DASHRATH PUNJAJI GUJAR, Amaravati V. ITO, WARD-II, Amaravati

ITA 231/NAG/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3161 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 27-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANITA RUPAVATARAM
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Gift
• Section: 50C; 142(1); 147; 148; 144

Judgement Text

1 ITA NO. 231/NAG/2013 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. ITA NO. 231/NAG/2013 ASSESSMENT YEAR : 2008 - 09. DASHRATH PUNAJAJI GUJAR, THE INCOME - TAX OFFICER, AMRAVATI. VS. WARD - II, AMRAVATI. PAN BAOPG5978A APPELLANT. RESPONDENT. APPELLANT BY : SHRI MAHAVIR ATAL. RESPONDENT BY : SMT. ANITA RUPAVATARAM. DATE OF HEARING : 01 - 12 - 2015. DATE OF PRONOUNCEMENT : 15 TH JAN., 2016. O R D E R PER SHRI SHAMIN YAHYA, A.M . THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - II, NAGPUR DATED 05 - 03 - 2013 AND PERTAINS TO ASSESSMENT YEAR 2008 - 09. THE GROUNDS OF APPEAL READ AS UNDER: 1. THAT KEEPING IN VIEW THE FACTS OF THE CASE AO ERRED IN ASSESSING THE INCOME OF CAPITAL GAIN IN AY 2008 - 09, AS THE PART CONSIDERATION OF SALE PRICE IS RECEIVED IN FY 2003 - 04 AND ENTIRE CONSIDERATION IS RECEIVED BEFORE 31/03/07 AND POSSESSION OF THE PROPERTY IS ALSO HANDED OVER IN FY 2003 - 04 AND THE SAME IS ACTED UPON BY THE TRANSFEREE SINCE FY 2003 - 04. AO ERRED IN ASSESSING THE CAPITAL GAIN AT RS.38,57,230/ - IN AY 2008 - 09 AND THEREBY ERRED IN LEVYING CAPITAL GAIN TAX AT RS.8,49,123/ - FOR AY 2008 - 09 AND CHARGING INTEREST AND RAI SING DEMAND AT RS.16,10,785/ - . THAT THE CIT(APPEALS) - II ERRED IN CONFIRMING THE SAME. 2. THAT ALTERNATIVELY AO SHOULD HAVE APPLIED CORRECT INDEXATION ON THE SAID TRANSFER AND HENCE THE CAPITAL GAIN WORKED OUT BY THE AO IS NOT PROPER, INCORRECT AND ACCORDINGLY ASSES SING THE GAIN AT RS.38,57,230/ - 2 ITA NO. 231/NAG/2013 IS NOT JUSTIFIED. THE ORDER PASSED BY CIT(APPEALS) - II IS ERRONEOUS, INVALID AND DESERVES TO BE QUASHED. 2. BRIEF FACTS OF THE CASE AS EMANATING FROM THE RECORDS OF THE CASE AND THE ORDERS OF THE AUTHORITIES BELOW ARE A S UNDER : IN THIS CASE, AS PER AIR DATA, IT CAME TO THE KNOWLEDGE OF THE AO THAT THE APPELLANT HAD SOLD AGRICULTURAL LAND ADMEASURING 72 R SHET SURVEY NO. 63/3 GAT NO. 1 SITUATED IN THE LIMIT OF MUNICIPAL CORPORATION AMRAVATI, MOUJA NAVSARI PRAGANE NANDGA ON PETH, TQ. DIST. AMRAVATI ON 30 - 05 - 2007 FOR A CONSIDERATION OF RS.12 LAKHS. IT WAS NOTED THAT THE VALUE ADOPTED FOR THE PURPOSE OF STAMP DUTY WAS RS.40,96,000/ - . THE AO ALSO NOTICED THAT THE APPELLANT DID NOT HAVE PAN AND HAD NOT FILED ITS