Adv.Shri Madhusudan S Ghule, Nagpur V. Income Tax Officer Ward 4(1), Nagpur

ITA 219/NAG/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3089 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 21-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: R V LOYA
• Keywords: Capital asset

Judgement Text

IN TH E INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH: NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO. 2 19 /NAG/20 1 3 ASSESSMENT YEAR: 2009 - 2010 ADV. SHRI MADHUSUDAN S. GHULE C/O. M/S. LOYA BAGRI & CO. C.A., GANDHIBAG, NAGPUR - 440002 PAN:AA YPG5221B VS INCOME TAX OFFICER WARD 4(1),SARAF CHAMBERS, SADAR NAGPUR - 440001 (APPELLANT) (RESPONDENT) APPELLANT BY SHRI R.V.LOYA AR RESPONDENT BY SHRI NARENDRA KANE DR DATE OF HEARING: 04 - 0 1 - 201 6 DATE OF PRONOUNCEMENT: - 31/03 /2016 O R D E R PER SHAMIM YAHYA , A .M. THIS IS AN APPEAL FILED BY THE ASSESSEE DIRE CTED AGAINST THE ORDER OF CIT (APPEALS) DATED 05.02.2013 AND PERTAINS TO ASSESSMENT YEAR 2009 - 10. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IN THIS APPEAL IS AS UNDER : - 1. THAT, THE ASSESSING OFFICER ERRED IN LAW AND ON FACTS IN CONSIDERING THE IMPUGNED LAND AS A SHORT TERM CAPITAL ASSET HELD FOR A PERIOD OF LESS THAN 36 MONTHS THEREBY CHARGING THE INCOME THEREON AT THE TIME OF SALE UNDER THE HEAD SHORT TERM CAPITAL GAINS AND THE LEARNED CIT(A)II WAS GROSSLY UNJUSTIFIED IN CONFIRMING THE ORDER OF THE ASSESSING OFFICER. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND EVIDENCES AVAILABLE ON RECORD, THE ACTION OF THE LEARNED AUTHORITIES IN NOT C OMPUTING INCOME UNDER THE HEAD LONG TERM CAPITAL GAINS IS GROSSLY ERRONEOUS AND LIABLE TO BE SET ASIDE . 2. IN THIS CASE, BRIEF F ACTS OF THE CASE ARE AS UNDER: - THE APPELLANT FILED ITS WORKING OF CAPITAL GAINS WHICH IS REPRODUCED HEREUND ER : - SALE CONSIDERATION OF SALE OF PLOT AND CONSTRUCTION THEREON NO.1,SHRIRAM NAGAR, SOMALWADA, WARDHA RD, NAGPUR AREA - 2563 SQ.FT ASLE DEED EXECUTED ON 08.09.2008 RS.42,00,000/ - PURCHASE - POSSESSION ON AGREEMENT DT. 26.10.2006 DT.15.02.1989 DT.02.08.1988 I NDEXED COST ON POSSESSION BASIS VALUE 12,25000 582 RS.44,28,260/ - THUS CAPITAL GAINS WAS COMPUTED BY THE APPELLANT AT NIL. 2 ITA NO. 219 /NAG/201 3 THE LD.AO NOTED THAT THOUGH THE PROPERTY WAS ACQUIRED BY THE APPELLANT IN FY 2006 - 07, THE INDEXATION HAS BEEN DONE AS PER FY 1988 - 89 AND REQUESTED THE APPELLANT FOR FURTHER CLARIFICATION IN THIS REGARD. THE APPELLANT EXPLAINED THAT HE HAD GOT POSSESSION OF THE PROPERTY ON 15.02.89 AND TO EVIDENCE THE SAME HE PRODUCED A COPY OF POSSESSION LETTER ISSUED BY THE SELLER AND ALSO SUBM ITTED A COPY OF A JUDGMENT OF COURT OF CIVIL JUDGE, SENIOR DIVISION, NAGPUR DATED 05.02.2005 WHEREIN THE SAID LETTER EVIDENCING TRANSFER OF POSSESSION HAS BEEN SUBJECT TO LITIGATION. IN THE SAID JUDGMENT IT WAS HELD BY THE COURT THAT THE EVIDENCE (EXH.118 ) PRODUCED BY THE PLAINTIFF IN THIS REGARD DOES NOT SUFFER FROM ANY MATERIAL INFIRMITY WHICH CAN CAST DOUBT IN THE TRUTHFULNESS OF THE FACTS MENTIONED IN THE SAID EVIDENCE. AND IN PARA 26 PAGE 32 THE COURT OBSERVED CONSIDERING THE EVIDENCE OF I HOLD TH AT THE EXH.118 IS A GENUINE DOCUMENT AND IT CANNOT BE DISBELIEVED AND IT WAS EXECUTED BY THE DEFENDANT ON HAVING RECEIVED THE AMOUNT OF RS.35,000/ - ON 15.02.1989. ON THE BASIS OF THE ABOVE FINDING, THE APPELLANT WAS OF THE VIEW THAT THE VENDOR HAD RECEIVE D AN AMOUNT OF RS.35,000/ - FROM THE ASSESSEE AGAINST HANDING OVER THE POSSESSION OF THE PLOT ON THE SAME DAY AND THAT THEREFORE HANDING OVER OF POSSESSION HAD TAKEN PLACE IN 1989. TO VERIFY THE GENUINENESS OF THE CLAIM OF APPELLANT REGARDING THE DATE OF TA KING POSSESSION OF THE PROPERTY, THE LD.AO ISSUED SUMMONS TO THE SE LLER OF THE SAID PROPERTY SHRI. WAMAN G. MULEY. 3. FROM THE STATEMENT OF SHRI.WAMA N G.MULE , AO IN FERRED THAT THE POSSESSION LETTER CLAIM ED BY THE ASSESSEE WAS NOT GENUINE AND AUTHENTIC EXCE PT THAT THE ASSESSEE S SUBMISSION THAT THERE IS A FINDING I N ORDER OF HONBLE CIVIL JUDGE, SENIOR DIVISION , NAGPUR THAT THE POSSESSION IS TO BE TRANSFERRED TO THE ASSESSEE ON 15.02.1989. 4. AFTER CONSIDERING THE SAID SUBMISSIONS OF THE APPELLANT THE LD.A O CONCLUDED THAT PHYSICAL POSSESSION OF THE SAID PIECE OF LAND WAS HANDED OVER BY SHRI . MULE TO THE APPELLANT ON THE DATE OF EXECUTION OF THE SALE DEED VIZ.26.10.2006 AND THAT THEREFORE THE APPELLANT BECAME THE OWNER OF THE PROPERTY IN FY 2006 - 07 AND CONSE QUENTLY THE CAPITAL GAIN ARISING TO THE APPELLANT WOULD BE SHORT TERM CAPITAL GAIN AND THE SAME WAS COMPUTED AT RS.28,98,900/ - AS AGAINST NIL CLAIMED BY THE APPELLANT. 5. AGAINST ABOVE ORDER , THE ASSESSEE HAD FILED AN APPEAL TO LEARNED CIT(A) WHO PROCE E D E D TO AFFIRM ORDER OF THE AO B Y RULING AS UNDER : - 1. I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE APPELLANT. THE MAIN CLAIM OF THE APPELLANT IS THAT IT HAD TAKEN PHYSICAL POSSESSION OF THE PROPERTY IN THE YEAR 1989 AND FOR COMPUTATI ON OF CAPITAL GAINS HE IS GOVERNED BY SECTION 53A OF TRANSFER OF PROPERTY ACT AND THAT THE RECITAL MADE IN THE SALE DEED MERELY CONFIRMS THE HANDING OVER OF THE ALREADY TRANSFERRED POSSESSION AND DOES NOT IN ANY WAY PROVE THAT THE POSSESSION OF PROPERTY WA S HANDED OVER ON THE DATE OF EXECUTION OF SALE DEED. IT WAS FURTHER SUBMITTED THAT SUCH RECITALS ARE COMMON IN STEREOTYPED DRAFTS OF CONVEYANCE DEEDS AND CONSIDERING ALL THE FACTS AND CIRCUMSTANCES THE MENTION OF HANDING OVER OF PHYSICAL POSSESSION OF PROP ERTY ON THE DATE OF EXECUTING THE SALE DEED SHOULD BE IGNORED ON THE GROUND THAT IT IS A TECHNICAL ERROR OR DEFAULT WHICH OCCURRED IN REGULAR COURSE. THE APPELLANT ALSO EXPRESSED SURPRISE THAT LD. AO RELIED ON THE FALSE STATEMENT OF THE VENDOR RELIED ON TH E FALSE STATEMENT OF THE VENDOR WHOSE STATEMENT HAS ALREADY BEEN PROVED TO BE FALSE IN A COURT OF LAW. 3 ITA NO. 219 /NAG/201 3 2. ON CAREFUL CONSIDERATION OF FACTS, IT IS SEEN THAT THE ENTIRE CASE OF THE APPELLANT IS AROUND ONE LETTER SUPPOSE TO HAVE BEEN WRITTEN BY SHRI WAMAN G . MULEY IN WHICH THE FACT OF HANDING OVER POSSESSION OF THE PROPERTY TO THE APPELLANT IS MENTIONED. THE APPELLANT FILED A SPECIAL CIVIL SUIT NO.232/89 AGAINST SHRI WAMAN G. MULEY FOR SPECIFIC PERFORMANCE OF THE AGREEMENT WHI CH WAS EVENTUALLY DECIDED IN FAV OUR OF THE APPELLANT AND IT WAS HELD THAT THE DOCUMENT OF POSSESSION WAS A GENUINE DOCUMENT AND COULD NOT BE DISBELIEVED AND THAT IT WAS EXECUTED BY SHRI WAMAN G. MULEY ON HAVING RECEIVED AN AMOUNT OF RS.35,000/ - ON 15.02.1989. THUS THE CIVIL COURT CAME TO THE CONSIDERED CONCLUSION THAT THE VENDOR HAD RECEIVED AN AMOUNT OF RS.35,000/ - FROM THE APPELLANT FOR HANDING OVER THE POSSESSION OF THE PLOT ON THE SAME DAY. BUT THE IMPORTANT POINT THAT NEEDS TO BE EMPHASIZED IS THAT THE MATTER DID NOT END THERE AND IT IS NOT THE CASE THAT SHRI WAMAN G. MULEY ACCEPTED THE FINDING AND DID NOT CONTEST THIS DECISION IN A HIGHER COURT. SHRI WAMAN G. MULEY AGGRIEVED BY THE SAID ORDER, WENT IN FURTHER APPEAL BEFORE THE 3 RD ADHOC ADDITIONAL DISTRICT JUDGE, NAGPUR. IT WAS DU RING THE PENDENCY OF THIS APPEAL IN THE SAID COURT THAT A COMPRISE WAS REACHED BY WAY OF A COMPROMISE PETITION BETWEEN THE APPELLANT AND SHRI WAMAN G. MULEY. THE COMPROMISE PETITION IS DATED 07.09.2006. SINCE THIS COMPROMISE PETITION IS SUBSEQUENT TO AND I N CONSEQUENCE TO THE FINDING OF THE LOWER COURT. THUS IT IS A VERY IMPORTANT FACT IN THIS APPEAL THAT THE FINDING OF THE LOWER COURT WAS CHALLENGED BY SHRI WAMAN G. MULEY AND A COMPROMISE PETITION WAS EVENTUALLY ARRIVED AT IN PURSUANCE OF WHICH THE FINAL S ALE DEED IN RESPECT OF THE SAID PROPERTY WAS EXECUTED. IN THIS SALE DEED IT IS CLEARLY AND EXPLICITLY MENTIONED THAT THE PHYSICAL POSSESSION OF THE SAID PROPERTY WAS IN THE HANDS OF SHRI WAMAN G. MULEY AS ON DATE OF EXECUTING THE SALE DEED. THE RELEVANT PO RTION OF THE SALE DEED (PAGE 2) IS REPRODUCED UNDER: - WHEREAS, THE PARTY NO.1 IS THE ABSOLUTE AND EXCLUSIVE OWNER, AND IS IN PHYSICAL POSSESSION OF ALL THAT PIECE AND PARCEL OF LAND PROPERTY, I.E. PLOT NO.1 ADMEASURING ABOUT 238.20 SQ. METERS, (I.E. 2563 SQ.FT.), SITUATED IN MOUZA - SOMALWADA, KH. NO. 