Jyotish G. Sevak, Ahmedabad V. The ACIT, Circle - XIII, Ahmedabad

ITA 307/AHD/2005

• Counselvise Citation: [2005] 113 COUNSELVISE.COM (IT) 0409 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2005
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 27-06-2005
• Assessment Year: 2002-2003
• Appeal Filed On: 01-02-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEETA SHAH
• Keywords: Capital asset; Question of law; Capital Gains
• Section: 147; 54; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD C BENCH (BEFORE S/SHRI R.V.EASWAR, VICE-PRESIDENT AND A.N. PAHUJA, ACCOUNTANT MEMBER) ITA.NO.3718/AHD/2004 [ASSTT.YEAR : 1999-2000] SMT.RAMABEN PARMAR 1072/1(19) BHOOMIKA CITY CENTRE, M.G.ROAD, SHAHID CHOWK, SILVASSA. PAN : ADQPP 0833 K VS. ITO, VAPI WARD-3 VAPI. ASSESSEE BY : SHRI MILIN MEHTA REVENUE BY : SMT.NEETA SHAH O R D E R PER R.V.EASWAR, VICE-PRESIDENT : THIS APPEAL BY THE ASSESSEE RELATES TO THE ASSESSMENT YEAR 1999-2000 AND ARISES OUT OF PROCEEDINGS TAKEN BY THE AO UNDER SECTION 154 OF THE INCOME-TAX ACT IN T HE FOLLOWING CIRCUMSTANCES. 2. THE ASSESSEE IS AN INDIVIDUAL. SHE OWNED LANDS IN DAMAN WHICH SHE SOLD DURING THE YEAR ENDED 31-3-1999. THERE WAS A CAPITAL GAIN OF RS.76,57,794/- WHICH WAS CLAIMED TO BE NOT CHARGEAB LE UNDER SECTION 45 OF THE INCOME-TAX ACT ON THE GROUND THAT THE ASSESSEE MERE LY HAD OCCUPATIONAL RIGHTS OVER THE LANDS WHICH DID NOT HAVE ANY COST OF ACQUI SITION. THE BASIS OF THE CLAIM SEEMS TO BE THE JUDGMENT OF THE SUPREME COURT IN CIT(A) VS. B.C.SRINIVAS SHETTY, 128 ITR 294. IT WAS NOT ACCEP TED BY THE AO AND THE MATTER ULTIMATELY REACHED THE TRIBUNAL AND IT APPEA RS THAT THE ASSESSEES CLAIM WAS NOT ACCEPTED BY THE TRIBUNAL. BE THAT AS IT MA Y, WHILE REJECTING THE ASSESSEES CONTENTION AND IN CALCULATING THE CHARGE ABLE CAPITAL GAINS, THE AO, IN HIS ORDER DATED 22-3-2002 PASSED UNDER SECTION 143( 3) READ WITH SECTION 147 ALLOWED THE ASSESSEES CLAIM FOR EXEMPTION OF THE I NVESTMENT OF RS.15.00 LAKHS IN THE PRESCRIBED ASSETS UNDER SECTION 54EA OF THE ACT. PAGE - 2 ITA.NO.3718/AHD/2004 -2- 3. ON 10-2-2004 THE AO ISSUED NOTICE UNDER SECTION 154 OF THE ACT INVITING OBJECTIONS FROM THE ASSESSEE TO THE RECTIF ICATION OF THE ASSESSMENT ORDER PASSED ON 22-3-2002 ALLOWING THE EXEMPTION UNDER SE CTION 54EA. HE OBSERVED THAT THE ASSESSEE HAD EXECUTED THE SALE DE ED IN RESPECT OF THE LAND ON 21-1-1999 AND THEREFORE THE INVESTMENT IN THE PRESC RIBED SECURITIES OUGHT TO HAVE BEEN MADE WITHIN SIX MONTHS FROM THE