M/S. Mangilall Estates (P) Ltd., Kolkata V. DCIT, CC-1(3), Kolkata, Kolkata

ITA 156/KOL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1457 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 04-02-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: T VARKEY JUDIC IA L M EMBER
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Depreciation; Business expenditure; Question of law
• Section: 50C

Judgement Text

, D , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI ABY.T VARKEY, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 156 / KOL / 2015 ASSESSMENT YEAR:2012-13 M/S MANGILALL ESTATES (P) LTD., 8A, EXPRESS TOWER, 42A, SHAKESPEARE SARANI, KOLKATA-17 [ PAN NO.AAECM 0821 C ] V/S . DCIT, CENTRAL CIRCLE- 1(3), 108, SHANTIPALLI, KOLKATA-108 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI SUBASH AGARWAL, ADVOCATE /BY RESPONDENT SHRI A.K. TIWARI, CIT-DR /DATE OF HEARING 04-01-2018 /DATE OF PRONOUNCEMENT 21-02-2018 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-20, KOLKATA DA TED 09.12.2014. ASSESSMENT WAS FRAMED BY DCIT, CENTRAL CIRCLE-V,, K OLKATA U/S 143(3)/153D OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT) VIDE HIS ORDER DATED 30.01.2014 FOR ASSESSMENT YEAR 2012-13. SHRI SUBASH AGARWAL, LD. ADVOCATE APPEARED ON BEHAL F OF ASSESSEE AND SHRI A.K. TIWARI, LD. DEPARTMENTAL REPRESENTATIVE APPEAR ED ON BEHALF OF REVENUE. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL:- 1. THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ACT ION OF ASSESSING OFFICER IN NOT ALLOWING THE VARIOUS ADMINISTRATIVE EXPENSES CLAIMED BY ITA NO.156/KOL/2015 A.Y. 2012-13 M/S MANGILALL ESTATES (P) LTD. VS. DCIT CC- 1(3) KOL. PAGE 2 THE ASSESSEE AGAINST INCOME FROM OTHER SOURCES WITH OUT APPRECIATING THE FACT THAT THEY ARE NECESSARY EXPENDITURE TO RUN A COMPANY. 2. THAT THE LD. CIT(A) ERRED IN TAXING THE CAPITAL GAIN IN THE YEAR UNDER CONSIDERATION IGNORING THE FACT THAT TRANSFER WITHI N THE MEANING OF SEC. 2(47) HAD ALREADY TAKEN PLACE IN AY 1992-93 WITHIN THE MEANING OF SEC. 53A OF TRANSFER OF PROPERTY ACT. 3. THAT THE LD. CIT(A) ERRED IN NOT APPRECIATING TH E FACT THAT SECTION 50C IS NOT APPLICABLE IN THE CASE OF APPELLANT AS THE A GREEMENT TO SELL WAS ENTERED INTO PRIOR TO INTRODUCTION OF SECTION 50C I N STATUTE. 4. THAT THE LD. CIT(A) ERRED IN NOT ACCEPTING THE P LEA OF THE APPELLANT THAT EVEN IF SEC 50C IS MADE APPLICABLE, STAMP DUTY VAL9UATION AS ON THE DATE OF AGREEMENT SHOULD BE ADOPTED AND NOT OF THE DATE OF REGISTRATION. 5. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, TO DELETE FROM OR SUBSTANTIATE THE ABOVE GROUND OF APPEAL 3. FIRST ISSUE RAISED BY ASSESSEE IN GROUND NO.1 IS THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF ASSESSING OFFICER BY SUSTAI NING THE DISALLOWANCE OF VARIOUS ADMINISTRATIVE EXPENSES ON THE GROUND THAT NO BUSINESS ACTIVITY WAS CARRIED ON BY ASSESSEE. 4. BRIEFLY, THE FACTS ARE THAT THE ASSESSEE IS A PR IVATE LIMITED COMPANY AND ENGAGED IN BUSINESS OF LETTING OUT OF IMMOVABLE PRO PERTY. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS SHOWN CERTAIN INCOME I N ITS COMPUTATION AS DETAILED UNDER:- INCOME FROM HOUSE PROPERTY RENT RECEIVED 1,071,600 LESS: MUNICIPAL TAXES 2,903 1,068,697 STANDARD DEDUCTION @ 30% 320,609 748087.90 INCOME FROM BUSINESS & PROFESSION INCOME AS PER PROFIT/LOSS ACCOUNT 447,924 LESS: INCOME FROM OTHER SOURCES 79,667 LESS: RENT RECEIVED 1,071,600 ADD: RATES & TAXES 35,039 ADD: REPAIRS TO BUILDING 11 3,059 ADD: DEPRECIATION 5,027 ADD: ELECTRICITY 76,267 -473950.91 INCOME FROM OTHER SOURCES INTEREST INCOME 79,667 79667.00 ITA NO.156/KOL/2015 A.Y. 2012-13 M/S MANGILALL ESTATES (P) LTD. VS. DCIT CC- 1(3) KOL. PAGE 3 TOTAL INCOME 353803.99 TOTAL INCOME 353800.00 THERE WAS NO INCOME SHOWN BY ASSESSEE FROM THE BUSI NESS ACTIVITY BUT ASSESSEE HAS CLAIMED CERTAIN EXPENSES TO MAINTAIN T HE STATUS OF THE COMPANY ACTIVE. THE DETAILS OF SUCH EXPENSES CLAIMED BY ASS ESSEE UNDER THE HEAD BUSINESS AND PROFESSION STAND AS UNDER:- SL.NO. PARTICULARS AMOUNT 1. EMPLOYEE BENEFIT EXPENSES 2,67,949.00 2. DEPRECIATION 5,027.00 3. OTHER EXPENSES A) RATES & TAXES 69,745.00 B) ELECTRICITY 76,267.00 C) SERVICES CHARGES FOR SECURITY 1,28,689 .00 D) AUDIT FEES 8,000.00 E) REPAIR & MAINTENANCE I) BUILDING REPAIRING 1,13,059.00 II) OTHER REPAIRING 820.00 F) MISC. EXPENSES 35,006.00 7,04,562.00.00 HOWEVER, ASSESSEE SUO MOTU HAS DISALLOWED THE EXPENSES WHILE WORKING OUT THE INCOME FROM BUSINESS AND PROFESSION AS DETAILED UNDER:- ADD: RATES & TAXES 35,039 ADD: REPAIRS TO BUILDING 11 3,059 ADD: DEPRECIATION 5,027 ADD: ELECTRICITY 76,267 2,29,392 THUS, ASSESSEE HAS CLAIMED THE NET EXPENSES OF RS. 4,75,170.00 WHICH WAS ADJUSTED WITH AN AMOUNT OF RS. 1220.00 REPRESENTING THE SUNDRY CREDIT BALANCE WRITTEN BACK. ACCORDINGLY A LOSS OF 473,950 UNDER THE HEAD ITA NO.156/KOL/2015 A.Y. 2012-13 M/S MANGILALL ESTATES (P) LTD. VS. DCIT CC- 1(3) KOL. PAGE 4 BUSINESS AND PROFESSION WAS SHOWN BY THE ASSESSEE . HOWEVER THE IMPUGNED BUSINESS LOSS WAS DISALLOWED BY THE ASSESS ING OFFICER ON THE GROUND THAT NO BUSINESS ACTIVITY WAS CARRIED ON BY ASSESSEE IN THE YEAR UNDER CONSIDERATION. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A) WHO HAS CONFIRMED THE ORDER OF AO. AGGRIEVED BY THIS, THE ASSESSEE HAS COME UP IN APPE AL BEFORE US. 6. LD. AR BEFORE US FILED A PAPER BOOK WHICH IS RUN NING FROM PAGES 1 TO 85 AND SUBMITTED THAT THE EXPENSES HAVE BEEN INCURRED TOWARDS DAY-TO-DAY RUNNING OF BUSINESS. THE ASSESSEE BEING A PRIVATE L IMITED COMPANY HAS INCURRED CERTAIN EXPENSES WHICH ARE IMPERATIVE FOR ITS EXISTENCE. SUCH AS AUDIT FEES, DIRECTORS MEETING FEES, FILING FEES ETC . SIMILARLY THERE ARE OTHER INDIRECT EXPENSES WHICH NEED TO BE INCURRED FOR ITS DAY-TO-DAY WORKING. SUCH AS BANKING CHARGES, TELEPHONE EXPENSES, PRINTING AN D STATIONARY, & SALARY ETC., LD.AR IN SUPPORT OF ASSESSEES CLAIM HAS RELI ED ON THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. GANGA PROPERTIES LTD. REPORTED IN 199 ITR 94 (CAL) WHEREIN IT WAS HELD AS UNDER:- A LIMITED COMPANY EVEN IF IT DOES NOT CARRY ON BUSI NESS, EVEN IF IT DERIVES INCOME FROM OTHER SOURCES, HAS TO MAINTAIN ITS ESTA BLISHMENT FOR COMPLYING WITH STATUTORY OBLIGATION SO LONG AS IT IS IN OPERA TION AND ITS NAME IS NOT STRUCK OFF THE REGISTER OR UNLESS THE COMPANY IS DISSOLVED . SO LONG AS THE COMPANY IS IN OPERATION, IT HAS TO MAINTAIN THE STATUS AS A CO MPANY AND IT HAS TO DISCHARGE CERTAIN LEGAL OBLIGATIONS AND FOR THAT PU RPOSE IT IS NECESSARY TO APPOINT CLERICAL STAFF AND SECRETARY OR ACCOUNTANT AND INCUR INCIDENTAL EXPENSES. IN THIS BACKGROUND, THE CONCLUSION OF THE TRIBUNAL THAT THE EXPENSES INCURRED WERE WHOLLY AND EXCLUSIVELY FOR T HE ACTIVITIES TO EARN INCOME WAS A REASONABLE CONCLUSION. THE TRIBUNAL WAS, THUS, JUSTIFIED IN ALLOWING THE E XPENDITURE CLAIMED BY THE ASSESSEE AS DEDUCTION. ON THE OTHER HAND, LD. DR SUBMITTED THAT NO DETAIL WAS FURNISHED BY ASSESSEE SUGGESTING THAT THE IMPUGNED EXPENSES WERE INCURRED FOR THE PURPOSE OF THE BUSINESS. AS SUCH, ASSESSEE HAS SHOWN ITS MAJOR INC OME UNDER HEAD HOUSE PROPERTY WHEREIN IT HAS ALREADY CLAIMED STATUTORY DEDUCTION AS SPECIFIED U/S. ITA NO.156/KOL/2015 A.Y. 2012-13 M/S MANGILALL ESTATES (P) LTD. VS. DCIT CC- 1(3) KOL. PAGE 5 24(A) OF THE ACT. THUS, FURTHER CLAIM MADE BY ASSES SEE WILL LEAD TO DOUBLE DEDUCTION OF SAME EXPENSES. LD. DR SUPPORTED THE OR DER OF AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE HAS CLAIMED CERTAIN EXPENSES TO KEEP THE STATUS OF THE ASSESSEE -COMPANY ACTIVE. THESE EXPENSES WERE CLAIMED AS BUSINESS LOSS UNDER THE HE AD BUSINESS AND PROFESSION. OUT OF TOTAL EXPENSE CLAIMED BY THE AS SESSEE AS DISCUSSED ABOVE CERTAIN EXPENSES WERE DISALLOWED BY THE ASSES SEE SOU MOTU . THE DETAILS OF EXPENSES CLAIMED AS DEDUCTION AND DISALL OWED BY THE ASSESSEE STAND AS UNDER:- SL.NO. PARTICULARS AMOUNT CLAIMED AS DEDUCTION AMOUNT DISALLOWED DEDUCTION CLAIMED 1 EMPLOYEE BENEFIT 267949 -- 267949 2 DEPRECIATION 5027 5027 - - 3 RATES AND TAXES 69745 35039 34706 4 ELECTRICITY 76267 76267 - - 5 SERVICE CHARGES OF SECURITY 128689 - - 128689 6 AUDIT FEES 8,000 - - 8,000 7 REPAIR & MAINTENANCE 113059 113059 - - 8 MIS. EXPENSES 35006 - - 35006 IT IS WELL SETTLED LAW THAT A PRIVATE LIMITED COMPA NY BEING A BODY CORPORATE HAS TO INCUR CERTAIN EXPENSES TO KEEP ITS STATUS ACTIVE . IN THIS REGARD, WE FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HON'BLE J URISDICTIONAL HIGH COURT IN THE CASE OF GANGA PROPERTIES LTD. (SUPRA) . HOWEVER, THE QUESTION ARISES WHETHER THE EXPENSE CLAIMED BY THE ASSESSEE ARE ESS ENTIAL TO KEEP THE STATUS ITA NO.156/KOL/2015 A.Y. 2012-13 M/S MANGILALL ESTATES (P) LTD. VS. DCIT CC- 1(3) KOL. PAGE 6 OF THE ASSESSEE-COMPANY AS ACTIVE. IT IS THE DUTY O F THE ASSESSEE TO ESTABLISH THAT THE EXPENSES CLAIMED BY IT WERE NECESSARY FOR ITS COMPANY. WE NOTE THAT THE ASSESSEE HAS CLAIMED THE EXPENSES UNDER TOTAL 8 HEADS AS DISCUSSED ABOVE. OUT OF THE TOTAL 8 HEADS OF EXPENS ES THE ASSESSEE HAS MADE THE DISALLOWANCE IN RESPECT OF 4 HEADS OF EXPE NSES WHICH HAS ALREADY BEEN DISCUSSED IN THE PRECEDING PARAGRAPHS. IN THE INSTANT CASE, THE ASSESSEE HAS SHOWN THE MAJ OR INCOME UNDER THE HEAD HOUSE PROPERTY AND HAS CLAIMED THE STATUTORY DEDUCT ION U/S 24(A) OF THE ACT TOWARDS THE REPAIRS AND MAINTENANCE OF THE EXPENSES . THE RELEVANT PROVISION OF SECTION 24(A) READS AS UNDER : [ DEDUCTIONS FROM INCOME FROM HOUSE PROPERTY . 24. INCOME CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY SHALL BE COMPUTED AFTER MAKING THE FOLLOWING DEDUCTIONS, NAM ELY: (A) A SUM EQUAL TO THIRTY PER CENT OF T HE ANNUAL VALUE; ONCE THE ASSESSEE HAS CLAIMED THE ABOVE DEDUCTION T HEN THE SAME DEDUCTION CANNOT BE ALLOWED UNDER ANY OTHER HEAD OF INCOME. T HE ASSESSEE BEFORE US HAS NOT BROUGHT ANY MATERIAL ON RECORD SUGGESTING T HAT THE EXPENSES CLAIMED UNDER THE HEAD OF BUSINESS WERE INCURRED EXCLUSIVEL Y FOR THE BUSINESS PURPOSE AND NO PART OF IT WAS INCURRED IN CONNECTIO N WITH THE RENTAL INCOME DECLARED BY THE ASSESSEE. IN THE ABSENCE OF INFORMA TION WE APPREHEND THAT THE ASSESSEE SHOULD NOT AVAIL THE DOUBLE DEDUCTION OF THE SAME EXPENSES. INDEED, THE ASSESSEE BEING A BODY CORPORATE HAS TO INCUR THE EXPENSES FOR ITS EXISTENCE DESPITE OF NO BUSINESS ACTIVITY AS HELD B Y THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF GANGA PROPERTIES LIMITED (SUPRA). THEREFORE THE DISALLOWANCE OF THE ENTIRE EXPENSES CANNOT BE MADE. BUT AT THE SAME TIME THE AMOUNT OF EXPENDITURE NECESSARY FOR THE SUSTENANCE OF THE COMPANY AND WHICH HAS NEXUS WITH THE BUSINESS ACTIVITY OF THE A SSESSEE IS ELIGIBLE FOR DEDUCTION. HOWEVER THE EXPENSES INCURRED IN CONNECTION WITH TH E RENTAL INCOME CANNOT BE ALLOWED AS DEDUCTION. IT IS BECAUSE THE ASSESSEE FOR THE RENTAL INCOME IS ITA NO.156/KOL/2015 A.Y. 2012-13 M/S MANGILALL ESTATES (P) LTD. VS. DCIT CC- 1(3) KOL. PAGE 7 ENTITLED FOR THE DEDUCTION AS PER THE PROVISIONS OF SECTION 24(A) OF THE ACT WHICH IT HAS ALREADY CLAIMED. THUS IN THE ABSENCE OF THE INFORMATION WE ARE OF TH E VIEW THAT ALL THE EXPENSES INCURRED BY THE ASSESSEE CANNOT BE TREATED AS BUSINESS EXPENSES. THEREFORE IN OUR VIEW AFTER CONSIDERING THE ENTIRE FACTS OF THE CASE THE JUSTICE SHALL BE SERVED IF THE DISALLOWANCE MADE BY THE AO IS RESTRICTED TO THE REASONABLE EXTENT. HENCE, IN THE INTEREST OF JUSTIC E & FAIR PLAY WE ARE INCLINED TO RESTRICT THE DISALLOWANCE OF THE EXPENSES TO THE TUNE OF 10% OF THE EXPENSES CLAIMED BY THE ASSESSEE IN THE MANNER SPEC IFIED BELOW : SL.NO. PARTICULARS AMOUNT CLAIMED AS DEDUCTION AMOUNT DISALLOWED FURTHER DISALLOWANCE 1 EMPLOYEE BENEFIT 267949 -- 10 % 2 DEPRECIATION 5027 5027 NIL 3 RATES AND TAXES 69745 35039 NIL 4 ELECTRICITY 76267 76267 NIL 5 SERVICE CHARGES OF SECURITY 128689 - - 10 % 6 AUDIT FEES 8,000 - - NIL 7 REPAIR & MAINTENANCE 113059 113059 NIL 8 MIS. EXPENSES 35006 - - 10% IN VIEW OF ABOVE WE RESTRICT THE DISALLOWANCE TO TH E EXTENT OF 10% OF THE EXPENDITURE AS DISCUSSED ABOVE. THUS THE GROUND OF APPEAL OF ASSESSEE IS PARTLY ALLOWED. 8. NEXT GROUND NO. 2 TO 4 ARE INTER-RELATED IS AS R EGARDS THAT LD. CIT(A) ERRED IN CONFIRMING THE ORDER OF AO BY TREATING THE TRANSFER OF THE PROPERTY AS INCOME AFTER IGNORING THE PROVISION OF SEC. 53A OF THE TRANSFER OF PROPERTY ACT. ITA NO.156/KOL/2015 A.Y. 2012-13 M/S MANGILALL ESTATES (P) LTD. VS. DCIT CC- 1(3) KOL. PAGE 8 AS PER THE AIR, IT WAS REVEALED THAT ASSESSEE HAS T RANSFERRED IMMOVABLE PROPERTY ON 21.07.2011 WHICH WAS VALUED FOR THE PUR POSE OF STAMP DUTY AT 1,90,83,227/- ONLY BY THE DISTRICT REGISTRAR, CHAIB AS. THE AO OBSERVED THAT THE TRANSACTION FOR THE SALE OF THE PROPERTY WAS NO T SHOWN IN ITS INCOME TAX RETURN. THUS, AN EXPLANATION WAS SOUGHT BY AO FROM ASSESSEE. THE ASSESSEE, ACCORDINGLY, SUBMITTED THAT IT HAS TRANSFERRED THE IMPUGNED PROPERTY FOR 1.90 LAKH IN THE YEAR 1991. IT HAS ALSO RECEIVED AN ADVA NCE OF 19,000/- WHICH WAS DULY REFLECTED IN THE BOOK OF ASSESSEE. BUT THE SAL E DEED WAS NOT EXECUTED IN THE NAME OF TRANSFEREE DUE TO SOME PROBLEM RELATED TO THE TITLE OF THE PROPERTY. THE ASSESSEE ALSO SUBMITTED THAT THE AGREEMENT WAS DULY MADE WITH THE TRANSFEREE VIDE DATED 22.03.1992 FOR THE TRANSFER O F THE IMPUGNED PROPERTY. THE RELEVANT CLAUSE OF THE AGREEMENT READS AS UNDER :- NOW THIS AGREEMENKT WITNESSETH AS FOLLOWS:- 1. THAT THE COMPANY HEREBY DECLARES THAT THE COMPAN Y IS IN ABSOLUTE OWNER OF ALL THOSE KAYAMI RIGHT PLOTS OF LAND BEARI NG NO.656 (A,B,C,D,E,F,G,H,I,J,K,L, AND M) MEASURING 3 ACRES 19.304 DECIMALS IN MUNICIPAL HOLDING NOS. 157 OF WARD NO.1 CHAIBASA MU NICIPALITY, DISTRICT SINGHBHUM (BIHAR0 HEREINAFTER REFERRED TO AS THE SAID PROPERTIES) 2. THE TRANSFERER AGREED TO SELL AND THE TRANSFEREE AGREED TO PURCHASE ALL THE SAID PLOTS OF LAND HEREINAFTER REFERRED TO AS THE SAID PROPERTIES AT AND FOR THE PRICE OF RS.1,90,000/- (RUPEES ONE L AC NINETY THOUSAND), ONLY OUT OF WHICH THE TRANSFEREE HAS PAI D A SUM OF RS.19,00/- (RUPEES NINETEEN THOUSAND) ONLY AS AND B Y WAY OF EARNEST MONEY AND AGREES TO PAY THE BALANCE AMOUNT TO OR BEFORE THE EXECUTION AND REGISTRATION OF PROPER SALE DEED IN THE NAME OF TRANSFEREE OR HIS NOMINEE OR NOMINEES BY ONE OR MOR E SALE DEEDS. 3. THE TRANSFERER WILL MAKE OUT A GOOD AND MARKETAB LE TITLE FREE FROM ALL ENCUMBRANCE WHATSOEVER NATURE IN FAVOUR OF THE TRAN SFEREE. 4. THE TRANSFERRER SHALL PAY ALL RATES, TAXES AND OUTGOINGS UPTO THE DATE OF COMPLETION OF SALE OR UPTO THE DATE OF GIVI NG POSSESSION OF THE SAID PROPERTIES AGREED TO BE SOLD TO THE TRANSF EREE WHICH EVER EVENT TAKES PLACE EARLIER. 5. THE TRANSFERER WILL PUT THE TRANSFEREE EITHER IN THE VACANT POSSESSION OR BY ISSUANCE OF LETTER OF ATTORNMENT ON THE EXIST ING OCCUPIER. 6. THE SALE WILL BE COMPLETED WITHIN 15 DAYS FROM T HE DATE OF OBTAINING NECESSARY PERMISSIONS BY THE TRANSFERER FROM THE AP PROPRIATE AUTHORITY OR AUTHORITIES CONCERNED AND ALSO OBTAINI NG INCOME TAX CLEARANCE CERTIFICATE, IF NECESSARY FOR COMPLETION OF SALE AND TIME OF 15 DAYS WILL BE CALCULATED FROM THE DATE OF TRANSFE RERS SUPPLY OF ITA NO.156/KOL/2015 A.Y. 2012-13 M/S MANGILALL ESTATES (P) LTD. VS. DCIT CC- 1(3) KOL. PAGE 9 COPIES OF ORDER AFTER OBTAINING SUCH PERMISSION AND SUPPLY OF INCOME TAX CLEARANCE CERTIFICATE TO THE TRANSFERER BY THE TRANSFEREE WHICHEVER PERIOD EXPIRES LAST. 7. THAT IN CASE OF DELAY IN OBTAINING NECESSARY PER MISSIONS AND INCOME TAX CLEARANCE CERTIFICATE ETC. THE TRANFERERE WILL DELIVER THE POSSESSIONS OF THE SAID PROPERTIES TO THE TRANSFERE E AND THE TRANSFEREE WILL BE ENTITLED TO HOLD THE SAID PROPER TIES AND TO USE THE SAME FOR HIS OWN PURPOSE AND MY ALSO LET OUT THE SA ME ON SUCH TERMS AND CONDITIONS AS HE MAY THINK FIT AND PROPER AND NO FURTHER PERMISSION WILL BE REQUIRED TO BE TAKEN IN THIS RES PECT FROM THE TRANSFERER. 8. THAT SO LONG THE TRANSFEREE IS READY AND WILLING TO HAVE THE SALE DEED EXECUTED AND REGISTERED ON FULFILMENT OF THE T ERMS AND CONDITIONS MENTIONED HEREIN, THE TRANSFERER SHALL H AVE NO RIGHT TO CANCEL THIS AGREEMENT AND THE TRANSFERER WILL NOT T AKE ANY STEP FOR TAKING REPOSSESSIONS OF THE SAID PROPERTIES FROM TH E TRANSFEREE. 9. IN CASE THE TRANSFEREE WANTS TO RESELL THE PROPE RTIES, HE SHALL BE AT LIBERTY TO RESELL THE SAME ON SUCH TERMS AND CONDIT IONS AND AT SUCH PRICE HE MAY THINK FIT AND PROPER SUBJECT TO OBSERV ATION AND PERFORMANCE OF ALL THE PROVISIONS OF LAW APPLICABLE TO SUCH TRANSFER BUT IN THE EVENT THE TRANSFEREE SHALL ALWAYS REMAIN LIABLE TO PAY THE BALANCE OF THE AGREED PRICE UNDER THIS AGREEMENT TO THE TRANSFER 10. THAT THE BALANCE AGREED PRICE WHICH REMAINS PAY ABLE UNDER THIS AGREEMENT BY THE TRANSFEREE TO THE TRANSFERER WILL FORM CHARGE ON THE SAID PROPERTIES. 11. IN CASE OF ANY ACQUISITION OR REQUISITION OF TH E SAID PROPERTIES BY ANY GOVERNMENT OR SEMI GOVERNMENT AUTHORITY, THE CO MPENSATION TO BE RECEIVED WILL BELONG TO THE TRANSSFEREE. THE TRA NSFERER WILL GIVE FULL CO-OPERATION TO THE TRANSFEREE TO ENABLE IT TO ENJOY THE PROPERTIES IN SUCH MANNER AS THE TRANSFEREE MAY THINK FIT AND PROPER. 12. THE TRANSFERER HEREBY AGREES TO SIGN SUCH PAPER S, DOCUMENTS, PLEADINGS ETC. AS MAY BE REQUIRED BY THE TRANSFEREE FOR PROTECTING HIS OWN POSSESSION AND OCCUPATION IN THE SAID PLOTS OF LAND AND FOR THAT PURPOSE THE TRANSFEREE CAN FILE SUITS AND PROC EEDINGS TAKE LEGAL STEPS, APPOINT ADVOCATE, SIGN VAKALATNAMA FOR AND/O R ON BEHALF OF AND IN THE NAME OF THE TRANSFERER BUT ALL COSTS TO BE INCURRED IN THIS CONNECTION WILL BE BORNE AND PAID BY THE TRANSFEREE . 13. THAT THIS DOCUMENT IS BEING EXECUTED IN DUPLICA TE EITHER PARTY WILL RETAIN A COPY OF THE SAME. IN FACT, THE DELAY IN REGISTRATION OF SAID PROPERTY WAS EXPLAINED BY THE ASSESSEE THAT THE IMPUGNED PROPERTY WAS TRANSFERRED VIDE AGREEMENT DATED 22.03.1992 FOR A SUM OF 1.90 LAKH ONLY. THE ASSESSEE AGAINST THE TRANSFER OF THE PROPERTY ALSO RECEIVED ADVANCE OF 19,000/- WHICH WAS DULY DISCLOSED IN ITA NO.156/KOL/2015 A.Y. 2012-13 M/S MANGILALL ESTATES (P) LTD. VS. DCIT CC- 1(3) KOL. PAGE 10 ITS BALANCE-SHEET. BUT THE IMPUGNED PROPERTY WAS NO T REGISTERED IN THE NAME OF THE TRANSFEREE IN THE YEAR OF AGREEMENT DUE TO T HE FACT THAT ASSESSEE FAILED TO MAKE THE TITLE OF THE IMPUGNED PROPERTY FREE FRO M ALL ENCUMBRANCES AS PER THE CLAUSE NO.3 OF THE AGREEMENT. IT WAS THE DUTY O F THE TRANSFEROR TO MAKE OUT A GOOD MARKETABLE TITLE FREE FROM ALL ENCUMBRANCES WHATSOEVER IN FAVOUR OF TRANSFEREE. IN FACT, A SUIT WAS FILED BY SHRI SIDRA M SOREN BEFORE THE LOWER COURT I.E. UPAYUKTH, PASCHIM SINGHBHUM CHALLENGING THE OW NERSHIP OF THE ASSESSEE ON THE IMPUGNED LAND. HOWEVER, THE SUIT WAS DECIDED VIDE APPEAL NO.19/2006-07 DATED 18.03.2008 IN FAVOUR OF ASSESSE E. HOWEVER, SUBSEQUENTLY SHRI SIDRAM SOREN FILED THE REVISION P ETITION BEFORE UPAYUKTH PASCHIM SINGHBHUM WHICH WAS AGAIN DECIDED IN FAVOUR OF ASSESSEE VIDE REVISION PETITION NO. 02/2009 DATED 22.07.2013. HOWEVER, THE ASSESSEE IN THE MEANTIME TRANSFERRED T HE IMPUGNED PROPERTY VIDE SALE DEED DATED 02.07.2011 BUT NO TAX WAS OFFE RED BY ASSESSEE IN THE YEAR UNDER CONSIDERATION. THEREFORE, THE AO CALLED UPON ASSESSEE TO EXPLAIN THE REASON FOR NOT DISCLOSING THE CAPITAL GAINS ON THE TRANSFER OF IMPUGNED PROPERTY. THE ASSESSEE IN COMPLIANCE THERETO SUBMIT TED THAT THE PROPERTY WAS TRANSFERRED IN THE FINANCIAL YEAR 1991-92 VIDE AGRE EMENT DATED 22.03.1992. AGAINST SUCH TRANSFER, AN ADVANCE FOR A SUM OF 19,000/- WAS ALSO RECEIVED BY THE ASSESSEE. THUS, AS PER THE PROVISION OF SECT ION 53A OF THE TRANSFER OF PROPERTY ACT, THE TRANSFER HAS TAKEN PLACE IN THE F INANCIAL YEAR 1991-92. THEREFORE, NO INCOME OF CAPITAL GAINS ON THE TRANSF ER OF SUCH IMPUGNED PROPERTY WAS OFFERED TO TAX. HOWEVER, THE AO DISREG ARDED THE CONTENTION OF ASSESSEE AND OBSERVED THE FACT THAT THE PROPERTY WA S TRANSFERRED IN THE FINANCIAL YEAR 2011-12 CORRESPONDING TO ASSESSMENT YEAR 2012-13 AND THEREFORE CAPITAL GAINS ON SUCH TRANSFER IS LIABLE TO BE TAXED IN THE YEAR UNDER CONSIDERATION. ACCORDINGLY, THE AO TREATED THE STAM P VALUE DETERMINED FOR THE PURPOSE OF STAMP DUTY OF 1,90,83,227/- AS SALE CONSIDERATION U/S 50C OF THE ACT AND DETERMINE THE CAPITAL GAINS INCOME OF 1,89,1,170/- AND ADDED TO THAT TOTAL INCOME OF ASSESSEE. ITA NO.156/KOL/2015 A.Y. 2012-13 M/S MANGILALL ESTATES (P) LTD. VS. DCIT CC- 1(3) KOL. PAGE 11 10. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A). THE ASSESSEE BEFORE LD. CIT(A) SUBMITTED THAT THE IMPUG NED PROPERTY WAS TRANSFERRED VIDE AGREEMENT DATED 22.03.1992, CONSEQ UENTLY THERE AROSE CAPITAL GAINS INCOME WHICH HAS TO BE TAXED IN THE F INANCIAL YEAR 1991-92. THE PROVISION OF SECTION 50C CAME INTO FORCE WITH EFFEC T FROM 01.04.2003. THEREFORE, SAME CANNOT BE APPLICABLE TO THE TRANSFE R OF THE IMPUGNED PROPERTY WHICH HAS TAKEN PLACE IN THE FINANCIAL YEAR 1991-92 . HOWEVER, LD. CIT(A) DISREGARDED THE CONTENTION OF ASSESSEE CONFIRMED TH E ORDER OF AO BY OBSERVING AS UNDER:- 6. I HAVE PERUSED THE IMPUGNED ORDER AND THE MATER IAL PLACED ON RECORD. I HAVE ALSO CONSIDERED THE SUBMISSIONS OF T HE ASSESSEE. IT IS NOT IN DISPUTE THAT THE SALE DEED WAS REGISTERED ON 21. 07.2011 IN THE OFFICE OF THE REGISTRAR AND THE MARKET VALUE OF THE PROPER TY FOR THE PURPOSES OF STAMP DUTY WAS DETERMINED BY THE STAMP VALUATION AU THORITY AT RS.1,90,83,227/-. IT IS ALSO NOT IN DISPUTE THAT NO CAPITAL GAIN ON TRANSFER OF THE SAID PROPERTY WAS DISCLOSED BY THE ASSESSEE IN ITS RETURN FOR THE RELEVANT ASSESSMENT YEAR 2012-13. THE LD. AR CLAIME D THAT THE POSSESSION OF THE PROPERTY WAS HANDED OVER ON THE D ATE OF THE AGREEMENT 22.03.1992. THE AO HOWEVER NOTED IN THE I MPUGNED ORDER THAT THE SALE DEED DATED 02.07.2011 HAS CLEARLY REC ORDED THAT THE ASSESSEE CONTINUED TO BE THE ABSOLUTE OWNER OF THE PROPERTY AND THAT THE PROPERTY WAS STILL IN ITS POSSESSION: WHEREAS THE SELLER HEREIN IS ABSOLUTE OWNER AND NAME STANDS RECORDED IN THE LAST TWO SURVEY SETTLEMENT KHATIYANS AND IS IN POSSESSION OF THE PL OT OF LAND . THE LD. AR HAS ARGUED THAT IN VIEW OF THE DEFINITIO N OF TRANSFER CONTAINED IN SECTION 2(47), THE TRANSFER OF THE PRO PERTY HAD TAKEN PLACE IN THE FINANCIAL YEAR 1991-92 AND CONSEQUENTLY THE CAPITAL GAIN ARISING OUT OF SUCH TRANSFER WAS ASSESSABLE IN THE ASSESSME NT YEAR 1992-93. THE LD AR HAS HOWEVER ADMITTED IN COURSE OF THE APP ELLATE PROCEEDINGS THAT NO CAPITAL GAIN ON TRANSFER OF THE PROPERTY WAS DECLARED BY THE ASSESSEE IN ITS RETURN FOR THE ASSE SSMENT YEAR 1992-93. I THEREFORE FIND THAT THOUGH THE ASSESSEE CLAIMED T O HAVE TRANSFERRED THE PROPERTY IN THE FINANCIAL YEAR 1991-92 BUT IT H AS NOT DECLARED ANY CAPITAL GAIN ARISING OUT OF SUCH TRANSFER IN ITS RE TURN FOR THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR 1991-92. IN OTHE R WORDS, THE ASSESSEE THOUGH CLAIMED THAT THE PROPERTY WAS TRANS FERRED IN THE FINANCIAL YEAR 1991-92 BUT SUCH TRANSFER WAS NOT DE CLARED BY THE ASSESSEE IN ITS RETURN FOR THE RELEVANT ASSESSMENT YEAR 1992-93. IN THIS FACTUAL BACKGROUND, I FIND THAT THE ASSESSEE HAS CL AIMED THAT THE PROPERTY WAS TRANSFERRED IN THE FINANCIAL YEAR 1991 -92 IN VIEW OF SECTION 2(47) BUT THEN THE ASSESSEE HAS ITSELF NOT FOLLOWED THE LEGAL PROVISIONS OF SECTION 2(47) AS IT HAS NOT OFFERED THE TRANSFER FOR TAXATION IN THE ITA NO.156/KOL/2015 A.Y. 2012-13 M/S MANGILALL ESTATES (P) LTD. VS. DCIT CC- 1(3) KOL. PAGE 12 RELEVANT ASSESSMENT YEAR 1992-93. I AM THEREFORE NO T IMPRESSED WITH THE CONTENTION OF THE ASSESSEE THAT THE TRANSFER WA S MADE IN THE FINANCIAL YEAR 1991-92 AND THAT THE CAPITAL GAIN AR ISING OUT OF SUCH TRANSFER WAS ASSESSABLE IN THE ASSESSMENT YEAR 1992 -93. THE ASSESSEE HAS NOT BEEN ABLE TO BRING SUFFICIENT POSI TIVE MATERIAL ON RECORD TO SUPPORT ITS CONTENTION THAT THE TRANSFER OF THE PROPERTY WAS MADE IN THE FINANCIAL YEAR 1991-92. I THEREFORE FIN D MERIT IN THE FINDING OF THE AO THAT THE TRANSFER OF THE PROPERTY WAS MADE O N 21-07-2011 WHEN THE DEED WAS REGISTERED IN THE OFFICE OF THE REGIST RAR AND CONSEQUENTLY THE CAPITAL GAIN ARISING OUT OF SUCH TRANSFER WAS A SSESSABLE IN THE RELEVANT ASSESSMENT YEAR 2012-13. I ALSO FIND THAT THE AO WAS JUSTIFIED IN APPLYING THE PROVISIONS OF SECTION 50C FOR THE P URPOSES OF COMPUTING THE CAPITAL GAIN. I HAVE PERUSED THE JUDICIAL DECIS IONS RELIED UPON BY THE ASSESSEE AS WELL AS BY THE AO. I FIND THAT THE ISSU E IN THE PRESENT APPEAL IS SQU9ARELY COVERED BY THE JUDGMENT OF THE JURISDICTIONAL HIGH CURT INCOME OF BAGRI IMPEX (P LD. VS. ACIT (SUPRA). FOR BETTER APPRECIATION OF THE JUDICIAL DECISION, THE ORDER OF THE HON'BLE COURT IS REPRODUCED HEREUNDER: 1. THE UNDISPUTED FACTS OF THE CASE ARE AS FOLLOWS :- THE ASSESSEE WAS OWNER OF 2/5 TH SHARE IN A LAND SITUATED AT 14A, BURDWAN ROAD, KOLKATA. NATURALLY, THERE WERE CO-OWNERS OWNI NG THE RESIDUARY RIGHT IN THE LAND IN QUESTION. THE CO-OWNER THE GROUP COMPAN IES. THE CASE OF THE ASSESSEE IS THAT THE LAND IN QUESTION OR THE INTERE ST OF THE ASSESSEE WAS AGREED TO BE SOLD ON 15 TH OCTOBER, 1996 TO 15 SEVERAL BUYERS. DEEDS OF CONVEYANCE IN FAVOUR OF FIVE BUYERS WERE EXECUTED O N 15.1.1998 THE BALANCE 10 DEEDS OF CONVEYANCE WERE EXECUTED ON 26 TH MAY, 2006 AND REGISTERED ON 27 TH NOVEMBER,2007. THE STAMP DUTY WAS ASSESSED ON 27TH NOVEMBER, 2007. THE ASSESSEE OFFERED THE SALE PROCEEDS FOR TA XATION DURING THE FINANCIAL YEAR 2005-06 ASSESSMENT YEAR 2006-07. CASE OF THE A SSESSEE IS THAT IT HAD RECEIVED MONEY BEFORE EXECUTING THE DEED OF CONVEYA NCE. IT WOULD APPEAR THAT THE DEED OF CONVEYANCE WAS EXECUTED IN THE FIN ANCIAL YEAR 2006-07 AND THE REGISTRATION TOOK PLACE IN THE FINANCIAL YEAR 2 007-08. THE QUESTION AROSE WHETHER SECTION 50C OF THE INCOME TAX ACT IS APPLIC ABLE TO THE TRANSACTION. IT SHALL BE CONVENIENT TO SET OUT SECTION 50C, WHICH P RIOR TO ITS AMENDMENT ON 1ST OCTOBER, 2009, WAS AS FOLLOWS:- SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION I N CERTAIN CASES. 50C.(1) WHERE THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING L AND OR BUILDING OR BOTH, IS LESS THAN' THE VALUE ADOPTED OR ASSESSED BY ANY AUT HORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO A S THE STAMP VALUATION AUTHORITY) FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED SHALL, F OR THE PURPOSES OF SECTION 48 BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERAT ION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. ITA NO.156/KOL/2015 A.Y. 2012-13 M/S MANGILALL ESTATES (P) LTD. VS. DCIT CC- 1(3) KOL. PAGE 13 2. AFTER THE AMENDMENT WITH EFFECT FROM 1 ST OCTOBER, 2009 THE PROVISION OF SECTION 50C STOOD AS FOLLOWS :- SPECIAL PROVISION FOR FULL VALUE OF CONSIDERATION I N CERTAIN CASES. 50C.(1) WHERE THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING L AND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED [OR ASSESSA BLE] BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRE D TO AS THE STAMP VALUATION AUTHORITY) FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED [OR ASSE SSABLE] SHALL, FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VA LUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF SUCH TRANSFER. 3. THE CASE OF THE ASSESSEE IS THAT THE PROVISION O F SECTION 50C HAS NO MANNER OF APPLICATION BECAUSE ON THE DATE WHEN HE R ECEIVED THE MONEY BY WAY OF SALE PROCEEDS NEITHER THE DEED OF CONVEYANCE HAD BEEN EXECUTED AND NATURALLY IT COULD HAVE BEEN REGISTERED ON THAT DAT E. WE ALREADY HAVE INDICATED THAT THE SALE PROCEEDS WERE CLAIMED TO HA VE BEEN RECEIVED IN THE FINANCIAL 2005-06; THE DEED OF CONVEYANCE WAS EXECU TED IN THE FINANCIAL YEAR 2006-07 AND THE REGISTRATION OF THE DEED OF CONVEYA NCE TOOK PLACE IN THE FINANCIAL YEAR 2007-08. 4. THE SUBMISSION OF THE ASSESSEE WAS ACCEPTED BY T HE CIT(A). THE REVENUE PREFERRED AN APPEAL. THE LD TRIBUNAL REVERSED THE O RDER OF CIT(A). THE ASSESSEE HAS ONCE AGAIN COME UP BEFORE THIS COURT. THE FOLLOWING QUESTION OF LAW HAS BEEN ADVANCED: ' WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD TRIBUNAL WAS JUSTIFIED IN LAW IN NOT CONSIDERING THAT THE WORDS ' OR ASSESSABLE ' WAS INTRODUCED IN SECTION 50C (1) OF THE INCOME TAX ACT , 1961 WITH EFFECT FROM T OCTOBER, 2009 AND THUS ERRED IN TAKING THE VALUE OF THE CAPITAL ASSET AS ASSESSED BY THE STAMP VALUATION AUTHORITY ON 27TH N OVEMBER, 2007 INSTEAD OF ACTUAL TRANSFER PRICE FOR THE RELEVANT ASSESSMEN T YEAR 2006-07?' 5. MR BHARATDWAJ, LD ADVOCATE FOR THE APPELLANT SUB MITTED THAT THE WORD ' TRANSFER ' IN RELATION TO CAPITAL ASSERTS HAS BEEN DEFINED I N SECTION 2(47) OF THE INCOME TAX ACT WHICH PROVIDES AS FOLLOWS : TRANSFER, IN RELATION TO A CAPITAL ASSET, INCLUDES :- (I) THE SALE, EXCHANGE OR RELINQUISHMENT OF THE AS SET; OR (II) THE EXTINGUISHMENT OF ANY RIGHTS THEREIN; OR (III) THE COMPULSORY ACQUISITION THEREOF UNDER ANY LAW; OR (IV) IN A CASE WHERE THE ASSET IS CONVERTED BY THE OWNER THEREOF INTO, OR IS TREATED BY HIM AS STOCK-IN-TRADE OF A BUSINESS CARR IED ON BY HIM, SUCH CONVERSION OR TREATMENT; OR (V) THE MATURITY OR REDEMPTION OF A ZERO COUPON BON D; OR (VI) ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANC E OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPE RTY ACT, 1882 (4 OF 1882) OR (VII) 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 AN Y OTHER MANNER ITA NO.156/KOL/2015 A.Y. 2012-13 M/S MANGILALL ESTATES (P) LTD. VS. DCIT CC- 1(3) KOL. PAGE 14 WHATSOEVER) WHICH HAS THE EFFECT OF TRANSFERRING, O R ENABLING THE EMPLOYMENT OF, ANY IMMOVABLE PROPERTY.' 6. HE SUBMITTED THAT GOING BY THE DEFINITION OF WOR D ' TRANSFER ', APPEARING FROM S.2(47)(V) OF THE IT ACT, THE SALE WAS COMPLET ED WHEN THE CONSIDERATION WAS RECEIVED IN THE FINANCIAL YEAR 2005-06. POSSESS ION HAD ALREADY BEEN GIVEN IN THE YEAR 1996 PURSUANT TO AN AGREEMENT FOR SALE, AS INDICATED EARLIER. SECTION 50C HAD NO MANNER OF APPLICATION BECAUSE TH E VALUATION OF THE LAND FOR THE PURPOSE OF STAMP DUTY WAS J1.ET TO BE ASSES SED. IN THE CIRCUMSTANCES, THE LD TRIBUNAL ERRED IN APPLYING SECTION 50C TO TH E CASE OF THE ASSESSEE. 7. WE HAVE NOT BEEN IMPRESSED BY THIS SUBMISSION. I T IS TRUE THAT ' TRANSFER ' HAS BEEN DEFINED IN SECTION 2(47) QUOTED ABOVE. BUT THE AFORESAID DEFINITION WAS MADE BEFORE SECTION 50C WAS INTRODUCED TO THE I NCOME TAX ACT. AFTER SECTION 50C WAS INTRODUCED IN THE YEAR 2003, THE VA LUE OF LAND OR BUILDING OR BOTH SOLD OR OTHERWISE TRANSFERRED HAS TO BE THE VA LUE ASSESSED BY THE AUTHORITY OF THE STATE GOVERNMENT FOR THE PURPOSE O F STAMP VALUATION. THE SUBMISSION THAT IN THE FINANCIAL YEAR 2005-06 WHEN THE CONSIDERATION WAS RECEIVED, THE DEED OF CONVEYANCE HAD NOT EVEN BEEN EXECUTED HAS NOT FOUND FAVOUR WITH US FOR THE SIMPLE REASON THAT THE INTEN TION OF THE PARLIAMENT IS THAT IN A CASE WHERE THE LAND OR BUILDING OR BOTH ARE SO LD OR OTHERWISE TRANSFERRED, SUCH TRANSFER SHALL BE DEEMED TO HAVE TAKEN PLACE O NLY AFTER THE STAMP DUTY HAS BEEN ASSESSED BY STATE GOVERNMENT, BECAUSE IT I S ON THE VALUATION MADE FOR THE PURPOSE OF STAMP DUTY THAT THE TAX IS PAYAB LE UNDER THE INCOME TAX ACT. THE AMENDMENT MADE IN THE YEAR 2009 MAY HAVE M ADE THE THINGS SIMPLER, BUT THE INTENTION OF THE LEGISLATURE WAS V ERY CLEAR FROM THE BEGINNING THAT THE VALUE