RETURN OF INCO ME. THE AO, THEREFORE, ISSUED A NOTICE U/S 148 DATED 19 - 04 - 2010 WHICH WAS SERVED ON THE APPELLANT ON 20 - 04 - 2010. SEVERAL NOTICES WERE ALSO SUBSEQUENTLY SERVED ON THE APPELLANT AND FINALLY ON 20 - 07 - 2010 THE APPELLANT HIMSELF ATTENDED AND HE WAS REQUESTED TO COMPLY TO THE VARIOUS DETAILS REQUIRED FOR COMPLETION OF ASSESSMENT. SINCE THERE WAS NO COMPLIANCE, A SHOW CAUSE LETTER WAS ISSUED ON THE APPELLANT ON 23 - 08 - 2011 AND THE APPELLANT WAS ASKED TO EXPLAIN AS TO WHY THE ASSESSMENT SHOULD NOT BE FINALISED ON TH E BASIS OF INFORMATION AVAILABLE ON RECORD AND AS TO WHY AN AMOUNT OF RS.40,96,000/ - , BEING VALUE ADOPTED BY STAMP VALUATION AUTHORITY SHOULD NOT BE DEEMED TO BE CONSIDERED RECEIVED AS PER SECTION 50C(1) OF THE INCOME TAX ACT. 3. BEFORE THE LEARNED CIT(APP EALS) THE ASSESSEE MADE THE FOLLOWING SUBMISSIONS : 1. 1. ASSESSMENT ORDER FOR AY 2008 - 09 IS PASSED ULS 144 R . W . S . SEC. 147 , AS ACCORDING TO AO ASSESSEE FAILED TO ATTEND AND COMPLY WITH THE NOTICES. ASSESSEE IS ILLITERATE AND CARRYING ON AGRICULTURAL ACTIVITY AND CULTIVATING AGRICULTURAL LAND BY HIMSELF PUTTING LABOUR IN THE SAID LAND. THERE IS NO BUSINESS IN THE FAMILY . NONE OF HIS SONS ARE EDUCATED. ASSESSEE'S SONS ARE CARRYING ON ACTIVITY OF RIK SHAW DRIVING AND OTHER LABOUR WORK AS TNCCCN ETC . ASSESSEE RECEIVED AN AGRICULTURAL LAND IN QUESTION IN GIFT ON 13/04/1978 BY 3 ITA NO. 231/NAG/2013 REGISTERED GIFT DEED NO . 1074 FROM HIS FATHER PUNJAJI AND SINCE THEN HE IS OWNER OF THE SAID LAND . THE LAND IS SOLD BY REGISTER ED SALE DEED DATED 2410512007. :4S PER SALE DEED THE CONSIDERATION FOR 72R OF LAND IS SHOWN AT RS. 12 LA CS. HOWEVER, AS PER TOKEN RECEIPT DATED 1711212003 AND AGREEMENT DATED 0510112004 THE LAND IS SOLD AT RS . 10 LACS PER ACRE AND AS SUCH THE VALUE OF THE LAND ADMEASURING 72R WORKS OUT AT RS. 17 . 75 LACS . I 2 . THE INITIAL PART PAYMENT OF THE CONSIDERATION AMOUNT OF RS. 210001 - WAS RECEIVED ON 1711212003 AND THEREAFTER ON THE DATE OF AGREEMENT DATED 0510112004 ASSESSEE RECEIVED IN ALL RS. 4,50 , 0001 - (RS . 1,00 , 0001 - BY BANK CHEQUE NO. 011379 OF AMRAVATI MERCHANTS CO . OP BANK AD BALANCE RS . 3,50,000/ - IN CASH). AS AGREED THE MEASUREMENT OF THE SAID LAND WAS CARRIED OUT THROUGH GOVERNMENT AGENCY ON 0510112004 ITSELF AND AFTER MEASUREMENT OF THE LAND THE POSSESSION IS ALSO GIVEN TO THE PURCHASER ON 0510112004 ITSELF FOR THEIR BUSINESS ACTIVITY. THIS WILL BE ' EVIDENT FROM THE REGISTERED SALE DEED DATED 2410512007 THE COPY OF WHICH WAS PROVIDED BY THE ASSESSEE TO THE ASSESSING OFFICER. IN PARA 6 OF THE SALE DEED IT