Income-tax Officer, V. Shri Prakash Rajaram Bolgamwar, Solapur

ITA 179/PUN/2014

• Counselvise Citation: 17924514 RSA 2014
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-01-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 28-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Assessee Lawyers: S N DOSHI
• Keywords: Capital asset; Advance ruling
• Section: 143(3); 133A; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.179/PN/2014 ASSESSMENT YEAR: 2003-04 INCOME TAX OFFICER, WARD - 2(3), SOLAPUR . APPELLANT VS. SHRI PRAKASH RAJARAM BOLGAMWAR, 102, ANTROLIKAR NAGAR NO.1, HOTGI ROAD, SOLAPUR, DIST SOLAPUR . RESPONDENT PAN: AJRPB9000H APPELLANT BY : SHRI B.C. MALAKAR RESPONDENT BY : SHRI S.N. DOSHI DATE OF HEARING : 24-02-2015 DATE OF PRONOUNCEMENT : 10-04-2015 ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A)-III, PUNE, DATED 20.11.2013 RELATING TO ASSESSMENT YEAR 2003-0 4 AGAINST ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX A CT, 1961. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN TREATING THE CAPITAL GAIN ARISING OUT OF THE ACQUISITION OF LAND BEARING SURVEY NO. 312 (OLD) & 130 (NEW), SITUATED AT MAJRE WADI, DIST SOLAPUR, AS LONG TERM CAPITAL GAIN. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT OBSERVING THAT AS PER THE POWER OF ATTORNEY GIVEN TO THE ASSESSEE BY SHRI SURESH S BHAIYYA, THERE WAS NO MEN TION OF ANY POSSESSION GIVEN TO THE ASSESSEE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED TO IGNORE THE FACT THAT NO POSSESS ION WAS GIVEN TO THE ASSESSEE WHICH IS AS PER POINT '0' OF THE DEVELOPME NT AGREEMENT DATED 18.01.1996. ITA NO.179/PN/2014 SHRI PRAKASH RAJARAM BOLGAMWAR 2 4. AS PER THE DEVELOPMENT AGREEMENT, 1996, ONLY RIG HT GIVEN WAS TO PERMIT TECHNICIANS, ARCHITECTS AND ENGINEERS TO ENTER AND VERIFY THE PROPERTY. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT OBSERVING PAGE NO.30 OF SALE DEED DATED 31.08.2000, WHEREIN IT IS CLEARLY WRITTEN THAT THE POSSESSION O F THE SAID PROPERTY WAS GIVEN ON 31.08.2000, I.E., ON THE SAME DAY OF THE AGREEME NT. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN NOT OBSERVING THE 7/12 EXTRACT WHEREIN THE NAME OF THE ASSESSEE IS REFLECTED IN THE NAME 'OTHERS' WHICH DO NOT PROVE THE OWNERSHIP IN THE NAME OF THE ASSESSEE. 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS I N RELATION TO THE TREATMENT OF GAIN ARISING ON SALE OF RIGHTS IN THE PROPERTY. 