41/1, P.H. NO. - 44,N.M.C. HOUSE NO. 1861/1, WARD NO.75, IN THE LAY - OUT OF A REGISTERED SOCIETY NAMELY JAI SHRIRAM CO. OP. HOUSING SOCIETY LTD., HAVING ITS OFFICE AT SHRIRAM - NAGAR, SOMALWADA, WARDHA ROAD, NAGP UR - 440025 TOGETHER WITH THE EXISTING TEMPORARY STRUCTURE OF ABOUT 100 SQ.FT. THEREON, TAHSIL AND DISTRICT, NAGPUR, WHICH IS MORE SPECIALLY DESCRIBED IN THE SCHEDULE OF THIS INSTANT DEED OF SALE. 2.1 ATTENTION IS ALSO INVITED TO THE FOLLOWING PORTION OF THE SALE DEED (PAGE 6, PARA 4) THAT THE PARTY NO.1 HEREBY ACKNOWLEDGES THE HANDING OVER THE POSSESSION OF THE SAID PROPERTY TO THE PARTY NO.2, AND ALSO ACKNOWLEDGES THE PURCHASES AS THE BENEFICIAL OWNER OF THE SAID PROPERTY AND DOES HEREBY GRANTS, CON VEYS, TRANSFERS, SALES AND ASSIGNS THE PURCHASES, THE ENTIRE SHARE AND INTEREST TO THE EXTENT OF 100% IN THE SAID PROPERTY I.E. THE LAND AND STRUCTURE THEREON, DESCRIBED IN THE SCHEDULE 2.2 THUS THE ABOVE ASSERTIONS, AS MENTIONED IN THE SALE DEED, DUL Y SIGNED BY THE APPELLANT AND SHRI MULE CLEARLY ESTABLISHED THE FACT THAT PHYSICAL POSSESSION OF THE PROPERTY WAS WITH SHRI MULE ALL ALONG TILL THE DATE OF SALE DEED. THERE ARE VARIOUS OTHER EVIDENCES ALSO WHICH DO ESTABLISH THE FACT THAT THE POSSESSION OF THE PROPERTY WAS ALL ALONG WITH SHRI WAMAN G. MULEY. THESE EVIDENCES INCLUDE : - A) CORPORATION TAX OF PROPERTY WAS PAID BY SHRI WAMAN G. MULEY TILL THE TIME OF SALE DEED. IF THE APPELLANT WAS IN POSSESSION OF THE SAID PROPERTY ALL ALONG, HE WOULD HAVE BEEN PAYING THE SAID CORPORATION TAX FOR THE PERIOD. 4 ITA NO. 219 /NAG/201 3 B) ON 30.10.06 A LETTER WAS WRITTEN BY SHRI MULEY TO THE JAI SHREERAM CO - OP, SOCIETY STATING THAT HE IS A OWNER OF THE SAID PLOT AND THAT HE HAD DECIDED TO SELL THE SAME TO THE APPELLANT AND REQUESTED FOR TRANS FER OF THE SAID PLOT IN THE NAME OF THE APPELLANT. C) EVEN IN THE STATEMENT WHICH ARE RECORDED ON OATH IN THE OFFICE OF THE LD.AO, SHRI MULEY HAS EXPLICITLY STATED THAT HE CONTINUED TO HAVE PHYSICAL POSSESSION OF THE SAID PROPERTY TILL THE DATE OF REGISTRATI ON OF THE SALE DEED AND THAT MUNICIPAL TAXES WERE PAID BY HIM TILL THE DATE OF EXECUTION OF THE SALE DEED. AS PER HIS STATEMENT, THE FACT THAT THE PHYSICAL POSSESSION OF THE PROPERTY WAS WITH HIM (SHRI WAMAN G. MULEY) IS FURTHER ESTABLISHED BY THE AFFIDAVI T JOINTLY FILED BY SHRI M.S.GHULE & SHRI WAMAN G.MULEY WHICH IS PART AND PARCEL OF THE REGISTERED SALE DEED. 3. CLEARLY, THE APPELLANT HAS SOUGHT TO GIVE TOO MUCH IMPORTANCE TO THE FINDING OF THE CIVIL JUDGE, SR. DIVISION, NAGPUR REGARDING THE AUTHENTICI TY OF THE DOCUMENT WHICH EVIDENCES PAYMENT OF RS.35,000/ - AND OBTAINING POSSESSION OF THE PLOT BECAUSE THAT IS THE ONLY PIECE OF EVIDENCE THAT SUITED HIS STAND. THE SIMPLE FACT IS THAT WHEN SHRI MULEY CONTESTED THAT FINDING OF THE CIVIL JUDGE, SR. DIVISION , NAGPUR IN A HIGHER COURT, THE APPELLANT HIMSELF ENTERED INTO A COMPROMISE PETITION WHEREIN HE CATEGORICALLY ADMITTED TO HAVE TAKEN OVER THE POSSESSION OF THE LAND ON 26.10.2006 WHICH WAS THE DATE OF EXECUTION OF THE SALE DEED. ONCE THE COMPROMISE PETITIO N IS ENTERED INTO SUBSEQUENT TO THE JUDGMENT OF THE CIVIL JUDGE, SR. DIVISION, NAGPUR AND IS AGREED TO BY BOTH THE PARTIES, THE FINDINGS OF THE CIVIL JUDGE, SR. DIVISION, NAGPUR GET EFFECTED AND NO LONGER CARRY THE FORCE OF LAW. THOSE FINDINGS THEREFORE C ANNOT COME TO THE RESCUE OF THE APPELLANT AT THIS STAGE. 4. CONSIDERING THE FACT IN TOTALITY IT IS CLEAR THAT THE PROPERTY CONTINUED TO BE IN POSSESSION OF THE VENDOR SHRI WAMAN G. MULEY TILL 26.10.2006 WHEN PHYSICAL POSSESSION OF THE SAID PROPERTY WAS HA NDED OVER TO THE APPELLANT ON EXECUTION OF THE SALE DEED. I AM THEREFORE IN AGREEMENT WITH THE FINDING OF THE AO THAT THE APPELLANT IS LIABLE TO PAY TAX ON SHORT TERM CAPITAL GAINS OF RS.28,98,900/ - AS C OMPUTED IN THE ASSESSMENT ORDER. 6. AGAINST THE AB OVE ORDER , THE ASSESSEE IS BEFORE US . THE LD. COUNSEL OF THE ASSESSEE HAS SUMMARISED HIS SUBMISSIONS AS UNDER: - RE : GIST OF SUBMISSION THE PROPERTY IS HELD FOR MORE THAN 36 MONTHS AND THEREFORE ITS LONG TERM CAPITAL ASSET AND THE GAIN ON SALE IS ASSES SABLE AS LONG TERM CAPITAL GAINS FOR THE FOLLOWING REASONS : - (1) THE PROPERTY WAS PURCHASED ON 02.08.1988 FOR A CONSIDERATION OF RS.1,80,000/ - WHICH IS EVIDENCED BY AGREEMENT (ISAR CHITTI) (2) THE POSSESSION OF THE PROPERTY WAS RECEIVED ON 15.02.1989 WHICH IS E VIDENCED BY LETTER SIGNED BY THE OWNER OF THE PROPERTY MR. W.G. MULEY. THE AUTHENTICITY OF POSSESSION LETTER CANNOT BE DOUBTED IN VIEW OF THE HONOURABLE DISTRICT COURT ORDER DATED 05.02.2005 WHEREIN IT IS HELD THAT THE POSSESSION LETTER DATED 15.02.1989 I S AN AUTHENTIC AND GENUINE DOCUMENT. 5 ITA NO. 219 /NAG/201 3 THE PURCHASE DEED DATED 26.10.2006 NOWHERE STATES THAT THE POSSESSION WAS HANDED OVER ON EXECUTION OF SALE DEED ON 26.10.2006. RECITAL IN THE SALE DEED IS ONLY ACKNOWLEDGEMENT OF POSSESSION TAKEN EARLIER. (3) SUBSTANTIAL PAYMENT WAS MADE AGAINST THE AGREED CONSIDERATION : - 02.08.1988. RS.30,000/ - 02.08.1988 RS.30.000/ - 09.08.1988 RS.10.000/ - 15.02.1989 RS.35.000/ - ------------------ RS.1,05,000/ - ======== (4) AFTER THE RECEIPT OF SUBSTANTIAL PAYMENT, OWNER OF THE PLOT MR. MUL EY TOOK FURTHER ACTION FOR TRANSFER OF PROPERTY WITH THE JAI SHREERAM CO - OPERATIVE HOUSING SOCIETY. (5) THE STATEMENT OF MR. W.G.MULEY CANNOT BE USED AGAINST THE ASSESSEE FOR FOLLOWING REASONS : - THE ASSESSEE WAS NOT ALLOWED TO CROSS EXAMINE MR.W.G.MULEY . EVEN AFTER THE COURT GIVING VERDICT THAT THE POSSESSION LETTER DATED 15.02.1989 IS AUTHENTIC AND GENUINE, THE AO WAS NOT JUSTIFIED IN PLACING RELIANCE ON THE AVERMENTS OF SHRI.W.G.MULEY WHICH ARE FALSE AND ALREADY PROVED WRONG IN THE COURT. (6) LEARNED CIT (A) HAS FAILED TO CONSIDER THE COMPROMISE PETITION DATED 07.09.2006 IN PROPER PERSPECTIVE. THE ASSESSEE AND MR. W.G.MULEY BOTH ENTERED THE COMPROMISE PETITION AND NOT THE ASSESSEE ALONG. THERE IS NO ISSUE OF POSSESSION AND ITS DATE, IN THE PETITION AND T HEREFORE THE OBSERVATION IF LEARNED CIT(A) ARE MISPLACED. 7. PER CONTRA THE LEARNED DR RELI ED UPON BEFORE US ON THE ORDERS OF AUTHORITIES BELOW. W E HAVE CAREFUL LY CONSIDER ED THE SUBMISSIONS & PERUSED THE RECORDS . W E F IND THAT AS PER THE AGREEMENT (ISAR CHITTI) THE PROPERTY WAS PURCHASED ON DATED 02.08.1988 AND THE POSSESSION OF THE PROPERTY WAS GIVEN ON 15.02.1989 WHICH WAS SUPPORTED B Y THE POSSESSION LETTER GIVEN. IN THIS REGARD, HONBLE CIVIL COURT , NAGPUR HAS HELD ON 05.02.2005 THAT POSSESSION LETTER DATED 15.02.1989 IS AUTHENTIC AND GENUINE DOCUMENTS. 8. NOW IN TH E S E CIRCUMSTANCE S , WE F I ND THAT THE AO HAVE PLACED RELIANCE UPON THE STATEMENT OF SHRI W.G. MULEY WHO WAS A PARTY IN THE DISPUTE BEFORE THE CIVIL COURT. IN OUR CONSIDER ED OPI NION ANY ORDER OF CIVIL SUIT WITH REGARD TO THE QUESTION OF AUTHENTIC ITY OF POSSESSION LETTER CANNOT BE DISREGARDED LIGHTLY. AUTHORITIES BELOW HAVE CLEARLY ERRED IN DISREGARDING THE DECISION OF CIVIL COURT AND HAVE PREFERRED THE STATEMENT OF SHRI W.G. MUL EY WHO IS A PART Y TO TH E DISPUTE. IN TH E S E CIRCUM STANCES THE ASSESSEE D ESERVES TO SUCCEED ON THE GROUNDS TH AT POSSESSION OF THE PROPERTY WAS TRANSFERRED ON 15.02.1989 AND THIS WAS DULY AF FIR MED BY THE DISTRICT COURT ORDER DATED 05.02.2005 . WE ACCORDINGLY AGREE WITH THE LE ARNED COUNSEL OF THE ASSESSEE. T HE PURCHASE DEED CANNOT BE OVER RI DE THE FACTS OF THE CASE AND TAKE PRECEDENCE OVER THE DISTRICT COURT ORDER . 6 ITA NO. 219 /NAG/201 3 9. FURTHER MORE, WE FIND THAT THE PROPERTY WAS PURCHASED ON 02.08.1988 FOR CONSIDERATION OF RS. 1,8 0 , 000/ - . S UBSTA NTIAL PAYMENT WAS MADE AGAINST THE AGREED CONSIDERATION IN 1988 - 89 AND THE SUBSEQUENT REGISTRATION OF PROPERTY WAS DONE VIDE PURCHASED DEED DATE D 2 6 . 1 0. 2006 . 10. WE FIND THAT , FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAINS, THE PROPERTY ST O OD TRANSFER RED TO THE ASSESSEE IN 1988 - 89 ITSELF. IN THIS REGARD, WE PLACE RELIANCE UPON HONBLE SUPREME COURT DECISION IN CIVIL APPEAL NO. 5899 - 5900 OF 2014 IN THE CASE OF SHRI SANJEEV LAL & OTHERS V /S. CIT VIDE ORDER DATED 01.07.2014. IN THIS CASE, HONBLE SUPREME COU RT DECISION HAS H E LD AS UNDER : - IN NORMAL CIRCUMSTANCES BY EXECUTING AN AGREEMENT TO SELL IN RESPECT OF AN IMMOVEABLE PROPERTY, A RIGHT IN PERSONAM IS CREATED IN FAVOUR OF THE TRANSFEREE/VENDEE. WHEN SUCH A RIGHT IS CREATED IN FAVOUR OF THE VENDEE, THE VENDOR IS RESTRAINED FROM SELLING THE SAID PROPERTY TO SOMEONE ELSE BECAUSE THE VENDEE, IN WHOSE FAVOUR THE RIGHT IN PERSONAM IS CREATED, HAS A LEGITIMATE RIGHT TO ENFORCE SPECIFIC PERFORMANCE OF THE AGREEMENT, IF THE VENDOR, FOR SOME REASON IS NOT EXECUT ING THE SALE DEED. THUS, BY VIRTUE OF THE AGREEMENT TO SELL SOME RIGHT IS GIVEN BY THE VENDOR TO THE VENDEE. THE QUESTION IS WHETHER THE ENTIRE PROPERTY CAN BE SAID TO HAVE BEEN SOLD AT THE TIME WHEN AN AGREEMENT TO SELL IS ENTERED INTO. IN NORMAL CIRCUMST ANCES, THE AFORESAID QUESTION HAS TO BE ANSWERED IN THE NEGATIVE. HOWEVER, LOOKING AT THE PROVISIONS OF SECTION 2(47) OF THE ACT, WHICH DEFINES THE WORD TRANSFER IN RELATION TO A CAPITAL ASSET, ONE CAN SAY THAT IF A RIGHT IN THE PROPERTY IS EXTINGUISHED BY EXECUTION OF AN AGREEMENT TO SELL, THE CAPITAL ASSET CAN BE DEEMED TO HAVE BEEN TRANSFERRED. RELEVANT PORTION OF SECTION 2(47), DEFINING THE WORD TRANSFER IS AS UNDER: - 2(47) TRANSFER, IN RELATION TO A CAPITAL ASSET, INCLUDES, - (I) .................. .... (II) THE EXTINGUISHMENT OF ANY RIGHTS THEREIN ; OR ........................................... NOW IN THE LIGHT OF DEFINITION OF TRANSFER AS DEFINED UNDER SECTION 2(47) OF THE ACT, IT IS CLEAR THAT WHEN ANY RIGHT IN RESPECT OF ANY CAPITAL ASSET IS E XTINGUISHED AND THAT RIGHT IS TRANSFERRED TO SOMEONE, IT WOULD AMOUNT TO TRANSFER OF A CAPITAL ASSET, 11. CONSIDERING THE PRESENT CASE, ON THE ANVIL OF AFORESAID HONBLE APEX C OU RT DECISION, WE FIND THAT QUA. SECTION 2(47) THE TRANSFER IN THIS CASE TOO K PLACE IN 1988 - 89 WHEN THE AGREEMENT TO PURCHASE WAS ENTERED INTO A ND THE SUBSTANTIAL PAYMENTS WAS MADE TO THE SELLER . 12. HENCE, FROM THIS POINT OF VIEW ALSO , THE A SSESSEES COMPUTATION OF CAPITAL GAIN BY TAKING THE PURCHASE IN THE YEAR 1988 - 89 IS CORRE CT. HENCE ACTION OF THE AUTHORITIES BELOW IS NOT SUSTAINABLE . A CCORDINGLY , WE SET ASIDE THE ORDERS OF A UTHORITIES BELOW AND DECIDE THE ISSUE IN THE FAVOUR OF THE ASSESSEE . 13. I N THE RESULT , T HIS APPEAL FILED BY ASSESSEE STANDS ALLOWED. 7 ITA NO. 219 /NAG/201 3 ORDER PRON OU NCED IN THE OPEN COURT ON THIS 31 ST DAY OF MARCH , 2016 SD/ - SD/ - (MUKUL K. SHRAWAT) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER NAGPUR, DATED: 31 / 03 /2016 MANGESH BODKHE/ PS COPY FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T., CONCERNED 4. CIT ( APPEALS) - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR B ENCH, NAGPUR