IS VERY CLEARLY MENTIONED THAT THE LAND IN QUESTION ADMEASURING 72R IS MEASURED THROUGH TALUKA NIRIKSHAK, BHUMI ABHILEKH BY PAYING MEASUREMENT CHARGES VIDE CHALLAN NO. 31612003 AND MEASUREMENT MAP WAS RECEIVED BY T HE ASSESSEE ON 0510112004 AND ON THE SAME DATE THE POSSESSION OF TNE LAND WAS GIVEN TO THE PURCHASER BY EXECUTING ISSAR CHITTHI (AGREEMENT TO SELL) . ASSESSEE IS ENCLOSING HEREWITH THE FOLLOWING DOCUMENTS: I) TOKEN RECEIPT FOR RS. 21000/ - DATED 17/12/2003 THE DATE OF CONTRACT II) ISSAR CHITTHI DATED 05/01/2004 THE DATE OF AGREEMENT TO SELL III) DOCUMENT OF PAYMENT OF ADDITIONAL PART PAYMENT DATED 23/03/2006 IV) REGISTERED SALE DEED DATED 25/05/2007 3. IN TOKEN RECEIPT DATED 1711212003 IT IS SPECIFICALLY MENTIONED TH AT THE POSSESSION OF THE LAND WILL BE GIVEN ON THE DATE OF ISSAR CHITTHI. IN ISSAR CHITTHI DATED 0510112004 IT LS M ENTIONED TH A T TNE POSSESSION OF THE . SAID LAND IS GIVEN TO THE PURCHASER ON 0510112004 ITSELF WHEN THE ASSESSEE RECEIVED PART PAYMENT . 4. AS PER SEC. 53A OF TRANSFER OF PROPERTY ACT, 1882 THE TRANSFER OF THE SAID CAPITAL ASSET STANDS COMPLETED ON 0510112004 WHEN THE ASSESSEE GAVE POSSESSION OF THE SAID LAND TO THE PURCHASER AFTER RECEIPT OF PART PAYMENT. EVEN AS PER DEFINITION OF TRANS FER UNDER I. T. ACT AS STIPULATED IN SEC. 2(47) THE TRANSFER OF THE CAPITAL ASSET IS COMPLETED ON THE DATE OF ALLOWING POSSESSION OF ANY IMMOVABLE PROPERTY ALONGWITH PART PAYMENT. THUS THE TRANSACTION IN QUESTION STANDS COMPLETED IN AY 2004 - 05 ITSELF AN D THIS FACT IS EVIDENT FROM THE REGISTERED SALE DEED SUBMITTED BEFORE AO WHICH IS ALSO SUPPORTED BY THE ABOVE DOCUMENTS WHICH ARE BEFORE AO. 4 ITA NO. 231/NAG/2013 5. IN VIEW OF THE ABOVE FACTS AO ERRED IN ASSESSING THE INCOME OF CAPITAL GAIN IN THE HANDS OF THE ASSESSEE IN AY 2008 - 09, WHEN IN FACT THE TRANSACTION AS PER THE DEFINITION OF TRANSFER OF CAPITAL ASSET . STANDS COMPLETED IN AY 2004 - 05. THUS THE LEVY OF TAX IN AY 2008 - 09 AND ASSESSMENT FOR THAT YEAR IS NOT PROPER AND BAD IN LAW . THE SAME MAY PLEASE BE CANCELLED. HOWEVER, LEARNED CIT(APPEALS) DID NOT ACCEPT THE ABOVE CONTENTIONS. LEARNED CIT(APPEALS) NOTED THAT IN SUPPORT OF HIS ARGUMENT THE ASSESSEE HAS SUBMITTED THE FOLLOWING EVIDENCES: I) TOKEN RECEIPT FOR RS. 210001 - DATED 17/1212003 T HE DATE OF CONTRACT. II) ISSAR CHITTHI DATED 05 / 01 / 2004 THE DATE OF AGREEMENT TO SELL III) DOCUMENT OF PAYMENT OF ADDITIONAL PART PAYMENT DATED 23 / 03 / 2006 . IV) REGISTERED SALE DEED DATED 24 / 05 / 2007 LEARNED CIT(APPEALS) ALSO NOTED THE FOLLOWING : AS PER THE APPELLANT, DOCUMENT AND THE FACTS OF THE CASE