provisions reads as under: \"53A. Part performance.— Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract: Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.\" 28. In order that the provisions of Section 53A of the Transfer of Property Act are attracted, there are two essential conditions. Firstly, the transferee ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 29 must, in part performance of the contract, have taken possession of the property or any part thereof. Secondly, the transferee must have performed or be willing to perform his part of the agreement. It is only if these two important conditions, among others, are satisfied that the provisions of section 53A can be said to be attracted on the facts of a given case. In the instant case, as we have noted above, the ld CIT(A) has returned a finding that \"possession of the said land was never handed over & land is still in the possession of appellant himself\" and Hon'ble Rajasthan High Court in SB Civil First Appeal No. 72/2013 vide stay order dated 11-2-2013 has directed to maintain status quo as regards possession, transfer, alienation and sale of the suit property. Further, the Hon'ble Rajasthan High Court vide order dated 19-7-2013 has restricted any party from approaching UIT for conversion of the impugned property or issue of Patta. Thus, the transferee, Shri Rajeev Singh has not taken possession of the property. Secondly, he has not discharged the sale consideration nor there is any willingness on his part to discharge the sale consideration as can be gauged by the fact that he himself has ordered and instructed his bank for stop-payment of cheques issued earlier by him towards the sale consideration in respect of both the sale deeds. Therefore, in the instant case, the transferee has not taken possession of the land and also, he has neither performed nor there is any willingness to perform his part of the sale deed and thus, the provisions of section 55A of the Transfer of the Property Act cannot be attracted and there is no transfer even in terms of section 2(47)(v) of the Act. 29. In light of aforesaid discussions and in the entirety of facts and circumstances of the case and following the decisions referred supra, we hereby affirm the findings of the ld CIT(A) and the matter is decided in favour of the assessee and against the Revenue. In the result, the ground no. 1 of Revenue's appeal is dismissed.” 6.6 The above decision of the Tribunal is applicable in the facts of the case in hand when the actual possession of the land was subject to the approval of the revised layout plan which could not happened and therefore, the transaction was not completed in the ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 30 absence of the satisfaction of the conditions as agreed between the parties reflected from the various MOUs and settlement entered into between the parties. The assessee also did not receive any consideration for sale of these plots and finally the parties mutually agreed to get the sale deed cancelled through the process of arbitration and court of law. Accordingly when finally the parties mutually got the transactions and sale deed cancelled through the process of court of law then there will be no question of any income in the shape of capital gain arising from the alleged registration of the sale deeds subsequently cancelled. Even the A.O made the addition of deemed full value consideration without allowing the cost of acquisition in the hand of the assessee. Hence, the addition made by the A.O on this account is not sustainable and the same is deleted. 7. Though the assessee has also challenged the validity of reopening of assessment however, in view of our finding on the merits of the matter we do not propose to go into the issue of validity of reopening of the assessment as the same becomes academic in nature. ITA No.359/Ind/2023 Indraprasth Grih Nirman Shakari Sanstha Maryadit 31 8. The appeal of the assessee is allowed. Order is pronounced in the open court on 18.10.2024. Sd/- Sd/- (B.M. BIYANI) (VIJAY PAL RAO) Accountant Member Judicial Member Indore,_ 18.10.2024 Dev/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore "