Smt. Rajshree Bihani, Kolkata V. ITO, Ward-36(1), Kolkata, Kolkata

ITA 266/KOL/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6811 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-05-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 09-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G MONDAL
• Assessee Lawyers: S K TULSYAN
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value; Benefit of exemption; Revised return
• Section: 143(3); 50C; 54F; 54

Judgement Text

, , , , , , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL B B ENCH: KOLKATA [ ( (( ( ) )) ) , , , , , , , , , . .. .!' !'!' !'. .. . , , , , #$ #$ #$ #$ ] ]] ] [BEFORE HONBLE SRI MAHAVIR SINGH, JM & HONBLE S RI C. D. RAO, AM] & & & & / I.T.A NO. 266/KOL/2010 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2005-06 SMT. RAJSHREE BIHANI -VS- INCOME TAX OFFICER/WARD-36(1) KOLKATA [PAN: AHFPB 7875 G] KOLKATA. [ ,- /APPELLANT ] [ ./,-/ RESPONDENT ] ,- / FOR THE APPELLANT : SHRI S. K. TULSYAN ./,- / FOR THE RESPONDENT : SHRI G. MONDAL #0 /ORDER , PER MAHAVIR SINGH J.M. THIS APPEAL BY ASSESSEE IS EMANATING OUT OF ORDER OF CIT(A)-XX, KOLKATA, IN APPEAL NO.192/CIT(A)-XX/WD.36(1)/07-08//KOL DATED 01.10.20 09. ASSESSMENT WAS FRAMED BY ITO WARD-36(1), KOL, FOR THE ASSESSMENT YEAR 2005-06 U/ S. 143(3) OF THE INCOME-TAX ACT 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORD ER DATED 25-10-2007. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF THE CIT(A) CONFIRMING THE ACTION OF THE AO IN ASSESSING THE LONG TERM CAP ITAL GAIN IN THIS ASSESSMENT YEAR INSTEAD OF ASSESSMENT YEAR 2001-02, WHEN THE PROPERTY WAS TRAN SFERRED IN TERMS OF SECTION 53A OF TRANSFER OF PROPERTY ACT AND DENIAL DEDUCTION U/S.5 4F OF THE ACT AND ALSO INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT. FOR THIS, ASS ESSEE RAISED FOLLOWING SIX EFFECTIVE GROUNDS:- 1. THAT THE LD. A.O. AND THE CIT(A) ERRED IN CON CLUDING THAT THE APPELLANT SOLD THE PROPERTY BEING 1/3RD SHARE IN A PLOT OF LAND ITA NO. 266/KOL/2010 SMT. RAJSHREE BIHANI A.Y.05-06 ] 2 SITUATED AT 115A/1 NETAJI SUBHASH CHANDRA BOSE ROAD , TOLLYGUNGE, KOLKATA - 700 040 TO M/S. GOLD MOON AGENCIES PVT. L TD. IN A.Y. 2005-06. 2. THAT THE LD. A.O. AND THE CIT(A) FURTHER ERRE D IN IGNORING THE FACT THAT THE APPELLANT HAD ALREADY ENTERED INTO AN AGRE EMENT FOR SALE WITH M/S. CONSOLIDATED COMMERCIAL ENTERPRISES LIMIT ED AND HANDED OVER THE POSSESSION AFTER RECEIVING SUBSTANTIAL PAR T OF THE CONSIDERATION IN A.Y. 2001-02 THEREBY EFFECTED THE TRANSFER WITHIN THE MEANING OF SECTION 2(47)(V) OF THE INCOME TAX ACT, 1961. 3. THAT THE TRANSFER HAVING TAKEN PLACE IN TERMS OF SECTION 2(47) ON ACCOUNT OF PART PERFORMANCE OF THE CONTRACT AND HAN DING OVER OF THE POSSESSION, THE LD. A.O. AND THE CIT(A) ERRED IN HO LDING THAT THE APPELLANT SOLD THE SAID PROPERTY DURING THE RELEVAN T YEAR UNDER CONSIDERATION. 4. THAT THE LD. CIT(A) FURTHER ERRED IN DENYING EXEMPTION U/S.54F FOR PURCHASE OF FLAT NO.3A, IN GOUTAM ENCLAVE, 7/5, BUR DWAN ROAD, ALIPORE, KOLKATA AGAINST THE SALE CONSIDERATION REC EIVED FROM 115A/1 NETAJI SUBHASH CHANDRA BOSE ROAD, TOLLYGUNGE , KOLKATA - 700 040. 5. THAT THE APPELLANT HAVING TRANSFERRED THE P ROPERTY DURING A.Y. 2001- 02, THE LD. A.O. AND THE CIT(A) ERRED IN HAVING INV OKED PROVISION OF SECTION 5OC OF THE I.T. ACT, 1961 TO THE IMPUGNED T RANSFER. 6. THAT M/S. GOLD MOON AGENCIES PVT. LTD. HAVING ACQUIRED THE PROPERTY FROM M/S. CONSOLIDATED COMMERCIAL ENTERPRISES LIMIT ED BY WAY OF NOMINATION DURING THE RELEVANT ASSESSMENT YEAR, THE LD. A.O. AND THE CIT(A) ERRED IN HOLDING THAT THE SALE TO M/S. G OLD MOON AGENCIES PVT. LTD. IS ON APPELLANTS ACCOUNT AND TH EREFORE, THE TRANSFER TOOK PLACE IN A.Y. 2005-06. 3. THE BRIEF FACTS OF THE ABOVE ISSUES ARE THAT THE ASSESSEE FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005-06 ON 25-07-2005 DISCLOSING CO MPUTATION OF LONG-TERM CAPITAL GAIN AT NIL AFTER CLAIMING DEDUCTION U/S.54F OF THE ACT FOR THE ENTIRE CAPITAL GAIN. THE ASSESSEE SOLD HER 1/3 RD UNDIVIDED SHARE OF PLOT OF LAND (ADMEASURING 21 KA TTA 4 CHATAK) SITUATED AT 115A/1 NETAJI SUBHASH CHANDRA BOSE ROAD, TOLLYGUNGE, KOLKATA-40 F OR A TOTAL CONSIDERATION OF RS.24.10 LACS BY VIRTUE OF AN AGREEMENT FOR SALE DATED 28-12-2000 ENTERED INTO THE PURCHASER, CONSOLIDATED COMMERCIAL ENTERPRISES LTD. THE ASSESSEE HAS HAN DED OVER THE POSSESSION OF LAND TO THE PURCHASER ON 28-12-2002 VIDE A POSSESSION LETTER AD DRESSED TO KAMALA PROPERTIES LTD, SVM ITA NO. 266/KOL/2010 SMT. RAJSHREE BIHANI A.Y.05-06 ] 3 CERA TEA BUILD LTD AND CONSOLIDATED COMMERCIAL ENT ERPRISES LTD. THE ASSESSEE ALSO RECEIVED PART CONSIDERATION TO THE EXTENT OF 18.75 LACS BETW EEN 01-10-2000 TO 10-03-2001 EXCEPT THE BALANCE AMOUNT OF RS.5.35 LACS. THE ASSESSEE ALSO E XECUTED A POWER OF ATTORNEY IN FAVOUR OF DIRECTOR OF CONSOLIDATED COMMERCIAL ENTERPRISES LTD . NAMELY SHRI BARDHAN MOHTA WHICH IS DATED 14-03-2001. SUBSEQUENTLY, CONSOLIDATED COMMER CIAL ENTERPRISES LTD. WAS AMALGAMATED WITH KAMALA PROPERTIES LTD UNDER AN ORDER OF HONBL E CALCUTTA HIGH COURT AND IN TURN KAMALA PROPERTIES LTD REQUESTED ASSESSEE THAT A CONVEYANCE DEED IS TO BE EXECUTED IN FAVOUR OF THEIR NOMINEE I.E GOLD MOON AGENCIES PRIVATE LTD VIDE LET TER DATED 15-11-2004. ACCORDINGLY, A CONVEYANCE DEED WAS EXECUTED IN FAVOUR OF GOLD MOON AGENCIES PRIVATE LTD, WHICH IS DATED 07-01-2005( THE COPY OF SALE DEED IS ENCLOSED IN TH E APB AT PAGES 33-55). THE ASSESSEE ALSO PURCHASED A RESIDENTIAL FLAT IN GAUTAM ENCLAVE, 7/5 BURDWAN ROAD, ALIPORE, KOLKATA FROM SARKAR PROMOTERS PVT. LTD. FO R A TOTAL CONSIDERATION OF RS.23,50,000/- VIDE DEED OF AGREEMENT FOR SALE DATED 23.03.2001 IN THE F.Y. 2000-01 RELEVANT TO THE A.Y. 2001-02. THE POSSESSION OF THE SAID PROPERTY WAS DE LIVERED TO ASSESSEE ON 27.04.2001. (COPIES OF THE AGREEMENT OF SALE DATED 23.03.2001 AND POSSE SSION LETTER ARE ATTACHED AT PAGES 56- 99 OF THE ASSESSEES PAPER BOOK). THE RECEIPT OF THE AMOU NT BY SANKAR PROMOTERS IS EVIDENCED BY RECEIPT ATTACHED AT PAGES 99-101 OF THE ASSESSEES PAPER BOOK. 4. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005-06, I.E. THE RELEVANT ASSESSMENT YEAR, DISCLOSING LONG TERM CAPITAL GAIN FROM SALE OF THE ABOVE PLOT OF LAND OF HER SHARE OF 1/3 RD AND CLAIMED EXEMPTION U/S.54F OF THE ACT IN RESPEC T OF INVESTMENT OF THIS CAPITAL GAIN IN RESIDENTIAL FLAT AS STATED ABOVE. THE AO D URING ASSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE HAS SOLD THE PROPERTY I.E. UNDIVIDED 1/3 RD SHARE IN THE LANDED PREMISES NO.115A/1, NETAJI SUBHASH CHANDRA BOSE ROAD, TOLLYGUNGE, KOLKA TA-700 040 IN THE FINANCIAL YEAR 2004- 05 RELATING TO AY 2005-06. ACCORDING TO AO, THE AS SESSEE HAS CLAIMED TO HAVE SOLD THE PROPERTY AT RS.24.10 LAC AND DERIVED CAPITAL GAIN O F RS.15,31,285/-, BUT AS PER THE PROVISIONS OF SECTION 50C OF THE ACT, THE VALUATION DETERMINED BY THE STAMP VALUATION AUTHORITY WAS AT RS.43,75,983/- FOR WHICH THE ASSESSEE PAID STAMP DU TY AND DID NOT CONTEST THE SAME BY FILING ANY APPEAL. EVEN THE ASSESSEES REPRESENTATIVE WAS ALLOWED OPPORTUNITY BUT ASSESSEE DID NOT PREFER ANY VALUATION TO BE REFERRED BY THE AO BEFOR E THE VALUATION CELL. HENCE, AO ITA NO. 266/KOL/2010 SMT. RAJSHREE BIHANI A.Y.05-06 ] 4 DETERMINED THE FAIR MARKET VALUE AS ASSESSED BY STA MP VALUATION AUTHORITY BY APPLYING DEEMING PROVISIONS OF SECTION 50C OF THE ACT AT RS. 43,75,983/-. THE AO FINALLY HELD AS UNDER: HENCE IN THE SAID CIRCUMSTANCES IT IS CLEAR THAT T HE AMOUNT OF SALE CONSIDERATION IS RS.43,75,983/- AS PER THE PROVISIONS OF SECTION 50C OF THE INCOME TAX ACT, 1961. THE LONG TERM CAPITAL GAIN ARISING IN THE HANDS OF THE ASSESSEE IS CALCULATED UNDER. THE EXEMPTION CLAIMED UNDER SECTION 54F WHICH THE A SSESSEE HAS ALLEGED TO HAVE DONE IS DISALLOWED AS THE ASSESSEE HAS COULD NOT GI VE EVIDENCE AGAINST SUCH CLAIM OF DEDUCTION/EXEMPTION. HENCE THE CLAIM OF 54F BY THE ASSESSEE IS NOT ALLOWED. HENCE, AS PER ABOVE THE AMOUNT OF RS.43,75,983/- DE TERMINED BY THE STAMP VALUATION AUTHORITY IS TAKEN AS THE DEEMED VALUE OF RECEIPT FOR THE TRANSFER OF THE LAND PROPERTY AND THE COMPUTATION OF THE SAME IS DO NE AS UNDER AND ADDED TO THE INCOME OF THE ASSESSEE. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A). THE CIT(A) ALSO CONFIRMED THE ACTION OF A.O. BY GIVING FOLLOWING FINDING IN PARA 3.7 OF HIS APPELLATE ORDER: 3.7. I HAVE PERUSED THE MATERIAL ON RECORD AND CON SIDERED THE SUBMISSION OF THE APPELLANT. I AM INCLINED TO AGREE WITH THE AO THAT THE MATERIAL ON RECORD ONLY SUGGESTS THAT THE APPELLANT SOLD THE PROPERTY TO M/S. GOLD MOON AGENCIES (P) LT D. IN THE FY 2004-05, AND THEREFORE, THE CAPITAL GAIN ARISING OUT OF SUCH SALE IS ASSESSABLE IN THE AY 2005-06. THE APPELLANT HAS HERSELF SHOWN THE CAPITAL GAIN IN HER RETURN FOR THE AY 200 5-06. ALSO, THE APPELLANT DID NOT FILE ANY REVISED RETURN. THE DIRECTOR OF M/S. GOLD MOON AGE NCIES (P) LTD. HAS CLEARLY STATED THAT THE SALE WAS MADE IN FY 2004-05 AND THE POSSESSION WAS ALSO TRANSFERRED DURING THE SAME PERIOD. IN VIEW OF THE ABOVE, THE CONTENTION OF THE APPELLA NT HOLDS NO GROUND. THE AO HAS RIGHTLY HELD THAT THE SALE WAS MADE IN ASSESSMENT YEAR 2005-06, AND THEREFORE, THE CAPITAL GAIN IS ASSESSABLE IN AY 2005-06. THE AO WAS ALSO JUSTIFIED IN APPLYI NG THE PROVISIONS OF SECTION 50C IN THE CASE OF THE APPELLANT. THE AO HAS CORRECTLY DISALLOWED THE CLAIM OF DEDUCTION U/S. 54F. THE VIEWS TAKEN BY THE AO ARE UPHELD. GROUND NO.1, 2 & 3 ARE DISMISSED. AGGRIEVED, NOW ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT FOR RELEVANT ASSESSMENT YEAR 2005-06, RETURN OF INCOME WAS FILED ON 25.07.2005 DECLARING A TOTAL INCOME OF RS.1,64,162/-, WHICH WA S ASSESSED AT RS.36,61,430/- VIDE ORDER UNDER SECTION 143(3) DATED 25.10.2007. THE ADDITION WAS MADE UNDER THE HEAD LONG TERM CAPITAL GAIN BY INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT AND BY DENYING BENEFIT OF EXEMPTION U/S 54F OF THE ACT. WE FIND THAT THE ASSE SSEE SOLD 1/3RD UNDIVIDED SHARE IN A PLOT OF LAND FOR TOTAL CONSIDERATION OF RS.24,10,000/- BY V IRTUE OF AN AGREEMENT OF SALE DATED 28.12.2000 ENTERED INTO WITH THE PURCHASER M/S CONS OLIDATED COMMERCIAL ENTERPRISES LTD. IN PART PERFORMANCE OF THE CONTRACT AND HANDED OVER PO SSESSION OF THE LAND TO THE PURCHASER ON 28.12.2000 VIDE A POSSESSION LETTER ON THAT VERY DA TE ADDRESSED TO M/S KAMALA PROPERTIES LTD., ITA NO. 266/KOL/2010 SMT. RAJSHREE BIHANI A.Y.05-06 ] 5 SVM CERA TEA BUILD LTD. AND M/S. CONSOLIDATED COMME RCIAL ENTERPRISES LTD. (COPIES OF THE AGREEMENT OF SALE DATED 28.12.2000 AND POSSESSION L ETTER ARE FILED IN THE ASSESSEES PAPER BOOK AT PAGES 1 TO 10). ENTIRE CONSIDERATION WAS RECEIVE D BETWEEN THE PERIOD 1.10.2000 TO 10.03.2001 EXCEPT FOR AN AMOUNT OF RS.5,35,000/- AN D POWER OF ATTORNEY VIDE DATED 14.3.2001 WAS ALSO EXECUTED IN FAVOUR OF THE DIRECTOR OF M/S. CONSOLIDATED COMMERCIAL ENTERPRISES LTD., MR. SHRIVARDHAN MOHTA DURING THE PREVIOUS YEAR RELE VANT TO THE A.Y. 2001-02 IN COMPLIANCE WITH THEIR LETTER DATED 2.03.2001. THE ASSESSEES C ONTENTION WAS THAT TRANSFER WAS EFFECTED IN THE RELEVANT A.Y. 2001-02 U/S. 2(47)(V) OF THE ACT. THE LAND SOLD WAS PURCHASED BY ASSESSEE FROM TOLLYGUNJ ESTATES PRIVATE LIMITED FOR A CONSIDERATI ON OF RS.3,54,167/- BY A DEED OF CONVEYANCE DATED 24.01.1997 AND WAS, THEREFORE, A LONG TERM CA PITAL ASSET ON THE DATE OF SALE. THE OTHER CO-OWNERS OF THE UNDIVIDED LAND WERE SMT. PUSHPA BI HANI AND SMT. PRABHA BIHANI EACH HAVING L/3 SHARE IN THE SAID PROPERTY. IT IS ALSO A FACT T HAT CONSOLIDATED COMMERCIAL ENTERPRISES LTD. WAS AMALGAMATED, SUBSEQUENTLY, WITH KAMALA PROPERTI ES LTD. UNDER AN ORDER OF HONBLE CALCUTTA HIGH COURT. WE FIND THAT KAMALA PROPERTIES LTD. (WHO BECAME THE OWNER OF THE PROPERTY ON AMALGAMATION) REQUESTED THE ASSESSEE FO R EXECUTING A CONVEYANCE DEED IN FAVOUR OF THEIR NOMINEE GOLD MOON AGENCIES PVT. LTD. DURING T HE PREVIOUS YEAR RELEVANT TO THE A.Y. 2005-06 VIDE ITS LETTER DATED 15.11.2004 AND ACCORD INGLY A CONVEYANCE DEED DATED 7.01.2005 WAS EXECUTED IN FAVOUR OF GOLD MOON AGENCIES PVT. L TD, WHICH ARE ATTACHED IN THE ASSESSEES PAPER BOOK AT PAGES 33-55. WE FIND THAT THE ASSESS EE ALSO PURCHASED A RESIDENTIAL FLAT IN GAUTAM ENCLAVE, 7/5 BURDWAN ROAD, ALIPORE, KOLKATA FROM M/S. SARKAR PROMOTERS PVT. LTD. AT A TOTAL COST OF RS.23,50,000/- BY VIRTUE OF A DEED OF AGREEMENT FOR SALE DATED 23.03.2001 IN THE F.Y. 2000-01 RELEVANT TO THE A.Y. 2001-02 AND POSSE SSION OF THE SAID FLAT WAS DELIVERED TO ASSESSEE ON 27.04.2001. (COPIES OF THE AGREEMENT OF SALE DATED 23.03.2001 AND POSSESSION LETTER ARE ENCLOSED IN THE ASSESSEES PAPER BOOK AT PAGES 56-99). 6. WE FIND THAT THE AO AS WELL AS CIT(A), IN VIEW O F THE ABOVE FACT, HAS ERRED IN HOLDING THAT THE ASSESSEE SOLD THE PROPERTY TO GOLD MOON AG ENCIES PVT. LTD. IN AY 2005-06 AND BOTH THE AUTHORITIES BELOW HAVE FURTHER ERRED IN IGNORIN G THE FACT THAT THE ASSESSEE HAD ALREADY ENTERED INTO AN AGREEMENT FOR SALE WITH CONSOLIDATE D COMMERCIAL ENTERPRISES LTD., AND ALSO HANDED OVER THE POSSESSION OF THE PROPERTY AFTER RE CEIVING SUBSTANTIAL PART OF THE CONSIDERATION IN THAT VERY YEAR, THEREBY EFFECTING THE TRANSFER W ITHIN THE MEANING OF SECTION 2(47)(V) OF THE ITA NO. 266/KOL/2010 SMT. RAJSHREE BIHANI A.Y.05-06 ] 6 ACT AND FURTHER DENYING EXEMPTION U/S. 54 F OF THE ACT FOR THE PURCHASE OF FLAT AGAINST THE SALE CONSIDERATION RECEIVED FROM THE SALE OF THE LANDED PROPERTY. WHETHER THE PROVISIONS OF SECTION 2(47) OF THE ACT R.W.S. THE PROVISIONS OF SECTION 5 3A OF THE TRANSFER OF PROPERTY ACT, 1882 AUTHORISES ASSESSEE TO MAKE SUCH TRANSFER AND WHETH ER THAT WILL BE CONSIDERED AS TRANSFER, WE HAVE TO GO TO THE PROVISIONS OF SECTION 2(47) OF TH E ACT. THE RELEVANT PROVISION OF SECTION 2(47) READS AS UNDER: 2(47) TRANSFER, IN RELATION TO A CAPITAL ASSET, IN CLUDES,- (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 CARRIED ON BY HIM, SUC H CONVERSION OR TREATMENT, OR (IVA) THE MATURITY OR REDEMPTION OF A ZERO COUPON B OND; OR (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE P OSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882) ; OR (VI) ANY TRANSACTION (WHETHER BY WAY OF BECOMING A MEMBER OF, OR ACQUIRING SHARES IN, A COOPERATIVE SOCIETY, COMPANY OR OTHER ASSOCIATION O F PERSONS OR BY WAY OF ANY AGREEMENT OR ANY ARRANGEMENT OR IN ANY OTHER MANNER WHATSOEVE R) WHICH HAS THE EFFECT OF TRANSFERRING, OR ENABLING THE ENJOYMENT OF, ANY IMM OVABLE PROPERTY. EXPLANATION. - FOR THE PURPOSES OF SUB-CLAUSES (V) AND (VI), IMMOVABLE PROPERTY SHALL HAVE THE SAME MEANING AS IN CLAUSE (D) OF SECTION 2 69UA . FURTHER, CENTRAL BOARD OF DIRECT TAXES HAS EXPLAINE D THE EFFECT OF INSERTION OF THE ABOVE SUB- SECTION (V) AND (VI) VIDE CBDT CIRCULAR NO.495 DATE D SEPTEMBER 22, 1987 (AS REPORTED IN 168 ITR (ST.) 87), WHICH READS AS UNDER: 11.1 THE EXISTING DEFINITION OF THE WORD TRANSFE R IN SECTION 2(47) DOES NOT INCLUDE TRANSFER OF CERTAIN RIGHTS ACCRUING TO A PURCHASER, BY WAY O F BECOMING A MEMBER OF OR ACQUIRING SHARES IN A CO-OPERATIVE SOCIETY, COMPANY, OR ASSOCIATION OF PERSONS OR BY WAY OF ANY AGREEMENT OR ANY ARRANGEMENT WHEREBY SUCH PERSON ACQUIRES ANY RI GHT IN ANY BUILDING WHICH IS EITHER BEING CONSTRUCTED OR WHICH IS TO BE CONSTRUCTED. TRANSACT IONS OF THE NATURE REFERRED TO ABOVE ARE NOT REQUIRED TO BE REGISTERED UNDER THE REGISTRATION AC T, 1908. SUCH ARRANGEMENTS CONFER THE PRIVILEGES OF OWNERSHIP WITHOUT TRANSFER OF TITLE I N THE BUILDING AND ARE A COMMON MODE OF ACQUIRING FLATS PARTICULARLY IN MULTI-STOREYED CONS TRUCTIONS IN BIG CITIES. THE DEFINITION ALSO DOES NOT COVER CASES WHERE POSSESSION IS ALLOWED TO BE T AKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT, OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882. NEW SUB-CLAUSES (V) & (VI) HAVE BEEN INSERTED IN SECTIO N 2(47) TO PREVENT AVOIDANCE OF CAPITAL GAINS LIABILITY BY RECOURSE TO TRANSFER OF RIGHTS IN THE MANNER REFERRED TO ABOVE. WE FIND FROM THE ABOVE PROVISIONS OF SECTION 2(47) OF THE ACT AS WELL AS THE POSITION EXPLAINED BY CBDT FOR INSERTION OF SUB-SECTION (V) AND (VI) W .E.F. 1.4.1988 IN SECTION 2(47) OF THE ACT THAT EVEN TRANSACTIONS INVOLVING ANY IMMOVABLE PROP ERTY ALLOWING POSSESSION OR RETAINED IN ITA NO. 266/KOL/2010 SMT. RAJSHREE BIHANI A.Y.05-06 ] 7 PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERR ED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882, OWNERSHIP WITHOUT TRANSFER OF T ITLE FALLS UNDER THE DEFINITION TRANSFER IN RELATION TO ANY CAPITAL ASSET U/S. 2(47)(V) OF THE ACT. IN THE PRESENT CASE BEFORE US, THE ASSESSEE HAS CATEGORICALLY TRANSFERRED THE LAND SOLD VIDE AG REEMENT DATED 28.12.2000 FOR A TOTAL CONSIDERATION OF HER 1/3 RD SHARE FOR A SUM OF RS.24.10 LAC TO CONSOLIDATE COM MERCIAL ENTERPRISE LTD. IN PART PERFORMANCE OF A CONTRACT AFTER HANDIN G OVER THE POSSESSION OF THE LAND ON 28.12.2000 VIDE POSSESSION LETTER ADDRESSED TO PURC HASER. THE AO AS WELL AS CIT(A) GOT CONFUSED IN THE SUBSEQUENT TRANSACTIONS ENTERED INT O BY THE PURCHASE OF THE PROPERTY I.E. CONSOLIDATED COMMERCIAL ENTERPRISES LTD., WHICH WAS SUBSEQUENTLY AMALGAMATED WITH KAMLA PROPERTIES LTD. UNDER AN ORDER OF HONBLE CALCUTTA HIGH COURT, WITH GOLD MOON AGENCIES PVT. LTD. DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMEN T YEAR 2005-06. HOWEVER, IT IS TO BE MENTIONED THAT ONLY ACT DONE BY THE ASSESSEE ON REQ UEST OF KAMLA PROPERTIES LTD. THAT A CONVEYANCE DEED WAS EXECUTED IN FAVOUR OF THE NOMIN EE OF KAMLA PROPERTIES LTD. I.E. GOLD MOON AGENCIES PVT. LTD. BUT THE ASSESSEE WAS NEITHE R IN POSSESSION OF THE LAND NOR ANY CONSIDERATION IS TO BE RECEIVED, WHICH WAS RECEIVED ON 28.12.2000 AND POSSESSION WAS ALSO HANDED OVER AS ON 28.12.2000. THE ASSESSEE HAS FUL FILLED THE CONDITIONS MENTIONED IN THE PROVISIONS OF SECTION 53A OF TRANSFER OF PROPERTY A CT, 1882. THE RELEVANT PROVISION READS AS UNDER: WHERE ANY PERSON CONTRACTS TO TRANSFER FOR CONSIDE RATION ANY IMMOVABLE PROPERTY BY WRITING SIGNED BY HIM OR ON HIS BEHALF FROM WHICH THE TERMS NECESSARY TO CONSTITUTE THE TRANSFER CAN BE ASCERTAINED WITH REASONABLE CERTAINTY, AND THE TRAN SFEREE HAS, IN PART PERFORMANCE OF THE CONTRACT, TAKEN POSSESSION OF THE PROPERTY OR ANY P ART THEREOF OR THE TRANSFEREE, BEING ALREADY IN POSSESSION, CONTINUES IN POSSESSION IN PART PERFORM ANCE OF THE CONTRACT AND HAS DONE SOME ACT IN FURTHERANCE OF THE CONTRACT, AND THE TRANSFEREE HAS PERFORMED OR IS WILLING TO PERFORM HIS PART OF THE CONTRACT, THEN, NOTWITHSTANDING THAT WHERE T HERE IS AN INSTRUMENT OF TRANSFER, THAT THE TRANSFER HAS NOT BEEN COMPLETED IN THE MANNER PRESC RIBED THEREFOR BY THE LAW FOR THE TIME BEING IN FORCE, THE TRANSFEROR OR ANY PERSON CLAIMING UND ER HIM SHALL BE DEBARRED FROM ENFORCING AGAINST THE TRANSFEREE AND PERSONS CLAIMING UNDER H IM ANY RIGHT IN RESPECT OF THE PROPERTY OF WHICH T HE TRANSFEREE HAS TAKEN OR CONTINUED IN POS SESSION, OTHER THAN A RIGHT EXPRESSLY PROVIDED BY THE TERMS OF THE CONTRACT : PROVIDED THAT NOTHING IN THIS SECTION SHALL AFFECT THE RIGHTS OR A TRANSFEREE FOR CONSIDERATION WHO HAS NO NOTICE OF THE CONTRACT OR OF THE PART PERFOR MANCE THEREOF. WE FIND THAT IN ORDER TO ATTRACT THE PROVISIONS OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882, FOLLOWING CONDITIONS NEED TO BE FULFILLED: (1) THERE SHOULD BE A CONTRACT FOR CONSIDERATION; ITA NO. 266/KOL/2010 SMT. RAJSHREE BIHANI A.Y.05-06 ] 8 (2) IT SHOULD BE IN WRITING; (3) IT SHOULD BE SIGNED BY THE TRANSFEROR; (4) IT SHOULD PERTAIN TO TRANSFER OF IMMOVABLE PRO PERTY; (5) THE TRANSFEREE SHOULD HAVE TAKEN POSSESSION OF THE PROPERTY; AND (6) THE TRANSFEREE SHOULD BE READY AND WILLING TO P ERFORM HIS PART OF THE CONTRACT. WE FIND THAT THE ASSESSEE FULFILLED ALL THE CONDITI ONS MENTIONED IN THIS SECTION OF TRANSFER OF PROPERTY ACT. 7. AS THE CASE LAW REFERRED BY THE LD. COUNSEL FOR THE ASSESSEE OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CHATURBHUJ DWARKADAS KAPADIA V . COMMISSIONER OF INCOME-TAX [2003] 260 ITR 491 (BOM) IS SIMILAR TO THE FACTS OF THE PR ESENT CASE AND THE RELEVANT FACTS DISCUSSED BY HONBLE HIGH COURT READS AS UNDER: THE ASSESSEE, AN INDIVIDUAL, HAD AN UNDIVIDED SHARE IN A PROPERTY. BY AGREEMENT DATED AUGUST 18, 1994, THE ASSESSEE HEREIN AGREED TO SELL TO A B UILDER HIS SHARE OF THE IMMOVABLE PROPERTY FOR A TOTAL CONSIDERATION OF RS.1,85,63,220/- WITH A RI GHT TO THE BUILDING TO DEVELOP THE PROPERTY IN ACCORDANCE WITH THE RULES AND REGULATIONS FRAMED UN DER THE MAHARASHTRA HOUSING AND AREA DEVELOPMENT ACT. FOR THAT PURPOSE, THE ASSESSEE AGR EED UNDER CLAUSE 8 TO EXECUTE A LIMITED POWER OF ATTORNEY, AUTHORIZING THE BUILDER TO DEAL WITH THE PROPERTY AND ALSO OBTAIN PERMISSIONS AND APPROVALS FROM THE URBAN LAND CEILING AUTHORITY , BOMBAY MUNICIPAL CORPORATION AND CRZ AUTHORITIES. UNDER CLAUSE 9 OF THE AGREEMENT IT WAS, INTER ALIA, PROVIDED THAT ON THE BUILDER OBTAINING ALL NECESSARY PERMISSIONS AND APPROVALS A ND UPON RECEIPT OF NO-OBJECTION CERTIFICATE UNDER CHAPTER XXC OF THE INCOME-TAX ACT, THE ASSESS EE SHALL GRANT AN IRREVOCABLE LICENCE TO ENTER UPON THE ASSESSEES SHARE OF THE PROPERTY. UN DER CLAUSE 14 OF THE AGREEMENT, THE ASSESSEE WAS ENTITLED TO RECEIVE PROPORTIONATE RENT TILL THE PAYMENT OF THE LAST INSTALLMENT AND TILL THAT TIME, THE ASSESSEE WAS BOUND TO PAY ALL OUTGOINGS. UNDER CLAUSE 20 OF THE AGREEMENT IT WAS AGREED THAT THE SALE SHOULD BE COMPLETED BY EXECUTI ON OF CONVEYANCE. TILL DATE, THERE WAS NO CONVEYANCE. BY MARCH 31, 1996, THE BUILDER HAD PAID ALMOST THE ENTIRE SALE PRICE OF RS.1,85,63,220 EXCEPT FOR THE SMALL AMOUNT OF RS.9, 98,000. HOWEVER, THE BMC ISSUED A COMMENCEMENT CERTIFICATE PERMITTING CONSTRUCTION OF A BUILDING UP TO THE PLINTH LEVEL ONLY ON NOVEMBER 15, 1996. IN THE MEANTIME, THE PLAN CAME T O BE AMENDED. ULTIMATELY, THE POWER OF ATTORNEY WAS EXECUTED ON MARCH 12, 1999. THE ASSESS EE PAID THE CAPITAL GAINS IN THE ASSESSMENT YEAR 1999-2000 BUT THE ASSESSING OFFICER HELD THAT IT WAS PAYABLE IN THE ASSESSMENT YEAR 1996- 97 AND THIS WAS UPHELD BY THE TRIBUNAL. THE MATTER WAS CARRIED BEFORE HONBLE HIGH COURT AN D IT WAS HELD AS UNDER: SECTION 2(47)(V) READ WITH SECTION 45 INDICATES TH AT CAPITAL GAINS WAS TAXABLE IN THE YEAR IN WHICH SUCH TRANSACTIONS WERE ENTERED INTO EVEN IF T HE TRANSFER OF IMMOVABLE PROPERTY IS NOT EFFECTIVE OR COMPLETE UNDER THE GENERAL LAW. IN THI S CASE, THE TEST HAD NOT BEEN APPLIED BY THE DEPARTMENT. NO REASON HAD BEEN GIVEN WHY THAT TEST HAD NOT BEEN APPLIED, PARTICULARLY WHEN THE AGREEMENT IN QUESTION, READ AS A WHOLE, SHOWED THAT IT WAS A DEVELOPMENT AGREEMENT. ONCE UNDER CLAUSE 8 OF THE AGREEMENT A LIMITED POWER OF ATTORNEY WAS INTENDED TO BE GIVEN TO THE DEVELOPER TO DEAL WITH THE PROPERTY, THEN THE DATE OF THE CONTRACT, VIZ., AUGUST 18, 1994, WOULD ITA NO. 266/KOL/2010 SMT. RAJSHREE BIHANI A.Y.05-06 ] 9 BE THE RELEVANT DATE TO DECIDE THE DATE OF TRANSFER UNDER SECTION 2(47)(V) AND, IN WHICH EVENT, THE QUESTION OF SUBSTANTIAL PERFORMANCE OF THE CONT RACT THEREAFTER WOULD NOT ARISE. THIS POINT HAD NOT BEEN CONSIDERED BY ANY OF THE AUTHORITIES B ELOW. THE ASSESSEE HAD PAID THE CAPITAL GAINS TAX FOR THE ASSESSMENT YEAR 1999- 2000. FROM MERE SUBSTANTIAL COMPLIANCE OF THE AGREEMENT, ONE COULD NOT INFER TRANSFER IN THE ACCO UNTING YEAR ENDING MARCH 31, 1996. APRIL 1, 1996, WAS THE DATE ON WHICH THE DEVELOPER CAME INTO POSSESSION, THEN THE POSSESSION WAS RECEIVED BY THE DEVELOPER DURING THE FINANCIAL YEAR 1996-97 CORRESPONDING TO THE ASSESSMENT YEAR 1997-98. THEREFORE, THIS FINDING OF THE TRIBUN AL WAS ERRONEOUS. TAKING INTO ACCOUNT THE TOTALITY OF THE CIRCUMSTANCES THE TRIBUNAL WAS NOT JUSTIFIED IN CONCLUDING THAT THE APPELLANT HAD TRANSFERRED THE PROPERTY DURING THE PREVIOUS YEAR R ELEVANT TO THE ASSESSMENT YEAR 1996-97. 8. SIMILARLY, THE CASE LAW REFERRED BY LD. COUNSEL FOR THE ASSESSEE OF THIS TRIBUNAL, MUMBAI BENCH (3 RD MEMBER) IN THE CASE OF MS. RUBAB M. KAZERANI VS. J CIT (2004) 91 ITD 429 (MUMBAI TM) WHEREIN IT IS HELD AS UNDER: ON READING THE VARIOUS CLAUSES OF THE MOU, IT IS C LEAR THAT THE LADY HAD ENTERED INTO AN AGREEMENT WITH SA TO DISPOSE OF THE SAID PROPERTY F OR A TOTAL CONSIDERATION OF RS.5.5 CRORES. THUS, FROM THE TERMS OF MOU, IT IS CLEAR THAT THE L ADY SIGNED THE MOU THROUGH HER GENERAL POWER OF ATTORNEY HOLDER FOR RS.5.5 CRORES. THE POS SESSION OF THE PROPERTY WAS HANDED OVER TO THE BUILDER, AND ORIGINAL DOCUMENTS WERE ALSO GIVEN TO HIM ON THAT DAY WITH AN UNDERSTANDING THAT HE WILL OBTAIN ALL NECESSARY CLEARANCE CERTIFI CATES UNDER THE PROVISIONS OF URBAN LAND (CEILING & REGULATION) ACT, 1976, AND CERTIFICATE U NDER S.269UC OF THE IT ACT, 1961. THEREFORE, IT IS CLEAR THAT THE MOU ENTERED INTO BETWEEN THE P ARTIES WAS NOT FOR THE PURPOSE OF SIMPLY IDENTIFYING THE PROSPECTIVE BUYER OR THE CONSIDERAT ION RECEIVED BY THE ASSESSEE WAS ONLY A SECURITY DEPOSIT. ON READING THE CONTENTS IT WILL B E CLEAR THAT IT WAS A TRANSACTION BY WHICH THE ASSESSEE TRANSFERRED THE PROPERTY IN QUESTION IN TH E MANNER PRESCRIBED IN CLS. (V) AND (VI) INTRODUCED IN S.2(47) W.E.F 1ST APRIL, 1988. THE EV ENTS WHICH HAD TAKEN PLACE CONSTITUTE TRANSFER WHICH INCLUDES ANY TRANSACTION WHICH ALLOWS POSSESS ION TO BE TAKEN/RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN S.53A OF THE TRANSFER OF PROPERTY ACT, 1882, AND ANY TRANSACTION ENTERED INTO IN ANY MANNE R WHICH HAS THE EFFECT OF TRANSFERRING OR ENABLING THE ENJOYMENT OF ANY IMMOVABLE PROPERTY. S IMILARLY, USING THE NOMENCLATURE MOU WILL NOT CHANGE ITS CHARACTER OF SALE AGREEMENT. THEREFO RE, CAPITAL GAINS WOULD BE TAXABLE IN THE YEAR IN WHICH SUCH TRANSACTIONS ARE ENTERED INTO, E VEN IF THE TRANSFER OF THE IMMOVABLE PROPERTY IS NOT EFFECTIVE OR COMPLETE FOR WANT OF REGISTRATI ON UNDER THE GENERAL LAW. UNDER S.