CONCLUSIVELY ESTABLISHED THAT THE PROPERTY WAS PHYSICALLY HANDED OVER BY THE APPELLANT TO THE PURCHASER ON 05.01.2004. IN ITS SUPPORT THE APPELLANT HAS ALSO STATED THAT PARA - 6 OF THE REGISTERED SALE DEE D CLEARLY MENTIONS THAT THE POSSESSION OF THE LAND WAS GIVEN TO THE PURCHASER BY EXECUTING THE ISSAR CHITTHI (AGREEMENT TO SALE). THUS, THE APPELLANT CONCLUDED THAT SINCE THE PHYSICAL POSSESSION OF THE PROPERTY WAS GIVEN ON 05.01D.2004 THE CAPITAL GAIN AN D HAVE BEEN TAXED IN A.Y. 2004 - 05. HOWEVER, LEARNED CIT(APPEALS) PLACING RELIANCE UPON SECTION 53A OF THE TRANSFER OF PROPERTY ACT AND THE AMENDMENT ETC. IN THE SAME CONCLUDED AS UNDER : THUS THE REGISTRATION OF THE DOCUMENT ASSUMES IMPORTANCE FOR THE S ECTION 53A OF THE TRANSFER OF PROP E RTY ACT TO OPERATE. THE APPELLANT HAS ADMITTEDLY NOT REGISTERED ANY DOCUMENT WHICH ES T ABLISHES THE FACTS THAT THE PHYSICAL POSSESSION OF THE LAND WAS INDEED TRANSFERRED TO THE PURCHASER. THE NEW SUB - SECTION (I - A) IN SEC TION 17 OF THE REGISTRATION ACT, 1908, REPRODUCED ABOVE , WAS INSERTED WITH THE INTENTION TO MAKE REGISTRATION OF THE DOCUMENTS CONTAINING CONTRACTS TO TRANSFER FOR CONSIDERATION ANY IMMOVABLE PROPERTY COMPULSORY FOR THE PURPOSE OF SECTION 53 - A OF THE TR ANSFER OF PROPERTY ACT, 1882. SINCE THE APPELLANT HAS NOT REGISTERED THE AGREEMENT TO SELL WHICH IT ENTERED INTO IN THE Y E AR 2003 - 04, SECTION 53 - A OF THE TRANSFER OF PROPERTY ACT, 1882 WILL NOT APPLY AND THE TR A NSFER CANNOT BE DEEMED TO HAVE TAKEN PLACE F OR THE PURPOSES OF COMPUTING CAPITAL G A IN IN THE ASSESSMENT YEAR 2005 - 06 AS CLAIMED BY THE APPELLANT . THEREFORE, THE APPE L L ANT CANNOT TAKE THE SHIELD OF SECTION 53A TO DEFLECT J T~ 5 ITA NO. 231/NAG/2013 TAX LIABILITY WHICH HAS BEEN CO R R ECTLY DETERMINED BY THE LD . ASSESSING OFFICER AND WHICH WAS SOUGHT TO BE EVADED F I RST BY NOT FILLING THE RETURN OF INCOME AND LATER BY NOT COMPLYING TO THE VARIOUS REQUIR EM ENTS OF SECTION 142(1) . CONSIDERING THE ABOVE FACTS THE DE T ERMINATION OF THE L ONG TERM CAPITAL GAIN OF RS.38,57, 2301 - BY THE ID . AO IS HEREBY UPHELD. 4. AGAINST THE ABOVE ORDER, ASSESSEE IS IN APPEAL BEFORE US. 5. LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT THERE IS NO DOUBT AND IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS ENTERED INTO AN AGREEMENT TO SALE TH E LAND , A S PER TOKEN RECEIPT DATED 17 - 12 - 2003 AND AS PER AGREEMENT DATED 15 - 01 - 2004 . T HE INITIAL PART OF PAYMENT OF RS.21,000/ - WAS RECEIVED ON 17 - 12 - 2003 AND THEREAFTER ON THE DATE OF AGREEMENT DATED 05 - 01 - 2004 THE ASSESSEE RECEIVED A SUM OF RS.4,50,000/ - . THE POSSESSION OF THE SAME WAS GIVEN TO THE PURCHASER ON 05 - 01 - 2004 ITSELF FOR THEIR BUSINESS ACTIVITY. HENCE LEARNED COUNSEL SUBMITTED THAT THE TRANSACTION HAS BEEN COMPLETED IN ASSESSMENT YEAR 2004 - 05. HENCE THE AO HAS TOTALLY ERRED IN ASS ESSING THE INCOME OF CAPITAL GAIN IN ASSESSMENT YEAR 2008 - 09. IN THIS REGARD LEARNED COUNSEL PLACED RELIANCE UPON THE FOLLOWING CASE LAWS : I) CIT VS. R. SUGANTHA RAVINDRAN 352 ITR 488 (MAD). II) SANJEEVAL LAL (C.A. NO. 589 OF 2014) & SMT. SHAIL MOTILA L ( C.A.NO. 5900 OF 2014) V. CIT & ANOTHER 365 ITR 389 (SC). III) ITO VS. M/S B.R. HERMAN & MOHTA (INDIA) P. LTD. ITA NO.6427/M/2010 (ITAT MUMBAI). IV) ITO VS. MODIPON LTD. 43 CCH 21 (ITAT DELHI) V) DCIT VS. VENKAT REDDY ITA NOS. 974 & 975(HYD) OF 2010 (ITAT HYDERABAD). 6. PER CONTRA LEARNED D.R. RELIED UPON THE ORDERS OF THE LEARNED CIT(APPEALS). SHE SUBMITTED THAT THE ASSESSEE DID NOT DISCLOSE ANY CAPITAL GAIN VOLUNTARILY IN ASSESSMENT YEAR 2004 - 05 OR ASSESSMENT YEAR 2008 - 09. SHE 6 ITA NO. 231/NAG/2013 SUBMITTED THAT THE LEA RNED CIT(APPEALS) HAS CORRECTLY NOTED THAT THE PROCEEDINGS ARE INITIATED PURSUANT TO SECTION 50C UPON REGISTRATION OF THE DOCUMENT AND, THEREFORE, THE TAX IS CORRECTLY LEVIED IN THE ASSESSMENT YEAR 2008 - 09 I.E. ON THE BASIS OF DATE OF REGISTRATION. IN THIS REGARD LEARNED D.R. PLACED RELIANCE UPON THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF BAGRI IMPEX (P) LTD. VS. ACIT 31 TAXMANN.COM 39. LEARNED D.R. FURTHER SUBMITTED THAT THE DECISIONS RELIED UPON BY THE LEARNED COUNSEL OF THE ASSESSEE ARE D ISTINGUISHABLE AND THE SAME ARE ON DIFFERENT SET OF FACTS. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. IN PARA 6 OF THE REGISTERED SALE DEED IT IS MENTIONED THAT THE LAND IN QUESTION ADMEASURING 72 R IS MEASURED THROUGH TALUKA NIRIKSHAK/BHUMI ABHILEKH BY PAYING MEASUREMENT CHARGES VIDE CHALLAN NO. 216/2003 AND THE MEASUREMENT MAP WAS RECEIVED BY THE ASSESSEE ON 05 - 01 - 2004 AND ON THE SAME DATE THE POSSESSION OF THE LAND WAS GIVEN TO THE PURCHASER BY EXECUTING ISSAR CHITTHI (AGRE EMENT TO SALE). THE TOKEN RECEIPT DATED 17 - 03 - 2003 SPECIFICALLY MENTIONED THAT THE POSSESSION OF THE LAND WILL BE GIVEN ON THE DATE OF ISSAR CHITTHI WHICH IS DATED 05 - 01 - 2004. FROM THE ABOVE IT IS EVIDENT THAT THE AGREEMENT FOR SALE WAS ENTERED INTO ASSESS MENT YEAR 2004 - 05 AND THE POSSESSION THEREOF WAS ALSO GIVEN IN ASSESSMENT YEAR 2004 - 05. REVENUE IS NOT DISPUTING THE VERACITY OF THIS AGREEMENT FOR SALE NOR IT IS DISPUTING THE VERACITY OF THE CLAIM THAT POSSESSION WAS GIVEN IN 2004 - 05. REVENUES