FOR THE PURPOSE OF INCOME TAX SHALL BE THE SAME AS THE VALUE FOR STAMP DUTY. BY ADOPTING DEVICES TO DEFEAT THE PROVI SION, THE ASSESSEE CANNOT BE HEARD TO CONTEND THAT SECTION 50C WOULD NOT BE A PPLICABLE MERELY BECAUSE THE DEED OF CONVEYANCE HAD NOT AT THAT TIME BEEN EX ECUTED OR REGISTERED. THE CONTENTION THAT THE PROPERTY STOOD TRANSFERRED IN THE FINANCIAL YEAR 2005- 06 WHEN THE SALE PROCEEDS WERE RECEIVED ON THE BASI S OF THE DEFINITION APPEARING FROM S.2(47)(V) OF THE IT ACT IS WITHOUT ANY SUBSTANCE FOR REASONS ALREADY DISCUSSED. THE ASSESSEE ITSELF DID NOT FOLL OW S.2(47)(V) OF THE IT ACT BECAUSE IT DID NOT OFFER THE TRANSFER FOR TAXATION IN THE YEAR 1996, WHEN THE POSSESSION IS CLAIMED TO HAVE BEEN MADE OVER ON THE BASIS OF THE AGREEMENTS FOR SALE IN ACCORDANCE WITH S.2(47)(V) Q UOTED ABOVE. DESIGNS TO EVADE TAX CANNOT BE PERMITTED. THE ASSESSING OFFICE R ON THE DATE OF ASSESSMENT FOR THE ASSESSMENT YEAR 2006-07 HAD BEFO RE HIM THE VALUATION MADE BY THE STATE FOR THE PURPOSE OF STAMP DUTY AND RIGHTLY APPLIED THE SAME. 7. THE HON'BLE HIGH COURT HAS NOTED IN ITS ORDER T HAT TRANSFER WAS DEFINED IN SECTION 2(47) BUT THEN IT WAS MADE BEFORE SECTION 5 0C WAS INTRODUCED. BUT, ONCE SECTION SOC WAS INTRODUCED, THE VALUE OF THE P ROPERTY TRANSFERRED HAS TO BE THE VALUE ASSESSED BY THE STAMP VALUATION AUTHOR ITY FOR THE PURPOSES OF STAMP DUTY. THE HON'BLE COURT HAS CLARIFIED THE INT ENTION OF THE LEGISLATURE IN INTRODUCING SECTION 50C THAT WHERE THE PROPERTY WAS TRANSFERRED, SUCH TRANSFER SHALL BE DEEMED TO HAVE TAKEN PLACE ONLY AFTER THE STAMP DUTY WAS ASSESSED BY THE STAMP VALUATION AUTHORITY BECAUSE IT WAS ON SUCH VALUATION THAT THE TAX WAS PAYABLE UNDER THE INCOME TAX ACT. THE HON 'BLE COURT HAS HELD THAT NO DESIGN OR DEVICE TO DEFEAT THE LEGAL PROVISIONS WIT H A VIEW TO EVADE TAX COULD ITA NO.156/KOL/2015 A.Y. 2012-13 M/S MANGILALL ESTATES (P) LTD. VS. DCIT CC- 1(3) KOL. PAGE 15 BE PERMITTED AND THE ASSESSEE COULD NOT BE ALLOWED TO TAKE REFUGE BEHIND THE ARGUMENT THAT THE DEED OF CONVEYANCE WAS REGISTERED AT A LATER DATE. THE HON'BLE COURT HAS FURTHER HELD THAT THE ASSESSEE CO ULD NOT BE ALLOWED TO ARGUE THAT TRANSFER HAD ALREADY TAKEN PLACE ON THE BASIS OF SECTION 2(47) WHEN THE ASSESSEE ITSELF DID NOT FOLLOW SECTION 2(47) BY NOT OFFERING IN THAT YEAR SUCH TRANSFER FOR TAXATION. I FIND THAT SIMILAR ING REDIENTS ARE PRESENT IN THE CASE OF THE ASSESSEE. FOR, THE ASSESSEE CLAIMED THAT TRA NSFER OF THE PROPERTY HAD TAKEN PLACE IN THE FINANCIAL YEAR 1991-92 ON THE BA SIS OF SECTION 2(47) BUT THEN THE ASSESSEE ITSELF DID NOT FOLLOW SECTION 2(4 7) AS IT DID OFFER SUCH TRANSFER FOR TAXATION IN THE RELEVANT ASSESSMENT YE AR 1992-93. FOLLOWING THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF BAGRI IMPEX (P) LTD VS ACIT (SUPRA), IT IS TO BE HELD THAT THE AO WAS JUST IFIED IN HOLDING THAT THE TRANSFER OF THE PROPERTY WAS MADE IN THE FINANCIAL YEAR 2011-12 AND CONSEQUENTLY THE CAPITAL GAIN ARISING OUT OF SUCH T RANSFER WAS ASSESSABLE IN THE RELEVANT ASSESSMENT YEAR 2012-13 AND ALSO THAT THE AO HAS RIGHTLY INVOKED SECTION 50C FOR THE PURPOSES OF COMPUTING T HE CAPITAL GAIN. THE IMPUGNED ORDER OF THE AO IS UPHELD. GROUND NO 2 TO 5 IS DISMISSED. GROUND NO 6 IS GENERAL IN NATURE. THE ASSESSEE BEING AGGRIEVED BY THIS ORDER OF LD. C IT(A) CAME IN SECOND APPEAL BEFORE US. 11. LD. AR BEFORE US SUBMITTED THAT THE IMPUGNED PR OPERTY HAS BEEN TRANSFERRED VIDE AGREEMENT DATED 22.03.1992 AS PER THE PROVISIO N O SECTION 53A OF THE TRANSFER OF PROPERTY ACT. THE LD. AR IN SUPPORT OF ASSESSEE S CLAIM DREW OUR ATTENTION ON PAGES 18 TO 23 OF THE PAPER BOOK WHERE THE COPY OF AGREEMENT DATED 22.03.1992 WAS PLACED. THE POSSESSION OF THE IMPUGNED PROPERTY WAS ALSO DULY HANDED OVER TO THE TRANSFEREE AS PER THE AGREEMENT DATED 22.03.199 2 WHICH HAS ALSO BEEN DISCUSSED IN THE PRECEDING PARAGRAPH. LD. AR IN SUP PORT OF ASSESSEES CLAIM ALSO DREW OUR ATTENTION ON PAGES 42 AND 43 OF THE SALE D EED MADE ON 20.07.2011 WHICH READS AS UNDER:- AND WHEREAS THE SELLER HAVING EARLIER AGREED TO SE LL THE SCHEDULE PROPERTY TO THE PURCHASERS ON THE BASIS OF THEIR MU TUAL UNDERSTANDING WHICH WAS REDUCED INTO WRITING VIDE AN AGREEMENT DATED 22 .03.92 AND THE PURCHASERS ARE IN THE POSSESSION OF THE PROPERTY SI NCE THEN, THIS SALE DEED IS MADE ON THE TERMS AND CONDITIONS SETTLED AND AGREED BY AND BETWEEN THE PARTIES AND COVENANTED HEREIN BELOW:- LD. AR ALSO SUBMITTED THAT PART PAYMENT WAS DULY RE CEIVED BY IT IN THE FINANCIAL YEAR 1991-92 AND HE FURTHER SUBMITTED THA T THE BALANCE AMOUNT OF 1.71 LAKH WAS DULY RECEIVED IN THE FINANCIAL YEAR 2 011-12. LD. AR IN SUPPORT OF ASSESSEES CLAIM DREW OUR ATTENTION ON PAGES 45 TO 49 OF THE PAPER BOOK WHICH READS AS UNDER:- ITA NO.156/KOL/2015 A.Y. 2012-13 M/S MANGILALL ESTATES (P) LTD. VS. DCIT CC- 1(3) KOL. PAGE 16 1. THAT THE SELLER HAD ALREADY RECEIVED A SUM OF R S.19,000 (NINETEEN THOUSAND ONLY) BY WAY OF EARNEST MONEY AT THE TIME EXECUTION OF THE AGREEMENT DATED 22.03.92 AND HEREBY ACKNOWLEDGES TO HAVE RECEIVED FROM THE PURCHASERS BALANCE AMOUNT OF RS.1,71,000/- (RUPEES ONE LAC SEVENTY ONE THOUSAND ONLY) BY WAY OF TWO CHEQUES IS SUED BY ICICI BANK LIMITED CHAIBASA BRANCH BEING CHEQUE NO 001219 DATED 19.07.2011 AMOUNTING TO RS.85,500/- (EIGHTY FIVE TH OUSAND FIVE HUNDRED) AND BEING CHEQUE NO 000482 DATED 19.07.201 1 AMOUNTING TO RS.85,500/- (EIGHTY FIVE THOUSAND FIVE HUNDRED) ONL Y AS FULL AND FINAL CONSIDERATION AMOUNT, IN VIEW OF THE ABOVE, LD. AR STATED THAT THE TRANSF ER OF THE IMPUGNED PROPERTY HAS TAKEN PLACE IN PURSUANCE TO THE PROVISION OF SE C. 2(47) R.W.S. SEC. 53A OF TRANSFER OF PROPERTY ACT. ON THE OTHER HAND, LD. DR FOR THE REVENUE SUBMITTED THAT NO CAPITAL GAINS INCOME WAS OFFERED BY THE ASSESSEE IN ASSESSMENT YE AR 1992-93. IT WAS ALSO SUBMITTED BY LD. DR THAT THE ENTIRE TRANSACTIONS WA S PLANNED TO ESCAPE FROM TAX LIABILITY. LD. DR IN SUPPORT OF REVENUES CASE RELIED ON THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF BAGRI IMPEX (P) LTD. VS. ACIT REPORTED (2013) 31 TAXMANN.COM 39 (CAL). HE VEHEMEN TLY RELIED ON THE ORDER OF AUTHORITIES BELOW. 12. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE CITED C ASE LAWS BY BOTH THE PARTIES. IN THE INSTANT CASE, THE IMPUGNED PROPERTY WAS REGI STERED BY ASSESSEE IN FAVOUR OF TRANSFEREE VIDE SALE DEED DATED 20.07.201 1.THE IMPUGNED PROPERTY WAS VALUED AT 1,90,83,227/- FOR THE PURPOSE OF STAMP DUTY. HOWEVE R, ASSESSEE DID NOT DISCLOSE THE IMPUGNED PROPERTY IN ITS IT RETURN. AS PER THE ASSESSEE THE IMPUGNED PROPERTY WAS TRANSFERRED IN F INANCIAL YEAR 1991-92 VIDE AGREEMENT DATED 22.03.1992. THEREFORE, NO CAPI TAL GAIN HAS ARISEN TO IT IN THE YEAR UNDER CONSIDERATION. AS PER ASSESSEE, THE TRANSFER OF THE PROPERTY HAS TAKEN PLACE IN THE FINANCIAL YEAR 1991-92 AS PE R THE PROVISION OF SECTION 2(47) R.W.S. 53A OF TRANSFER OF PROPERTY ACT THUS S IMPLY, THE IMPUGNED PROPERTY WAS REGISTERED BY WAY OF SALE DEED IN THE YEAR UNDER CONSIDERATION CANNOT BE THE BASIS CHARGING THE CAPITAL GAINS IN T HE YEAR UNDER CONSIDERATION. ITA NO.156/KOL/2015 A.Y. 2012-13 M/S MANGILALL ESTATES (P) LTD. VS. DCIT CC- 1(3) KOL. PAGE 17 HOWEVER, AO TREATED THE SAID TRANSACTIONS OF SALE O F THE IMPUGNED PROPERTY PERTAINING TO THE YEAR UNDER CONSIDERATION AND ACCO RDINGLY ADDITION ON ACCOUNT OF CAPITAL GAINS WAS MADE TO THE TOTAL INCOME OF AS SESSEE. THE VIEW TAKEN BY AO WAS SUBSEQUENTLY CONFIRMED BY LD. CIT(A). NOW TH E ISSUE BEFORE US ARISE SO AS TO WHETHER THE CAPITAL GAIN INCOME HAS ARISEN IN THE HANDS OF ASSESSEE IN THE YEAR UNDER CONSIDERATION IN THE GIVEN FACTS & CIRCUMSTANCES. IT IS UNDISPUTED FACT THAT THE IMPUGNED PROPERTY WAS TRAN SFERRED TO THE TRANSFEREE VIDE AGREEMENT DATED 22.03.1992 AND THE POSSESSION WAS ALSO DULY HANDED OVER TO THE TRANSFEREE. AGAINST SUCH TRANSFER AN AM OUNT OF 19,000/- WAS ALSO RECEIVED BY ASSESSEE. THUS, WE NOTE THAT ALL THE IN GREDIENTS FOR THE TRANSFER OF IMPUGNED PROPERTY AS SPECIFIED U/S 53A OF TRANSFER OF PROPERTY ACT HAS BEEN DULY COMPLETED IN THE TRANSACTIONS OF THE IMPUGNED PROPERTY. THE RELEVANT PROVISION OF SEC. 2(47) OF THE ACT READS AS UNDER:- (47) 30 [TRANSFER 31 , IN RELATION TO A CAPITAL ASSET, INCLUDES, (I) THE SALE 31 , EXCHANGE 31 OR RELINQUISHMENT 31 OF THE ASSET ; OR (II) THE EXTINGUISHMENT OF ANY RIGHTS THEREIN 31 ; OR (III) THE COMPULSORY ACQUISITION THEREOF UNDER ANY LAW ; OR (IV) IN A CASE WHERE THE ASSET IS CONVERTED BY THE OWNER THEREOF INTO, OR IS TREATED BY HIM AS, STOCK-IN-TRADE OF A BUSINESS CARRIED ON BY HIM, SUCH CONVERSION OR TREATMENT ;] 32 [OR] 33 [(IVA) THE MATURITY OR REDEMPTION OF A ZERO COUPON BOND; OR] 34 [(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 35 OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882) ; OR (VI) ANY TRANSACTION (WHETHER BY WAY OF BECOMI NG A MEMBER OF, OR ACQUIRING SHARES IN, A CO-OPERATIVE SOCIETY, COMPAN Y OR OTHER ASSOCIATION OF PERSONS OR BY WAY OF ANY AGREEMENT O R ANY ARRANGEMENT OR IN ANY OTHER MANNER WHATSOEVER) WHICH HAS THE EF FECT OF TRANSFERRING, OR ENABLING THE ENJOYMENT OF, ANY IMMOVABLE PROPERT Y. SIMILARLY, THE PROVISION OF SEC. 53A OF TRANSFER OF PROPERTY ACT IS ALSO REPRODUCED BELOW:- '53A. PART PERFORMANCE- WHERE ANY PERSON CONTRACTS TO TRANSFER FOR CONSIDERATION ANY IMMOVABLE PROPERTY BY WRITING SI GNED BY HIM OR ON HIS BEHALF FROM WHICH THE TERMS NECESSARY TO CONSTITUTE THE TRANSFER CAN BE ASCERTAINED WITH REASONABLE CERTAINTY, ITA NO.156/KOL/2015 A.Y. 2012-13 M/S MANGILALL ESTATES (P) LTD. VS. DCIT CC- 1(3) KOL. PAGE 18 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 P ART PERFORMANCE OF THE CONTRACT AND HAS DONE SOME ACT IN FURTHERANCE OF TH E CONTRACT, AND THE TRANSFEREE HAS PERFORMED OR IS WILLING TO P ERFORM HIS PART OF THE CONTRACT, THEN, NOTWITHSTANDING THAT THE CONTRACT, THOUGH REQUIRED TO BE REGISTERED, HAS NOT BEEN REGISTERED, OR, WHERE THERE IS AN INSTRUME NT OF TRANSFER, THAT THE TRANSFER HAS NOT BEEN COMPLETED IN THE MANNER PRESC RIBED THEREFOR BY THE LAW FOR THE TIME BEING IN FORCE, T HE TRANSFEROR OR ANY PERSON CLAIMING UNDER HIM SHALL BE DEBARRED FROM ENFORCING AGAINST THE TR ANSFEREE AND PERSONS CLAIMING UNDER HIM ANY RIGHT IN RESPECT OF THE PROP ERTY OF WHICH THE TRANSFEREE HAS TAKEN OR CONTINUED IN POSSESSION, OT HER THAN A RIGHT EXPR ESSLY 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.' 12.1 THEREFORE, WE HOLD THAT THE TRANSFER OF IMPUGN ED PROPERTY HAS TAKEN PLACE IN THE FINANCIAL YEAR 1991-92 AND ACCORDINGLY THE TAX LIABILITY AROSE UNDER THE HEAD CAPITAL GAINS HAS TO BE SUBJECTED TO TAX IN THAT FI NANCIAL YEAR. IN HOLDING SO WE FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HONBLE B OMBAY HIGH COURT IN THE CASE OF CHATURBHUJ DWARKADS KAPADIA VS. CIT REPORTED IN 260 ITR 491 WHEREIN IT WAS HELD AS UNDER: UNDER SECTION 2( 47 )( V ), ANY TRANSACTION INVOLVING ALLOWING OF POSSESSION TO BE TAKEN OVER OR RETAINED IN PART-PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPE RTY ACT WOULD COME WITHIN THE AMBIT OF SECTION 2( 47 )( V ). IN ORDER TO ATTRACT SECTION 53A, THE FOLLOWING CONDITIONS NEED TO BE FULFILLED. THERE SHOULD BE A CONTRACT FOR CONSIDERATION; IT SHOULD BE IN WRITING; IT SHOULD BE SIGNED BY THE TR ANSFEROR; IT SHOULD PERTAIN TO TRANSFER OF IMMOVABLE PROPERTY; THE TRANSFEREE SHOU LD HAVE TAKEN POSSESSION OF THE PROPERTY; LASTLY THE TRANSFEREE SHOULD BE RE ADY AND WILLING TO PERFORM HIS PART OF THE CONTRACT. EVEN ARRANGEMENTS CONFIRMING PRIVILEGES OF OWNERSHIP WITHOUT TRANSFER OF TITLE CAN FALL UNDER SECTION 2( 47 )( V ). SECTION 2( 47 )( V ) WAS INTRODUCED IN THE ACT FROM ASSESSMENT YEAR 1988-89 BECAUSE PRIOR THERETO, IN MOST CASES, IT WAS ARGUED ON BEHALF OF THE ASSESSEE THAT NO TRANSFER TOOK PLACE TILL EXECUTION OF THE CONVEYANCE. CONSEQUENTL Y, ASSESSEES USED TO ENTER INTO AGREEMENTS FOR DEVELOPING PROPERTIES WIT H THE BUILDERS AND UNDER THE ARRANGEMENT WITH THE BUILDERS, THEY USED TO CON FER PRIVILEGES OF OWNERSHIP WITHOUT EXECUTING CONVEYANCE AND TO PLUG THAT LOOP HOLE, SECTION 2( 47 )( V) CAME TO BE INTRODUCED IN THE ACT. IT WAS ARGUED BY THE ASSESSEE THAT THERE WAS NO EFFECTIVE TRANSFER TILL GRANT OF IRREV OCABLE LICENCE. ITA NO.156/KOL/2015 A.Y. 2012-13 M/S MANGILALL ESTATES (P) LTD. VS. DCIT CC- 1(3) KOL. PAGE 19 SIMILARLY WE ALSO FIND SUPPORT FROM THE THIRD MEMBE R BENCH OF THE BOMBAY TRIBUNAL IN THE CASE OF MS. RUBAB M. KAZERANI VS. J CIT, REPORTED IN 91 ITD 429 WHEREIN