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 S.53A OF TH E TRANSFER OF PROPERTY ACT WOULD COME WITHIN THE AMBIT OF S.2(47)(V). IN ORDER TO ATTRACT S.53A 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; THE TRANSFEREE SHOU LD HAVE TAKEN POSSESSION OF THE PROPERTY AND THE TRANSFEREE SHOULD BE READY AND WILLING TO PERFO RM HIS PART OF CONTRACT. THEREFORE, CAPITAL GAINS WOULD BE TAXABLE IN THE YEAR IN WHICH SUCH TR ANSACTIONS ARE ENTERED INTO, EVEN IF THE TRANSFER OF THE IMMOVABLE PROPERTY IS NOT EFFECTIVE LY COMPLETE UNDER THE GENERAL LAW. 9. FURTHER IN THE CASE LAW DECIDED BY AUTHORITY FOR AD VANCE RULLING HAS DISCUSSED REGARDING EXECUTING OF POWER OF ATTORNEY AND WAS HELD TO BE TRANSFER IN JASBIR SINGH SARKARIA [2007] 294 ITR 196 (AAR), WHEREIN IT WAS HELD AS FOLLOWS: ITA NO. 266/KOL/2010 SMT. RAJSHREE BIHANI A.Y.05-06 ] 10 ... THEREFORE, THE CRUCIAL EVENT OR STEP THAT AMOU NTED TO A TRANSACTION INVOLVING THE ALLOWING OF POSSESSION TO BE TAKEN WITHIN THE MEANING OF SE CTION 2(47)(V) OF THE INCOME-TAX ACT, 1961, WAS THE EXECUTION OF THE IRREVOCABLE GENERAL POWER OF ATTORNEY IN ACCORDANCE WITH CLAUSE 15 OF THE COLLABORATION AGREEMENT. SUCH GENERAL POWER OF ATTORNEY WAS EXECUTED IN FAVOUR OF THE DEVELOPERS ON MAY 8, 2006, I.E., DURING THE FINANCI AL YEAR SUBSEQUENT TO THE YEAR OF AGREEMENT. THE GENERAL POWER OF ATTORNEY UNEQUIVOCALLY GRANTED TO THE DEVELOPERS A BUNDLE OF POSSESSORY RIGHTS: THE ACTS OF MANAGEMENT, CONTROL AND SUPERVI SION OF PROPERTY BEING EXPLICITLY MENTIONED. THE GENERAL POWER OF ATTORNEY WAS NOT A MERE LICENC E TO ENTER THE LAND FOR DOING SOME PRELIMINARY ACTS IN RELATION TO THE DEVELOPMENT WOR K; THE POWER OF CONTROL OF THE LAND, WHICH WAS AN INCIDENCE OF POSSESSION, WAS CONFERRED TO TH E DEVELOPERS UNDER THE GENERAL POWER OF ATTORNEY. THE DEVELOPERS, ARMED WITH THE GENERAL PO WER OF ATTORNEY, COULD NOT BE REGARDED MERELY AS A LICENSEE OR AN AGENT ; THEIR POSSESSION COULD NOT BE CHARACTERISED AS PRECARIOUS OR OF TENTATIVE NATURE. THE OWNERS LIMITED RIGHT TO E NTER THE LAND AND OVERSEE THE DEVELOPMENT WORK WAS NOT INCOMPATIBLE WITH THE DEVELOPERS RIGH T OF CONTROL OVER THE LAND WHICH THEY DERIVED FROM THE GENERAL POWER OF ATTORNEY. THEREFO RE, THE IRREVOCABLE POWER OF ATTORNEY EXECUTED BY THE OWNERS IN FAVOUR OF THE DEVELOPERS HAD TO BE REGARDED AS A TRANSACTION IN THE EYE OF LAW WHICH ALLOWED POSSESSION TO BE TAKEN IN PART PERFORMANCE OF THE CONTRACT OF TRANSFER. THE TRANSFER WITHIN THE MEANING OF SECTION 2(47)(V) TOOK PLACE DURING THE FINANCIAL YEAR 2006- 07 CORRESPONDING TO THE ASSESSMENT YEAR 2007-08 AND THE ENTIRE CAPITAL GAINS INCLUDING THAT ATTRIBUTABLE TO THE INSTALLMENT AMOUNT REMAINING UN PAID BY MARCH 31, 2007, AROSE DURING THE FINANCIAL YEAR 2006-07 (ASSESSMENT YEAR 2007-08). T HE ACTUAL RECEIPT OF THE ENTIRE SALE CONSIDERATION DURING THE YEAR OF TRANSFER IS NOT NECESSARY FOR THE PURPOSE OF CAPITAL GAINS. 10. FROM THE ABOVE LEGAL POSITION, IT IS CLEAR THAT THE ASSESSEE SOLD HER 1/3 RD UNDIVIDED SHARE IN A PLOT OF LAND BY VIRTUE OF AN AGREEMENT FOR SAL E ENTERED INTO WITH THE PURCHASER IN PART PERFORMANCE OF CONTRACT BY HANDING OVER POSSESSION OF LAND CONSTITUTES TRANSFER WITHIN THE MEANING OF SECTION 2(47)(V) OF THE ACT. IN THE PRE SENT CASE THE ASSESSEE SOLD HER SHARE ON 28.12.2000 IN TERM OF THE ABOVE, AS THE FACTS NARRA TED ABOVE, THE ASSESSEE HAS TRANSFERRED THE PROPERTY I.E. PLOT OF LAND IN FINANCIAL YEAR 2000-0 1 RELEVANT TO ASSESSMENT YEAR 2001-02. 11. AS REGARDS TO APPLICABILITY OF SECTION 50C OF THE A CT TO THE TRANSFER OF PLOT OF LAND OF THE ASSESSEE AS ON 28.12.2000, ON THE BASIS THAT THE AM OUNT OF RS.43,75,983/- ASSESSED BY STAMP VALUATION AUTHORITY TO BE DEEMED FULL VALUE OF THE SALE CONSIDERATION FOR THE PURPOSES OF COMPUTATION OF LONG TERM CAPITAL GAIN, IT IS STATED THAT SECTION 50C OF THE ACT WAS INSERTED BY THE FINANCE ACT, 2002 W.E.F. 1.4.2003 AND THUS, IS NOT APPLICABLE TO THE ASSESSEES CASE. ONCE IT IS A FACT THAT THE TRANSFER TOOK PLACE AS ON 28.12. 