SAID DATE IN ACCORDANCE WITH SUB- SECTION-1 THEREOF WHICH MEANS THAT THE INVESTMENT O UGHT TO HAVE BEEN ON OR BEFORE 20-7-1999 AND SINCE THE ASSESSEE HAD MADE TH E INVESTMENT IN THE PRESCRIBED SECURITIES ONLY ON 17-9-1999, WHICH WAS BEYOND THE PERIOD OF SIX MONTHS, THE ALLOWANCE OF THE EXEMPTION WAS A MISTAK E APPARENT FROM THE RECORD AND OUGHT TO BE RECTIFIED. THE ASSESSEE OB JECTED TO THE RECTIFICATION PROCEEDINGS BY LETTER DATED 25-2-2004 AND SUBMITTED THAT THE INVESTMENT HAD BEEN MADE WITHIN THE PERIOD OF SIX MONTHS AS PRESCR IBED BY THE SECTION. IT WAS POINTED OUT THAT THE SALE DEED EXECUTED ON 21-1-199 9 WAS A CONDITIONAL SALE DEED UNDER WHICH IT WAS STIPULATED THAT IF THE PURC HASER FAILS TO MAKE THE FINAL PAYMENT OF RS.30.00 LAKHS ON OR BEFORE 22-3-1999 TH E SALE WOULD NOT BE COMPLETE AND WOULD BE TREATED AS VOID-AB-INITIO AND ALL THE RIGHTS, TITLE AND INTERESTS IN THE LAND WOULD CONTINUE TO REMAIN WITH THE ASSESSEE. IT WAS ALSO POINTED OUT THAT THE PURCHASER MADE THE FINAL PAYME NT OF RS.30 LAKHS ON 22-3- 1999 BY CHEQUE WHICH WAS ALSO DEPOSITED IN THE BANK ON THE SAME DAY AND THEREFORE THE SALE WAS COMPLETE ONLY ON THAT DATE, WITH THE RESULT THAT THE INVESTMENT MADE IN THE SPECIFIED SECURITIES ON 17-9 -1999 WAS WELL WITHIN THE SIX MONTHS PERIOD STIPULATED IN SECTION 54EA (1). 4. THE ABOVE CONTENTION DID NOT FOUND FAVOUR WITH T HE AO WHO NOTED THAT THE PURCHASER HAD PROPOSED TO GIVE AN ABSOLUTE AND IRREVOCABLE BANK GUARANTEE FOR THE AMOUNT OF RS.30.00 LAKHS AND IT WAS ON THIS BASIS THAT THE SALE DEED WAS EXECUTED. HE FURTHER NOTED FROM THE DOCUMENT EMBOD YING THE BANK GUARANTEE THAT THE BANK WAS TO PAY THE AMOUNT ON THE WRITTEN DEMAND FROM THE ASSESSEE AND THEN THE GUARANTEE COULD BE ENFORCED NOTWITHSTA NDING ANY DISPUTE OR SUIT PAGE - 3 ITA.NO.3718/AHD/2004 -3- PENDING BETWEEN THE ASSESSEE AND THE PURCHASER AND THAT THE GUARANTEE WOULD BE UNCONDITIONAL, ABSOLUTE AND IRREVOCABLE. FROM T HESE STIPULATIONS IN THE BANK GUARANTEE AND ALSO FROM THE REVENUE RECORDS SHOWING THE PURCHASER M/S.EVEREST GARDEN TO BE THE ABSOLUTE OWNER OF THE LANDS FROM 27-1-1999, THE AO CONCLUDED THAT THE LANDS WERE TRANSFERRED BY THE ASSESSEE ON THE DATE ON WHICH THE SALE DEED WAS EXECUTED VIZ. 21-1-1999 AND ACCORDINGLY THE INVESTMENT IN THE SPECIFIED SECURITIES MADE ON 17-9 -1999 WAS BEYOND THE PERIOD OF SIX MONTHS MENTIONED IN SECTION 54EA(1). ON THE GROUND THAT THE ALLOWANCE OF THE EXEMPTION UNDER THIS SECTION IN TH E ASSESSMENT ORDER WAS A MISTAKE APPARENT