PLEA IS B ASED UPON THE FACT THAT SINCE THE SALE DEED WAS REGISTERED IN ASSESSMENT YEAR 2008 - 09, SECTION 50C WOULD BE APPLIED ON THE BASIS OF DATE OF REGISTRATION IN ASSESSMENT YEAR 2008 - 09. THE EXTANT PROVISION OF SECTION 50C AS APPLICABLE FOR ASSESSMENT YEAR 2004 - 05 MANDATED THAT VALUE AS PER STAMP VALUATION AUTHORITY SHALL BE ADOPTED WHERE THE SAME HAVE BEEN SO ASSESSED BY THE REGISTRATION AUTHORITY. . THIS SIGNIFIES THAT THE EXTANT PROVISION OF SECTION 50C DID NOT POSTULATE APPLICATION OF SECTION 50C WHERE THE D OCUMENT WAS NOT REGISTERED. THIS POSITION WAS AMENDED VIDE 7 ITA NO. 231/NAG/2013 INSERTION OF FINANCE ACT NO. 2(ACT 2009) WITH EFFECT FROM 01 - 10 - 2009 WHICH ALSO PROVIDED FOR APPLICATION OF SECTION 50C IN CASES OF AGREEMENTS ONLY WHERE DOCUMENT WAS NOT ACTUALLY REGISTERED BY INS ERTION OF THE WORD ASSESSABLE. HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. R. SUGANTHA RAVINDRAN 352 ITR 488 HAS MANDATED THAT AMENDMENT TO SECTION 50C ARE PROSPECTIVE I.E. AFTER 01 - 10 - 2009. FROM THE ABOVE IT IS CLEAR THAT THE PROVISIONS OF SECTION 50C CANNOT BE APPLIED IN ASSESSMENT YEAR 2004 - 05. HONBLE APEX COURT IN THE CASE OF SANJEEV LAL VS. CIT 365 ITR 389 HAS EXPOUNDED AS UNDER : IN NORMAL CIRCUMSTANCES BY EXECUTING AN AGREEMENT TO SELL IN RESPECT OF AN IMMOVABLE 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 SOME ONE 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 EXECUTING 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 CIRCUMSTANCES, THE AFORESAID QUESTION HAS TO BE ANSWERED IN THE NE GATIVE. 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 CA N BE DEEMED TO HAVE BEEN TRANSFERRED. RELEVANT PORTION OF SECTION 2(47), DEFINING THE WORD TRANSFER IS AN UNDER : 2(47) TRANSFER, IN RELATION TO A CAPITAL ASSET, INCLUDES, - (II) THE EXTINGUISHMENT OF ANY RIGHTS THEREIN; OR...... NOW, IN THE LIGH T OF THE 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 EXTINGUISHED AND THAT RIGHT IS TRANSFERRED TO SOMEONE, IT WOULD AMOUNT TO TRANSFER OF A CAPITAL ASSET. THE ABOV E EXPOSITION OF THE HONBLE APEX COURT IS QUITE CLEAR AND LEARNED D.RS PLEA THAT IT IS NOT APPLICABLE ON THE FACTS OF THIS CASE IS TOTALLY UNSUSTAINABLE. IN THE PRESENT CASE ALSO AN AGREEMENT TO SELL IN RESPECT OF CAPITAL 8 ITA NO. 231/NAG/2013 ASSET HAS BEEN EXECUTED ON 05 - 01 - 2004 AND POSSESSION OF THE LAND HAS ALSO BEEN GIVEN TO THE PURCHASER. THUS A RIGHT HAS BEEN CREATED IN FAVOUR OF THE VENDEE AND THE VENDOR I.E. THE ASSESSEE IS RESTRAINED FROM SELLING THE SAID PROPERTY TO SOMEONE ELSE BECAUSE THE VENDEE IN WHOSE FAVOUR TH E RIGHT IN PERSON AM IS CREATED AS A LEGITIMATE RIGHT TO ENFORCE A SPECIFIC PURPOSE OF AGREEMENT IF THE VENDOR FOR SOME REASON IS NOT EXECUTING THE SALE DEED. THUS ON THE ANVIL OF HONBLE APEX COURT EXPOSITION AS ABOVE IT CAN BE CONCLUDED THAT LOOKING AT THE PROVISIONS OF SECTION 2(47) OF THE ACT WHICH DEFINES THE WORD TRANSFER IN RELATION TO A CAPITAL ASSET IT CAN BE SAID THAT SINCE THE RIGHT IN THE PROPERTY IS EXTINGUISHED BY EXECUTION OF AN AGREEMENT TO SELL ON 05 - 01 - 2005 COUPLED WITH GRANTING OF PO SSESSION OF THE LAND, THE CAPITAL ASSET CAN BE DEEMED TO HAVE BEEN TRANSFERRED. IN THIS VIEW OF THE MATTER, IT IS CLEAR THAT SINCE THE TRANSFER IS COMPLETE IN ASSESSMENT YEAR 2004 - 05 THE CAPITAL GAIN, IF ANY, IS EXIGIBLE TO TAX IN ASSESSMENT YEAR 2004 - 05 ITSELF. 8. WHEN WE VIEW THIS POSITION IN THE LIGHT OF THE HONBLE MADRAS HIGH COURT DECISION IN THE CASE OF R. SUGANTHA RAVINDRAN (SUPRA) IT IS CLEAR THAT THE PROVISIONS OF SECTION 50C ARE NOT APPLICABLE IN ASSESSMENT YEAR 2004 - 05. IN THIS VIEW OF THE MATT ER, IT IS CLEAR THAT ASSESSEES LIABILITY DOES NOT ARISE IN THE IMPUGNED ASSESSMENT YEAR I.E. ASSESSMENT YEAR 2008 - 09. AS REGARDS THE DECISION OF HONBLE CALCUTTA HIGH COURT RELIED UPON BY THE LEARNED D.R. IN THE CASE OF BAGRI IMPEX P. LTD. (SUPRA), WE NOT E THAT THERE IS NO DECISION OF HONBLE JURISDICTIONAL HIGH COURT ON THIS ISSUE. HONBLE MADRAS HIGH COURT IN THE CASE OF R. SUGANTHA RAVINDRAN IS CLEARLY IN FAVOUR OF THE ASSESSEE. AS MANDATED BY THE HONBLE APEX COURT IN THE CASE OF VEGETABLE PRODUCTS 8 8 ITR 192 WHEN TWO VIEWS ARE POSSIBLE, ONE IN FAVOUR OF THE ASSESSEE SHOULD BE ADOPTED. IN THIS VIEW OF THE MATTER, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE CAN BE GIVEN THE BENEFIT OF HONBLE MADRAS HIGH COURT DECISION AS ABOVE. MOREOVER WE FIND T HAT ON THE ANVIL OF HONBLE APEX COURT DECISION IN THE CASE 9 ITA NO. 231/NAG/2013 OF SANJEEV LAL (SUPRA) WE HAVE ALREADY HELD THAT THE PROPERTY IN QUESTION STOOD TRANSFERRED IN ASSESSMENT YEAR 2004 - 05. THERE IS NO QUESTION OF FASTENING THE ASSESSEE WITH CAPITAL GAINS LIABILITY ON THE IMPUGNED TRANSACTION IN ASSESSMENT YEAR 2008 - 09. 9. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF JAN., 2016. SD/ - SD/ - (MUKUL K. SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER. NAGPUR, DATED: 15 TH JANUARY, 2016. COPY FORWARDED TO : 2. SHRI DASHRATH PUNJAJI GUJAR, MATAKHIDKI, AMRAV ATI. 3. I.T.O., WARD - II, AMRAVATI. 4. COMMISSIONER OF INCOME - TAX - , NAGPUR. 5. CIT(APPEALS) - II, NAGPUR. 6. D.R., ITAT, NAGPUR. 7. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, NAGPUR WAKODE.