2000, THE PROVISIONS OF SECTION 50C WHICH WAS MADE APPLICABLE W.E.F. 1.4.2003 I.E. FOR AND FROM A SSESSMENT YEAR 2003-04, THE SAME WILL NOT APPLY TO ASSESSMENT YEAR 2001-02, WHEN THE CAPITAL ASSET OF THE ASSESSEE WAS TRANSFERRED. ACCORDINGLY, IN OUR CONSIDERED OPINION, THE PROVISI ONS OF SECTION 50C OF THE ACT WILL NOT APPLY TO THE PRESENT CASE. ITA NO. 266/KOL/2010 SMT. RAJSHREE BIHANI A.Y.05-06 ] 11 12. AS REGARDS TO ALLOWANCE OF EXEMPTION U/S. 54F, IT I S A FACT THAT ASSESSEE ALSO PURCHASED A RESIDENTIAL FLAT IN GAUTAM ENCLAVE, 7/5 BURDWAN R OAD, ALIPORE, KOLKATA FROM SARKAR PROMOTERS PVT. LTD. FOR A TOTAL CONSIDERATION OF RS .23,50,000/- VIDE DEED OF AGREEMENT FOR SALE DATED 23.03.2001 IN THE F.Y. 2000-01 RELEVANT TO THE A.Y. 2001-02. THE POSSESSION OF THE SAID PROPERTY WAS DELIVERED TO THE ASSESSEE ON 27.0 4.2001. (COPIES OF THE AGREEMENT OF SALE DATED 23.03.2001 AND POSSESSION LETTER ARE ATTACHED AT PAGES 56 TO 99 OF THE ASSESSEES PAPER BOOK. THE RECEIPT OF THE AMOUNT BY SANKAR PROMOTERS IS EVIDENCED BY RECEIPT ATTACHED AT PAGES 99-101 OF THE ASSESSEES PAPER BOOK. IN VIEW OF TH E ABOVE FACTS, WE FIND THAT THE ASSESSEE BEING AN INDIVIDUAL TRANSFERRED A LONG TERM CAPITAL ASSET I.E. LAND AS ON 28.12.2000 AND ACQUIRED A FLAT AGAINST THE SALE CONSIDERATION OF THAT LAND AS ON 2 3.3.2001, IT MEANS THE LONG TERM CAPITAL GAIN ARISING OUT OF SALE OF LAND WAS INVESTED IN THE RE SIDENTIAL HOUSE. THE ASSESSEE CLAIMED EXEMPTION U/S. 54F AND FOR THAT NOW WE HAVE TO APPR ECIATE THE MAIN INGREDIENTS OF SECTION 54F OF THE ACT, WHICH ARE AS UNDER: (I) CAPITAL GAIN ARISES TO AN APPELLANT BEING AN INDIV IDUAL OR A HINDU UNDIVIDED FAMILY (II) THE ASSET TRANSFERRED MUST BE A LONG TERM CAPITAL ASSET. (III) THE ASSET TRANSFERRED CAN BE ANY CAPITAL ASSET OTH ER THAN A RESIDENTIAL HOUSE. (IV) THE APPELLANT PURCHASES WITHIN A PERIOD OF ONE YEA R BEFORE OR TWO YEARS AFTER THE DATE ON WHICH THE TRANSFER TOOK PLACE, OR CONSTRUCTS WITHIN A PERIOD OF THREE YEARS AFTER THE DATE OF TRANSFER, A RESIDENTIAL HOUSE. (V) THE APPELLANT DOES NOT OWN MORE THAN ONE RESIDENTIA L HOUSE ON THE DATE OF TRANSFER OF THE ORIGINAL ASSET EXCLUSIVE OF ONE PURCHASED FOR CLAIM ING EXEMPTION UNDER SECTION 54F. WE FIND FROM THE ABOVE THAT THE NET CONSIDERATION O N ACCOUNT OF TRANSFER OF LAND HAD BEEN UTILISED IN ACQUIRING A FLAT WITHIN THE STIPULATED PERIOD AND IT IS NOT THE CASE OF THE REVENUE THAT ON THE DATE OF TRANSFER THE ASSESSEE WAS HAVING ANY OTHER HOUSE OTHER THAN THE ORIGINAL ASSET. SINCE, ASSESSEE FULFILLED ALL THE CONDITIONS STIPUL ATED IN SECTION 54F OF THE ACT, IS ENTITLED TO CLAIM EXEMPTION U/S. 54F OF THE ACT IN RESPECT OF F LAT SHE HAD PURCHASED FOR HER PERSONAL RESIDENCE. ACCORDINGLY, WE ALLOW THE CLAIM OF THE ASSESSEE IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE. 13. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, LEGAL POSITION AS DISCUSSED ABOVE, WE ARE OF THE VIEW THAT THE ASSESSEE HAS SOLD HER 1/3 RD UNDIVIDED SHARE IN PLOT OF LAND VIDE AGREEMENT OF SALE DATED 28.12.2000 ENTERED INTO WITH THE PURCHAS ER CONSOLIDATED COMMERCIAL ENTERPRISES LTD. IN PART PERFORMANCE OF THE CONTRACT AFTER HAND ING OVER THE POSSESSION OF THE LAND ON ITA NO. 266/KOL/2010 SMT. RAJSHREE BIHANI A.Y.05-06 ] 12 28.12.2000 VIDE POSSESSION LETTER DATED 28.12.2000. IT MEANS THAT THE ASSESSEE FULFILLED THE CONDITIONS OF PROVISION OF SECTION 2(47)(V) OF THE ACT AND THIS TRANSACTION COMES WITHIN THE AMBIT OF TRANSFER. ONCE, THIS IS A TRANSFER EFFECT ED AS ON 28.12.2000, THE PROVISION OF SECTION 50C OF THE ACT, WHICH ARE W.E.F. 1.4.2003 FOR AND F ROM AY 2003-04, WILL NOT APPLY TO THE PRESENT TRANSACTION. THE ASSESSEE HAS ALSO MADE IN VESTMENT OF THE SALE CONSIDERATION OF PLOT OF LAND OF HER SHARE IN PURCHASE OF RESIDENTIAL FLAT F OR A TOTAL COST OF RS.23.50 LAC VIDE DEED OF AGREEMENT FOR SALE DATED 23.3.2001 AND POSSESSION O F THE FLAT WAS ALSO DELIVERED TO THE ASSESSEE ON 27.4.2001, THE CONDITIONS FOR EXEMPTION U/S. 54 OF THE ACT ARE FULFILLED AND ASSESSEE IS ELIGIBLE FOR EXEMPTION. ACCORDINGLY, THE ISSUE UNDER CONSIDERATION IS ALLOWED IN FAVOUR OF THE ASSESSEE IN ENTIRETY. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. #0 $1# 2 1' 3 4 ORDER PRONOUNCED IN OPEN COURT ON 24.6.2011 SD/- SD/- [ . !' !'!' !' . , #$ ] [ , ] [ C. D. RAO ] [ MAHAVIR SING H ] ACCOUNTANT MEMBER JUDICIAL MEMBER ('$) DATED : 24. 06. 2011. #0 5 .6 7#6)/ COPY OF THE ORDER FORWARDED TO: 1 . ,- /APPELLANT- SMT. RAJSHREE BIHANI, C/O. SYNTHETICS MOULDERS LTD., 16, N.S. ROAD, KOLKATA-70 0 001. 2 ./,- / RESPONDENT : INCOME TAX OFFICER, WARD 36(1), KO LKATA. 3 . 0' / THE CIT, 4 . 0' ( )/ THE CIT(A), KOLKATA. 5 . =3 .' / DR, KOLKATA BENCHES, KOLKATA [/6 ./ TRUE COPY ] #0'1/ BY ORDER , ? /ASSTT REGISTRAR [JD @A 'B? C /SR.PS]