FROM RECORD, HE WITHDREW THE EXEMP TION OF RS.50 LAKHS BY ORDER PASSED ON 31-3-2004 UNDER SECTION 154 OF THE ACT AND RECOMPUTED THE CAPITAL GAINS AT A HIGHER FIGURE AND RAISED THE DEM AND. 5. THE ASSESSEE FILED AN APPEAL TO THE CIT(A) AGAIN ST THE ORDER UNDER SECTION 154 AND CONTENDED THAT THE ACTION OF THE AO AMOUNTS TO REVISION OF THE EARLIER ORDER OF THE ASSESSMENT AND NOT RECTIFICATI ON. IT WAS ALSO SUBMITTED THAT THE SALE BEING CONDITIONAL ON THE FINAL PAYMENT OF RS.30.00 LAKHS BEING MADE ON OR BEFORE 22-3-1999, IT WAS COMPLETE ONLY WHEN T HE SAID AMOUNT WAS PAID BY THE PURCHASER AND THEREFORE THE INVESTMENT IN T HE PRESCRIBED SECURITIES MADE ON 17-9-1999 WAS WITHIN THE PERIOD OF SIX MONTHS FR OM THE DATE OF SALE. THESE CONTENTIONS DID NOT FIND FAVOUR WITH THE CIT(A). A CCORDING TO HIM, THE CONDITIONAL CLAUSE IN THE SALE DEED IS NOTHING BUT AN ACCOMMODATION ON THE PART OF THE ASSESSEE TO THE PURCHASER BY GIVING HIM SOM E TIME TO MAKE THE PAYMENT. HE ALSO OBSERVED THAT THE AGREEMENT ITSELF WAS NOT DEFERRED BY TWO MONTHS AND IF IT WAS SO, THEN THERE WAS NO NEED FOR THE ASSESS EE TO TAKE A BANK GUARANTEE. THE CIT(A) THEREFORE HELD THAT THE SALE WAS COMPLET E ON 21-1-1999 AND SINCE THE INVESTMENT IN THE PRESCRIBED SECURITIES WAS MAD E AFTER 20-7-1999, THE ASSESSEE WAS NOT ENTITLED TO THE EXEMPTION UNDER SE CTION 54EA. ACCORDING TO THE CIT(A) SINCE THE ASSESSEE FAILED TO FOLLOW THE STATUTORY PROVISION THERE WAS PAGE - 4 ITA.NO.3718/AHD/2004 -4- A CLEAR MISTAKE APPARENT FROM THE RECORD IN RESPECT OF APPLICATION OF LAW WHICH WAS RIGHTLY RECTIFIED UNDER SECTION 154. HE ACCORD INGLY DISMISSED THE APPEAL. 6. THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. TH E LEARNED REPRESENTATIVE FOR THE ASSESSEE ARGUED THAT THIS IS A DEBATABLE QU ESTION REQUIRING LONG-DRAWN ARGUMENTS TO ESTABLISH ONE POINT OF VIEW OR THE OTH ER AND ACCORDINGLY THE AO WAS NOT JUSTIFIED IN INITIATING PROCEEDINGS FOR REC TIFICATION OF THE ASSESSMENT UNDER SECTION 154 OF THE ACT. HE DREW OUR ATTENTI ON TO THE JUDGMENT OF THE SUPREME COURT IN CIT VS. HERO CYCLES PVT. LTD. AND OTHERS, 228 ITR 463 AND SUBMITTED THAT HAVING REGARD TO THE PRINCIPLES LAID DOWN IN THIS JUDGMENT THE RECTIFICATION PROCEEDINGS WERE WITHOUT JURISDICTION . IN SUPPORT OF HIS ARGUMENT THAT THE QUESTION WHETHER IN THE CASE OF A CONDITIO NAL SALE THE TITLE WOULD PASS WITH THE REGISTRATION OF THE SALE DEED WAS DEBATABL E, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE DREW OUR ATTENTION TO A JUDGMENT O F THE PATNA HIGH COURT IN SHIV NARAYAN SHAH AND OTHERS VS. BAIDYA NATH PRASAD TIWARY AND OTHERS (AIR 1973 PAT 386). IT WAS SUBMITTED THAT IN THE J UDGMENT IT HAS BEEN HELD THAT WHEN THE SALE PRICE WAS ONLY PART PAID BUT THE SALE DEED WAS EXECUTED AND REGISTERED IT DOES NOT PASS THE TITLE UNLESS THE BA LANCE OF THE SALE CONSIDERATION WAS PAID BY THE PURCHASER. IT WAS CONTENDED THAT A CCORDING TO THE TERMS OF THE SALE DEED IN THE PRESENT CASE, THE TITLE TO THE PRO PERTY WAS TO PASS ONLY WHEN THE BALANCE SALE CONSIDERATION OF RS.30.00 LAKHS WAS PA ID FOR WHICH TIME WAS GIVEN TILL 22-3-1999 AND IT WAS ALSO STIPULATED THAT IF T HE PAYMENT IS NOT MADE AS ABOVE THE DEED OF SALE SHALL BE AUTOMATICALLY RENDE RED VOID ENTITLING THE ASSESSEE TO RESCIND THE AGREEMENT OF SALE DATED 17- 10-1998 AS ALSO TO FORFEIT THE EARNEST MONEY OF RS.25 LAKHS PAID EARLIER. OUR AT TENTION WAS ALSO DRAWN TO THE RECITAL IN THE PREAMBLE TO THE EFFECT TILL THE BALA NCE OF RS.30.00 LAKHS IS PAID BY THE PURCHASER TO THE ASSESSEE, THE PROPERTY UNDER T HE SALE DEED SHALL REMAIN IN CHARGE FOR RS.30.00 LAKHS IN FAVOUR OF THE ASSESSEE AND THAT THE BANK GUARANTEE SHALL BE COLLATERAL SECURITY. ACCORDING TO THE LEA RNED REPRESENTATIVE FOR THE ASSESSEE THE ENTIRE TERMS AND CONDITIONS SUBJECT TO WHICH THE SALE DEED WAS PAGE - 5 ITA.NO.3718/AHD/2004 -5- EXECUTED POINTED TO THE CONCLUSION THAT THE SALE WO ULD BE CONSIDERED TO BE COMPLETE ONLY WHEN THE PURCHASER PAID THE BALANCE O F RS.30.00 LAKHS ON OR BEFORE 22-3-1999. STRONG RELIANCE WAS ALSO PLACED ON THE RECITAL IN THE SALE DEED THAT THE CONVEYANCE IS A CONTINGENT CONVEYANCE SUBJECT TO THE TIMELY PAYMENT OF THE SUM OF RS.30 LAKHS AND ON THE FURTHE R STIPULATION THAT IF THE PAYMENT IS NOT SO MADE, THE SALE SHALL BE VOID-AB-INITIO AND THE RIGHT, TITLE AND INTEREST IN THE PROPERTY SHALL STAND REVERTED AND VESTED IN FAVOUR OF THE VENDOR ABSOLUTELY AND FOREVER WITHOUT ANY ENCUMBRANCES WHA TSOEVER. THE CASE OF THE DEPARTMENT PRESENTED BEFORE US BY THE LEARNED S R.DR WAS THAT THE ASSESSEE HAD TAKEN A BANK GUARANTEE FOR DUE PAYMENT OF THE B ALANCE OF RS.30.00 LAKHS AND THIS WAS REFLECTED IN THE SALE DEED ITSELF AND THIS WOULD NOT HAVE BEEN THE CASE IF THE SALE HAD NOT BEEN COMPLETED ON THAT DAT E ITSELF. BESIDES RELYING STRONGLY ON THE ORDERS OF THE TAX AUTHORITIES, THE LEARNED SR.DR RELIED ON THE FINDING RECORDED BY THE CIT(A) THAT THE POSSESSION OF THE PROPERTY WAS GIVEN BY THE ASSESSEE TO THE PURCHASER ON THE DATE OF SAL E DEED. BASED ON THIS FINDING, IT WAS CONTENDED THAT WHEN THE POSSESSION HAD BEEN HANDED OVER AND RS.47 LAKHS OUT OF THE SALE CONSIDERATION OF RS.77 LAKHS HAD ALSO BEEN RECEIVED BY 21-1-1999 (DATE OF SALE DEED), IT IS NOT POSSIBL E TO SAY THAT THE SALE WAS NOT COMPLETE ON THAT DATE. SHE ALSO DREW OUR ATTENTION TO THE REMARK MADE BY THE AO TOWARDS END OF THE PARA-2 OF THE ORDER UNDER SEC TION 154 THAT IN THE REVENUE RECORDS THE NAME OF THE PURCHASER, M/S.EVER EST GARDEN HAS BEEN SHOWN AS THE OWNER OF THE PROPERTY WITH EFFECT FROM 27-1-1999. ON THE BASIS OF THESE FINDINGS, IT WAS STRONGLY CONTENDED BY HER THAT THE ORDER PASSED UNDER SECTION 154 WITHDRAWING THE RELIEF GRANTED UNDER SE CTION 54EA REQUIRES TO BE UPHELD. 7. IN REPLY, THE LEARNED REPRESENTATIVE FOR THE ASS ESSEE DISPUTED THE FINDING OF THE CIT(A) THAT THE POSSESSION WAS HANDED OVER T O THE PURCHASER ON 21-1- 1999, THE DATE OF SALE DEED. HE CONTENDED THAT THI S IS NOT AN ESTABLISHED FACT AND IN THE ORDER UNDER SECTION 154 THERE IS NO FIND ING TO THIS EFFECT. ACCORDING PAGE - 6 ITA.NO.3718/AHD/2004 -6- TO HIM THIS IS A NEW FACT BROUGHT IN BY THE CIT(A) WITHOUT ANY BASIS AND AT ANY RATE DISPUTED FACTS OR FACTS WHICH HAVE NOT BEEN ES TABLISHED ON RECORD CANNOT FORM THE BASIS OF RECTIFICATION PROCEEDINGS UNDER S ECTION 154. HE VEHEMENTLY SUBMITTED THAT THE APPEAL SHOULD BE DECIDED WITHOUT GIVING ANY CREDENCE TO THE OBSERVATION OF THE CIT(A) THAT THE POSSESSION OF TH E PROPERTY WAS GIVEN BY THE ASSESSEE TO THE PURCHASER ON 21-1-1999. 8. ON A CAREFUL CONSIDERATION OF THE FACTS AND RIVA L CONTENTIONS, WE ARE OF THE VIEW THAT THE CONTENTIONS OF THE ASSESSEE SHOUL D PREVAIL. IT IS NOW WELL SETTLED THAT THE RECTIFICATION PROCEEDINGS UNDER SE CTION 154 CAN BE SUCCESSFULLY TAKEN ONLY IF THE MISTAKE IS APPARENT FROM THE RECO RD AND DISPUTED QUESTIONS OF FACT OR LAW CANNOT BE EXAMINED IN SUCH PROCEEDINGS AND CANNOT FORM THE BASIS OF THE PROCEEDINGS. THE LEARNED REPRESENTATIVE FOR THE ASSESSEE, IN OUR HUMBLE OPINION, IS RIGHT IN HIS CONTENTION THAT THE QUESTI ON WHETHER THE ASSESSEE INVESTED THE SUM OF RS.15 LAKHS IN THE PRESCRIBED S ECURITIES, WITHIN A PERIOD OF SIX MONTHS, FROM THE DATE OF TRANSFER, IS A DEBATAB LE QUESTION OF LAW, WHICH CANNOT BE DECIDED UNDER SECTION 154. UNDER SECTION 54EA(2), THE ASSESSEE, IN ORDER TO CLAIM EXEMPTION, IS REQUIRED TO INVEST THE SALE CONSIDERATION IN THE PRESCRIBED SECURITIES IN ANY OF THE SPECIFIED SECUR ITIES WITHIN A PERIOD OF SIX MONTHS AFTER THE DATE OF SUCH TRANSFER. UNDER SECT ION 2(47)(I) OF THE ACT TRANSFER INCLUDES SALE OF CAPITAL ASSETS. A SALE I S A TRANSFER OF THE PROPERTY FOR A PRICE. THE CONTROVERSY IN THE PRESENT CASE IS WHET HER THERE WAS A COMPLETE SALE ON 21-1-1999 AS CONTENDED BY THE DEPARTMENT OR WHET HER THE SALE WAS COMPLETE ONLY WHEN THE BALANCE OF SALE CONSIDERATION OF RS.3 0 LAKHS WAS PAID ON 22-3- 1999, AS CONTENDED BY THE ASSESSEE. TO DECIDE THIS QUESTION ONE HAS TO INTERPRET THE TERMS AND CONDITIONS OF THE SALE DEED EXECUTED ON 21-1-1999 AND REGISTERED ON THE SAME DATE. THE CONTENTION OF THE ASSESSEE IS THAT ON A PROPER CONSIDERATION OF THE TERMS OF THE SALE DEED, IT WOU LD BE CLEAR THAT THE INTENTION OF THE PARTIES WAS THAT THE SALE SHOULD BE TAKEN AS COMPLETE ONLY WHEN THE BALANCE CONSIDERATION OF RS.30 LAKHS WAS PAID. IN S UPPORT OF THIS CONTENTION PAGE - 7 ITA.NO.3718/AHD/2004 -7- RELIANCE HAS BEEN PLACED ON THE AVERMENTS IN THE SA LE DEED TO THE EFFECT THAT IT IS A CONTINGENT CONVEYANCE SUBJECT TO THE CONDITION TH AT IF THE PURCHASER DEFAULTS IN MAKING THE PAYMENT OF RS.30 LAKHS ON OR BEFORE 2 2-3-1999, THE DEED OF SALE SHALL BE VOID-AB INITIO AND THE RIGHT, TITLE AND INTEREST IN THE PROPERTY U NDER THE CONVEYANCE SHALL STAND REVERTED AND VESTED IN FAVOU R OF THE ASSESSEE ABSOLUTELY AND FOR EVER, WITHOUT ANY ENCUMBRANCE. THESE AVERM ENTS PRIMA-FACIE SEEM TO SUPPORT THE ASSESSEES CONTENTION THAT THE SALE WAS NOT COMPLETE ON THE EXECUTION OF THE SALE DEED BUT WOULD TAKEN AS COMPL ETE ONLY WHEN THE FINAL CONSIDERATION OF RS.30 LAKHS WAS PAID BY THE PURCHA SER. THE CONTENTION OF THE DEPARTMENT IS THAT SINCE THE ASSESSEE TOOK BANK GUA RANTEE FOR THE BALANCE CONSIDERATION OF RS.30 LAKSH, THAT IS AS GOOD AS PA YMENT OF THE CONSIDERATION AND THEREFORE THE SALE WAS COMPLETE ON THE EXECUTIO N OF THE SALE DEED. THE DEPARTMENT HAS ALSO RELIED ON THE FACT THAT THE PUR CHASERS NAME HAD BEEN ENTERED IN THE REVENUE RECORD AS THE OWNER FROM 27- 1-1999. HAVING REGARD TO THE RIVAL STANDS, IT IS CLEAR THAT THE QUESTION AS TO WHEN THE SALE WAS COMPLETE IS A DEBATABLE AND ARGUABLE POINT OF LAW. THE JUDGMEN T OF PATNA HIGH COURT (SUPRA) CITED ON BEHALF OF THE ASSESSEE HAS TAKEN T HE VIEW THAT IN A CASE WHERE THE SALE DEED STIPULATES THAT THE BALANCE OF CONSID ERATION HAS TO BE PAID ON THE FUTURE DATE AND WHERE THE SALE DEED DOES NOT POSTPO NE THE PASSING OF THE TITLE TILL DISCHARGE OF THE CONSIDERATION, AND WHERE THE BULK OF THE CONSIDERATION I.E. MORE THAN 3/4TH HAS ALSO BEEN PAID, EVEN THEN THE T ITLE TO THE PROPERTY WILL NOT PASS UNDER SECTION 54 OF THE TRANSFER OF PROPERTY A CT, 1882 WITH THE REGISTRATION OF SALE DEED AND WILL PASS ONLY WHEN T HE BALANCE OF THE SALE CONSIDERATION IS PAID. FROM THE PARA-6 OF THE JUDG MENT, IT IS SEEN THAT THIS JUDGMENT WAS RENDERED BY THE PATNA HIGH COURT FOLLO WING THREE OF ITS EARLIER JUDGMENTS. IT IS THUS CLEAR THAT THE RECTIFICATION PROCEEDINGS TOUCHED UPON A DEBATABLE OR ARGUABLE QUESTION OF LAW WHICH REQUIRE S A LONG DRAWN PROCESS OF ARGUMENT TO ESTABLISH ONE POINT OF VIEW OR THE OTHE R. THEREFORE, RECTIFICATION PROCEEDINGS CANNOT BE TAKEN UNDER SECTION 154 OF TH E ACT. IT IS NO DOUBT TRUE THAT A GLARING AND OBVIOUS MISTAKE OF LAW CAN ALSO BE RECTIFIED UNDER SECTION PAGE - 8 ITA.NO.3718/AHD/2004 -8- 154 BUT THAT IS NOT THE CASE HERE, FOR THERE IS NO STATUTORY PROVISION OR JUDGMENT OF THE SUPREME COURT OR JURISDICTIONAL HIGH COURT T O WHICH OUR ATTENTION WAS DRAWN TO SHOW THAT ON SIMILAR FACTS THE TITLE TO TH E PROPERTY PASSED ON THE EXECUTION OF THE SALE. 9. WE HAVE ALREADY NOTICED THAT THE ARGUMENT ON BEH ALF OF THE DEPARTMENT WAS THAT THE BULK OF THE CONSIDERATION I.E. RS.47 L AKHS WAS RECEIVED BEFORE THE EXECUTION OF THE SALE DEED AND THAT THE PURCHASER W AS ALSO PUT IN POSSESSION OF THE PROPERTY AND THEREFORE THERE WAS A COMPLETED TR ANSFER ON THE DATE OF SALE DEED. THOUGH NO STATUTORY PROVISION WAS SPECIFICAL LY POINTED OUT IN SUPPORT OF THE CONTENTION, WE HAVE NO DOUBT THAT THE LEARNED S R.DR WAS HAVING IN MIND CLAUSE (V) OF SECTION 2(47) OF THE I.T.ACT WHICH SA YS THAT TRANSFER IN RELATION TO THE CAPITAL ASSET INCLUDES ANY TRANSACTIONS INVOLVI NG ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED I N PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A O F THE TRANSFER OF PROPERTY ACT. WE SPECIFICALLY PUT THIS STATUTORY PROVISION TO THE LEARNED AR WHO IN HIS REPLY, WHICH WE HAVE ALREADY NOTED, VEHEMENTLY OBJE CTED TO THE FINDING RECORDED BY THE CIT(A) THAT THE POSSESSION OF THE P ROPERTY WAS HANDED OVER TO THE PURCHASER ON THE DATE OF THE EXECUTION OF THE S ALE DEED, AS BEING WITHOUT ANY BASIS. WE ARE INCLINED TO UPHOLD THE OBJECTION BECAUSE THE RECTIFICATION PROCEEDINGS INITIATED BY THE AO DO NOT APPEAR TO US TO BE BASED ON THE FACT THAT THE ASSESSEE HAD HANDED OVER THE POSSESSION ON THE DATE OF SALE DEED AND THE BULK OF THE CONSIDERATION HAVING BEEN RECEIVED BY T HAT DATE, THE PROVISIONS OF SECTION 2(47)(V) OF THE ACT WOULD APPLY. WE ARE OF THE VIEW THAT IT IS NOT AN ESTABLISHED OR UNDISPUTED FACT THAT THE ASSESSEE HA NDED OVER THE POSSESSION TO THE PURCHASER ON THE DATE OF EXECUTION OF THE SALE DEED. THIS FACT DOES NOT EMERGE FROM THE SALE DEED AS A FACT. IN OUR HUMBLE OPINION, RECTIFICATION PROCEEDINGS CANNOT BE UPHELD ON THE BASIS OF A FACT WHICH HAS NOT BEEN ESTABLISHED AS SUCH AND IS NOT PART OF THE RECORD. WHETHER THE PURCHASER WAS ACTUALLY PUT IN POSSESSION OF THE LAND IS THUS A DI SPUTED OR ANY RATE NOT AN PAGE - 9 ITA.NO.3718/AHD/2004 -9- ESTABLISHED FACT AND MAY REQUIRE INVESTIGATION INTO FACTS WHICH ARE NOT ALREADY ON RECORD. IF THE FACT IS NOT ALREADY PART OF THE RECORD, THE PROCEEDINGS FOR RECTIFICATION UNDER SECTION 154 STAND EXCLUDED. IN OTHER WORDS, THE PROCEEDINGS FOR RECTIFICATION CANNOT BE TAKEN TO IN VESTIGATE INTO THE FACTS WHICH ARE NOT ALREADY ON RECORD. IN THE PRESENT CASE, IT SEEMS TO US, WITH RESPECT, THAT THE OBSERVATION OF THE CIT(A) THAT THE ASSESSEE GRA NTED POSSESSION OF THE PROPERTY TO THE PURCHASER ON THE DATE OF THE SALE D EED IS WITHOUT ANY BASIS. AS ALREADY NOTED THAT WAS NOT ONE OF THE REASONS FOR W HICH THE AO INITIATED RECTIFICATION PROCEEDINGS. THE MAIN GROUND ON WHIC H RECTIFICATION PROCEEDINGS WERE TAKEN BY THE AO IS THAT THE SALE WAS COMPLETE ON 21-1-1999 ITSELF, WHICH IS THE DATE OF SALE DEED, BECAUSE (A) THE NAME OF T HE PURCHASER HAD BEEN ENTERED IN THE REVENUE RECORDS AS OWNER OF THE PROPERTY FRO M 27-1-1999 AND (B) THE ASSESSEE HAS TAKEN A BANK GUARANTEE WHICH WAS QUITE UNNECESSARY, IF THE SALE WAS NOT COMPLETE ON THE EXECUTION OF THE SALE DEED. IT WAS NOT THE CASE OF THE AO THAT THE PURCHASER WAS PUT IN POSSESSION OF THE PROPERTY ON THE DATE OF EXECUTION OF THE SALE DEED. 10. FOR THE REASONS STATED ABOVE, WE ARE OF THE VIE W THAT THE QUESTION WHETHER THE SALE WAS COMPLETE ON 21-1-1999 IS DEBAT ABLE. A DEBATABLE QUESTION OF LAW CANNOT FORM THE SUBJECT MATTER OF T HE RECTIFICATION PROCEEDINGS UNDER SECTION 154. THEREFORE, WE HOLD THAT THE REC TIFICATION PROCEEDINGS WERE WITHOUT JURISDICTION. THERE WAS NO MISTAKE APPAREN T FROM THE RECORD. WE HOLD ACCORDINGLY AND ALLOW THE APPEAL OF THE ASSESSEE WI TH NO ORDER AS TO COSTS. ORDER PRONOUNCED IN OPEN COURT ON 13 TH AUGUST, 2009. SD/- SD/- (A.N.PAHUJA) ACCOUNTANT MEMBER (R.V.EASWAR) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 13-08-2009 PAGE - 10 ITA.NO.3718/AHD/2004 -10- COPY OF THE ORDER FORWARDED TO: 1) : ASSESSEE 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR, ITAT, AHMEDABAD