IT WAS HELD AS UNDER: FROM THE MOU IT WAS CLEAR THAT THE ASSESSEE HAD ENT ERED INTO AN AGREEMENT WITH SA TO DISPOSE OF THE SAID PROPERTY FOR A TOTAL CONSI DERATION OF RS. 5.5 CRORES. THE POSSESSION OF THE PROPERTY WAS HANDED O VER TO THE BUILDER SA AND ORIGINAL DOCUMENTS WERE ALSO GIVEN TO HIM ON TH AT DAY WITH AN UNDERSTANDING THAT HE WILL OBTAIN ALL NECESSARY CLE ARANCE CERTIFICATE UNDER THE URBAN LAND (CEILING AND REGULATION) ACT, 1976 AND C ERTIFICATE UNDER SECTION 269UC. THEREFORE, THE MOU WAS NOT FOR THE PURPOSE O F SIMPLY IDENTIFYING THE PROSPECTIVE BUYER OR THE CONSIDERATION RECEIVED BY THE ASSESSEE WAS ONLY A SECURITY DEPOSIT. THAT WAS A TRANSACTION BY WHICH T HE ASSESSEE TRANSFERRED THE PROPERTY IN QUESTION IN THE MANNER PRESCRIBED I N SUB-CLAUSES ( V ) AND ( VI ), INTRODUCED IN SECTION 2(47) WITH EFFECT FROM APRIL, 1988. THE EVENTS WHICH HAD TAKEN PLACE CONSTITUTED TRANSFER WHICH INCLUDES ANY TRANSACTION WHICH ALLOWS POSSESSION TO BE TAKEN/RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER O F PROPERTY ACT, 1882, AND ANY TRANSACTION ENTERED INTO IN ANY MANNER WHICH HA S THE EFFECT OF TRANSFERRING OR ENABLING THE ENJOYMENT OF ANY IMMOVABLE PROPERTY . SIMILARLY, USING THE NOMENCLATURE MOU WILL NOT CHANGE ITS CHARACTER OF S ALE AGREEMENT. FURTHER, CAPITAL GAINS WOULD BE TAXABLE IN THE YEAR IN WHICH SUCH TRANSACTIONS ARE ENTERED INTO, EVEN IF THE TRANSFER OF THE IMMOVABLE PROPERTY IS NOT EFFECTIVE OR COMPLETE FOR WANT OF REGISTRATION UNDER THE GENERAL LAW. UNDER SECTION 2(47)( V ) ANY TRANSACTION INVOLVING ALLOWING OF POSSESSION TO BE TAKEN OVER OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE N ATURE REFERRED TO IN SECTION 53A OF THE 1882 ACT WOULD COME WITHIN THE AMBIT OF SECTION 2(47)( V ). IN ORDER TO ATTRACT SECTION 53A, THEREFORE, THERE SHOULD BE AN AGREEMENT FOR CONSIDERATION; IT SHOULD BE IN WRITING; IT SHOULD B E SIGNED BY THE TRANSFEROR, IT SHOULD PERTAIN TO TRANSFER OF IMMOVABLE PROPERTY; T HE TRANSFEREE SHOULD HAVE TAKEN POSSESSION OF THE PROPERTY AND THE TRANSFEREE SHOULD BE READY AND WILLING TO PERFORM HIS PART OF CONTRACT. THEREFORE, CAPITAL GAINS WOULD BE TAXABLE IN THE YEAR IN WHICH SUCH TRANSACTIONS WERE ENTERED INTO, EVEN IF THE TRANSFER OF THE IMMOVABLE PROPERTY WAS NOT EFFECTIV E OR COMPLETE FOR WANT OF REGISTRATION UNDER THE GENERAL LAW. THEREFORE, THE CONCLUSION OF THE ACCOUNTANT MEMBER THAT IT WAS MERELY DOCUMENTS TO I DENTIFY BUYER AND AN ASSURED SECURITY DEPOSIT WAS NOT CORRECT IN THE EYE OF LAW. [PARA 15] THEREFORE, TAXABILITY OF CAPITAL GAINS AT THE HANDS OF THE ASSESSEE DID NOT FALL IN THE ASSESSMENT YEAR 2000-2001 ON CAREFUL CONSIDERATION OF THE PRINCIPLES LAID DOW N IN THE ABOVE JUDGMENTS, WE NOTE THAT THE TRANSFER OF THE PROPERTY IN THE IN STANT CASE HAS TAKEN PLACE IN THE FY 1991-92 AND IT CAN BE BROUGHT TO TAX IN THE ASSESSMENT YEAR 1992-93 ONLY. ITA NO.156/KOL/2015 A.Y. 2012-13 M/S MANGILALL ESTATES (P) LTD. VS. DCIT CC- 1(3) KOL. PAGE 20 12.2 WE FURTHER NOTE THAT THE FACTS OF THE CASE REL IED BY LD. DR ARE NOT APPLICABLE TO THE INSTANT FACTS OF THE CASE. THE RE LEVANT QUESTION RAISED BEFORE THE HONBLE COURT READS AS UNDER:- ' WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LEARNED TRIBUNAL WAS JUSTIFIED IN LAW IN NOT CONSIDERING THAT THE WO RDS 'OR ASSESSABLE' WAS INTRODUCED IN SECTION 50C(1) OF THE INCOME TAX ACT, 1961 WITH EFFECT FROM 1ST OCTOBER, 2009 AND THUS ERRED IN TAKING THE VALUE OF THE CAPITAL ASSET AS ASSESSED BY THE STAMP VALUATION AUTHORITY ON 27TH N OVEMBER, 2007 INSTEAD OF ACTUAL TRANSFER PRICE FOR THE RELEVANT ASSESSMEN T YEAR 2006-07?' THUS THE QUESTION WAS RAISED IN CONNECTION WITH THE APPLICABILITY OF THE PROVISIONS OF SECTION 50C(1) OF THE ACT WHICH IS NO T THE DISPUTE IN THE CASE ON HAND. THE DISPUTE IN QUESTION IS FOR THE TRANSFER O F THE PROPERTY IN THE MANNER PRESCRIBED IN SUB-CLAUSES (V) INTRODUCED IN SECTION 2(47) WITH EFFECT FROM APRIL, 1988. IN OUR CONSIDERED VIEW THE EVENTS WHICH HAD T AKEN PLACE CONSTITUTED TRANSFER WHICH INCLUDES ANY TRANSACTION WHICH ALLOW S POSSESSION TO BE TAKEN/RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882. THUS ANY TRANSACTION ENTERED INTO IN ANY MANNER WHICH HAS THE EFFECT OF TRANSFERRING OR ENABLING THE ENJOYMENT OF ANY IMMOVABLE PROPERTY AMOUNTS TO TRAN SFER UNDER SECTION 2(47) OF THE ACT. ACCORDINGLY CAPITAL GAINS WOULD BE TAXA BLE IN THE YEAR IN WHICH SUCH TRANSACTIONS ARE ENTERED INTO, EVEN IF THE TRA NSFER OF THE IMMOVABLE PROPERTY IS NOT EFFECTIVE OR COMPLETE BY WAY OF REG ISTRATION UNDER THE GENERAL LAW. UNDER SECTION 2(47)(V ) ANY TRANSACTION INVOLV ING ALLOWING OF POSSESSION TO BE TAKEN OVER OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE 1882 ACT WOULD CO ME WITHIN THE AMBIT OF SECTION 2(47)(V). IN ORDER TO ATTRACT SECTION 53A, THEREFORE, THERE SHOULD BE AN AGREEMENT FOR CONSIDERATION; IT SHOULD BE IN WRITIN G; IT SHOULD BE SIGNED BY THE TRANSFEROR, IT SHOULD PERTAIN TO TRANSFER OF IMMOVA BLE PROPERTY; THE TRANSFEREE SHOULD HAVE TAKEN POSSESSION OF THE PROPERTY AND TH E TRANSFEREE SHOULD BE READY AND WILLING TO PERFORM HIS PART OF CONTRACT. THEREFORE, CAPITAL GAINS WOULD BE TAXABLE IN THE YEAR IN WHICH SUCH TRANSACTIONS W ERE ENTERED INTO, EVEN IF THE TRANSFER OF THE IMMOVABLE PROPERTY WAS NOT EFFECTIV E OR COMPLETE FOR WANT OF ITA NO.156/KOL/2015 A.Y. 2012-13 M/S MANGILALL ESTATES (P) LTD. VS. DCIT CC- 1(3) KOL. PAGE 21 REGISTRATION UNDER THE GENERAL LAW. THEREFORE, THE TAXABILITY OF CAPITAL GAINS AT THE HANDS OF THE ASSESSEE DID NOT FALL IN THE ASSES SMENT YEAR 2012-2013. THUS THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED. 13. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED PAR TLY AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT 21/ 02/2018 SD/- SD/- (ABY. T. VARKEY) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP #- 21 / 02 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-M/S MANGILLL ESTATES (P) LTD., 8A, EXPRE SS TOWER, 42A, SHAKESPEARE SARANI, KOLKATA- 17 2. / RESPONDENT-DCIT, CC-1(3), 108, SHANTIPALI, KOLKA TA-108 3. / 0 / CONCERNED CIT KOLKATA 4. 0- / CIT (A) KOLKATA 5. 3 66/, /, / DR, ITAT, KOLKATA 6. 9 / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO /,