ITO, Panchkula V. Col. Amarjit Singh (Retd.), Panchkula

ITA 311/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6999 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 14-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHRI
• Keywords: Capital asset; Salary income; Principle of natural justice; Cost of acquisition; Competent authority
• Section: 143(3); 54F

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 311/CHD/20 17 ASSESSMENT YEAR: 2008-09 THE ITO, VS. COL. AMARJIT SINGH (RETD), WARD 1, FLAT NO. J-406, VIKRAM VIHAR, PANCHKULA. AWHO, SECTOR 27, PANCHKULA. PAN NO. AWDPS2438P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUSHIL KUMAR, CIT-DR RESPONDENT BY : SHRI PANKAJ BHALLA,CA DATE OF HEARING : 08.06.2017 DATE OF PRONOUNCEMENT : 11.08.2017 ORDER PER DIVA SINGH,JM THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE ASSAILING THE CORRECTNESS OF THE ORDER DATED 26.12.2016 OF LD. CIT(APPE ALS) PANCHKULA PERTAINING TO 2008-09 ASSESSMENT YEAR ON THE FOLLOWING GROUND : 1. IN VIEW OF THE ABOVE FACTS, ID. CIT(A) DOES NOT SEEM TO BE JUSTIFIED IN DELETING THE ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN OF RS . 1,49,25,000/- U/S 45 OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF ALLEGED TRANSFER OF PROPERT Y. IT IS THEREFORE, PRAYED THAT ADDITION MADE BY AO BE RESTORED AND THAT ORDER PASSED BY THE ID. CIT(A) BE QUASHED. 2. THE LD. CIT-DR RELIED UPON THE ASSESSMENT ORDER. TH E LD. AR ON THE OTHER HAND, RELIED UPON THE IMPUGNED ORDER AND SUBMITTED THAT THE ISSUES HAD BEEN DECIDED ON THE BASIS OF THE DECISION OF THE JUR ISDICTIONAL HIGH COURT IN THE CASE OF SHRI C.S.ATWAL (2015) 59 TAXMANN.COM 359 . ACCORDINGLY, IT WAS HIS SUBMISSION THAT THE DEPARTMENTAL APPEAL IS NOT MAINTAINABLE. 3. THE LD. SR.DR IN REPLY, THOUGH GIVEN AN OPPORTUNITY TO REPLY, DID NOT REFER TO ANY CHANGE EITHER IN FACT OR POSITION OF LAW CONTR ARY TO WHAT HAS BEEN CONSIDERED BY THE HON'BLE JURISDICTIONAL HIGH COURT OR FOR THAT MATTER, AS CONSIDERED BY THE CIT(A). 4. THE RELEVANT FACTS OF THE CASE ARE THAT THE RETURN OF INCOME FILED BY THE ASSESSEE ON 18.06.2008 WAS REOPENED ON THE BASIS OF RE ASONS RECORDED. SINCE THE SAME HAVE BEEN RECORDED IN THE ORDER ITSELF, THEY AR E REPRODUCED HEREUNDER FOR THE SAKE OF COMPLETENESS : THE DEFENCE SERVICES COOPERATIVE HOUSE BUILDING SOC IETY, WHICH WAS HAVING 27.3 ACRE OF LAND IN VILL. KANSAL, DISTT. MOHALI. THE DEFENCE SE RVICES COOPERATIVE HOUSE BUILDING SOCIETY ITA 311/CHD/2017 A.Y. 2008-09 PAGE 2 OF 9 HAS ENTERED INTO TRIPARTITE JOINT DEVELOPMENT AGREE MENT WITH M/S HASH BUILDERS PVT. LTD., CHANDIGARH & M/S TATA HOUSING DEVELOPMENT COMPANY L TD., MUMBAI ON 27.04.2007. BY VIRTUE OF THE TRIPARTITE AGREEMENT, IT WAS AGREED U PON AMONG THESE PARTIES THAT DEFENCE SERVICES COOPERATIVE HOUSE BUILDING SOCIETY, MOHALI OWNER OF 27.3 ACRE LAND SHALL TRANSFER ITS LAND TO M/S TATA HOUSING DEVELOPMENT COMPANY LI MITED IN LIEU OF MONETARY CONSIDERATION AND CONSIDERATION IN KIND. ON 24.02,2007 SALE DEED FOR 3.08 ACRES OF LAND WAS EXECUTED BY THE SOCIETY IN FAVOUR OF M/S TATA HOUSING DEVELOPME NT COMPANY LTD. FOR A CONSIDERATION OF RS. 15.48 CRORE AND ON 30.04.2007 SALE DEED FOR 4.62 AC RES OF LAND WAS EXECUTED FOR A CONSIDERATION OF RS. 23.22 CRORE IN PURSUANCE TO TH E AGREEMENT ENTERED BY THE SOCIETY. THE TOTAL CONSIDERATION RECEIVABLE IN RESPECT OF ASSESS EE'S SHARE COMES TO RS.80,00,000/- THOUGH THE ASSESSEE RECEIVED ONLY AT RS.32,00,000/- DURING THE F.Y.2007-08 RELEVANT TO A.Y.2008-09 AND ONE FLAT OF 2250 SQ. FT. AS PER AGREEMENT. THE VALUE OF FLAT IS DETERMINED AT RS.1,01,25,000/- BY TAKING VALUE OF FLAT AT RS.4500 /- PER SQ.FT. 4.1 AS PER THE AGREEMENT IN LIEU OF TRANSFER OF ITS LAND THE DEFENCE SERVICES CO-OPERATIVE HOUSE BUILDING SOCIETY, MOHALI SHALL RECEIVED RS.12 4.72 CRORE AS MONETARY CONSIDERATIONS. IN ADDITION TO THIS, AS CONSIDERATION IN KIND MEMBERS OF THIS SOCIETY SHALL RECEIVE 206 FLATS HAVING TOTAL SUPER AREA OF 3,85,400/- SQ. FT. TO BE CONSTR UCTED BY M/S TATA HOUSING DEVELOPMENT COMPANY LTD. 4.2 A SALIENT FEATURE OF THIS TRIPARTITE AGREEME NT IS THAT M/S HASH BUILDERS (P) LTD. WILL BE RESPONSIBLE FOR MAKING PAYMENTS TO THE DEFENCE S ERVICES CO-OPERATIVE HOUSE BUILDING SOCIETY, MOHALI IN CONSIDERATION OF THE LAND PURCHA SED BY M/S TATA HOUSING DEVELOPMENT COMPANY. IN ACCORDANCE WITH THE TRIPARTITE AGREEMEN T M/S HASH BUILDERS IS COMMITTED TO PAY THE MEMBERS OF THE DEFENCE SERVICES COOPERATIVE HOUSE BUILDING SOCIETY, MOHALI A TOTAL AMOUNT OF RS.124.72 CRORE AS FULL AND FINAL PAYMENT . 4.3 MOREOVER, AS PER THE TRIPARTITE AGREEMENT, 2 06 FLATS SHALL BE PROVIDED TO THE DEFENCE SERVICES CO-OPERATIVE HOUSE BUILDING SOCIET Y TATA HOUSING DEVELOPMENT COMPANY LTD. ON ACCOUNT OF TRANSFER OF LAND TO TATA HOUSING DEVELOPMENT COMPANY LTD., FIRST PAYMENT OF RS.18.70 CR. WAS RECEIVED BY THE MEMBERS OF THE SOCIETY ON 30.04.2007 AND SECOND PAYMENT OF RS.26.50 CR. WAS RECEIVED BY THE RESPECTIVE MEMBERS OF THE SOCIETY ON 15.06.2007. THUS A TOTAL AMOUNT OF RS.45.20 CR. HAS BEEN RECEIVED BY 207 MEMBERS OF THE SOCIETY DURING F.Y.2007-08. 4.4 AS PER THIS AGREEMENT, THE ASSESSEE'S SALE CON SIDERATION SHARE COMES TO RS.80,00,000/- AND ALLOTMENT OF 1 FLAT 2250 SQ. FT. OUT OF TOTAL S ALE CONSIDERATION OF RS.80,00,000/-, THE ASSESSEE RECEIVED RS.15,00,000/- ON 30.04.2007 AND RS.17,00,000/- ON 15.06.2007. THE ASSESSEE WAS LIABLE TO WORK OUT LONG TERM CAPITAL G AINS BY TAKING TOTAL CONSIDERATION OF RS.80,00,000/- FOR SALE OF LAND OF ASSESSEE'S SHARE AND 1 FLAT OF 2250 SQ. FT. THE TOTAL VALUE OF FLAT MEASURING 2250 SQ. FT. IS TAKEN AT RS.1,01, 25,000/- @ RS.4,500/- PER SQ. FT. IN THIS CASE, TOTAL SALE CONSIDERATION OF RS.80,0.0,000/- P LUS COST OF FLAT AS DETERMINED ABOVE IS TAKEN AT RS.1,01,25,000/-; TOTALING RS. 1, 81,25,000/- THOUGH THE ASSESSEE RECEIVED ONLY AT RS.32,00,000/-. AS PER SE CTION 45 OF THE I.T.ACT, THE INCOME HAS TO BE CHARGED UNDER THE HEAD CAPITAL GAIN ON ANY PROFIT O N TRANSFER OF CAPITAL ASSETS AND SHALL BE DEEMED TO BE INCOME OF THE PREVIOUS YEAR IN WHICH T HE TRANSFER TOOK PLACE. AS EVIDENT FROM THE AGREEMENT/INFORMATION AVAILABLE WITH THIS OFFICE TRANSFER OF THE CAPITAL ASSETS TOOK PLACE IN THE F.Y.2007-08 RELEVANT TO A.Y.2008-09. T HEREFORE, THE ASSESSEE IS LIABLE TO PAY TAX ON LONG TERM CAPITAL GAINS WORKED OUT AT RS.1,81,25 ,000/-WHEREAS THE ASSESSEE HAS SHOWN NET LONG TERM CAPITAL GAINS AT RS.28,42,981/- AFTER TAKING INDEXED COST OF ACQUISITION OF RS. 3,57,019/- AS AGAINST TOTAL CONS IDERATION OF RS. 1,81,25,000/-. ----------------- 4.1. ACCORDINGLY, AFTER SHOW CAUSING THE ASSESSEE AND CON SIDERING THE REPLY, THE ENTIRE CONSIDERATION COMPRISING OF MONEY AND FLAT WHICH ACCRUED TO THE ASSESSEE, WAS TAKEN AS COMPRISING OF THE CASH AMOUNT R ECEIVABLE BY THE ASSESSEE. THE VALUE WAS WORKED OUT AS RS. 4500/- PER SQ.FT. HOWEVER, SINCE AS PER CLAUSE 3.6, ONE OF THE PRICES AT WHICH THDC WOULD SELL THE FLA T TO HASH WAS SHOWN AS RS. 4500/- PER SQ.FT. ADDITION OF THE SAID AM OUNT WAS MADE BY THE AO. ITA 311/CHD/2017 A.Y. 2008-09 PAGE 3 OF 9 5. THE ISSUE WAS CHALLENGED IN APPEAL BEFORE THE CIT(A) AND THE FOLLOWING ARGUMENTS BY WAY OF GROUNDS WERE RAISED BEFORE THE CIT(A) : '1) THAT THE LD. AO ERRED ON FACTS AND IN LAW IN FRAMING THE ASSESSMENT U/S 143(3) OF THE ACT R.W.S 148 VIDE ORDER DATED 2 9.02.2016. 2) THAT THE LD. AO ERRED IN FACTS AND IN LAW IN MAKING THE ADDITION OF LONG TERM CAPITAL GAINS OF RS.1,49,25,000/- U/S 45 OF THE ACT ON ACCO UNT OF ALLEGED TRANSFER OF PROPERTY. 2.1) THAT THE LD. AO ERRED ON FACTS AND IN LAW BY HOLDIN G THAT THERE WAS DEEMED TRANSFER OF PROPERTY ON THE DATE OF SIGNING OF TRIPARTITE JOINT DEVELOPMENT AGREEMENT ('THE AGREEMENT') ITSELF, IN TERMS OF SUB SECTION (III), (V) AND (VI) SECTION 2(47) OF THE ACT. 2.2) THAT THE LD. AO ERRED ON FACTS AND IN LAW IN OBSERV ING THAT THE RECEIPT OF CONSIDERATION AND REGISTRATION OF PROPERTY ARE NOT RELEVANT FACTORS WHILE DETERMINING THE TRANSFER OF THE PROPERTY. 2.3) THAT THE LD AO FAILED TO APPRECIATE THAT UNDER THE PROVISIONS OF THE ACT WHAT COULD BE BROUGHT TO TAX IS ONLY THE REAL INCOME AND NOT A N AMOUNT, WHICH WAS NEITHER RECEIVED NOR LIKELY TO BE RECEIVED BY THE ASSESSEE, BESIDES THE ASSESSEE HAS BEEN DEPRIVED FOR CLAIMING EXEMPTION U/S 54EC AND OTHER PROVISIONS OF SECTION 54, DUE TO NON-RECEIPT OF ENTIRE SALE CONSIDERATION. 2.4) THAT THE LD. AO FAILED TO APPRECIATE THAT THE AGREE MENT ENTERED INTO BY THE ASSESSEE WAS SUBJECT TO VARIOUS REGULATION/STATUTORY/OTHER A PPROVALS/ PERMISSIONS ETC. REQUIRED TO BE OBTAINED BY THE OTHER PARTY(IES) WHICH WERE NOT REC EIVED AND HENCE THERE COULD BE NO 'TRANSFER' UNDER THE SAID AGREEMENT. . 2.5) THAT THE LD. AO FURTHER ERRED ON FACTS AND IN LAW I N OBSERVING THAT CERTAIN TERMS AND CONDITIONS OF THE AGREEMENT WHICH PROVIDED THAT THE TRANSFER OF LAND WAS SUBJECT TO FURTHER CONDITION/ENCUMBRANCES, WERE NOT RELEVANT. 2.6) THAT THE LD. AO ERRED ON FACTS AND IN LAW IN NOT AP PRECIATING THAT ACTUAL PHYSICAL POSSESSION OF THE PROPERTY WAS NOT HANDED OVER BY T HE ASSESSEE IN PART PERFORMANCE OF THE CONTRACT, IN TERMS OF SECTION 53A OF THE TRANSFER O F PROPERTY ACT AND HENCE THERE WAS NO TRANSFER' IN LAW. THAT THE RELEVANT PROVISIONS OF S ECTION 2(47) AS ALSO THE PROVISIONS OF SECTION 53 A OF THE TRANSFER OF PROPERTY ACT, 1882 QUA THE FACTS OF THIS CASE, HAVE BEEN MISCONSTRUED BY THE LD. AO. THAT THE LD. AO FAILED TO APPRECIATE THAT REGISTRATION OF TERMS OF AGREEMENT WAS A PRECONDITION TO THE HANDING OVER THE POSSESSION OF THE PROPERTY. 2.7) THAT THE LD. AO ERRED ON FACTS AND IN LAW IN AFFI RMING THE VALUE OF THE FLATS RECEIVABLE TOWARDS PART CONSIDERATION OF THE PROPOS ED TRANSFER OF PROPERTY, @RS.4,500/- PER SQ. FEET IGNORING THE EVIDENCE OF LOWER VALUE. THAT COMPUTATION OF CAPITAL GAIN, BY ASSUMING NOTIONAL CONSIDERATION OF TWO NON-EXISTENT FLATS, N OT BEING CONSISTENT WITH THE BASIC SCHEME OF INCOME TAX ACT, DESERVES NOT TO BE UPHELD. 3) WITHOUT PREJUDICE, THAT THE LD. AO FAILED TO APPRE CIATE, THAT THE INCOME, IF AT ALL, COULD HAVE BEEN ASSESSED IN THE HANDS OF THE SOCIETY AND NOT THE APPELLANT. 4) THAT THE ASSESSED INCOME HAVING FOR EXCEEDED RS.35 LAKHS OF WHICH THE ITO WAS WELL AWARE BEFORE INVOKING HIS JURISDICTION, HE OUGHT TO HAVE TRANSFERRED THE CASE TO AN ASSESSING OFFICER OF COMPETENT JURISDICTION. THIS LEGAL INFIR MITY RENDERS THE ORDER IMPUGNED AS NULL AND VOID. 5) THAT THE IMPUGNED CAPITAL GAINS WAS ALSO NOT ASSESS ABLE AS THE VERY RIGHT TO RECEIVED THE PROJECTED CONSIDERATION HAS FALLEN INT O SERIOUS JEOPARDY FOLLOWING STAY GRANTED BY THE HON'BLE PUNJAB & HARYANA HIGH COURT TAKING C OGNIZANCE OF A PIL FILED AGAINST THE EXECUTION OF IMPUGNED DEAL. 6) THAT THE LD, AO GROSSLY ERRED TO APPRECIATE THE JUD GMENT PASSED BY JURISDICTIONAL HIGH COURT IN THE CASE OF C.S. ATWAL VS. CIT[59 TAX MANN.COM 359]. ON SAME ISSUE WHEREIN THEIR LORDSHIP HAS CATEGORICALLY HELD ON THIS, ISSU E THAT NO TRANSFER HAS TAKEN PLACE SO IT CANNOT BE SAID THAT ANY INCOME CHARGEABLE TO CAPITAL GAIN TAX IN RESPECT OF REMAIN ING LAND HAD ACCRUED OR ARISEN TO THE ASSESSEE IN THE FACTS OF THE CASE. 7) THAT THE LD. AO ERRED ON FACTS AND IN LAW IN IMPOSI NG INTEREST U/S 234B, 234C & 234D AND WITHDRAWAL OF INTEREST U/S 244 A(3) OF THE ACT. 8) THAT THE ORDERS OF THE AUTHORITIES BELOW ARE HIGHLY UNJUST, ARBITRARY, AGAINST EQUITY ITA 311/CHD/2017 A.Y. 2008-09 PAGE 4 OF 9 AND NATURAL JUSTICE AND HENCE LIABLE TO BE SET ASID E ON THIS SCORE ALSO. ' 5.1. THE ASSESSEE IS FURTHER FOUND TO HAVE RELIED UPON THE FOLLOWING REPLY PLACED BEFORE THE AO AT PAGES 5 TO 9 OF THE ASSESSMENT ORDER WHICH IS REPRODUCED HEREUNDER : (I) 'THAT DURING THE FINANCIAL YEAR 2007-2008 RELEV ANT TO THE AY: 2008-2009, THE ASSESSEE HAD INCOME FROM SALARY AND PENSION, LONG TERM CAPIT AL GAINS AND INTEREST INCOME. (II) THAT DURING THE FINANCIAL YEAR 2007-2008 RELEV ANT TO THE AY: 2008-2009, THE ASSESSEE HAD DECLARED AN INCOME OF RS.28,42,981/- AS INCOME FROM LONG TERM CAPITAL GAIN ARISING OUT OF PART RECEIPTS ON ACCOUNT OF SURRENDER OF PLOT IN THE DEFENCE SERVICES CO-OP HOUSE BUILDING SOCIETY LTD THE DETAIL OF WHICH IS GIVEN A S UNDER: SALE CONSIDERATION (PART PAYMENT) 32,00, 000-00 LESS: INDEXED COST (3,00,000 X661/463) 3,57,019- 00 LONG TERM 'CAPITAL GAINS 28,42,981-00 THE ASSESSEE WAS A MEMBER OF THE DEFENCE SER VICES COOPERATIVE HOUSE BUILDING SOCIETY, MOHALI AND WAS ALLOTTED A PLOT OF SIZE 500 SQ. YARD S. THE SOCIETY OWNED 27.3 ACRES OF LAND IN VILLAGE KANSAL. THE SOCIETY HAD ENTERED INTO JOINT DEVELOPMENT AGREEMENT WITH TATA HOUSING DEVELOPMENT COMPANY LIMITED AND M/S HASH BU ILDERS PVT. LTD, WHEREIN IT WAS AGREED THAT EACH MEMBER OF THE SOCIETY SHALL GET RS .80.00 LACS CASH AND A FLAT OF THE SIZE 2250 SFT FOR SURRENDERING HIS SHARE IN THE SOCIETY. DURING THE FINANCIAL YEAR 2007-08 RELEVANT TO THE AY: 2008-09, A SUM OF RS.32.00 LACS (PART PAYMENT) WAS PAID TO EACH MEMBER INCLUDING THE ASSESSEE. THEREAFTER THE PROJECT RAN INTO LEGAL TROUBLE AND NEVER GOT STARTED. THE POSITION OF THE PROJECT IS THE SAME EVEN AS OF TODAY. SINCE THE PROJECT RAN INTO LEGAL TROUBLE AFTER MAKI NG THE PART PAYMENT, THE BALANCE PAYMENT WAS NOT MADE TO THE SOCIETY. THE SOCIETY ALSO IN TU RN HAD ONLY REGISTERED 7.70 ACRES OF THE LAND OUT OF TOTAL LAND HOLDING OF 27.30 ACRES, I.E. PART PERFORMED THE OBLIGATION UNDER THE CONTRACT, THEREBY HANDING OVER PRO-RATA POSSESSION OF THE LAND. (III) NOW YOUR GOODSELF VIDE THIS NOTICE HAS S OUGHT TO TAX THE ASSESSEE ON THE BASIS OF THE TOTAL CONSIDERATION WHICH WAS TO BE RECEIVED I.E RS. 80 F OO,000/~ PLUS VALUE OF FLAT AT RS.1,01,25,000/- WHICH COMES TO RS. 1,81,25,OOO/-. THE LONG TERM CAPITAL GAIN ON THE SAME WORKS AT RS. 1,77,67,981/- AS AGAINST RS. 28,42,981 /- CALCULATED AND DECLARED BY THE ASSESSEE. (IV) THE CASE OF THE ASSESSEE IS NOT A LONE CA SE. THERE WERE OTHER HOUSING SOCIETIES AND THEIR MEMBERS ALSO WHO WERE ASKED TO PAY THE CAPITAL GAIN TAX ON THE BASIS, AS SOUGHT BY YOUR GOODSELF. THE MATTER CAME BEFORE THE HON'BLE HIGH C OURT OF PUNJAB AND HARYANA IN THE CASE OF C.S. ATWAL V. COMMISSIONER OF INCOME-TAX, LUDHIANA* [2015 ] 59 TAXMANN.COM 359 (PUNJAB & HARYANA). IN THIS CASE THE HON'BLE HIGH COURT SETTLED THE FOL LOWING QUESTIONS OF LAW ARISING OUT OF THESE TYPES OF TRANSACTIONS IN T HE FAVOUR OF THE ASSESSEE: (A) WHETHER THE TRANSACTIONS IN HAND ENVISAGE A 'TRANSF ER' EXIGIBLE TO TAX BY REFERENCE TO SECTION 2(47)(V) OF THE INCOM E TAX ACT, 1961 READ WITH SECTION 53-A OF THE TRANSFER OF PROPERTY ACT, 1882? (B) WHETHER THE INCOME TAX APPELLATE TRIBUNAL, HAS IGNORED RIGHTS EMANATING FROM THE JDA, LEGAL EFFECT OF NON-REGISTRATION OF JDA, I TS ALLEGED REPUDIATION ETC. ? (C) WHETHER 'POSSESSION' AS ENVISAGED BY SECTION 2(47)( V) AND SECTION 53-A OF THE TRANSFER OF PROPERTY ACT, 1882 WAS DELIVERED, AND I F SO, ITS NATURE AND LEGAL EFFECT? WHETHER THERE WAS ANY DEFAULT ON THE PART OF THE DE VELOPERS, AND IF SO, ITS EFFECT ON THE TRANSACTIONS AND ON EXIGIBILITY TO TAX? (D) WHETHER AMOUNT YET TO BE RECEIVED CAN BE TAXED ON AN HYPOTHETICAL ASSUMPTION ARISING FROM THE AMOUNT TO BE RECEIVED? ' (F) REGARDING PART PERFORMANCE UNDER T HE JDA AND GIVING PRO-RATA POSSESSION OF LAND THE HON'BLE HIGH COURT OBSERVED AS UNDER: (A) 'UNDER CLAUSE 2.1 OF THE JDA, THE POSSESSION OF THE PROPERTY WAS TO BE HANDED OVER SIMULTANEOUSLY WITH THE EXECUTION AND REGISTRATION OF THE SAID AGREEMENT. THE JDA WAS NEVER REGISTERED AND, THEREFORE, THE PRESUMPTION OF DELIVERY OF POSSESSION TO THE ITA 311/CHD/2017 A.Y. 2008-09 PAGE 5 OF 9 DEVELOPERS CANNOT BE ASSUMED. THE DELIVERY OF TITLE DEEDS WOULD NOT NECESSARILY RAISE PRESUMPTION OF DELIVERY OF POSSESSION AS THESE ARE TWO DISTINCT ACTIONS. FURTHER, THE IRREVOCABLE REGISTERED SPECIAL POWER OF ATTORNEY AL SO RECORDS THAT ON 26-2-2007 (I.E. THE DATE OF ITS EXECUTION AND REGISTRATION), THE POSSES SION CONTINUED TO BE WITH THE MEMBERS OF THE SOCIETY. STILL FURTHER, EVEN THE TWO SALE DE EDS EXECUTED BETWEEN THE PARTIES ON 2-3- 2007 AND 25-4-2007 IN RESPECT OF 3.08 ACRES AND 4.6 2 ACRES RESPECTIVELY CLEARLY STIPULATE THAT POSSESSION WAS DELIVERED UNDER THE SAID INSTRU MENTS WHICH WOULD SHOW THAT THE PARTIES HAD AGREED FOR PRO RATA TRANSFER OF LAND. A COMBINED READING OF THE VARIOUS CLAUSES OF JDA AND IRREVOCABLE REGISTERED SPECIAL P OWER OF ATTORNEY CLEARLY SHOWS THAT THE DEVELOPER WAS ENTITLED TO ENTER UPON THE PROPER TY FOR THE PURPOSES OF DEVELOPMENT, ETC. FOR INVOKING SECT/ON 53A OF 1882 ACT, IT WAS M ANDATORY TO ESTABLISH THAT POSSESSION IN PART PERFORMANCE OF AN AGREEMENT WAS DELIVERED B Y THE TRANSFEROR TO THE TRANSFEREE. SECTION 53A OF 1882 ACT DOES NOT DEFINE ANY CONTRAC T BUT RELATES TO A PARTICULAR NATURE OF CONTRACT WHERE TRANSFEREE IS ENTITLED TO PROTECT HI S POSSESSION WHEN HE HAS BEEN DELIVERED THE SAME IN PART PERFORMANCE OF A CONTRAC T. IN OTHER WORDS, THE SOCIETY OR ITS MEMBERS HAD NEVER PARTED POSSESSION OF THE PROPERTY THOUGH UNDER JDA AND THE SPECIAL POWER OF ATTORNEY, THE DEVELOPER WAS GIVEN POWER TO RAISE FINANCE BY MORTGAGING THE PROPERTY AND FOR THE PURPOSE OF REGISTRATION OF THE CHARGE THEREON. IF AT ALL, IT IS TO BE HELD THAT POSSESSION WAS DELIVERED TO THE DEVELOPER S, THEN IT WOULD BE AS A LICENSEE ONLY. THE DEVELOPER WAS AUTHORIZED TO AMALGAMATE THE PROJ ECT AND IN THE EVENT OF TERMINATION OF JDA, PROVISIONS OF CLAUSE 6 THEREOF WERE AGREED TO BE SURVIVING. THE ENVIRONMENTAL CLEARANCE WAS THE RESPONSIBILITY OF THE DEVELOPER, OUT OF ITS OWN SOURCES. THE TRIBUNAL HAD SOUGHT TO RAISE PRESUMPTION OF DELIVERY OF POSS ESSION WHICH ON THE BASIS OF PRECEDING ANALYSIS OF FACTUAL MATRIX INVOLVED HEREI N WAS LEGALLY NOT PERMISSIBLE. THE JDA TO BE COVERED UNDER SECTION 53A OF 1882 ACT WAS REQUIRED TO BE A REGISTERED INSTRUMENT EVEN FOR PURPOSES OF ENFORCING CIVIL LAW RIGHTS. ONCE IT WAS EMBODIED IN SECTION 2(47)(V) BY INCORPORATION, ALL THE LEGAL RE QUIREMENTS OF SECTION 53A OF 1882 ACT HAD TO BE COMPLIED WITH. IN THE ABSENCE OF REGISTRA TION OF SUCH AN AGREEMENT, THE SAME WAS NOT ENFORCEABLE, UNDER GENERAL LAW KEEPING IN V IEW THE PROVISIONS OF SECTIONS 17(1 A) AND 49 OF THE 1908 ACT AND AT THE SAME TIME, THE TRANSACTION WOULD NOT FALL UNDER SECTION 2(47)(V). [PARA 40] (B) UNDER JDA, IT WAS THE OBLIGATION OF THE DEVELOPERS TO PREPARE, SUBMIT AND OBTAIN SANCTION OF THE PLANS, DESIGNS AND DRAWINGS FOR CONSTRUCTION OF THE PROJECT FROM THE COMPETENT AUTHORITY WHICH WAS TO BE WITHIN THE PRESCRIBED TIME. THE COSTS FOR NECESSARY APPROVALS WERE ALSO TO BE BORNE BY THEM. IT WAS ALSO THE OBLIGATION OF THE DEVELOPERS TO MAKE TIMELY PAYMENT OF THE CONSIDERAT ION IN THE MANNER SET OUT THEREIN WHICH WAS AN ESSENCE OF THE JDA. ADDITIONALLY, IT W AS THE RESPONSIBILITY OF THE DEVELOPERS TO OBTAIN REQUISITE -GOVERNMENT AND STA TUTORY APPROVALS, SANCTIONS OF ALL DRAWINGS AND PLANS REQUIRED FOR DEVELOPMENT OF THE PROJECT AND ALSO TO UNDERTAKE THE PROJECT WITHIN SIX MONTHS OF THE HANDING OVER OF TH E FINAL PLANS, DESIGNS AND DRAWINGS TO THE DEVELOPER FOR SUBMISSION OF THE SAME TO THE COM PETENT AUTHORITY FOR OBTAINING THE APPROVAL WHICH WAS TO BE DONE BY DEVELOPER WITHIN T HE PRESCRIBED TIME SCHEDULE. THE EXTERNAL DEVELOPMENT CHARGES, LICENCE FEE, CLU CHAR GES AND ANY OTHER RELATED CHARGES WERE THE LIABILITY OF THDC. [PARA 41] (C) APART FROM ABOVE, HASH/THDC HAD MADE PAYMENT OF ADJUSTABLE ADVANCE OF RS. 3 LAKHS TO THE PLOT HOLDER OF 500 SQUARE YAR DS BESIDES MAKING PAYMENT OF RS. 12 LAKHS AND RS. 18 LAKHS AS FIRST AND SECOND INSTALLM ENTS RESPECTIVELY. THDC DEFAULTED IN MAKING PAYMENT OF THIRD INSTALLMENT AS REQUIRED UND ER CLAUSE 4.1(IV) OF THE JDA. THE PROJECT WAS DELAYED DUE TO VARIOUS SUBSEQUENT DEVEL OPMENTS. A PUBLIC INTEREST LITIGATION WAS FILED WHERE CONSTRUCTION/DEVELOPMENT OF THE PROJECT WAS STAYED. THIS COURT HAD DIRECTED THE DEVELOPERS TO OBTAIN ADDITIO NAL PERMISSION UNDER THE PUNJAB NEW CAPITAL (PERIPHERY)CONTROL ACT, 1952. SUBSEQUEN TLY, IN COURT ON ITS OWN MOTION V. UT, CHANDIGARH [CWP NO. 18253 OF 2009, DATED 14-5-2 012] THE COURT DIRECTED STAY OF CONSTRUCTION IN THE ENTIRE CATCHMENT AREA OF SUKHNA LAKE AS PER SURVEY OF INDIA RECORD INCLUDING THE PROJECT UNDER CONSIDERATION. DEMOLITI ON OF THE EXISTING STRUCTURE AFTER 11- 3-2011 WAS ALSO ORDERED. HOWEVER, THE APEX COURT VI DE ORDER DATED 22-5-2012 GRANTED STATUS QUO AND DIRECTED THAT NO CONSTRUCTION SHOULD BE UNDERTAKEN IN THE AREA AND STAYED DEMOLITION OF THE EXISTING STRUCTURE. THE SO CIETY IN THE MEANTIME ISSUED LETTER TO ITA 311/CHD/2017 A.Y. 2008-09 PAGE 6 OF 9 HASH FOR PAYMENT OF THIRD INSTALLMENT AS PER CLAUSE 4.1(IV) OF THE JDA. HASH REPLIED THAT THE THIRD INSTALLMENT WOULD BECOME DUE ONLY AF TER OBTAINING PERMISSION TO COMMENCE CONSTRUCTION WHICH WAS STILL PENDING WITH THE MINISTRY OF ENVIRONMENT AND FORESTS. THE HIGH COURT HAD ALREADY RESTRAINED THE DEVELOPERS TO START CONSTRUCTION. THE SOCIETY NOT SATISFIED WITH THE STAND TAKEN BY T HE DEVELOPERS SENT LEGAL NOTICE TO THEM STATING THEREIN THAT TIME WAS THE ESSENCE OF JDA AN D THERE WAS DELAY ON THEIR PART TO OBTAIN NECESSARY APPROVAL FROM THE COMPETENT AUTHOR ITY. THE SOCIETY GAVE 30 DAYS TIME TO THE DEVELOPERS TO MAKE PAYMENT OF THE THIRD INST ALLMENT FALLING WHICH THE JDA WAS LIABLE TO BE TERMINATED. ON FAILURE OF THE DEVELOPE RS TO PAY THE INSTALLMENT, THE SOCIETY DECIDED TO TERMINATE THE JDA AND CANCELLED THE SPEC IAL POWER OF ATTORNEY WHICH WAS EARLIER EXECUTED IN FAVOUR OF THE DEVELOPERS. THUS, WILLINGNESS TO PERFORM THEIR PART OF THE CONTRACT WAS ABSENT ON THE PART OF THE DEVELOPE RS OR IT COULD NOT BE PERFORMED BY THEM WHICH WAS ONE OF THE CONDITION PRECEDENT FOR A PPLYING SECTION 53A OF THE 1882 ACT. UNDER CLAUSE 26 OF THE JDA, PRINCIPLE OF FORCE MAJE URE HAD BEEN PROVIDED FOR, WHICH WOULD BE APPLICABLE WITH FULL VIGOUR IN THE CIRCUMS TANCES NOTICED EARLIER. HOWEVER, THE HAYDON'S RULE, IN THE FACTS AS NARRATED HEREINBEFOR E, WOULD NOT BE ATTRACTED. [PARA 42] (D) IN VIEW OF PRECEDING ANALYSIS, IT CANNOT BE H ELD THAT THE MANDATORY REQUIREMENTS OF SECTION 53A OF 1882 ACT WERE COMPLIED WITH WHICH ST OOD INCORPORATED IN SECTION 2(47)(V). ONCE THAT WAS SO, IT COULD NOT BE SAID TH AT THE ASSESSEE WAS LIABLE TO CAPITAL GAINS TAX IN RESPECT OF REMAINING LAND WHICH WAS NO T TRANSFERRED BY HIM TO THE DEVELOPER/BUILDER BECAUSE OF SUPERVENING EVENT NOT ON ACCOUNT OF ANY VOLITION ON THEIR PART. [PARA 43] (E ) VIEWED FROM ANOTHER ANGLE, IT CANNOT BE SAID THA T ANY INCOME CHARGEABLE TO CAPITAL GAINS TAX IN RESPECT OF REMAINING LAND HAD ACCRUED OR ARISEN TO THE ASSESSEE IN THE FACTS OF THE CASE. [PARA 44]' THE ASSESSEE HAD RECEIVED ONLY PART PAYMENT ON ACCO UNT OF SURRENDER OF PLOT IN THE SOCIETY. THE ASSESSEE HAD DECLARED ALL THE INCOMES IN THE IT RETURN FOR THE AY: 2008-09 AND PAID ALL THE DUE TAXES INCLUDING THE LONG TERM CAPITAL GAIN ARISING OUT OF SURRENDER OF PLOT IN THE SOCIETY. THE ASSESSEE IS NOT SURE OF WHETHER THE BALANCE WILL BE RECEIVED BY HIM OR NOT. BY THIS STATEMENT THE ASSESSEE WANTS TO CONVEY AND CONVINCE THAT WHENEVER THE ASSESSEE RECEIVES THE BALANCE AMOUNT, HE SHALL PAY THE LONG TERM CAPITAL GAIN DUE WHEREIN COST OF ACQUISITION FOR THE BALANCE AMOUNT SHALL BE NIL. (V) THE COPIES OF THE BANK STATEMENTS FOR THE FINAN CIAL YEAR 2007-08 RELEVANT TO THE AY: 2008-09 ARE ATTACHED HEREWITH. (VI) KEEPING IN VIEW THE ABOVE FACTS WHIC H ARE SIMILAR IN THE MATTERS DECIDED BY THE JURISDICTIONAL HIGH COURT, THE INCOME MAY BE ASSESS ED AT THE INCOME DECLARED IN THE IT RETURN. 5.2. THE EXPLANATION ADMITTEDLY HAD NOT BEEN ACCEPTED BY THE AO AND THE REASONS FOR REJECTION HAVE BEEN SUMMED UP BY THE CIT(A) AS UNDER: 3.1 AFTER CONSIDERING THE JOINT DEVELOPMENT AGREEME NT THE AO NOTED THAT THE MEMBERS OF THE SOCIETY BEING THE OWNERS OF THE PROPERTY OF APP ROX. 27.3 ACRES OF (AND ENTERED INTO AGREEMENT WITH HASH BUILDERS (P) LTD. (HASH) AND TA TA HOUSING DEVELOPMENT COMPANY LTD. (THDC) WHO WERE THE DEVELOPERS TO DEVELOP SOCI ETY, FOR WHICH VARIOUS RIGHTS IN THE PROPERTY WERE ASSIGNED AS WELL AS TRANSFERRED. THE PHYSICAL POSSESSION OF THE VACANT PROPERTY WAS ALSO HANDED OVER TO THDC. THE MEMBERS INCLUDING THE ASSESSEE SURRENDERED THEIR ALLOTMENT LETTERS AND IN TURN THEIR RIGHTS IN THE LAND IN LIEU OF 'ENTIRE CONSIDERATION'. AS PER PARA 4.1 OF THE AGREEMENT THE OWNER GRANTED AND ASSIGNED THE DEVELOPMENT RIGHTS IN THE PROPERTY, IRREVOCABLY AND IN PERPETUITY, TO THDC TO DEVELOP THE PROPERTY AND TRANSFER OF PROPERTY UPON THE SURRENDER OF ALLOTMENT RIGHTS OF 250 SQ. YDS AND 500 SQ. YDS. BY ITS MEMBERS VIDE RESOLUTION DATED 08.03.2007 AND 25.03. 2007. AS PER PARA 2.1 OF THE AGREEMENT THAT THE OWNER IRREVOCABLY AND UNEQUIVOCA LLY GRANTS AND ASSIGNS IN PERPETUITY ALL ITS RIGHTS TO DEVELOP, CONSTRUCT, MORTGAGE, LEASE, LICENSE, SELL AND TRANSFER THE PROPERTY ALONGWITH ANY AND ALL THE CONSTRUCTIONS, PREMISES, HEREDITAMENTS, EASEMENTS, TREES THEREON IN FAVOUR OF THDC FOR THE PURPOSE OF DEVELOPMENT, C ONSTRUCTION, MORTGAGE, SALE TRANSFER, LEASE, LICENSE AND EXPLOITATION FOR FULL UTILIZATIO N OF THE PROPERTY AND TO EXCUSE ALL THE DOCUMENTS NECESSARY TO CARRY OUT FACILITATE AND ENF ORCE THE RIGHTS IN THE PROPERTY INCLUDING EXECUTE LEASE AGREEMENT FOR SALE, CONVEYANCE, MORTG AGE DEEDS, FINANCE DOCUMENTS AND ALL ITA 311/CHD/2017 A.Y. 2008-09 PAGE 7 OF 9 DOCUMENTS AND AGREEMENTS NECESSARY TO CREATE AND RE GISTER THE MORTGAGE, CONVEYANCE, LEASE DEEDS, LICENSE AGREEMENT, POWER OF ATTORNEYS, AFFID AVITS, , DECLARATIONS, INDEMNITIES AND ALL SUCH OTHER DOCUMENTS, LETTERS AS MAY BE NECESSARY T O CARRY OUT, FACILITATE AND ENFORCE THE RIGHTS AND TO REGISTER THE SAME .WITH THE REVENUE/C OMPETENT AUTHORITIES, STATUTORY OR OTHERS WISE, AND BEFORE ANY COURT OF LAW. THE OWNER HANDED OVER THE ORIGINAL TITLE DEEDS OF THE PROPERTY AND POSSESSION OF VACANT PROPERTY TO THDC SIMULTANEOUS FOR THE EXECUTION OF AGREEMENT TO DEVELOP THE SAME. 3.2 THE AO FURTHER NOTED THAT THE AGREEMENT UND ER REFERENCE CAN ALSO NOT BE L SAID TO BE OF THE NATURE OF AN AGREEMENT TO SELL AND NOT A SALE D EED. THE JOINT DEVELOPMENT AGREEMENT IS IN FACT A SALE AGREEMENT RESULTING INTO THE TRANSFER O F THE ASSET. ALL THE FACTORS OF TRANSFER CONSIDERATION, SCHEDULE OF PAYMENTS, RIGHTS AND LIA BILITIES OF EACH OF THE THREE PARTIES AND TERMINATION, INDEMNITY AND ARBITRATION CLAUSES WERE VERY EXHAUSTIVELY MENTIONED IN THE JOINT DEVELOPMENT AGREEMENT. THE CAPITAL GAIN AROSE FOR T HE FACT THAT IT WAS A CASE OF TRANSFER OF CAPITAL ASSET GENERALLY AND ALSO IN VIEW OF SECTION 2(47)(II), 2(47)(V) AND 2(47)(VI) OF THE ACT. 3.3 FURTHER, ON CONSIDERATION OF VARIOUS CLAUSES O F THE JOINT DEVELOPMENT AGREEMENT AND IN PARTICULAR CLAUSE 2.1, VACANT POSS ESSION OF THE PROPERTY TO THDC SIMULTANEOUS TO THE EXECUTION AND REGISTRATION OF T HIS AGREEMENT TO DEVELOP THE SAME AS SET OUT, THE CASE OF THE ASSESSEE WAS ALSO COVERED BY THE PROVISIONS OF SECTION 2(47)(V). THE OWNER/MEMBER RECEIVED PART OF THE 'ENTIRE CONSIDERATION' DURING THE YEAR ON ACCOUNT OF EXECUTION AND REGISTR ATION OF THIS AGREEMENT. THE PHYSICAL VACANT POSSESSION OF THE ENTIRE PROPERTY O F 27.3 ACRES OF LAND WAS HANDED TO THDC. THUS, IT IS A CASE OF A TRANSACTION INVOLV ING THE ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO SECTION 53 A OF TRANSFER OF PROPERTY AC T. THE AMOUNTS RECEIVED UNDER THE AGREEMENT CANNOT BE TREATED AS ADVANCES RECEIVED AN D IN ACTUAL IS THE SALE CONSIDERATION. AS PER THE JOINT DEVELOPMENT AGREEMENT ON ACCOUNT O F TRANSFER OF CAPITAL ASSET THE OWNERS WERE TO RECEIVE THE CONSIDERATION AS PER CLAUSE 4. THE PAYMENT SCHEDULE WAS STRUCTURED AND THE PAYMENTS/CONSIDERATION RECEIVED BY THE ASSESSEE IN F.Y. 2007-08 AND IN SUBSEQUENT YEARS WAS PART OF THE 'ENTIRE CONSIDERATION' AS DEC IDED BY THE PARTIES TO THE AGREEMENT. 3.4 AFTER CONSIDERING ALL FACTS AND MATERIAL ON RE CORDS, THE AO ENUMERATED THE POINTS AS IN PARA 19 OF THE ASSESSMENT ORDER, THE C ONTENTION OF THE ASSESSEE AS IN PARA 21 OF THE ASSESSMENT ORDER AND THE FACT THAT D EPARTMENT HAS PREFERRED SLP BEFORE THE HON'BLE SUPREME COURT AGAINST THE ORDERS IN VARIOUS CASES OF HON'BLE PUNJAB & HARYANA HIGH COURT, PROCEEDED WITH COMPLET ION OF ASSESSMENT OF INCOME. THE AO CONCLUDED THAT IN ORIGINAL RETURN OF INCOME, THE ASSESSEE HAD DECLARED INCOME FROM LONG TERM CAPITAL GAINS AT RS. 28,42,9817- IN RESPECT OF PART PAYMENT RECEIVED OF RS.32,00,000/- AS PER TRIPARTIT E AGREEMENT. SINCE, THE 'ENTIRE CONSIDERATION' COMPRISED OF MONEY AND FLATS, THE FU LL VALUE OF CONSIDERATION WHICH HAD ACCRUED TO THE ASSESSEE WAS TAKEN COMPRISING OF THE CASH AMOUNT RECEIVABLE BY THE ASSESSEE AND VALUE OF THE FLAT. THE AO CONSIDERED THE VALUE OF THE FLAT AT RS.4,500/- PER SQ. FT. WHICH WAS DERIVED FROM THE AGREEMENT DATED 26.04.2007 BET WEEN HASH AND THDC. FURTHER, AS PER CLAUSE 3.6 OF THE AGREEMENT ONE OF THE PRICE AT WHICH THDC WOULD SELL THE FLAT TO HASH WAS SHOWN AT RS.4,500/- PER SQ. FT. BUT THIS IS NOT THE PRICE AT WHICH THESE FLATS WERE OFFERED TO THE GENERAL PUBLIC. IN THE ABSENCE OF SPECIFIC I NFORMATION, THE VALUE OF THE FLAT TO THE ASSESSEE WAS TAKEN AT RS.4,500/- PER SQ. FT. THUS, THE AO COMPUTED FULL VALUE OF CONSIDERATION OF RS. 1,81,25,000/-. THE ASSESSEE IN THE RETURN OF INCOME, COMPUTED HIS LONG TERM CAPITAL GAINS AND TAKEN THE COST OF ACQUISITIO N AFTER INDEXATION AT RS.3,57,019/-. THE VALUE OF ACQUISITION TAKEN BY THE ASSESSEE WAS ACCE PTED AND THE AO MADE ADDITION OF RS. 1,49,25,000/- TO THE TOTAL INCOME OF THE ASSESSEE A S INCOME FROM LONG TERM CAPITAL GAINS. 5.3. THE ASSESSEE, IN THE AFOREMENTIONED FACTS AND CIRCUMS TANCES PLACED RELIANCE ON THE DECISION OF THE JURISDICTIONAL HIGH COURT WH ICH HAS BEEN RELIED UPON BY THE LD. AR IN THE PRESENT PROCEEDINGS ALSO AND NOT DISPUTED BY THE LD. CIT-DR, FOR READY REFERENCE, WE EXTRACT THE R ELEVANT PORTION FROM THE ORDER : ITA 311/CHD/2017 A.Y. 2008-09 PAGE 8 OF 9 4 . DURING THE APPELLATE PROCEEDING, THE COUNSEL FOR THE APPELLANT AFTER GIVING THE BRIEF FACTS OF THE CASE AND LISTING THE GROUNDS OF APPEAL AGAIN SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF APPELLANT BY THE ORDER OF HON' BLE HIGH COURT OF PUNJAB & HARYANA IN C.S. ATWAL VS. CIT [2015] 59 TAXMANN.COM 359. THE COUNSEL FOR THE APPELLANT REPRODUCED THE CONCLUSION OF HON'BLE HIGH COURT AS UNDER :- '1. PERUSAL OF THE JDA DATED 25.02.2007 READ WI TH SALE DEEDS DATED 02.03.2007 AND 25.04.2007 IN RESPECT TO 3.08 ACRES AND 4.62 AC RES RESPECTIVELY WOULD REVEAL THAT THE PARTIES HAD AGREED FOR PRO-RATA TRANSFER O F LAND. 2. NO POSSESSION HAD BEEN GIVEN BY THE TRANSFEROR T O THE TRANSFEREE OF THE ENTIRE LAND IN PART PERFORMANCE OF JDA DATED 25.02.2007 SO AS TO FALL WITHIN THE DOMAIN OF SECTION 53A OF 1882 ACT. 3. THE POSSESSION DELIVERED, IF AT ALL, WAS AS A LICENSEE FOR THE DEVELOPMENT OF THE PROPERTY AND NOT IN THE CAPACITY OF A TRANSFEREE. 4. FURTHER, SECTION 53A OF 1882 ACT, BY INCORPORA TION, STOOD EMBODIED IN SECTION 2(47)(V) OF THE ACT AND ALL THE ESSENTIAL I NGREDIENTS OF SECTION 53 A OF 1882 WERE REQUIRED TO BE FULFILLED. IN THE ABSENCE OF REGISTRATION OF JDA DATED 25.02.2007 HAVING BEEN EXECUTED AFTER 24.09.2 001, THE AGREEMENT DOES NOT FALL U/S 53A OF 1882 ACT AND CONSEQUENTLY SECTION 2(47) (V) OF THE ACT DOES NOT APPLY. 5. IT WAS SUBMITTED BY LD. COUNSEL FOR THE ASSESSE E APPELLANT THAT WHATEVER AMOUNT WAS RECEIVED FROM THE DEVELOPER, CA PITAL GAINS TAX HAS ALREADY BEEN PAID ON THAT AND SALE DEEDS HAVE ALSO BEEN EXECUTED. IN VIEW OF CANCELLATION OF JDA DATED 25.02.2007. NO FURTHE R AMOUNT HAS BEEN RECEIVED AND NO ACTION THEREON HAS BEEN TAKEN. IT W AS URGED THAT AS AND WHEN ANY AMOUNT IS RECEIVED, CAPITAL GAINS TAX SHAL L BE DISCHARGED THEREON IN ACCORDANCE WITH LAW. IN VIEW OF THE AFORESAID ST AND, WHILE DISPOSING OF THE APPEALS, WE OBSERVE THAT THE APPELLANTS SHALL R EMAIN BOUND BY THEIR SAID STAND. 6. THE ISSUE OF EXIGIBILITY TO CAPITAL GAINS TAX HA VING BEEN DECIDED IN FAVOUR OF THE APPELLANT, THE QUESTION OF EXEMPTION U/S 54F OF THE ACT WOULD NOT SURVIVE ANY LONGER AND HAS BEEN RENDERED ACADEM IC. 7. THE TRIBUNAL AND THE AUTHORITIES BELOW WERE NOT RIGHT IN HOLDING THE APPELLANT TO BE LIABLE TO CAPITAL GAINS TAX IN RESP ECT OF REMAINING LAND'. MEASURING 19.6 ACRES FOR WHICH NO CONSIDERATION HAD BEEN RECEIVED AND WHICH STOOD CANCELLED AND INCAPABLE OF PERFORMANCE AT PRESENT DUE TO VARIOUS ORDERS PASSED BY THE SUPREME COURT AND THE HIGH COURT IN PILS. THEREFORE, THE APPEALS ARE ALLOWED. ' 4.1 THE APPELLANT FURTHER RELIED ON THE DECISION O F HON'BLE ITAT, CHANDIGARH IN M/S PUNJAB STATE FOREST CORPN. LTD. VS. ADDL.CIT ITA NO . 693/CHANDI/2008 DATED 26.03.2009 ON THE REQUIREMENT OF JUDICIAL DISCIPLIN E TO FOLLOW THE ORDER OF JURISDICTIONAL TRIBUNAL/HIGH COURT AS A BINDING PRE CEDENCE BY THE CIT(APPEALS). 5.4 CONSIDERING THESE FACTS, THE CIT(A) DELETED THE ADDIT ION HOLDING AS UNDER : 5. I HAVE GONE THROUGH THE FACTS OF THE CASE AND WR ITTEN SUBMISSION FILED BY THE APPELLANT . IT IS NOTED THAT THE APPELLANT BEING A MEMBER OF DEFEN SE SERVICES COOPERATIVE HOUSE BUILDING SOCIETY RECEIVED AN AMOUNT OF RS.30,00,000/- AS PER JOINT DEVELOPMENT AGREEMENT WITH DEVELOPERS, HASH AND THDC. THE AMOUNT RECEIVED DURI NG THE YEAR HAS BEEN OFFERED BY THE APPELLANT FOR TAXATION AS INCOME UNDER THE HEAD CAP ITAL GAINS. AS PER AGREEMENT, THE MEMBER OF THE SOCIETY WAS TO RECEIVE MONETARY CONSI DERATION OF RS.80,00,000/- AND A FOLLY FURNISHED FLAT MEASURING 2250 SQ. FT. TO BE CONSTRU CTED BY THE DEVELOPERS. THE AO CONSIDERED THE ENTIRE CONSIDERATION INCLUDING THE AMOUNT YET T O BE RECEIVED AND THE COST OF A FULLY FURNISHED FLAT BY THE ADOPTING A RATE OF RS.4,500/- PER SQ. FT. THUS, THE AO ESTIMATED TOTAL CAPITAL GAINS AT RS.L,81,25,000/- AND ADDED RS. 1,4 9,25,000/- UNDER THE HEAD CAPITAL GAINS. 5.1 AFTER CONSIDERING THE FACTS AND SUBMISSION OF T HE APPELLANT, I FIND THAT THE FACTS OF THE CASE ARE IDENTICAL TO THE FACTS OF THE CASE IN C.S. ATWAL (SUPRA). RESPECTFULLY FOLLOWING THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT OF PU NJAB & HARYANA IN THE CASE OF C.S. ATWAL (SUPRA), I FIND THAT THE ISSUE OF COMPUTATION OF LONG TERM CAPITAL GAIN ON IDENTICAL FACTS IS COVERED IN FAVOUR OF THE APPELLANT. THEREF ORE, THE AO WAS NOT JUSTIFIED IN ITA 311/CHD/2017 A.Y. 2008-09 PAGE 9 OF 9 COMPUTATION OF LONG TERM CAPITAL GAIN ON THE AMOUNT OF RECEIVABLE CONSIDERATION AND THE VALUE OF ESTIMATED FLAT WHICH WERE NOT RECEIVED DUR ING THE YEAR. THUS, THE LONG TERM CAPITAL GAIN IS RESTRICTED IN THE HANDS OF THE APPELLANT AS DECLARED BY HIM IN THE RETURN OF INCOME. THE FURTHER ADDITION ON ACCOUNT OF LONG TERM CAPITA L GAIN OF RS 1,49,25,000/- IS DELETED. THE GROUNDS OF APPEAL ARE ALLOWED. 5.5 ACCORDINGLY, IN THE AFOREMENTIONED PECULIAR FACTS AND CIR CUMSTANCES, WE FIND THAT THE ISSUE IS NO LONGER RES-INTEGRA. BEING SA TISFIED BY THE REASONING AND FINDING ARRIVED AT ON THE FACTS AS THEY ST AND AND IN THE ABSENCE OF ANY CHANGE IN FACTS, CIRCUMSTANCES OR POSITION OF LAW, THE DEPARTMENTAL APPEAL IS DISMISSED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH AUGUST,2017. SD/- SD/- (ANNAPURNA GUPTA) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.