4. THE BRIEF FACTS OF THE CASE ARE THAT SURVEY UNDE R SECTION 133A OF THE ACT WAS CARRIED OUT AT THE PREMISES OF ASSESSEE ON 21.0 3.2006. DURING THE COURSE OF SURVEY, STATEMENT OF ASSESSEE WAS RECORDED, IN W HICH HE ADMITTED TO HAVE RECEIVED COMPENSATION OF RS.3,21,10,358/- FROM MAHA RASHTRA HOUSING AND DEVELOPMENT AUTHORITY (MHADA) TOWARDS ACQUISITION O F LAND ADMEASURING 80307 SQ. MTRS. IN THE RETURN OF INCOME FILED PURSUANT T O NOTICE UNDER SECTION 148 OF THE ACT, THE ASSESSEE DECLARED TOTAL INCOME OF RS.2,92, 89,040/- AND AGRICULTURAL INCOME OF RS.1,57,350/-. THE ASSESSEE HAD ACQUIRED DEVELOPMENT RIGHTS IN THE LAND SITUATED AT SURVEY NO.312 (OLD) / 130 (NEW), M AJAREWADI, JULE SOLAPUR, VIDE AGREEMENT DATED 18.01.1996, UNDER WHICH THE CONSIDE RATION WAS FIXED AT RS.45,00,000/-. THE SAID PROPERTY WAS OWNED BY ONE SHRI SURESH S. BHAIYYA. ANOTHER SUPPLEMENTARY DEVELOPMENT AGREEMENT OF LAND WAS EXECUTED ON 26.07.1999. IT WAS ADMITTED THAT OUT OF TOTAL CONS IDERATION OF RS.45,00,000/-, SUM OF RS.31,00,000/- WAS PAID UP TO 26.07.1999. T HE ASSESSEE ULTIMATELY PURCHASED THE LAND VIDE SALE DEED DATED 31.08.2000 FOR CONSIDERATION OF RS.23,92,000/- AND STAMP DUTY OF RS.2,23,000/- WAS PAID. SUBSEQUENTLY, OUT OF THIS LAND, MHADA ACQUIRED LAND ADMEASURING 80307 SQ . MTRS. AND PAID COMPENSATION OF RS.3,21,10,358/- ON 14.12.2002. AS PER THE ASSESSEE, INCOME ON ACCOUNT OF COMPENSATION RECEIVED WAS TO BE ASSES SED AS INCOME FROM LONG TERM CAPITAL GAIN, WHEREAS THE ASSESSING OFFICER WA S OF THE VIEW THAT THE ITA NO.179/PN/2014 SHRI PRAKASH RAJARAM BOLGAMWAR 3 TRANSACTION BETWEEN THE PARTIES WAS COMPLETED BY HA NDING OVER THE POSSESSION VIDE SALE DEED DATED 31.08.2000, AS INITIALLY NO PO SSESSION WAS GIVEN TO THE ASSESSEE AND ONLY PERMISSION WAS GIVEN TO CARRY OUT THE DEVELOPMENT WORKS AND OTHER TRANSACTIONS, AND HENCE IT WAS SHORT TERM CAP ITAL GAINS. ON THE OTHER HAND, CLAIM OF THE ASSESSEE WAS THAT IT WAS IN POSS ESSION OF THE LAND SINCE 18.01.1996. THE ASSESSING OFFICER HELD THAT THE IN COME WAS ASSESSABLE AS INCOME FROM SHORT TERM CAPITAL GAIN. 5. THE CIT(A) EXAMINED THE TERMS OF DEVELOPMENT AGR EEMENT, POWER OF ATTORNEY AND SUPPLEMENTARY DEVELOPMENT AGREEMENT AN D ALSO FINAL SALE DEED. IT WAS NOTED BY THE CIT(A) THAT UNDER THE DEVELOPME NT AGREEMENT DATED 18.01.1996, THE APPELLANT WAS GIVEN THE RIGHT TO DE VELOP LAND AND FOR THIS, POWER OF ATTORNEY DATED 18.01.1996 WAS EXECUTED. UNDER T HE SAID POWER OF ATTORNEY, THE PERMISSION FOR CONVERSION OF LAND AS NON-AGRICU LTURAL, DIVISION OF LAND INTO PLOTS AND THEIR SALE, EXECUTION OF SALE DEEDS / AGR EEMENTS OF SALE AND ALSO ACCEPTANCE OF CONSIDERATION WAS GIVEN TO THE ASSESS EE. THE AGREEMENT ALSO REFLECTED THAT THE EXPENSES TOWARDS DEVELOPMENT OF LAND HAD TO BE BORNE BY THE ASSESSEE INCLUDING THE EXPENSES INCURRED FOR PERMIS SION OF NA, ARCHITECTURE, LABOUR, MASONS, ETC. THE ORIGINAL DEVELOPMENT AGRE EMENT WAS NOT A REGISTERED DOCUMENT, BUT THE POWER OF ATTORNEY EVEN DATED WAS REGISTERED WITH SUB- REGISTRAR, SOLAPUR NORTH. ANOTHER SUPPLEMENTARY DE VELOPMENT AGREEMENT DATED 17.07.1999 WAS EXECUTED BEFORE THE TAHSILDAR AND EXECUTIVE MAGISTRATE, SOLAPUR NORTH, UNDER WHICH DEVELOPMENT OF PLOTS WAS INTENDED. THE SAID AGREEMENT STATED THAT PROPERTY WAS IN THE POSSESSIO N OF SECOND PARTY I.E. THE PURCHASER AND THE ENTIRE PROPERTY ALONG WITH EASEME NT RIGHTS WAS GIVEN IN POSSESSION TO THE FIRST PARTY BY THE SECOND PARTY O N 18.01.1996 BY EXECUTING THE DEVELOPMENT AGREEMENT AND POWER OF ATTORNEY, WHICH AGREEMENT WAS STILL IN EXISTENCE. THE CIT(A) WAS OF THE VIEW THAT THE ASS ESSEE HAD ACQUIRED CERTAIN RIGHTS VIDE THE DEVELOPMENT AGREEMENT AND HAD ALSO SHOWN THAT ASSESSEE HAD PART POSSESSION OF THE PROPERTY ALTHOUGH THE VENDOR S STILL RETAINS HIS OWNERSHIP OR ITA NO.179/PN/2014 SHRI PRAKASH RAJARAM BOLGAMWAR 4 OTHER RIGHTS. THE CIT(A) FURTHER OBSERVED THAT NO DOUBT, THE SALE DEED DATED 31.08.2000 MENTIONED THAT THE APPELLANT HAD PURCHAS ED THE LAND PERMANENTLY AND PHYSICAL POSSESSION OF THE LAND WAS DELIVERED P ERPETUALLY BY WAY OF OWNERSHIP FOR CONSIDERATION OF RS.23,92,000/-, BUT THE ASSESSEE HAD ACQUIRED CERTAIN RIGHTS IN THE PROPERTY, WHICH AMOUNTED TO P ART POSSESSION VIDE THE EARLIER DOCUMENTS. THE LAND WAS ALSO MUTATED IN 7/12 RECOR DS IN THE NAME OF ASSESSEE BY WAY OF ENTRY NO.1777, DATED 04.11.1996. THE CIT (A) WAS OF THE VIEW THAT THE ASSESSEE HAD ACQUIRED EFFECTIVE RIGHTS OVER THE LAN D AS PER SECTION 53A OF THE TRANSFER OF PROPERTY ACT. RELIANCE WAS PLACED ON T HE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CHATURBHUJ DWARKADAS K APADIA VS. CIT, (2003) 260 ITR 491 (BOM) AND IT WAS HELD THAT SINCE THE RI GHTS OVER THE PROPERTY VESTED WITH THE ASSESSEE AS PER IRREVOCABLE POWER OF ATTOR NEY AND DEVELOPMENT AGREEMENT DATED 18.01.1996, THEREFORE, THERE WAS EF FECTIVE TRANSFER OF IMPUGNED PROPERTY ON THAT DATE AND THE COMPENSATION RECEIPTS WERE TO BE TAXED AS INCOME FROM LONG TERM CAPITAL GAIN IN THE HANDS OF THE ASS ESSEE. 6. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CI T(A). 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT THE ISSUE ARISING IN THE PRESENT APPEAL IS WHE THER THE GAINS ARE TO BE ASSESSED AS SHORT TERM OR LONG TERM CAPITAL GAINS. THE CASE OF THE ASSESSING OFFICER WAS THAT THE POSSESSION WAS GIVEN ON 31.08. 2000 I.E. ON THE DATE ON SALE DEED WAS EXECUTED, WHEREAS THE CASE OF THE ASSESSEE WAS THAT THE POSSESSION WAS GIVEN IN 1996 ON THE EXECUTION OF DEVELOPMENT A GREEMENT. IT WAS POINTED OUT BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE THAT BOTH THE DEVELOPMENT AGREEMENTS DO NOT MENTION GIVING OF POS SESSION AND ONLY POWER OF ATTORNEY WAS ONLY REGISTERED. THE LEARNED DEPAR TMENTAL REPRESENTATIVE FOR THE REVENUE FURTHER POINTED OUT THAT THE RATIO LAID DOWN BY HONBLE BOMBAY HIGH COURT IN CHATURBHUJ DWARKADAS KAPADIA VS. CIT (SUPR A) WAS DISTINGUISHABLE AS THERE WAS NO HANDING OVER OF POSSESSION IN THE CASE OF ASSESSEE AND HENCE, NO PERFORMANCE OF CONTRACT. ITA NO.179/PN/2014 SHRI PRAKASH RAJARAM BOLGAMWAR 5 8. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE AS SESSEE DREW OUR ATTENTION TO THE ENGLISH TRANSLATION, COPIES OF DIF FERENT AGREEMENTS EXECUTED BETWEEN THE PARTIES. IT WAS POINTED OUT THAT AS PE R THE DEVELOPMENT AGREEMENT DATED 18.01.1996, POSSESSION WAS GIVEN TO THE ASSES SEE THOUGH UNDER CLAUSE (O), IT CONFERRED ONLY OWNERSHIP RIGHTS IN THE SAID PROPERTY. FURTHER, THE SALE DEED TALKS ABOUT ABSOLUTE OWNERSHIP AND THE PERPETUAL OW NERSHIP WERE GIVEN TO THE ASSESSEE. FURTHER, REFERENCE WAS MADE TO THE TERMS OF SUPPLEMENTARY DEVELOPMENT AGREEMENT DATED 26.07.1999, WHEREIN IT HAS BEEN MENTIONED THAT THE ASSESSEE WAS TO TAKE POSSESSION FROM MHADA. FU RTHER, THE NAME OF ASSESSEE WAS RECORDED IN OTHER RELEVANT DOCUMENTS I .E. 7/12 EXTRACTS. THE AWARD FOR PAYMENT OF COMPENSATION IS PLACED AT PAGE 7 OF THE PAPER BOOK AND THE AWARD HAS BEEN GIVEN TO THE POWER OF ATTORNEY H OLDER AND EVEN CHEQUE WAS ISSUED TO THE SAID PERSON I.E. THE ASSESSEE. OUR A TTENTION WAS ALSO DRAWN TO THE WEALTH TAX ORDERS PLACED AT PAGE 15 OF THE PAPER BO OK. RELIANCE WAS PLACED ON THE RATIOS LAID DOWN IN THE FOLLOWING CASES:- A) CHATURBHUJ DWARKADAS KAPADIA VS. CIT, (2003) 26 0 ITR 491 (BOM) B) ICI LTD. VS. DCIT (2002) 80 ITD 58 (CAL) C) JASBIR SINGH SARKARIA, IN RE (2007) 294 ITR 196 (AAR) D) CHARANJIT SINGH ATWAL VS. ITO (2013) 36 TAXMANN .COM 10 (CHANDIGARH TRIB) 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE IN THE PRESENT CASE HAD ACQUIRED THE DEVEL OPMENT RIGHTS OF LAND IN QUESTION FROM ONE SHRI SURESH S BHAIYYA IN TERMS OF AN AGREEMENT DATED 18.01.1996, CONSEQUENT TO WHICH EVEN A REGISTERED I RREVOCABLE POWER OF ATTORNEY WAS EXECUTED IN FAVOUR OF THE ASSESSEE. C LAUSE (C) OF THE SAID AGREEMENT CLEARLY STATED THAT IF THE ASSESSEE CONTR ADICTED ANY PROVISIONS OF THE ACT RELATING TO DEVELOPMENT AND CONSTRUCTION, THEN THE AGREEMENT WOULD BE CANCELLED AND THE TRANSFEROR WOULD HAVE RIGHT TO TA KE OVER THE POSSESSION OF THE LAND. THE CONTENTION OF THE ASSESSEE IN THIS REGAR D, WAS THAT AS PER THE DEVELOPMENT AGREEMENT AND POWER OF ATTORNEY EXECUTE D ON 18.01.1996, THE POSSESSION OF THE LAND WAS GIVEN. THE ASSESSEE HAD ALSO FURNISHED ON RECORD ITA NO.179/PN/2014 SHRI PRAKASH RAJARAM BOLGAMWAR 6 THE MUTATION (PHERPHAR) IN THE RECORDS OF RIGHTS EF FECTIVE FROM 18.01.1996 MUTATED ON 04.11.1996 WHICH ESTABLISH THAT THE ASSE SSEE HAD ACQUIRED RIGHTS IN THE SAID PROPERTY AS THE PROPERTY WAS ALSO MUTATED IN THE NAME OF ASSESSEE. THE CIT(A) HAD EXAMINED THE DOCUMENTS EXECUTED BY T HE ASSESSEE VIS--VIS THE SAID PROPERTY AND OBSERVED AS UNDER:- 3.2. I HAVE CONSIDERED THE SUBMISSIONS MADE ON BEH ALF OF THE APPELLANT, THE OBJECTIONS OF THE ASSESSING OFFICER AND THE LEG AL POSITION WITH REGARD TO TRANSFER OF A CAPITAL ASSET. THE CRUX OF THE ISS UE IS THE DETERMINATION OF THE CORRECT DATE OF TRANSFER OF THE LAND IN QUESTIO N. SINCE THIS ISSUE INVOLVES EXAMINATION OF THE DEVELOPMENT AGREEMENT, POA AND SUPPLEMENTARY DEVELOPMENT AGREEMENT AND THE FINAL S ALE DEED, I HAVE EXAMINED THE IMPUGNED DOCUMENTS WHICH HAVE BEEN GOT TRANSLATED INTO ENGLISH BY THE APPELLANT THROUGH SHRI MUKUND MADHAV RAO KULKARNI, ADVOCATE SOLAPUR AND FILED DURING THE COURSE OF APP ELLATE PROCEEDINGS. PAGES 17 TO 21 OF THE PAPER BOOK, RELATE TO THE DEV ELOPMENT AGREEMENT DATED 18.1.1996 WHEREIN ADMITTEDLY, AGAINST THE CON SIDERATION OF RS.5 LAKHS RECEIVED TILL THAT DATE (RS.40 LAKHS RECEIVED VIDE POST-DATED CHEQUES DATED 1.7.1996. 1.1.1997 AND 11.71997) THE APPELLAN T WAS GIVEN THE RIGHTS TO DEVELOP THE LAND UNDER THE TALEGAON DABHADE SCHE ME OF GOVT. OF MAHARASHTRA. FOR DEVELOPMENT OF THE SCHEME, VIDE P OA DATED 18.1.1996 THE APPELLANT WAS TO GET THE PERMISSION FOR CONVERS ION OF LAND AS NON- AGRICULTURAL, DIVISION OF LAND IN TO PLOTS, SALE OF THE SAME, EXECUTION OF SALE DEEDS AND AGREEMENTS OF SALE AS ALSO ACCEPTING THE CONSIDERATION FOR THE PLOTS SOLD. THE POA ALSO GAVE THE APPELLANT THE POW ER TO ENTER INTO AGREEMENT FOR DEVELOPMENT OF PLOT AND GETTING THE N ECESSARY SANCTIONS. BOTH THE AGREEMENTS ALSO SHOW THAT ALL THE EXPENSES TOWARDS DEVELOPMENT OF THE LAND ARE TO BE BORNE BY THE APPE LLANT. PARA 3 OF THE IRREVOCABLE POA, WHICH IS A REGISTERED DOCUMENT CLE ARLY MENTIONS THAT THE EXECUTEE (NAMELY, THE APPELLANT) HAS TO BEAR ENTIRE EXPENSES FOR DEVELOPMENT OF THE PROPERTY. THE DEVELOPMENT AGREEM ENT ALSO CLEARLY STATES THAT EXPENSES FOR PERMISSION OF N.A (CLAUSE F), ARCHITECTURE, ENGINEER, LABOUR, MASONS, ETC. (CLAUSE G) AGREEMENT , POA, SALE DEED OF PLOTS/FLATS, STAMP DUTY, REGISTRATION FEE, ETC (CLA USE M) HAVE TO BE BORNE BY THE APPELLANT. IT IS ALSO SEEN FROM THE R ECORD THAT, ALTHOUGH THE DEVELOPMENT AGREEMENT DATED 18.1.1996 IS NOT A REGI STERED DOCUMENT, THE POA OF EVEN DATE HAS BEEN REGISTERED WITH SUB R EGISTRAR (SOLAPUR NORTH) VIDE REGISTRATION NO. 1/96 DATED 18.1.1996. I HAVE ALSO EXAMINED THE SUPPLEMENTARY DEVELOPMENT AGREEMENT DATED 17.7. 1999 WHICH HAS BEEN EXECUTED BEFORE THE TAHSILDAR AND EXECUTIVE MA GISTRATE, (SOLAPUR NORTH) AND BY WHICH THE DEVELOPMENT OF PLOTS HAS BE EN INTENDED. THIS AGREEMENT REALLY CLINCHES THE ISSUE THAT THE PROPER TY IS UNDER THE POSSESSION OF THE FIRST PARTY TO THE DOCUMENT VIZ. THE APPELLANT. IT IS MENTIONED THEREIN 'THE SAID PROPERTY IS IN MY POSSE SSION (SECOND PARTY) AND I AM ENJOYING THE FRUITS OF SAID PROPERTY. I A LSO ASSURE YOU THAT OTHER THAN ME NO ONE IS THE OWNER AND POSSESSOR OF SAID P ROPERTY. THE ENTIRE PROPERTY MENTIONED ABOVE WITH ELEMENTARY RIGHTS ARE GIVEN IN POSSESSION TO 1 ST PARTY BY 2 ND PARTY ON 18.01.1996 BY EXECUTING A REGISTERED DEVELOPMENT AGREEMENT AND POWER OF ATTORNEY BEFORE SUB-REGISTRAR NORTH SOLAPUR, SOLAPUR VIDE REGISTERED AGREEMENT IS STILL IN EXISTENCE AND IT IS CONTINUING' IT ALSO MENTIONS, TO QUOTE 'THE A BOVE MENTIONED PROPERTY IS GIVEN TO 1 ST PARTY BY 2 ND PARTY TO CARVE PLOT AND IMPLEMENT SCHEMES AS PER LAW HENCE TO EXECUTE THE SAME THIS SUPPLEMENTAR Y AGREEMENT IS MADE AND GIVEN TO 1 ST PARTY. THE 2 ND PARTY ASSURES AND GIVES UNDERTAKING THAT WHILE EXECUTING SALE DEED OR DEVELOPMENT AGREE MENT, WHEREVER HIS ITA NO.179/PN/2014 SHRI PRAKASH RAJARAM BOLGAMWAR 7 SIGNATURES ARE REQUIRED HE WILL DO SO. AS PER THI S AGREEMENT, THE 2 ND PARTY SHRI SURESHKUMAR SHREEKISHAN BHAIYYA ACKNOWLEDGES T HE RECEIPT OF RS.31 LAKHS BY CASH AND THROUGH CHEQUE AS A CONSIDE RATION FOR THE AGREEMENT. 10. THE FINDING OF THE CIT(A) VIDE PARAS 4.3.3 AND 4.3.4 WAS AS UNDER:- 3.3 A READING OF THESE THREE DOCUMENTS AS MENTIONE D IN THE PRECEDING PARAGRAPHS SHOWS THAT THE APPELLANT HAS ACQUIRED CE RTAIN RIGHTS VIZ. THE DEVELOPMENT RIGHTS BY WHICH HE IS AUTHORISED TO GET THE LAND CONVERTED FOR NON AGRICULTURAL USE, TAKE SANCTIONS AND PERMISSION S FOR CONSTRUCTION OF ROW HOUSES (SUBSEQUENTLY PLOTS) AS PER THE TALEGAON DABHADE SCHEME. AS ALREADY MENTIONED, THE POA WHICH IS A REGISTERED DOCUMENT, MENTIONS THE RIGHTS ACQUIRED BY THE APPELLANT FOR TAKING THE VARIOUS PERMISSIONS, IMPLEMENTATION OF THE ROW HOUSE SCHEME, DIVISION OF THE LANDS INTO PLOTS, SELLING THE PLOTS AND ACCEPTING THE SALE CONSIDERAT ION OF THE PLOTS. THEREFORE, READING OF THE THREE DOCUMENTS TOGETHER [IRRESPECTIVE OF CLAUSE O OF THE DEVELOPMENT AGREEMENT DATED 18.1.1996] CLE ARLY SHOWS THAT THE APPELLANT HAS PART POSSESSION OVER THE PROPERTY ALT HOUGH THE VENDOR STILL RETAINS HIS OWNERSHIP OR OTHER RIGHTS. NO DOUBT THE SALE DEED DATED 31.8.2000 MENTIONS THAT THE APPELLANT HAS PURCHASED THE LAND PERMANENTLY AND PHYSICAL POSSESSION OF THE LAND IS DELIVERED PERPETUALLY BY WAY OF OWNERSHIP FOR A CONSIDERATION OF RS.23,92 ,000/-, BUT THE APPELLANT IS SEEN TO HAVE ACQUIRED CERTAIN RIGHTS I N THE PROPERLY WHICH AMOUNTS TO PART POSSESSION VIDE THE EARLIER DOCUMEN TS. THIS WAS ALSO THE VIEW ENDORSED BY THE THIRD MEMBER DECISION OF ITAT MUMBAI IN THE CASE OF RUBAB M KAZERANI VS JCIT REPORTED IN 91 ITD 429. SUBSEQUENTLY, THIS VIEW HAS BEEN ENDORSED BY THE BOMBAY HIGH COURT IN THE CASE OF CHATURBHUJ DWARKADAS KAPADIA REPORTED IN 260 ITR 49 1B AND PUNE ITAT IN DYNANESHWAR M MULIK VS DCIT REPORTED IN 98 TTJ 1 79. THIS VIEW IS ALSO SUPPORTED BY THE DECISION OF THE AUTHORITY FOR ADVANCE RULING IN THE CASE OF JASBIR SINGH SARKANYA CITED SUPRA WHICH HEL D THAT 'THE ACTUAL DATE OF TAKING PHYSICAL POSSESSION OR THE INSTANCES OF P OSSESSION ACTS EXERCISED IS NOT VERY RELEVANT. THE ASCERTAINMENT OF SUCH DATE, IF CALLED FOR, LEADS TO COMPLICATED INQUIRIES WHICH MAY FRUST RATE THE OBJECTIVE OF THE LEGISLATIVE PROVISION IT IS ENOUGH IF THE TRANSFERE E HAS, BY VIRTUE OF THAT TRANSACTION, A RIGHT TO ENTER UPON AND EXERCISE ACT S OF POSSESSION EFFECTIVELY PURSUANT TO THE COVENANTS IN THE CONTRA CT THAT TANTAMOUNTS TO LEGAL POSSESSION.' THE COURT FURTHER HELD THAT 'A D EVELOPER ARMED WITH GPA CANNOT BE REGARDED MERELY AS A LICENSEE OR AN A GENT SUBJECT TO THE CONTROL OF THE OWNERS. HIS POSSESSION CANNOT BE CHA RACTERIZED AS PRECARIOUS OR TENTATIVE IN NATURE. THE FACT THAT TH E AGREEMENT DESCRIBES THE GPA AS IRREVOCABLE AND AN EXPRESS DECLARATION T O THAT EFFECT IS FOUND IN THE GPA ITSELF IS NOT WITHOUT SIGNIFICANCE. THER EFORE, THE IRREVOCABLE GPA EXECUTED BY THE OWNERS IN FAVOUR OF THE DEVELOP ER MUST BE REGARDED AS A TRANSACTION IN THE EYE OF LAW WHICH ALLOWS THE POSSESSION TO BE TAKEN IN PART PERFORMANCE OF THE CONTRACT FOR TRANSFER OF THE PROPERTY IN QUESTION'. 3.4. IT IS ALSO SEEN THAT THE LAND STANDS MUTATED IN THE 7/12 RECORDS IN THE NAME OF THE APPELLANT BY WAY OF ENTRY NO. 1777 DATED 04.11,1996. THIS PROVES BEYOND DOUBT THAT THE APPELLANT HAS ACQUIRED EFFECTIVE RIGHTS OVER THE LAND AS PER SEC. 53A IF THE TRANSFER OF PROPERT Y ACT. UNDOUBTEDLY, THE SALE DEED EXECUTED AS ON 31.08.2000 GRANTS CONTROL AND POSSESSION OF THE LAND TO THE APPELLANT AS 'ABSOLUTE OWNER. HOWE VER, THE ARRANGEMENT CONFIRMING THE PRIVILEGES OF OWNERSHIP WITHOUT TRAN SFER OF TITLE HAS BEEN HELD BY THE BOMBAY HIGH COURT TO FALL WITHIN THE PU RVIEW OF SEC.2(47)(V). ACCORDINGLY, RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE BOMBAY ITA NO.179/PN/2014 SHRI PRAKASH RAJARAM BOLGAMWAR 8 HIGH COURT IN CHATURBHUJ DWARKADAS KAPADIA'S CASE A ND OTHER CASES REFERRED SUPRA, IT IS HELD THAT THE RIGHTS OVER THE PROPERTY VESTED WITH THE APPELLANT AS PER THE IRREVOCABLE POA AND DEVELOPMEN T AGREEMENT DATED 18.1.1996 AND THEREFORE, THERE WAS EFFECTIVE TRANSF ER ON IMPUGNED PROPERTY ON THAT DATE. THE ASSESSING OFFICER IS DIR ECTED TO TREAT THE COMPENSATION RECEIPTS AS LONG TERM CAPITAL GAINS IN THE HANDS OF THE APPELLANT. GROUNDS 1, 3 AND 4 STAND ALLOWED. 11. THE ASSESSEE BEFORE US HAS FURNISHED AN EXPLANA TION OF THE NOTINGS MADE IN THE RECORD OF RIGHT IN FORM NO.6D. AS PER THE E NTRIES MADE IN NATURE OF RIGHTS IN RECORD OF RIGHT IN FORM 6D IN PURSUANCE OF DEVELO PMENT AGREEMENT AND IRREVOCABLE POWER OF ATTORNEY REGISTERED WITH S UB-REGISTRAR OF SOLAPUR ON 19.01.1996 THE NAME OF SHRI PRAKASH R BOLGAMWAR IS RECORDED IN OTHER RIGHTS. AS PER THE COMMENTARY ON 7/12 EXTRACT AND RECORDIN G OF RIGHTS BY ADV. SADANAND MANKAR ON PG NO 104 PARA 15 OF THIS COMMEN TARY, THE EXAMPLES OF OTHER RIGHTS ARE STATED AS UNDER:- A) THE NAME OF KARTA OF HUF IS SHOWN AS OCCUPIER AN D NAMES OF OTHER LEGAL HEIRS ARE RECORDED UNDER OTHER RIGHTS, B) BANKS, FINANCIAL INSTITUTIONS, PATHASANTHA WHO H AVE PROVIDED THE LOANS, C) SPECIAL PRIVILEGES, RIGHT OF GETTING WATER, RIGH T OF WAY, D) WHERE THE SHARE IN LAND IS UNDIVIDED OR CONDITIO NAL AND CONTROLLED, E) TRANSFER PROHIBITED UNDER REHABILITATION ACT OR SIMILAR LEGISLATIONS THE SAME SHALL BE RECORDED. 12. IN VIEW THEREOF, WHERE THE NAME OF THE ASSESSEE IS RECORDED IN OTHER RIGHTS PURSUANT TO SIGNING OF DEVELOPMENT AGREEMENT AND THE REGISTRATION OF IRREVOCABLE POWER OF ATTORNEY, IT IMPLIES THAT THE ASSESSEE HAD ACQUIRED THE RIGHTS IN THE SAID PROPERTY AND SINCE POSSESSION HA D ALREADY BEEN GIVEN TO THE ASSESSEE, IN VIEW OF THE PROVISIONS OF SECTION 2(47 )(V) OF THE ACT, THERE WAS PART PERFORMANCE OF THE CONTRACT UNDER SECTION 53A OF TH E TRANSFER OF PROPERTY ACT AND THUS, WHERE THE ASSESSEE HAD ACQUIRED RIGHTS IN THE SAID PROPERTY AND ALSO RECEIVED POSSESSION, THE OWNERSHIP IN THE SAID PROP ERTY STARTS FROM 18.01.1996. 13. IN THE FACTS OF THE PRESENT CASE, WHERE THE POS SESSION OF LAND HAD BEEN GIVEN TO THE ASSESSEE IN LINE WITH THE TERMS AGREED UPON BETWEEN THE PARTIES CONSEQUENT TO WHICH AN IRREVOCABLE POWER OF ATTORNE Y WAS EXECUTED, WHICH HAS NOT BEEN CANCELLED TILL DATE AND ALSO WHERE THE LAN D WAS MUTATED IN 7/12 RECORDS ITA NO.179/PN/2014 SHRI PRAKASH RAJARAM BOLGAMWAR 9 IN THE NAME OF ASSESSEE BY WAY OF ENTRY NO.1777, DA TED. 04.11.1996 ESTABLISHES THE CASE OF ASSESSEE OF HAVING ACQUIRED RIGHTS OVER THE LAND AS PER SECTION 53A OF THE TRANSFER OF PROPERTY ACT. THE ARRANGEMENT B ETWEEN THE PARTIES CONFIRMS THE HANDING OVER OF THE POSSESSION OF LAND THOUGH I N THE SALE DEED EXECUTED ON 31.08.2000, THE CONTROL AND POSSESSION OF LAND WAS GIVEN TO THE ASSESSEE AS ABSOLUTE OWNER. APPLYING THE RATIO LAID DOWN BY TH E HONBLE BOMBAY HIGH COURT IN CHATURBHUJ DWARKADAS KAPADIA VS. CIT (SUPRA), WH ERE THE ASSESSEE HAD ACQUIRED CERTAIN RIGHTS OVER THE PROPERTY UNDER THE DEVELOPMENT AGREEMENT AND THE IRREVOCABLE POWER OF ATTORNEY AND THE PART POSS ESSION OF THE PROPERTY HAVING BEEN GIVEN TO THE ASSESSEE, WE HOLD THAT THERE WAS EFFECTIVE TRANSFER ON THE DATE OF EXECUTION OF AGREEMENT DATED 18.01.1996. CONSEQ UENTLY, THE ASSESSEE ACQUIRED CERTAIN RIGHTS IN THE SAID PROPERTY FROM 1 8.01.1996 AND THE COMPENSATION RECEIVED BY THE ASSESSEE IN VIEW THERE OF, IS TO BE TAXED IN THE HANDS OF THE ASSESSEE AS INCOME FROM LONG TERM CAPI TAL GAINS. WE UPHOLD THE ORDER OF CIT(A) AND DISMISS THE GROUNDS OF APPEAL R AISED BY THE REVENUE. 14. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON THIS 10 TH DAY OF APRIL, 2015. SD/- SD/- (G.S. PANNU) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 10 TH APRIL, 2015. GCVSR COPY OF THE ORDER IS FORWARDED TO: - 1) THE DEPARTMENT; 2) THE ASSESSEE; 3) THE CIT(A)-III, PUNE 4) THE CIT-III, PUNE 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE