Smt. Jagdish Kaur Dhillon, Faridkot V. The DCIT, Ferozepur

ITA 384/ASR/2013

• Counselvise Citation: 38420914 RSA 2013
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 10-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: J S BHASIN
• Keywords: Reopening of assessment; Capital asset; Depreciation; Rule of consistency; Additional evidence; Advance ruling; Cost of acquisition; Deemed dividend; Competent authority; Revocable transfer; Benefit of exemption; Revised return; Reason to believe; Unabsorbed depreciation
• Section: 44AD; 244A; 54F; 2(14); 142(1); 234B; 147; 148; 54; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.188(ASR)/2013 ASSESSMENT YEAR:2007-08 PAN :ACUPK8414C SH. MANORANJAN KALIA, VS. DY. COMMR. OF INCOME TAX , 158/4, CENTRAL TOWN, CIRCLE-III, JALANDHAR. JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.J.S.BHASIN, ADVOCATE RESPONDENT BY:SH.MAHAVIR SINGH, SR.DR I.T.A. NO.225(ASR)/2013 ASSESSMENT YEAR:2007-08 PAN :AUNPK6499E SH.JATINDER SINGH KARIHA (DECEASED) VS. INCOME TAX OFFICER, L/H SMT. SATINDER KAUR KARIHA, NAWANSHAHAR. NAWANSHAHAR. (APPELLANT) (RESPONDENT) APPELLANT BY:NONE RESPONDENT BY:SH.MAHAVIR SINGH, SR.DR I.T.A. NO.301(ASR)/2013 ASSESSMENT YEAR:2007-08 PAN :CDYPS1255G SH.MANJIT SINGH L/H VS. INCOME TAX OFFICER, SMT. HARJIT KAUR, WARD IV(1), AMRITSAR. AMRITSAR. (APPELLANT) (RESPONDENT) 2 APPELLANT BY:SH.J.S.BHASIN, ADVOCATE RESPONDENT BY:SH.MAHAVIR SINGH, SR.DR I.T.A. NO.384(ASR)/2013 ASSESSMENT YEAR:2007-08 PAN :ACHPD8464E SMT.JAGDISH KAUR DHILLON VS. DY.COMMR. OF INCOME TA X, C/O M/S. DHILLON MOTORS, CIRCLE-III, FEROZEPUR FARIDOT. (APPELLANT) (RESPONDENT) APPELLANT BY:NONE RESPONDENT BY:SH.MAHAVIR SINGH, SR.DR I.T.A. NO.439 & 440(ASR)/2013 ASSESSMENT YEAR:2007-08 & 2008-09 PAN :ARHPS4295F BHAI HARNIRPAL SINGH, VS. ASSTT. COMMR. OF INCOME TAX, C/O BHARI NARINDER SINGH, CIRCLE-II, MUKTSAR. BATHINDA. (APPELLANT) (RESPONDENT) APPELLANT BY:NONE RESPONDENT BY:SH.MAHAVIR SINGH, SR.DR I.T.A. NO.447(ASR)/2013 ASSESSMENT YEAR:2007-08 PAN :AFCPG1253L DR. RAM KUMAR GOYAL VS. INCOME TAX OFFICER, S/O SH. NAND LAL GOYAL, WARD II(3), ABOHAR. ABOHAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. P.N.ARORA, ADVOCATE RESPONDENT BY:SH.MAHAVIR SINGH, SR.DR 3 I.T.A. NO.453(ASR)/2013 ASSESSMENT YEAR:2007-08 PAN :AADPJ5345H SH.SURJIT SINGH JAYANI VS. INCOME TAX OFFICER, CABINET MINISTER, WARD II(4), FAZILKA. ABOHAR. (APPELLANT) (RESPONDENT) APPELLANT BY:NONE RESPONDENT BY:SH.MAHAVIR SINGH, SR.DR I.T.A. NO.454(ASR)/2013 ASSESSMENT YEAR:2007-08 PAN :AEHPK8331F SH.NIRMAL SINGH KAHLON, VS. DY. COMMR. OF INCOME T AX, EX-SPEAKER VIDHAN SABHA, CIRCLE-1, CIVIL LINES, BATHINDA. BATHNDA. (APPELLANT) (RESPONDENT) APPELLANT BY:NONE RESPONDENT BY:SH.MAHAVIR SINGH, SR.DR I.T.A. NO.460(ASR)/2013 ASSESSMENT YEAR:2007-08 PAN :AQMPK6184B SMT. GURMAIL KAUR VS. INCOME TAX OFFICER, W/O SH.BALBIR SINGH, WARD 1(1), BATHINDA. BATHINDA. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.ASHWANI KALIA, CA RESPONDENT BY:SH.MAHAVIR SINGH, SR.DR I.T.A. NO.461(ASR)/2013 ASSESSMENT YEAR:2007-08 4 PAN :AKNPM 6546Q SH.JORA SINGH MANN VS. INCOME TAX OFFICER, L/H SH. VARDEV SINGH MANN WARD II(4), VILL CHAK SUHELE WALA, ABOHAR. TEH. JALALABAD (W) (APPELLANT) (RESPONDENT) APPELLANT BY:NONE RESPONDENT BY:SH.MAHAVIR SINGH, SR.DR I.T.A. NO.462(ASR)/2013 ASSESSMENT YEAR:2007-08 PAN :ASHPS0525R SH.SHER SINGH , VS. DY.COMMR. OF INCOME TAX, S/O NARAIN SINGH CIRCLE-II, VILL. GHUBAYA, TEH. JALALABAD(W). BATHINDA. (APPELLANT) (RESPONDENT) I.T.A. NO.463(ASR)/2013 ASSESSMENT YEAR:2007-08 PAN :AQLPSS2251 SH.INDERJIT SINGH VS. INCOME TAX OFFICER, S/O SH.GURDIP SINGH, WARD III(2), ZIRA, FEROZEPUR. FEROZEPUR. (APPELLANT) (RESPONDENT) APPELLANT BY:NONE RESPONDENT BY:SH.MAHAVIR SINGH, SR.DR I.T.A. NO.402(ASR)/2013 ASSESSMENT YEAR:2007-08 PAN :BWMPS9167F SH.CHARANJIT SINGH SANDHU VS. INCOME TAX OFFICER, S/O SG.DEV SINGH SANDHU, WARD II(4), 5 FAZILKA. ABOHAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. TEJ MOHAN SINGH, ADVOCATE RESPONDENT BY:SH.MAHAVIR SINGH, SR.DR I.T.A. NO.334(ASR)/2013 ASSESSMENT YEAR:2007-08 PAN : SH. SHINGARA RAM SANGHURA, VS. INCOME TAX OFFICER, EX-MLA, GARHSHANKER, WARD I, DISTT. HOSHIARPUR. HOSHIARPUR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.SURINDER MAHAJAN, CA RESPONDENT BY:SH.MAHAVIR SINGH, SR.DR DATE OF HEARING:23/08/2013 DATE OF PRONOUNCEMENT:28/08/2013 ORDER PER BENCH ; THESE 15 APPEALS OF DIFFERENT ASSESSEES ARISE FR OM THE DIFFERENT ORDERS OF THE CIT(A), AS PER DETAILS BELOW: S.NO. I.T.A.NO. A.Y. NAME OF THE PARTY CIT (A) DATE OF ORDER 1. 188(ASR)/2013 2007-08 SH.MANORANJAN KALIA JALANDHAR 01.01.2013 2. 225(ASR)/2013 2007-08 SH.JATINDER KARIHA (DECD) JALANDHAR 01.01.2013 3. 301(ASR)/2013 2007-08 SH.MANJIT PAL SINGH AMRITSAR 09.11.2012 4. 384(ASR)/2013 -DO- SMT.JAGDISH KAUR DHILLON BATHINDA 28.03.2013 6 5. 439(ASR)/2013 -DO- BHAI HARNIRPAL SINGH BATHINDA 19.03.2013 6. 440(ASR)/2013 2008-09 -DO- -DO- -DO- 7. 447(ASR)/2013 2007-08 DR.RAM KUMAR GOYAL -DO- 28.03.2013 8. 453(ASR)/2013 -DO- SH.SURJIT KUMAR JAYANI -DO- 07.03.2013 9. 454(ASR)/2013 -DO- SH.NIRMAL SINGH KAHLON -DO- -DO- 10. 460(ASR)/2013 -DO- SMT. GURMAIL KAUR -DO- 28.03.2013 11. 461(ASR)/2013 -DO- S.JORA SINGH MANN -DO- 07.03.2013 12. 462(ASR)/2013 -DO SH.SHER SINGH -DO- -DO- 13. 463(ASR)/2013 -DO- SH.INDERJIT SINGH -DO- -DO- 14. 402(ASR)/2013 2008-09 SH.CHARANJIT SINGH -DO- -DO- 15. 334(ASR)/2013 2007-08 SH.SHINGA RAM SANGHURA JALANDHAR 21.03.2013 2. IN ITA NO.188(ASR)/2013, SH.MANORANJAN KALIA, T HE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A), IN THE GIVEN FACTS OF THE CASE, WHEN ALL MATERIAL FACTS RELATING TO THE IMPUGNED CAPITAL G AIN WERE DISCLOSED IN THE RETURNED FILED, HAS ERRED IN UPH OLDING THE VALIDITY OF ASSUMPTION OF JURISDICTION U/S 147/1 48. 2. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE VALIDITY OF PROCEEDINGS INITIATED BY THE AO U/S 147/148 WITH OUT PROPER APPRECIATION OF THE FACTS AND THE POSITION OF LAW Q UA SUCH FACTS. 3. THAT THE LD. CIT(A) MISDIRECTED HIMSELF IN LAW AND ON FACTS IN CONFIRMING THE TAXATION OF NOTIONAL CAPITAL GAIN OF RS.2,91,12,574/- BY WRONGLY UPHOLDING THE TRANSFER OF LAND ON THE DATE OF EXECUTION OF JOINT DEVELOPMENT AGREEMEN T WITH THE DEVELOPERS. 7 4. THAT THE LD. CIT(A) OUGHT TO HAVE READ THE JOINT DE VELOPMENT AGREEMENT IN TOTALITY, SO AS NOT TO INFER THE ACCRU AL OF CAPITAL GAIN ON THE VERY DATE OF EXECUTION OF THE SAID AGR EEMENT. 5. THAT WHEN CIT(A) HIMSELF ADMITTED THAT TWO FLATS, M ADE PART OF SALE CONSIDERATION, WERE NON-EXISTENT HIS UPHOLDI NG THE TAXATION OF CAPITAL GAIN, COMPUTED ON A SALE VALUE , COMPRISED MAINLY OF THE COST OF SAID TWO FLATS, WAS SELF CONT RADICTORY. 6. THAT THE LD. CIT(A) WAS NOT JUSTIFIED OVERLOOKING V ARIOUS JUDICIAL AUTHORITIES RELIED UPON BY ASSESSEE, ON A FACIAL DISTINCTION DRAWN BY HIM. 7. THAT THE ASSESSES ALTERNATE CLAIM OF DEDUCTION U/S 54F OUGHT TO HAVE BEEN ALLOWED BY THE LD. CIT(A). 8. THAT THE LD. CIT(A) WRONGLY REJECTED THE ASSESSEES CLAIM THAT THE IMPUGNED CAPITAL GAIN, IF ANY, COULD BE ASSESSE D ONLY IN THE HANDS OF SOCIETY AND NOT THE ASSESSEE MEMBER. 9. THAT THE ASSESSEES CLAIM NOT TO TAX THE IMPUGNED G AIN ON THE PRINCIPLES OF MUTUALITY INVOLVED IN THE TRANSACTION S, AS BEEN WRONGLY REJECTED BY LD. CIT(A). 10. THAT CHARGING OF INTEREST U/S 234A & 234B HAS BEEN CONFIRMED. 11. THAT INITIATION OF PENALTY U/S 271(1)(C) HAS BEEN W RONGLY CONFIRMED. 12. THAT THE ORDER UNDER APPEAL IS WHOLLY AGAINST LAW A ND FACTS OF THE CASE. 3. IN ITA NO.225(ASR)/2013, THE ASSESSEE, SH.JATIND ER SINGH KARIHA HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND FACTS OF THE CASE IN CONFIRMING THE ASSESSMENT OF RS.1,70,39,276/- AS LONG TERM CAPITAL GAIN. 2. THAT THE LD. CIT(A) FURTHER ALSO HAS ERRED IN LAW A ND FACTS OF THE CASE IN DENYING THE DEDUCTION U/S 54 OF THE ACT. 3. THAT THE LD. CIT(A) ALSO MISDIRECTED HIMSELF WHILE APPLYING THE PROVISIONS OF SECTION 45, 48 OF THE ACT, AS WELL A S SECTION 53A OF THE TRANSFER OF PROPERTY ACT. 8 4. THAT THE LD. CIT(A) FURTHER ALSO ERRED IN LAW WHILE CONFIRMING THE ADDITIONS OF CAPITAL GAINS ON NOTIONAL BASIS, B EING AGAINST THE PRINCIPLES OF REAL INCOME. 5. THAT THE IMPUGNED ORDER UNDER APPEAL IS ARBITRARY A ND CONTRARY OF LAW & FACTS OF THE CASE, HENCE DESERVES TO BE CA NCELLED. 6. THAT THE APPELLANT CRAVES LEAVE TO AMEND/ALTER OR A DD ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL.= 4. IN ITA NO.301(ASR)/2013, THE ASSESSEE, SH.MANJIT PAL SINGH HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT LD. CIT(A) WAS NOT JUSTIFIED IN UPHOLDING INITIATION OF PROCEEDINGS U/S 148, IN GENERAL AND AGAINST THE A SSESSEE AS LEGAL HEIR, IN PARTICULAR, CONTRARY TO FACTS ON RECORD AND THE RELEVANT PROVISIONS OF LAW. 2. THAT THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE IMPUGNED ORDER AGAINST THE ASSESSEE, AS LEGAL HEIR OF THE DECEASED, BY TAKING WHOLLY ERRONEOUS NOTICE OF THE BARE FACTS ON RECORD. 3. THAT EVEN OTHERWISE, THERE WAS NO MATERIAL TO ASSUM E JURISDICTION U/S 147 AGAINST THE APPELLANT, IN HIS INDIVIDUAL CAPACITY OR EVEN AS LEGAL HEIR OF THE DECEASED. 4. THAT IN THE GIVEN FACTS OF THE CASE, THE IMPUGNED O RDER OUGHT TO HAVE BEEN PASSED IN THE HANDS OF AOP BY VIRTUE OF P ROVISIONS OF SECTION 168 OF THE ACT. 5. THAT THE LD. CIT(A)MISDIRECTED HIMSELF IN LAW AND O N FACTS IN CONFIRMING THE TAXATION OF NOTIONAL CAPITAL GAIN OF RS.1,76,13,556/- (WITH 1/4 TH THEREOF TAXED IN THIS CASE) BY WRONGLY UPHOLDING THE TRANSFER OF LAND ON THE DATE OF EXECUTION OF JOINT DEVELOPMENT AGREEMENT WITH THE DEVELOPERS. 6. THAT THE LD. CIT(A) OUGHT TO HAVE READ THE JOINT DE VELOPMENT AGREEMENT IN TOTALITY, SO AS NOT TO INFER THE ACCRU AL OF CAPITAL GAIN ON THE VERY DATE OF EXECUTION OF THE SAID AGRE EMENT. 7. THAT THE COST OF ACQUISITION OF THE LAND, AS WRONGL Y COMPUTED BY THE AO SHOULD NOT HAVE BEEN UPHELD BY THE LD. CI T(A). THE RESULTANT COMPUTATION OF CAPITAL GAIN IS THUS INCOR RECT. 8. THAT THE SOCIETY BEING THE OWNER OF THE LAND, THE C APITAL GAIN OUGHT TO HAVE BEEN ASSESSED IN THE HANDS OF THE SOC IETY. 9 9. THAT THE ACQUISITION OF FLATS, WHEN ASSESSED AS PAR T OF SALE CONSIDERATION, OUGHT TO HAVE BEEN ALLOWED THE BENEF IT OF SECTION 54F. 10. THAT THE ORDER UNDER APPEAL IS WHOLLY AGAINST LAW A ND FACTS OF THE CASE. 5. IN ITA NO.384(ASR)/2013, THE ASSESSEE, SMT.JAGDI SH KAUR DHILLON HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE AO ERRED IN REOPENING THE CASE OF THE ASSESSEE AS NO LTCG ESCAPED IN THE HANDS OF THE ASSESSEE. SO, THE RE-ASSESSME NT IS LIABLE TO BE QUASHED. 2. THAT THE RE-ASSESSMETN MADE BY THE AO CIRCLE III AT FEROZEPUR IS WITHOUT JURISDICTION AS THE CASE WAS REOPENED BY THE AO WARD 3(3) AT FARIDKOT BY RECORDING THE REASONS U/S 148 ON 04.01.2010 AND THE CASE WAS NOT TRANSFERRED FROM TH E FILE OF THE AO AT FARIDKOT TO THE AO CIRCLE III AT FEROZPUR BY THE COMPETENT OFFICER BY PASSING THE NECESSARY ORDER TO THAT EFFECT AND BY GIVING THE NECESSARY NOTICE TO THE ASSESSEE BEFORE THE TRANSFER ORDER. SO, REASSESSMENT IS LIABLE TO BE QU ASHED. THIS IS SUPPORTED BY THE FACT THAT THE CASE FOR THE NEXT AS SESSMENT YEAR 2008-09 WAS ASSESSED BY THE AO AT FARIDKOT ON 28.12 .2010. 3. THAT THE AO HAS NOT CONFRONTED THE ADVERSE MATERIAL COLLECTED TO REOPEN THE CASE TO THE ASSESSEE DURING THE COURS E OF ASSESSMENT PROCEEDINGS. EVEN THE ADVERSE MATERIAL W AS NOT IN THE POSSESSION OF THE AO NOT ONLY AT THE TIME OF R ECORDING OF REASONS TO REOPEN THE CASE BUT TILL DATE AND WERE B ASED ON HEAR SAY. IT IS AGAINST NATURAL LAW AND JUSTICE. ACCORDI NGLY, THE ASSESSEE COULD NOT MEET THE CASE. SO, THE RE-ASSES SMENT IS LIABLE TO BE QUASHED. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) ERRED IN GIVING THE FINDING THAT THE MEMBERS OF THE SOCIETY ARE OWNERS OF THE 21.2 ACRES OF AGRICULTURA L LAND IN V. KANSAL WHEREAS IN THE REASONS RECORDED TO REOPEN TH E CASE THE AO HIMSELF HAS ADMITTED BY MENTIONING THAT THE SOCI ETY IS THE OWNER. ACCORDINGLY, THE LTCG OF THE AGRICULTURAL LA ND CAN NOT 10 BE ASSESSED IN THE HANDS OF ASSESSEE PARTICULARLY W HEN THE SAME WAS ASSESSED IN THE HANDS OF THE SOCIETY BY THE DEP ARTMENT. 5. THAT NO LTCG CAN BE CHARGED IN THE HANDS OF THE AS SESSEE OR THE SOCIETY FOR THE ALLEGED TRANSFER OF 21.2 ACRES OF AGRICULTURAL LAND IN V.KANSAL AS IT IS OUT OF MUNICIPAL LIMIT OF CHANDIGARH, SO NOT A CAPITAL ASSET AND CHANDIGARH IS NOT NOTIFI ED FOR LTCG UNDER NOTIFICATION DATED 06.01.1994. 6. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) ERRED IN HOLDING THAT THERE IS A TRANSFER OF CAPITAL ASSET PARTICULAR IN VIEW OF THE FACT THAT THE AGREEMENT L ATER ON CANCELLED ON 13.06.2011. THE LD. CIT(A) SHOULD HAVE TAKEN THE NOTICE OF THIS LATER DEVELOPMENT AS THE SAME GOES T O THE ROOT OF THE CASE. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) ERRED IN NOT FOLLOWING THE DECISION OF CIT(A ), LUDHIANA, IN THE CASE OF SAT PAL GOSAIN IN VIEW OF THE PRINCIPLE OF CONSISTENCY. IN VIEW OF ARTICLE 14/16 OF THE CON STITUTION OF INDIA, 1950, THERE CAN NOT BE ANY DISCRIMINATION WH EN ALL THE MEMBERS OF THE SOCIETY ARE SIMILARLY PLACED. 8. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE ASSESSEE HAS NOT FULFILLED ALL THE FOUR CONDITIONS OF SECTION 45.. SO, THE LTCG CAN NOT BE ASSESSED IN THE HANDS OF TH E ASSESSEE IF THE PROVISIONS OF SECTION 45 ARE STRICTLY CONSTR UED AS SECTION 45 CREATES AN ITEM OF ARTIFICIAL INCOME. 9. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) SHOULD HAVE TAKEN THE VALUE OF THE FLAT AT N IL AS THE SAME HAS NOT BEEN CONSTRUED TILL DATE AS IT IS BEYO ND THE CONTROL OF THE ASSESSEE. IN ANY CASE, THE VALUATION OF FLAT IS ON HIGHER SIDE. 10. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) ERRED IN NOT GIVING THE BENEFIT OF SECTION 5 4/54F ON ACCOUNT OF FLAT ALLOTTED TO THE ASSESSEE. IT IS A BARTER SYSTEM VIDES WHICH FLAT WAS ALLOTTED ALONG WITH THE CASH OF RS.825000/- ON DIFFERENT DATES. 11. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) ERRED IN NOT CONSIDERING THE ADDITIONAL OBJE CTION TO THE REASSESSMENT IN THE WRITTEN ARGUMENTS FILED BEFORE HIM DURING THE COURSE OF APPELLATE PROCEEDINGS. SO HIS ORDER IS LIABLE TO BE SET ASIDE. 11 6. IN ITA NOS.439 & 440(ASR)/2013, BHAI HARNIRPAL S INGH, THE ASSESSEE, HAS RAISED FOLLOWING COMMON GROUNDS IN BOTH THE AP PEALS: 1. THAT ORDER PASSED U/S 250(6) OF THE ACT BY THE LD. CIT(A) BATHINDA IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH AS HE WAS NOT JUSTIFIED TO UPHOLD THE AO HAD ASSUMED VA LID JURISDICTION BY RECOURSE TO PROVISIONS OF SECTION 148. 2. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN NOT PASSIN G A SPEAKING ORDER IN THE CASE OF THE APPELLANT. 3. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE ACTION OF THE AO TO TAX THE ENTIRE CAPITAL GAIN ON HYPOTHETIC AL BASIS IN THE YEAR OF EXECUTION OF TRIPARTITE AGREEMENT. 4. THAT HE GRAVELY ERRED IN UPHOLDING THE ACTION OF TH E AO IN DENYING THE APPELLANT THE BENEFIT OF EXEMPTION U/S 54F OF THE ACT. 7. IN ITA NO. 447(ASR)/2013, DR.RAM KUMAR GOYAL, T HE ASSESSEE, HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) HAS ERRED ON FACTS & LAW I N NOT QUASHING THE NOTICE U/S 148 DATED 06/01/2010 ISSUED & SERV ED IN THE NAME OF THE APPELLANT WHEN THE PLOT IN QUESTION W AS ACQUIRED OUT OF AGRI. INCOME DERIVED FROM ANCESTRAL AGRI. LAND OF VILLAGE BAZIDPUR AND AGI. INCOME IS BEING ACCEPTED AS THA T OF HUF AND NEVER CONSIDERED FOR AGGREGATION SINCE LONG IN TH E HANDS OF THE APPELLANT. 2. THAT THE LD. CIT(A) HAS ERRED ON FACTS & LAW IN UPH OLDING THE ASSESSMENT OF ALLEGED CAPITAL GAIN ON PLOT OF 400 S /YD ON THE STRENGTH TRIPARTITE OF JOINT DEVELOPMENT AGREEMENT WHICH REMAINS UNEXECUTED FOR VARIOUS DISPUTES AND FINALLY TERMINATED BY THE SOCIETY BEING THE OWNER. 3. THAT THE LD. CIT(A) HAS ERRED ON FACTS & LAW IN UPH OLDING THE ACTION OF THE AO TO TREAT THE TRIPARTITE AGREEMENT TO SELL LAND A TRANSACTION FALLING WITHIN THE DEFINITION OF TRAN SFER AS DEFINED U/S 2(47) OF THE ACT. 12 4. THAT THE LD. CIT(A) ERRED IN OVERLOOKING THE FACTS THAT THE PROPERTY IN QUESTION IS AGR. LAND AND IS EXEMPT FRO M CAPITAL GAIN TAX AS NOT BEING CAPITAL ASSET WITH IN THE MEA NING OF SECTION 2(14)(V) OF THE ACT R.W. NOTIFICATION NO.94 47 DATED 06.01.1994. 5. THAT THE LD. CIT(A) HAS ERRED ON FACTS & LAW IN UPH OLDING THE ACTION OF THE AO COMPUTING THE LONG TERM CAPITAL GA IN AGAINST THE PROVISION OF LAW AS CAPITAL GAIN CAN BE COMPUTE D ONLY IN ACCORDANCE WITH THE PROVISION OF SECTION 48 OF THE ACT, AFTER DEDUCTING THE COST OF ACQUISITION FROM THE FULL VAL UE OF CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF T RANSFER OF CAPITAL ASSET & FULL VALUE OF CONSIDERATION WILL BE DETERMINED ONLY AT THE TIME OF TAKING POSSESSION OF FLAT, TO B E CONSTRUCTED BY THE DEVELOPERS, BY THE APPELLANT (THE ALLEGED FL AT IN NON EXISTENT TILL TODAY). THE AO HAS OBSERVED IN THE AS SESSMENT ORDER THAT IN THE ABSENCE OF SPECIFIC INFORMATION T HE VALUE OF FLAT TO THE ASSESSEE CAN BE TAKEN AT RS.4500/- PER S/FT SUBJECT TO RECTIFICATION IF THE RATE OFFERED TO THE GENERAL PU BLIC IS HIGHER THAN RS.4500 /-SQ. FT WHICH SHOWS THAT THE RATE CON SIDERATION HAS BEEN TAKEN ON NOTIONAL BASIS. THUS NOTIONAL MAR KET VALUE OF THE FLAT HAS BEEN ADOPTED BY A.O. FOR DETERMINING F ULL VALUE OF CONSIDERATION U/S 48 OF THE ACT. 6. THAT WITHOUT PREJUDICE TO GROUNDS OF APPEAL, THE LD . CIT(A) ERRED IN NOT ALLOWING EXEMPTION U/S 54F OF THE ACT ON NOTIONAL COST OF RESIDENTIAL FLAT TO BE CONSTRUCTED BY THE D EVELOPERS & DELIVERED TO THE APPELLANT. 7. THAT THE LD. CIT(A) HAS ERRED ON FACTS & LAW IN UPH OLDING THE ASSESSMENT OF ALLEGED LONG TERM CAPITAL GAIN ON PLO T OF 500 SQ. YD BECAUSE OF CONCEPT OF MUTUALITY BEING INVOLVED I N THE FORMATION OF THE SOCIETY. THE IMPUGNED TRANSACTION PER SE WAS NOT LIABLE TO TAX. 8. THAT WITHOUT PREJUDICE TO GROUNDS OF APPEAL, IN TER MS OF AMENDED PROVISIONS OF SECTION 53A OF THE TRANSFER O F PROPERTY ACT WITH SECTION 2(47) OF THE ACT NO CAPITAL GAIN B EYOND THE PART OF LAND ACTUALLY TRANSFERRED BY WAYA OF REGIST ERED SALE DEED WAS LIABLE TO TAX. 9. THAT WITHOUT PREJUDICE TO GROUNDS OF APPEALS THE AP PELLANT BEING ONLY A MEMBER OF THE SOCIETY AND THE JOINT DE VELOPMENT AGREEMENT HAVING BEEN EXECUTED BY THE SOCIETY WITH THE 13 DEVELOPERS, IN THE CAPACITY AS OWNER THE ALLEGED CA PITAL GAIN, IN ANY, OUGHT TO HAVE BEEN ASSESSED IN THE HANDS OF TH E SOCIETY. 10. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN NOT ADJUDICATING THE ISSUE OF CHARGING OF INTEREST U/S 234A & 234B 11. THAT THE HUMBLE APPELLANT PRAYS FOR PERMISSION TO A DD OR AMEND ANY GROUND OF APPEAL BEFORE THE DISPOSAL OF APPEAL. 8. IN ITA NO. 453(ASR)/2013, SH.SURJIT KUMAR JAYAN I, THE ASSESSEE, HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN S USTAINING THE ADDITION OF LONG TERMS CAPITAL GAIN OF RS.3,23,88 ,210 UNDER SECTION 45 OF THE ACT ON ACCOUNT OF ALLEGED TRANS FER OF PROPERTY. 1.1 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN CONFIR MING THE FINDING OF THE AO THAT THERE WAS DEEMED TRANSFER OF PROPERTY ON THE DATE OF SIGNING OF TRIPARTITE JOINT DEVELOPMENT AGREEMENT ITSELF, IN TERMS OF SUB SECTION (II), (V) AND (VI) SECTION 2(47) OF THE ACT. 1.2 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN OBSERV ING THAT THE RECEIPT OF CONSIDERATION AND REGISTRATION OF PROPER TY ARE NOT RELEVANT FACTORS WHILE DETERMINING THE TRANSFER OF THE PROPERTY. 1.3 THAT THE CIT(A) FAILED TO APPRECIATE THAT UNDER THE PROVISIONS OF THE ACT WHAT COULD BE BROUGHT TO TAX IS ONLY THE RE AL INCOME AND NOT AN AMOUNT, WHICH WAS NEITHER RECEIVED NOR LIKEL Y 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 CO NSIDERATION. 1.4 THAT THE CIT(A) FAILED TO APPRECIATE THAT THE AGREE MENT ENTERED INTO BY THE APPELLANT WAS SUBJECT TO VARIOUS REGULARTORY/STATUTORY/OTHER APPROVALS/PERMISSIONS ETC. REQUIRED TO BE OBTAINED BY THE OTHER PARTY WHICH WERE NOT RE CEIVED AND HENCE THERE COULD BE NO TRANSFER UNDER THE AID AG REEMENT. 1.5 THAT THE CIT(A) FURTHER ERRED ON FACTS AND IN LAW I N HOLDING THAT CERTAIN TERMS AND CONDITIONS OF THE AGREEMENT WHICH PROVIDED THAT THE TRANSFER OF LAND WAS SUBJECT TO FURTHER CONDITION/ENCUMBRANCES, WERE NOT RELEVANT. 14 1.6 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN NOT A PPRECIATING THAT ACTUAL PHYSICAL POSSESSION OF THE PROPERTY WAS NOT HANDED OVER BY THE ASSESSEE IN PART PERFORMANCE OF THE CON TRACT, IN TERMS OF SECTION 53A OF THE TRANSFER OF PROPERTY AC T AND HENCE THERE WAS NO TRANSFER IN LAW. THAT THE RELEVANT PRO VISIONS OF SECTION 2(47) AS ALSO THE PROVISIONS OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1822 QUA THE FACTS OF THI S CASE HAVE BEEN MISCONSTRUED BY THE CIT(A) TO CONFIRM THE ITO S ORDER. THAT THE CIT(A) FAILED TO APPRECIATE THAT REGISTRAT ION OF TERMS OF AGREEMENT WAS A PRE-CONDITION TO THE HANDING OVER THE POSSESSION OF THE PROPERTY. 1.7 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN AFFIRM ING THE VALUE OF THE FLATS RECEIVABLE TOWARDS PART CONSIDERATION OF THE PROPOSED TRANSFER OF PROPERTY @ RS.4500 PER SQ. FT IGNORING THE EVIDENCE OF LOWER VALUE GIVEN DURING THE COURSE OF ASSESSMENT. THAT COMPUTATION OF CAPITAL GAIN, BY ASSUMING NOTIO NAL CONSIDERATION OF TWO NON EXISTENT FLATS, NOT BEING CONSISTENT WITH THE BASIS OF SCHEME OF INCOME TAX ACT, DESERVE S NOT TO BE UPHELD. 1.8 WITHOUT PREJUDICE, THE CIT(A) ERRED ON FACTS AND I N LAW IN NOT DIRECTING THE AO TO COMPUTE CAPITAL GAINS WITH RESP ECT TO THE ACTUAL AMOUNT RECEIVED DURING THE RELEVANT ASSESSME NT YEAR. 2. WITHOUT PREJUDICE, THE CIT(A) FAILED TO APPRECIATE THAT THE INCOME IF AT ALL, COULD HAVE BEEN ASSESSED IN THE H ANDS OF THE SOCIETY AND NOT THE APPELLANT. 3. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN REJECT ING APPLICANT FACTS ABOUT JDA IS RESCINDED AND THE CONTRACT BECOM E IMPOSSIBLE AND ILLEGAL DUE TO ENVIRONMENT HAZARD DE CLARED BY THE HONBLE PUNJAB & HARYANA HIGH COURT HOLDING THE SAME TO BE FRIVOLOUS AND IRRELEVANT. 4. THAT THE ASSESSED INCOME HAVING FAR EXCEEDING RS. 5 LACS OF WHICH THE ITO WAS WELL AWARE BEFORE INVOKING HIS JU RISDICTION, HE OUGHT TO HAVE TRANSFERRED THE CASE TO AO TO COMP ETENT JURISDICTION. THIS LEGAL INFIRMITY RENDERS THE ORDE R IMPUGNED AS NULL AND VOID. 15 9. IN ITA NO. 454(ASR)/2013, SH. NIRMAL SINGH KAHLO N, THE ASSESSEE, HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN S USTAINING THE ADDITION OF LONG TERMS CAPITAL GAIN OF RS.3,54,20 ,685/-UNDER SECTION 45 OF THE ACT ON ACCOUNT OF ALLEGED TRANS FER OF PROPERTY. 1.1. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN CONFIR MING THE FINDING OF THE AO THAT THERE WAS DEEMED TRANSFER OF PROPERTY ON THE DATE OF SIGNING OF TRIPARTITE JOINT DEVELOPMENT AGREEMENT ITSELF, IN TERMS OF SUB SECTION (II), (V) AND (VI) SECTION 2(47) OF THE ACT. 1.2 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN OBSER VING THAT THE RECEIPT OF CONSIDERATION AND REGISTRATION OF PROPE RTY ARE NOT RELEVANT FACTORS WHILE DETERMINING THE TRANSFER OF THE PROPERTY. 1.3 THAT THE CIT(A) FAILED TO APPRECIATE THAT UNDER TH E PROVISIONS OF THE ACT WHAT COULD BE BROUGHT TO TAX IS ONLY THE R EAL INCOME AND NOT AN AMOUNT, WHICH WAS NEITHER RECEIVED NOR LIKE LY 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 C ONSIDERATION. 1.4 THAT THE CIT(A) FAILED TO APPRECIATE THAT THE AGRE EMENT ENTERED INTO BY THE APPELLANT WAS SUBJECT TO VARIOUS REGULARTORY/STATUTORY/OTHER APPROVALS/PERMISSIONS ETC. REQUIRED TO BE OBTAINED BY THE OTHER PARTY WHICH WERE NOT R ECEIVED AND HENCE THERE COULD BE NO TRANSFER UNDER THE AID A GREEMENT. 1.5 THAT THE CIT(A) FURTHER ERRED ON FACTS AND IN LAW IN HOLDING THAT CERTAIN TERMS AND CONDITIONS OF THE AGREEMENT WHIC H PROVIDED THAT THE TRANSFER OF LAND WAS SUBJECT TO FURTHER CONDITION/ENCUMBRANCES, WERE NOT RELEVANT. 1.6 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT ACTUAL PHYSICAL POSSESSION OF THE PROPERTY WA S NOT HANDED OVER BY THE ASSESSEE IN PART PERFORMANCE OF THE CO NTRACT, IN TERMS OF SECTION 53A OF THE TRANSFER OF PROPERTY A CT AND HENCE THERE WAS NO TRANSFER IN LAW. THAT THE RELEVANT PR OVISIONS OF SECTION 2(47) AS ALSO THE PROVISIONS OF SECTION 53 A OF THE TRANSFER OF PROPERTY ACT, 1822 QUA THE FACTS OF TH IS CASE HAVE BEEN MISCONSTRUED BY THE CIT(A) TO CONFIRM THE ITO S ORDER. THAT THE CIT(A) FAILED TO APPRECIATE THAT REGISTRA TION OF TERMS OF 16 AGREEMENT WAS A PRE-CONDITION TO THE HANDING OVER THE POSSESSION OF THE PROPERTY. 1.7 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN AFFIR MING THE VALUE OF THE FLATS RECEIVABLE TOWARDS PART CONSIDERATION OF THE PROPOSED TRANSFER OF PROPERTY @ RS.4500 PER SQ. FT IGNORING THE EVIDENCE OF LOWER VALUE GIVEN DURING THE COURSE O F ASSESSMENT. THAT COMPUTATION OF CAPITAL GAIN, BY ASSUMING NOTI ONAL CONSIDERATION OF TWO NON EXISTENT FLATS, NOT BEIN G CONSISTENT WITH THE BASIS OF SCHEME OF INCOME TAX ACT, DESERV ES NOT TO BE UPHELD. 1.8 WITHOUT PREJUDICE, THE CIT(A) ERRED ON FACTS AND IN LAW IN NOT DIRECTING THE AO TO COMPUTE CAPITAL GAINS WITH RES PECT TO THE ACTUAL AMOUNT RECEIVED DURING THE RELEVANT ASSESSM ENT YEAR. 2. WITHOUT PREJUDICE, THE CIT(A) FAILED TO APPREC IATE THAT THE INCOME IF AT ALL, COULD HAVE BEEN ASSESSED IN THE HANDS OF THE SOCIETY AND NOT THE APPELLANT. 3. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN REJEC TING APPLICANT FACTS ABOUT JDA IS RESCINDED AND THE CONTRACT BECO ME IMPOSSIBLE AND ILLEGAL DUE TO ENVIRONMENT HAZARD D ECLARED BY THE HONBLE PUNJAB & HARYANA HIGH COURT HOLDING TH E SAME TO BE FRIVOLOUS AND IRRELEVANT. 10. IN ITA NO. 460(ASR)/2013, SMT. GURMAIL KAUR, TH E ASSESSEE, HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) BATHINDA HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF LONG TERMS CAPITAL GA IN OF RS.17875000 UNDER SECTION 45 OF THE ACT ON ACCOUN T OF ALLEGED TRANSFER OF PROPERTY. 2 THAT THE LD. CIT(A) BATHINDA HAS ERRED IN LAW AN D ON FACTS IN BLINDLY FOLLOWING HIS ORDER IN THE CASE OF NIRMAL SINGH KAHLON IN APPEAL NO.214-IT/10-11 DATED 7.3.2013 WHILE DE CIDING THE APPEAL IN THIS CASE 3. THAT THE LD. CIT(A) BATHINDA AS WELL AS THE AO HA VE GROSSLY ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE FACT THAT THE ASSESSEE HAS RECEIVED A PALTRY SUM OF RS.3200000 O NLY AS PER 17 JOINT DEVELOPMENT AGREEMENT DATED 25.2.2007 OUT O F WHICH RS.1800000 WAS RECEIVED IN FINANCIAL YEAR 2007-08. 4. THAT THE LD. CIT(A) BATHINDA HAS GROSSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION MADE BY AO WITHO UT APPRECIATING THE FACT THAT THE SOCIETY HAVE ALREAD Y TERMINATED THE JDA DUE TO NON PERFORMANCE OF ITS PART BY THE DEVELOPER HENCE THERE IS NO QUESTION OF TRANSFER OF ANY PROP ERTY BY THE APPELLANT. 5. THAT THE LD. CIT(A) BATHINDA HAS GROSSLY ERRED IN LAW AND ON FACTS IN NOT ALLOWING DEDUCTION U/S 54F OF THE ACT , IN CASE THE LONG TERM CAPITAL GAIN WAS ASSESSABLE IN THE HANDS OF ASSESSEE. 6. THAT THE PROCEEDINGS U/S 148 WAS WRONGLY INITIATED IN THIS CASE AND ASSESSMENT FRAMED U/S 144 WAS ABSOLUTELY ILLEG AL. HENCE, THE ORDER IS BAD IN LAW AND ON FACTS. 7. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND TH E GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD AND DISPOSED OFF . 11. IN ITA NO. 461(ASR)/2013, SH.ZORA SINGH MANN L/ H S.VARDEV SINGH MANN, THE ASSESSEE, HAS RAISED FOLLOWING GROUNDS O F APPEAL: 1. THAT THE LD. CIT(A) HAS ERRED IN DISMISSING T HE APPEAL AND CONFIRMING ORDER OF A.O. ASSESSING INCOME AT RS.1 ,79,32,120/-, INCLUDING LONG TERMS CAPITAL GAINS OF RS.1,77,65, 845/- 2. THAT THE LD. CIT(A) BATHINDA HAS ERRED IN LAW A ND ON FACTS IN UPHOLDING THE ACTION OF THE AO OF BRINGING TO TAX THE NOTIONAL CAPITAL GAIN OF RS.1,77,,65,845/- ON THE STRENGTH OF JOINT DEVELOPMENT AGREEMENT WHICH REMAINED UNEXECUTED F OR VARIOUS DISPUTES AND FINALLY TERMINATED BY THE SO CIETY BEING THE OWNER. 3. THAT THE LD. CIT(A) BATHINDA HAS ERRED IN LAW A ND ON FACTS IN UPHOLDING THE ACTION OF THE AO OF DETERMINING THE LONG TERM CAPITAL GAIN OF RS.1,77,65,845/-. THE IMPUGNED TR ANSACTION ON THE BASIS OF WHICH THE SHORT TERM CAPITAL GAIN HA S BEEN DETERMINED BY THE AO IS NOT COVERED UNDER THE DEF INITION OF TRANSFER AS DEFINED U/S 2(47) OF THE ACT. 18 4. THAT THE LD. CIT(A) BATHINDA HAS ERRED IN LAW A ND ON FACTS IN UPHOLDING THE ACTION OF AO OF DETERMINING THE LON G TERM CAPITAL GAINS OF RS.1,77,65,845/- ON ACCOUNT OF THE FOLL OWING REASONS: I) THE CAPITAL GAIN CAN ONLY BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 48 OF THE ACT AFTER DEDUCTING THE COST OF ACQUISITION FROM THE FULL VA LUE OF CONSIDERATION, RECEIVED OR ACCRUING AS A RESULT OF TRANSFER OF CAPITAL ASSET. II) BUT IN THE PRESENT CASE, THE FULL VALUE OF CONSIDER ATION SHALL STAND DETERMINED ONLY AT THE TIME OF TAKING O F POSSESSION OF THE FLAT BY THE ASSESSEE. THE AO HAS GIVEN THE FINDING IN THE ASSESSMENT ORDER THAT IN THE AB SENCE OF SPECIFIC INFORMATION THE VALUE OF THE FLAT TO THE A SSESSEE CAN BE TAKEN AT RS.4500 PER SQ. FT. SUBJECT TO RECT IFICATION IF THE RATE OFFERED TO THE GENERAL PUBLIC IS HIGHER THEN RS.4500 SQ. FT. WHICH SHOWS THAT THE SALE CONSIDERA TION HAS BEEN TAKEN ON NOTIONAL BASIS. THUS, THE NOTIONA L MARKET VALUE OF THE FLAT HAS BEEN ADOPTED BY THE AO FOR DETERMINING THE FULL VALUE OF CONSIDERATION FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN U/S 148 OF T HE ACT. THE ACTION OF THE AO IS AGAINST THE PROVISIONS OF L AW. 5. THAT THE LD. CIT(A) ERRED ON FACTS AND LAW IN U PHOLDING THE ACTION OF THE AO OF DETERMINING THE LONG TERM CAP ITAL GAIN OF RS.1,77,65,845/- BECAUSE OF THE CONCEPT OF MUTUAL ITY BEING INVOLVED IN THE FORMATION OF THE SOCIETY, THE IMP UGNED TRANSACTION PER SE WAS NOT LIABLE TO TAX. 6. THAT THE LD. CIT(A) ERRED ON FACTS AND LAW IN D ISALLOWING DEDUCTION U/S 54F AND CONFIRMING THE ORDER OF ASS ESSING AUTHORITY. 7. THAT WITHOUT PREJUDICE TO GROUNDS OF APPEAL, IN TERMS OF THE AMENDED PROVISIONS OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT READ WITH SECTION 2(47) OF THE ACT NO CAPITAL GAIN BEYOND THE PART OF LAND ACTUALLY TRANSFERRED BY WAY OF R EGISTERED SALE DEED, WAS LIABLE TO TAX. 19 8. THAT WITHOUT PREJUDICE TO GROUNDS OF APPEAL, IN TER MS OF THE AMENDED PROVISIONS OF SECTION 53A OF THE TRANSFER O F THE PROPERTY ACT, READ WITH SECTION 2(47) OF THE ACT, NO CAPITAL GAIN, BEYOND THE PART OF LAND ACTUALLY TRANSFERRED BY WAY OF REGISTE RED SALE DEED, WAS LIABLE TO TAX. 9. THAT THE APPELLANT CRAVES TO ADD OR AMEND THE GROUN DS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOSED OFF. 12. IN ITA NO. 462(ASR)/2013, SH.SHER SINGH, THE A SSESSEE, HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) HAS ERRED IN DISMISSING T HE APPEAL AND CONFIRMING ORDER OF A.O. ASSESSING INCOME AT RS.1 ,77,48,188/-, INCLUDING LONG TERMS CAPITAL GAINS OF RS.1,77,35, 838/- 2. THAT THE LD. CIT(A) BATHINDA HAS ERRED IN LAW A ND ON FACTS IN UPHOLDING THE ACTION OF THE AO OF BRINGING TO TAX THE NOTIONAL CAPITAL GAIN OF RS.1,77,35,838/- ON THE STRENGTH OF JOINT DEVELOPMENT AGREEMENT WHICH REMAINED UNEXECUTED F OR VARIOUS DISPUTES AND FINALLY TERMINATED BY THE SO CIETY BEING THE OWNER. 3. THAT THE LD. CIT(A) BATHINDA HAS ERRED IN LAW A ND ON FACTS IN UPHOLDING THE ACTION OF THE AO OF DETERMINING THE LONG TERM CAPITAL GAIN OF RS.1,77,35,838/-. THE IMPUGNED TR ANSACTION ON THE BASIS OF WHICH THE SHORT TERM CAPITAL GAIN HA S BEEN DETERMINED BY THE AO IS NOT COVERED UNDER THE DEF INITION OF TRANSFER AS DEFINED U/S 2(47) OF THE ACT. 4. THAT THE LD. CIT(A) BATHINDA HAS ERRED IN LAW A ND ON FACTS IN UPHOLDING THE ACTION OF AO OF DETERMINING THE LON G TERM CAPITAL GAINS OF RS.1,77,35,838/- ON ACCOUNT OF THE FOLL OWING REASONS: III) THE CAPITAL GAIN CAN ONLY BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 48 OF THE ACT AFTER DEDUCTING THE COST OF ACQUISITION FROM THE FULL VA LUE OF CONSIDERATION, RECEIVED OR ACCRUING AS A RESULT OF TRANSFER OF CAPITAL ASSET. 20 IV) BUT IN THE PRESENT CASE, THE FULL VALUE OF CONSIDER ATION SHALL STAND DETERMINED ONLY AT THE TIME OF TAKING O F POSSESSION OF THE FLAT BY THE ASSESSEE. THE AO HAS GIVEN THE FINDING IN THE ASSESSMENT ORDER THAT IN THE AB SENCE OF SPECIFIC INFORMATION THE VALUE OF THE FLAT TO THE A SSESSEE CAN BE TAKEN AT RS.4500 PER SQ. FT. SUBJECT TO RECT IFICATION IF THE RATE OFFERED TO THE GENERAL PUBLIC IS HIGHER THEN RS.4500 SQ. FT. WHICH SHOWS THAT THE SALE CONSIDERA TION HAS BEEN TAKEN ON NOTIONAL BASIS. THUS, THE NOTIONA L MARKET VALUE OF THE FLAT HAS BEEN ADOPTED BY THE AO FOR DETERMINING THE FULL VALUE OF CONSIDERATION FOR THE PURPOSE OF COMPUTATION OF CAPITAL GAIN U/S 148 OF T HE ACT. THE ACTION OF THE AO IS AGAINST THE PROVISIONS OF L AW. 5. THAT THE LD. CIT(A) ERRED ON FACTS AND LAW IN U PHOLDING THE ACTION OF THE AO OF DETERMINING THE LONG TERM CAP ITAL GAIN OF RS.1,77,35,838/- BECAUSE OF THE CONCEPT OF MUTUAL ITY BEING INVOLVED IN THE FORMATION OF THE SOCIETY, THE IMP UGNED TRANSACTION PER SE WAS NOT LIABLE TO TAX. 6. THAT THE LD. CIT(A) ERRED ON FACTS AND LAW IN D ISALLOWING DEDUCTION U/S 54F AND CONFIRMING THE ORDER OF ASS ESSING AUTHORITY. 7. THAT WITHOUT PREJUDICE TO GROUNDS OF APPEAL, IN TERMS OF THE AMENDED PROVISIONS OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT READ WITH SECTION 2(47) OF THE ACT NO CAPITAL GAIN BEYOND THE PART OF LAND ACTUALLY TRANSFERRED BY WAY OF R EGISTERED SALE DEED, WAS LIABLE TO TAX. 8 THAT WITHOUT PREJUDICE TO GROUNDS OF APPEAL, IN TER MS OF THE AMENDED PROVISIONS OF SECTION 53A OF THE TRANSFER O F THE PROPERTY ACT, READ WITH SECTION 2(47) OF THE ACT, NO CAPITAL GAIN, BEYOND THE PART OF LAND ACTUALLY TRANSFERRED BY WAY OF REGISTE RED SALE DEED, WAS LIABLE TO TAX. 9 THAT THE APPELLANT CRAVES TO ADD OR AMEND THE GROUN DS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOSED OFF. 21 13. IN ITA NO. 463(ASR)/2013, SH. INDERJIT SINGH, THE ASSESSEE, HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THE ASSESSEE FILED INCOME TAX RETURN FOR THE A .Y. 2007-08 VIDE RECEIPT NO.9708 DATED 31.03.2008. 2. THE ASSESSEE IS A MEMBER OF M/S. PUNJABI CO-OPE RATIVE HOUSE BUILDING SOCIETY HAVING 21.1 ACRES OF LAND IN VIL LAGE KANSAL, DISTT. SAS NAGAR, PUNJAB HAVING ITS REGISTERED OF FICE AT MLA FLAT NO.1, SECTOR 3, CHANDIGARH. 3. THE ASSESSEE WAS ALLOTTED A PLOT MEASURING 500 SQ. YD THROUGH ALLOTMENT LETTER DATED 09.01.2004. 4. THE SAID SOCIETY ENTERED INTO AN AGREEMENT WITH M/S. TATA HOUSING DEVELOPMENT COMPANY LTD. ON 25.02.2007 I N ACCORDANCE WITH THE AGREEMENT. 5. THE ASSESSEE HAS RECEIVED PARTIAL CONSIDERATION OF RS.15,00,000/- IN F.Y.2006-07. 6. THE ASSESSEE WAS ISSUED NOTICE U/S 148 ON -04.0 1.2010 7. THE ASSESSEE FILED RETURN IN RESPONSE TO NOTICE ISS UED U/S 148 8. THE AO THEN ISSUED NOTICE U/S 143(2) AND 142(1) ALO NGWITH A COPY OF THE REASONS RECORDED FOR ISSUANCE OF NOTICE U/S 148. 9. THE AO HAS MADE ADDITIONS OF RS.1,78,75,000 ON ACCO UNT OF LONG TERM CAPITAL GAINS AND HAS RAISED A DEMAND OF RS.61,36,455/-. 10. THE ASSESSEE FILED AN APPEAL WITH LD. CIT(A), BATHI NDA. 11. THE LD. CIT(A) BATHINDA PASSED AN ORDER DATED 07.03 .2013 AND DISMISS THE APPEAL FILED. 12. AGGRIEVED WITH THE ABOVE ORDER, THE ASSESSEE HERE F ILES AN APPEAL ON THE FOLLOWING GROUNDS. 14. IN ITA NO. 402(ASR)/2013, THE ASSESSEE, SH. C HARANJIT SINGH SANDHU, HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) ERRED ON FACTS AND LAW IN UPHOLDING THE ISSUANCE OF NOTICE U/S 148 OF THE ACT WITHOUT COM PLYING THE REQUIREMENTS OF THE SAID SECTION WHICH IS ARBITRA RY AND UNJUSTIFIED AND AS SUCH THE ASSESSMENT MERITS ANN ULMENT. 22 2. THAT THERE BEING NO ESCAPEMENT OF INCOME LEADIN G TO FORMATION OF REASON TO BELIEVE, MORE SO WHEN THE ASSESSMENT HAS BEEN FRAMED AT THE AMOUNT MUCH HIGHER THAN THE ONE MEN TIONED IN THE REASONS RECORDED, THE RESORT TO THE PROVISION S OF SECTION 148 OF THE ACT IS ILLEGAL, ARBITRARY & UNJUSTIFIED. 3. THAT THE LD. CIT(A) ERRED ON FACTS AND LAW IN N OT DETERMINING EXPLICITLY AS TO WHO IS THE ACTUAL OWNER LIABLE TO PAY CAPITAL GAIN TAX IF ANY AS THE NOTICE U/S 148 OF THE ACT HAS BEEN ISSUED BOTH THE ASSESSEE AS WELL AS THE SOCIETY NAMELY M /S. PUNJABI COOPERATIVE HOUSE BUILDING SOCIETY LTD. FOR THE S AME REASON WHICH IN ITSELF SHOWS THAT THERE IS NO REASON TO BELIEVE AS ENVISAGED IN SECTION 147 OF THE ACT AND AS SUCH T HE ASSESSMENT FRAMED IS ILLEGAL WHICH MERITS ANNULMENT. 4. WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT(A) HAS FURTHER ERRED IN UPHOLDING THE ADDITION OF RS.80,00,000/- AS THE ALLEGED CONSIDERATION RECEIVED IN CASH WHICH IN FACT HAS NOT BEEN RECEIVED TILL DATE EXCEPT RS.32,00,000 AND AS SUC H THE ADDITION UPHELD IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 5. THAT THE ENTIRE HYPOTHETICAL ADDITION IS BASED ON AN AGREEMENT RELIED UPON IN PARTS BY THE AO WHICH IN FACT HAS NOT BEEN IMPLEMENTED TILL DATE AND AS SUCH THE ADDITION M ADE AND UPHELD BY THE CIT(A) BATHINDA ON SUSPICION, SURMISES AND CONJECTURES MERITS DELETION. 6. THAT THE LD. CIT(A) ERRED ON FACTS AND LAW IN U PHOLDING THE ADDITION OF RS.1,12,50,000/- TO BE THE ALLEGED VA LUE OF ONE FLAT MEASURING 2250 SQ. FT. @ RS.5000/- PER SQ. FT REL YING UPON AN AGREEMENT ENTERED INTO BETWEEN THIRD PARTIES WHI CH IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 7. THAT THE ENTIRE ADDITION OF RS.1,77,48,072/- IS BAS ED PURELY ON SUSPICION, SURMISES AND CONJECTURES IN AS MUCH AS N EITHER ANY AMOUNT HAS BEEN RECEIVED IN CASH EXCEPT RS.32,00,00 0/- DURING THE YEAR NOR ANY FLAT HAS BEEN GIVEN TO THE ASSESSE E AND AS SUCH THE HYPOTHETICAL ADDITIONS MADE AND UPHELD BY THE CIT(A) ARE ILLEGAL, ARBITRARY AND UNJUSTIFIED. 8. THAT THE AGREEMENTS RELIED UPON BY THE AO HAVE TO B E READ AS A WHOLE AND NOT IN PARTS WHICH HAS SO BEEN DONE BY T HE AO AS 23 CLAUSES RELATING TO TRANSFER OF OWNERSHIP, RIGHTS, TERMINATION, POSSESSION HAVE BEEN BRUSHED ASIDE WHILE ONLY THE CONSIDERATION CLAUSE HAS BEEN REFERRED TO WHICH CAN NOT UNDER ANY CIRCUMSTANCE BE READ IN ISOLATION AND AS SUCH T HE ENTIRE ADDITION MADE AND UPHELD BY THE CIT(A) MERITS DELET ION. 9. THAT THE CAPITAL GAINS SHALL ARISE ONLY IN THE YEAR WHEN THE BALANCE PAYMENT IS RECEIVED AND THE POSSESSION OF T HE BUILT UP FURNISHED FLAT IS HANDED OVER TO THE ASSESSEE AND A S SUCH TO TAX THE INCOME WHICH IS SILL TO BE RECEIVED ESPECIALLY WHEN THE IMPLEMENTATION OF THE AGREEMENT ITSELF IS DOUBTFUL, THE ADDITION OF RS.1,77,48,072/- SO MADE AND UPHELD BY THE CIT(A ) MERITS DELETION. 10. THAT THE LD. CIT(A) ERRED ON FACTS AND LAW IN HOLDI NG THAT THE TRANSACTION WAS SQUARELY COVERED BY THE PROVISIONS OF SECTION 2(47) READ WITH SECTION 45 AND 48 WHICH IS ARBITRAR Y AND UNJUSTIFIED. 11. THAT IN ANY CASE, SECTION 53A OF THE TRANSFER OF PR OPERTY ACT IS NOT APPLICABLE TO UNREGISTERED DOCUMENTS AS IN THE INSTANT CASE AND AS SUCH THE ORDER IS ILLEGAL, ARBITRARY AND UNJ USTIFIED. 12. THAT THE LD. CIT(A) ERRED ON FACTS AND LAW IN CHARG ING INTEREST UNDER SECTION 234B OF THE ACT WHICH IS NOT CHARGEAB LE IN THE FACTS OF THE CASE. 13. THAT ORDER OF THE LD. CIT(A) IS ERRONEOUS, ARBITRAR Y, OPPOSED TO LAW AND FACTS OF THE CASE AND IS THUS,UNTENABLE. 15. IN ITA NO. 334(ASR)/2013, THE ASSESSEE, SH. SH INGARA RAM EX-MLA, HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT EXEMPTION U/S 54F SHOULD HAVE BEEN ALLOWE D ON THE NOTIONAL INVESTMENT IN FLATS WHICH WAS COUNTED AS MAJOR PART OF SALE CONSIDERATION FOR COMPUTATION OF CAPITAL. 2. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS GROSSLY ERRED IN CONCLUDING THAT ASSUMPTION OF JU RISDICTION U/S 147/148 OF ACT IS LEGAL AND AS PER LAW. 3. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS GROSSLY ERRED IN CONCLUDING THAT NOTICE ISSUED U/ S 148 OF THE ACT HAS BEEN SERVED AS PER LAW. 24 4. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS GROSSLY ERRED IN CONCLUDING THAT THE ASSESSMENT F RAMED U/S 144 OF THE ACT IS CORRECT. 5. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS GROSSLY ERRED IN CONCLUDING THAT LAND IN QUESTION IS NOT A AGRICULTURE LAND AND IS A ASSET AS PER SECTION 2( 14) OF THE ACT AS SUCH CAPITAL GAIN WAS ATTRACTED. 6. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS GROSSLY ERRED IN DISMISSING GROUND OF APPEAL NO.5 WHERE IN ASSESSEE HAS CHALLENGED THAT ALLEGED NOTIONAL CAP ITAL GAIN OF RS.1,77,65,846/- WAS CALCULATED ON THE BASIS OF J T. DEVELOPMENT AGREEMENT WHICH WAS REMAINED UNEXECUTED FOR VARIO US DISPUTES AND FINALLY TERMINATED BY THE SOCIETY, BEING THE OWNER. 7. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS GROSSLY ERRED IN DISMISSING GROUND OF APPEAL NO.6 WHERE IN ASSESSEE HAS CHALLENGED THAT I AM ONLY A MEMBER O F THE SOCIETY AND THE JT. DEVELOPMENT AGREEMENT HAVING BEEN EXE CUTED BY THE SOCIETY WITH THE DEVELOPERS, IN ITS CAPACITY AS OWNER, THE ALLEGED CAPITAL GAIN, IF ANY, OUGHT TO HAVE ASSES SED IN THE HANDS OF THE SOCIETY. 8. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS GROSSLY ERRED IN DISMISSING GROUND OF APPEAL NO.7 WHERE IN ASSESSEE HAS CHALLENGED THAT THE CONCEPT OF MUTUA LITY BEING INVOLVED IN FORMATION OF THE SOCIETY AS SUCH THE IMPUGNED TRANSACTION WAS NOT LIABLE TO TAX AT ALL. 9. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) HAS GROSSLY ERRED IN DISMISSING GROUND OF APPEAL NO.8 WHERE IN ASSESSEE HAS CHALLENGED THAT CAPITAL GAIN IS ATTR ACTED ONLY IF LAND ACTUALLY TRANSFERRED BY WAY OF REGISTERED SALE DE ED, WAS LIABLE TO TAX. 10. THAT THE APPELLANT REQUESTS FOR LEAVE TO ADD O R AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR D ISPOSED OFF. 16. THE LD. JCIT(DR), MR. MAHAVIR SINGH INVITED OU R ATTENTION THAT THE ISSUES IN ALL THE 15 APPEALS MENTIONED HER EINABOVE ARE IDENTICAL TO 25 THE ISSUES IN THE BUNCH OF 30 APPEALS DECIDED BY TH E ITAT, CHANDIGARH BENCH VIDE A CONSOLIDATED ORDER DATED 29.07.2013 IN THE CASE OF CHARANJIT SINGH ATWAL, LUDHIANA VS. ITO WARD VI(1), LUDHIANA IN ITA NO.448(ASR)/2011 AND OTHERS FOR THE ASSESSMENT YEAR 2007-08 AND 24 APPEALS DECIDED BY THIS BENCH IN THE CASE OF SH. SA TNAM SINGH KAITH VS. ITO NAWANSHAHAR AND OTHERS ITA NO.180(ASR)/2013 AND OT HERS, DATED 19.08.2013. 17. HE FURTHER INVITED OUR ATTENTION THAT IN THE PR ESENT APPEALS, THE ASSESSEES ARE EITHER PRESENT OR EX-MLAS OF PUNJAB LEGISLATIVE ASSEMBLY WHO ARE MEMBERS OF HOUSING SOCIETY. THE SAID SOCIET Y CONSISTS OF IN TOTAL 95 PRESENT OR EX-MLAS OF PUNJAB LEGISLATIVE ASSEMBLY. THE MATTER WITH RESPECT TO SOME MLAS AND THE MATTER WITH RESPECT TO THE SOCIETY ITSELF FALL UNDER THE JURSIDCTION OF CHANDIGARH ITAT AND THE RE ST UNDER THE AMRITSAR ITAT JURISDICTION. ALL THE 15 MATTERS FIXED TOD AY FOR HEARING AS MENTIONED HEREINABOVE ARE PART OF 95 PRESENT OR EX- MLAS HEREINABOVE. THE ISSUES IN THE PRESENT APPEALS ARE COMMON AND IDENTI CAL AS IN THE BUNCH OF 30 APPEALS DECIDED BY THE ITAT, CHANDIGARH BENCH IN TH E CASE OF CHARANJIT SINGH ATWAL, LUDHIANA VS. ITO WARD VI(1), LUDHIANA IN ITA NO.448(ASR)/2011 AND OTHERS DATED 29.07.2013 AND 24 APPEALS DECIDED BY THE ITAT, AMRITSAR BENCH, IN THE CASE OF SH. SATNA M SINGH KAITH VS. ITO 26 NAWANSHHAR AND OTHERS IN ITA NO.180(ASR)/2013 AND OTHERS, DATED 19.08.2013. 18. ON THE OTHER HAND, ALL THE LD. COUNSELS APPEAR ING ON BEHALF OF DIFFERENT ASSESSEES BEFORE US IN ALL THE 15 PRESEN T APPEALS, AGREED TO THE ARGUMENT MADE BY THE LD. DR. MR. MAHAVIR SINGH. ALL THE COUNSELS PRAYED BEFORE THE BENCH TO CONSIDER THEIR WRITTEN SUBMISSI ONS AND DECIDE THE ISSUES IN ALL THE 15 APPEALS ACCORDINGLY. 19. ON PERUSING THE FACTS IN THE PRESENT 15 APPEALS BEFORE US AND THE FACTS IN THE BUNCH OF 30 APPEALS DECIDED BY A CONSOLIDATE D ORDER DATED 29.07.2013 BY THE ITAT CHANDIGARH BENCH (SUPRA) AND 24 APPEALS DECIDED BY THIS BENCH (SUPRA) AND ON PERUSAL OF WRITTEN SUBMISSIONS PLACED ON RECORD BY DIFFERENT ARS, WE ARE OF THE VIEW THAT THE ISSUES D ECIDED BY THE ITAT CHANDIGARH BENCH VIDE ORDER DATED 29.07.2013 (SUPRA ) AND BY THIS BENCH VIDE ORDER DATED 19.08.2013 ARE IDENTICAL TO THE IS SUES IN THE PRESENT 15 APPEALS BEFORE US. THEREFORE, WE ARE PROCEEDING TO DECIDE THE PRESENT APPEALS BY THIS CONSOLIDATED ORDER. IT IS PERTINENT TO REPRODUCE OUR DECISION IN THE CASE OF SH. SATNAM SINGH KAINTH IN ITA NO.1 80(ASR)/2013 AND OTHERS (SUPRA) (IN PARA 30 TO 38 I.E. PAGE 40 TO 147) AS U NDER: 30. WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E WRITTEN SUBMISSIONS PLACED ON RECORD BY THE REPRESENTATIVE S OF THE ASSESSEES. THE MAIN ISSUE IN THE PRESENT APPEALS IS WHETHER THE ASSESSEE IS LIABLE TO CAPITAL GAINS TAX IN THE IMPUGNED YEAR OR NOT. THE SAID LEGAL ISSUE 27 HAS BEEN DEALT WITH BY THE CHANDIGARH BENCH OF ITA T IN ITS ORDER DATED 29.07.2013 (SUPRA) IN THE CASE OF CHARANJIT SINGH ATWAL, LUDHIANA VS. ITO WARD VI(1), LUDHIANA AND IN ITA NO.448/CHD/2011 AND OTHERS VIDE ORDER DATED 29.07. 2013 (SUPRA) VIDE PARA 27 TO 44. THE FACTS IN THE CASE OF CHARA NJIT SINGH ATWAL (SUPRA) IN THE LIGHT OF LEGAL POSITION IN PARA 27 TO 44 ARE DISCUSSED VIDE PARA 45 TO 51. THE LD. COUNSEL APPEARING FOR THE ASSESSEE IN THE CASE OF CHARANJIT SINGH ATWAL (SUPRA) HAS RAISED M AINLY FOLLOWING CONTENTIONS WHICH HAVE BEEN DEALT BY CHANDIGARH B ENCH OF ITAT IN ITS ORDER DATED 29.07.2013 (SUPRA) AS UNDER: I) VIDE PARA 52 TO 58 OF THE ORDER, FIRST CONTENTION WAS THAT POSSESSION WAS NOT GIVEN BY THE SOCIETY BECAUSE ACC ORDING TO HIM AS PER CLAUSE 2.1 OF THE JDA, THE POSSESSION OF THE PROPERTY WAS TO BE HANDED OVER SIMULTANEOUSLY TO THE EXECUTI ON AND REGISTRATION OF JDA AND SINCE THE JDA WAS NOT REGI STERED, THEREFORE, THE POSSESSION WAS NOT GIVEN. IT WAS HEL D BY CONSIDERING VARIOUS CONTENTIONS OF LD. COUNSELS AND LD. DR AND CASES OF VARIOUS COURTS OF LAW RELIED UPON THAT BY CONSIDERING THE PURPOSE OF INSERTION OF CLAUSE (V) AND CLAUSE (VI) OF SECTION 2(47) AND VARIOUS CLAUSES OF POWER OF ATTORNEY AND JDA, IT BECOMES ABSOLUTELY CLEAR THAT THE SOCIE TY HAS HANDED OVER THE POSSESSION OF THE SOCIETY TO THDC/H ASH AND ACCORDINGLY FIRST CONTENTION OF THE LD. DR WAS REJE CTED. II) VIDE PARA 59 TO 61 OF THE ORDER, SECOND CONTENTION WAS THAT JDA WAS EXECUTED ON 25.02.2007 AND IF POSSESSION WA S GIVEN THEN HOW THE ASSESSEE WAS HAVING POSSESSION IN TER MS OF LATER SALE DEEDS EXECUTED ON 2.3.2007 AND 25.4.2007. IT W AS HELD AFTER CONSIDERING AND ARGUMENTS OF RIVAL PARTIES AN D FACTS ON RECORD THAT MERE RECITATION IN THE SALE DEED TO THE EFFECT THAT THE SOCIETY WAS OWNER OF LAND IN POSSESSION MEASURING 2 1.2 ACRES, DOES NOT SHOW THAT THE SOCIETY WAS HAVING ACTUAL P OSSESSION. WHAT THE SOCIETY WAS HAVING IS ONLY OWNERSHIP RIGHT AND THE POSSESSION WAS ONLY CONCURRENT AS THE POSSESSORY RI GHT. ACCORDINGLY THE SECOND CONTENTION WAS ALSO REJECTED . III) VIDE PARA 62 TO 63 THE THIRD CONTENTION WAS THAT POSSESSION IF AT WAS GIVEN SHOULD BE HELD TO BE ONLY A LICENSE A S DEFINED IN SECTION 52 OF INDIAN EASEMENT ACT. THIS THIRD CONTE NTION WAS ALSO REJECTED FOR THE REASONS THAT RIGHTS GIVEN BY THE SOCIETY ARE MUCH LARGER THAN WHAT IS COVERED IN THE TERM LICEN SE. 28 IV) VIDE PARAS 64 TO 68, THE FOURTH CONTENTION WAS THAT THE MONEY RECEIVED AT THE TIME OF EXECUTION OF JDA CAN BE TER MED, AS ADVANCE AND WHATEVER MONEY HAS BEEN RECEIVED HAS AL READY BEEN SHOWN AS CAPITAL GAIN. IT WAS HELD THAT IT IS NOT ONLY THE MONEY, WHICH IS REQUIRED TO BE TAXED BUT THE CONSI DERATION WHICH HAS ACCRUED TO THE ASSESSEE IS ALSO REQUIRED TO BE TAXED. ACCORDINGLY, THE FOURTH CONTENTION WAS ALSO REJECTE D. V) VIDE PARA 69 TO 74, FIFTH CONTENTION WAS THAT SINCE SECTION 53A OF THE TRANSFER OF PROPERTY ACT ITSELF HAS UNDERGON E AMENDMENT W.E.F. 24.9.2001 BY WHICH AGREEMENT REFERRED TO IN THAT SECTION IS REQUIRED TO BE REGISTERED AND THEREFORE, NOW IN SECTION 2(47)(V) ONLY THE AMENDED PROVISIONS CAN BE READ. I T WAS HELD THAT NON-REGISTRATION OF AGREEMENT CANNOT LEAD TO T HE CONCLUSION THAT PROVISION OF SECTION 2(47)(V) IS NOT APPLICABL E. ACCORDINGLY, FIFTH CONTENTION WAS REJECTED. VI) VIDE PARAS 75 AND 76, THE SIXTH CONTENTION WAS WITH RESPECT TO DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CHATURBHUJ DWARKADAS KAPADIA VS. CIT 260 ITR 491 IS NOT APPLICABLE. IT WAS HELD THAT THE BENCH HAS ALREADY DISCUSSED THE IMPLICATION OF THE DECISION IN THE CASE OF CHATURBH UJ DWARKADAS KAPADIA (SUPRA) IN PARA 33 TO 38 OF ITS ORDER AND A CCORDINGLY THIS CONTENTION WAS ALSO REJECTED. VIA) VIDE PARA 77 TO 86, BEING THE CONTENTION THA T IT IS NECESSARY FOR INVOKING OF SECTION 2(47)(V) OF THE ACT TO COMPLY WITH THE PROVISION OF SECTION 53A OF THE TRANSFER OF PROPERT Y ACT TO THE EXTENT THAT THERE SHOULD BE WILLINGNESS ON THE PART OF THE TRANSFEREE TO PERFORM HIS PART OF THE CONTRACT. IT WAS HELD THAT IT CANNOT BE SAID THAT THE BUILDERS WERE NOT WILLING T O PERFORM THEIR PART OF THE CONTRACT IN VIEW OF CLAUSES 4.1(I V) READ WITH CLAUSE 26(V) VII. VIDE PARA 87 AND 88, BEING THE SEVENTH CONTENTION T HAT REVENUE WRONGLY HELD THAT EVEN CLAUSE (VI) OF SECTION 2(47) IS APPLICABLE. IT WAS HELD THAT THE DEVELOPER I.E. TH DC/HASH HAS PURCHASED THE MEMBERSHIP OF THE MEMBERS IN THE SOCI ETY WHICH NOW LEAD TO THE ENJOYMENT OF THE PROPERTY AND IN TH AT TECHNICAL SENSE, CLAUSE (V) OF THE SECTION 2(47) IS APPLICABL E. VIII. VIDE PARAS 89 TO 96, BEING THE EIGHTTH CONTENTION THAT SINCE THE SOCIETY HAS TRANSFERRED THE LAND THROUGH JDA ON A P RO-RATA BASIS, THEREFORE, ONLY WHATEVER MONEY IS RECEIVED AGAINST WHICH SALE DEEDS HAVE ALSO BEEN EXECUTED CAN BE TAX ED AND 29 NOTIONAL INCOME I.E. THE MONEY TO BE RECEIVED LATER , CANNOT BE TAXED. IT WAS HELD THAT THERE IS NO DISPUTE THAT N O NOTIONAL INCOME CAN BE TAXED, BUT IN THE CASE OF CAPITAL GAI N SECTION 45 READ WITH SECTION 48 CLEARLY PROVIDES THAT IT IS TH E PROFIT ARISING FROM THE TRANSFER OF CAPITAL ASSET, WHICH WOULD BE SUBJECTED TO CHANGE CAPITAL GAIN TAX AND SECTION 48 CLEARLY PRO VIDES FOR TAKING THE TOTAL CONSIDERATION INTO ACCOUNT WHILE C OMPUTING THE CAPITAL GAINS, WHICH HAS ALREADY BEEN DISCUSSED IN PARAS 64 TO 68 OF THE ORDER. THEREFORE, THE WHOLE CONSIDERATION WHETHER RECEIVED OR ACCRUED WHICH HAS TO BE TAXED UNDER THE CAPITAL GAIN, ONCE THE TRANSFER OF CAPITAL ASSET TAKES PLAC E. ACCORDINGLY, THE CONTENTION WAS REJECTED. FURTHER, THE CHANDIGARH ITAT BENCH IN THE ORDER DATED 29.7.2013 (SUPRA) VIDE PARAS 97 TO 99 HAS DEALT WIT H ISSUE OF TAXABILITY OF FLAT ON THE BASIS OF ABOVE PRINCIPLES CONSIDERING CLAUSE 4 OF JDA, IT WAS HELD THAT ONCE THIS VESTED RIGHT ARISES OUT OF THE ABOVE CONTRACT, IT CAN BE EASILY SAID THAT THIS RIGHT HAS ALSO ACCRUED TO THE ASSESSEE. THEREFORE, CAPITA L GAIN TAX HAS TO BE PAID ON THE TOTAL CONSIDERATION ARISING ON TH E TRANSFER WHICH WOULD INCLUDE THE CONSIDERATION WHICH HAS BEE N RECEIVED AS WELL AS THE CONSIDERATION WHICH HAS ARISEN AND B ECOME DUE AND MAY BE RECEIVED LATER ON. ACCORDINGLY, THIS CON TENTION OF THE ASSESSEE WAS ALSO REJECTED. IX VIDE PARA 100 TO 107, BEING THE NINTH CONTENTION THAT ASSESSEE HAS ALREADY TERMINATED THE AGREEMENT AND HAS REVOK ED THE POWER OF ATTORNEY. IT WAS HELD IN VIEW OF PROVISIO N OF SECTION 45 READ WITH SECTION 48 OF THE ACT THAT SUBSEQUENT EVENTS, IF AT ALL ANY WILL NOT MAKE ANY DIFFERENCE BECAUSE TOTAL CONSIDERATION RECEIVED OR ACCRUED HAS TO BE ASSESSED IN THE YEAR OF TRANSFER. THE WORD IRREVOCABLE ITSELF SHOWS THAT IN THE E YES OF LAW SPECIAL POWER OF ATTORNEY COULD NOT HAVE BEEN REV OKED. IN VIEW OF THIS ANALYSIS, EITHER THE JDA HAS NOT BEEN CANCELLED OR IN ANY CASE THE SAME CANNOT BE CONSIDERED FOR DETE RMINING THE TAXATION OF CAPITAL GAIN. ACCORDINGLY THIS CONTENT ION WAS ALSO REJECTED. X. VIDE PARA 108 & 109, BEING THE TENTH CONTENTION THAT EVEN IF THE WHOLE CONSIDERATION HAS TO BE TAXED THEN VALUE OF THE FLATS CANNOT BE TAKEN AT RS.4500/- PER SQ.FEET. IN VIEW OF AGREEMENT BETWEEN HASH AND THDC CONSIDERATION HAS BEEN SHOW N AT 30 RS.2000/- PER SQ. FEET FOR 126 FLATS WHEREAS IT IS RS.4500/- PER SQ. FEET FOR THREE FLATS. IT WAS HELD THAT AO HAS ESTIMATED THE VALUE OF FLATS ON MOST REASONABLE BASIS. ALSO VIDE PARA 110 THERE WAS CONTENTION WITH RESPE CT TO DEDUCTION U/S 54F OF THE ACT. IT WAS HELD THAT NO G ROUND WAS RAISED IN THE APPEAL. THOUGH REFERENCE WAS MADE IN GROUND NO.2.3 WITH REFERENCE TO SECTION 54F\ AND 54EC WHIC H ARE ON DIFFERENT FACTS AND THEREFORE DEDUCTION U/S 54F AN D 54 ARE NOT THE SAME. ACCORDINGLY, THE CONTENTION WAS REJECTED. ALSO THE SAID ISSUE HAS BEEN DISMISSED IN THE CASE OF SH.SUR INDER SINGH VS. DCIT IN ITA NO.1071/CHD/2011 VIDE PARA 166 TO 169 FOR THE REASONS MENTIONED THEREIN. 31. VIDE PARA 111 TO 113, IT WAS CONTENDED THAT CA PITAL GAIN SHOULD HAVE BEEN TAXED IN THE HANDS OF SOCIETY WHICH IS L EGAL OWNER OF THE LAND. IT WAS HELD THAT THE FACT STANDS ADMITTED BY THE ASSESSEE BECAUSE ASSESSEE HAS FILED A RETURN DECLARING CAPITAL GAIN AGAINST PART MONEY RECEIVED AGAINST THE PLOT. THUS, IT BECOMES CLEAR THAT IT IS THE INDIVIDUAL MEMBER WHO ARE LIABLE TO TAX IN RESPECT OF TRANSFER OF PLOTS AND THE SOCIETY BEING ONLY A FACILITATOR OR POST O FFICE. ACCORDINGLY, THIS CONTENTION WAS ALSO REJECTED. 32 VIDE PARAS 5 TO 9 ALSO THE ASSESSEE HAS RAISE D THE ADDITIONAL EVIDENCE, WHICH AFTER CONSIDERING THE FACTS ON REC ORD AND ARGUMENTS OF LD. COUNSELS ALLOWED THE ADMISSION OF ADDITIONA L EVIDENCE. 33 VIDE PARA 10 TO 14, THE REVISED RETURN WAS TREA TED AS NON-EST AND IT WAS HELD THAT NO DISADVANTAGE HAS OCCURRED TO T HE ASSESSEE BECAUSE IN THE REVISED RETURN, THE ASSESSEE HAS INCLUDED A SUM OF RS.27,58,436/- ON ACCOUNT OF CAPITAL GAIN AND THE WHOLE DISPUTE IN THE ASSESSMENT RELATES TO CAPITAL GAIN ARISING OUT OF SALE OF PLOT IN THE ASSESSMENT RELATING TO CAPITAL GAIN ARISING OUT OF SALE OF PLOT IN PUNJABI CO-OPERATIVE HOUSING BUILDING SOCIETY LTD. MOHALI. IN FACT, THE AO HAS ULTIMATELY ASSESSED MUCH HIGHER AMOUNT OF CAPITAL GAIN, WHICH THE ASSESSEE IS DISPUTING. ACCORDINGLY, THI S GROUND OF THE ASSESSEE WAS REJECTED. ACCORDINGLY ALL THE ISSUES, AS DISCUSSED ABOVE IN THE CASE OF SH.CHARANJIT SINGH ATWAL (SUPRA) W ERE DISMISSED BY THE ITAT CHANDIGARH BENCH IN ITS ORDER DATED 29.07 .2013. 34. AS REGARDS ISSUE OF NOTICE U/S 148, THE SAME WAS DEALT WITH IN ITA NO.986/CHD/2011 IN THE CASE OF AVTAR SINGH BRA R VS. ITO. IT 31 WAS HELD THAT LD. CIT(A) HAS DONE NO WRONG IN REJ ECTING THE ISSUE ON REOPENING OF ASSESSMENT. ACCORDINGLY, THE GROUND W AS REJECTED. 35. IN THE CASE OF SMT. SURJIT KAUR IN ITA NO.993 /CHD/2011, THE ASSESSEE WAS A MEMBER OF THE DEFENCE SERVICES CO- OPERATIVE HOUSING BUILDING SOCIETY LTD; WHICH WAS THE OWNER OF 27.3 ACRES OF LAND. THIS LAND WAS TRANSFERRED TO THDC/HASH AS I N THE CASE OF PUNJABI CO-OPERATIVE HOUSING BUILDING SOCIETY LTD; EITHER FACTS ARE IDENTICAL TO THE CASE OF SH. CHARANJIT SINGH ATWAL (SUPRA). ACCORDINGLY, BEING IDENTICAL ISSUE AS IN THE CASE OF SH.CHARANJIT SINGH ATWAL (SUPRA), THE APPEAL OF THE ASSESSEE WAS DISM ISSED. 36. REGARDING INTEREST U/S 234B AND WITHDRAWAL U/S 244A, IT WAS HELD IN PARA 114 THAT THE SAME IS CONSEQUENTIAL IN NATURE AND AO WAS DIRECTED TO CHARGE OR WITHDRAW INTEREST IN ACCORD ANCE WITH LAW. 37. ACCORDINGLY, ALL THE GROUNDS AND CONTENTIONS R AISED IN 30 APPEALS AS MENTIONED HEREINABOVE BY THE ITAT, CHA NDIGARH BENCH HAVE BEEN DISMISSED. FOR THE SAKE OF CONVENIENCE, WE REPRODUCE THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS ITO IN ITA NO.448(CHD/2011 AND THE FINDINGS OF THE ITAT, CHAN DIGARH BENCH ON THE ISSUES IN THE APPEAL VIDE PARAS 17 TO 115 A S UNDER: 17 BRIEF FACTS OF THE CASE ARE THAT WHILE MAKING DI SCREET ENQUIRIES IN THE CASES OF HOUSING SOCIETIES, IT WA S GATHERED THAT HOUSING SOCIETY CONSISTING OF 95 PRE SENT AND EX-MLAS OF PUNJAB LEGISLATIVE ASSEMBLY IS OWNE R OF THE 21.2 ACRES OF LAND IN VILLAGE KANSAL, DISTT. M OHALI. THE VILLAGE KANSAL SHARES ITS BOUNDARY WITH CAPITA L CITY OF CHANDIGARH. ON 25.2.2007 THE HOUSING SOCIETY OF M LAS ENTERED INTO A TRIPARTITE JOINT DEVELOPMENT AGREEM ENT (HEREIN AFTER REFERRED AS JDA) WITH HASH BUILDER S (P) LTD (HEREINAFTER REFERRED TO HASH) AND M/S TATA HOUSING DEVELOPMENT COMPANY LTD. (HEREINAFTER REFERRED AS THDC). BY VIRTUE OF THIS TRIPARTITE AGREEMENT IT WAS AGREED UPON AMONG THESE PARTIES THAT THE SOCIETY W HICH IS OWNER OF 21.2 ACRES OF LAND, SHALL TRANSFER ITS LAND TO THDC/HASH IN LIEU OF MONETARY CONSIDERATION AND CONSIDERATION IN KIND. AS PER THE AGREEMENT EACH MEMBER OF THE SOCIETY HAVING A PLOT OF 500 SQYD IN THE SO CIETY WAS TO RECEIVE MONETARY CONSIDERATION OF RS. 82,50 ,000/- AND THE MEMBERS HOLDING PLOT OF 1000 SQYD WAS TO R ECEIVE 32 A SUM OF RS. 1.65 CRORES. IN ADDITION TO THIS MEMB ER HOLDING A PLOT OF 500 SQYD WAS TO RECEIVE FULLY FU RNISHED FLAT MEASURING 2250 SQFT TO BE CONSTRUCTED BY THDC /HASH AND MEMBERS HAVING 1000 SQYD WERE TO GET TWO SUCH FLATS. ACCORDING TO THE ASSESSING OFFICER TOTAL CONSIDERATION TO BE RECEIVED BY ALL THE MEMBERS WA S RS. 1,06,42,35,000/- AND FURNISHED FLATS AS MENTIONED ABOVE. BEFORE ENTERING INTO THE TRIPARTITE AGREEMENT THE SOCIETY IN ITS EXECUTIVE COMMITTEE MEETING HELD ON 4.01.20 07 WHICH WAS APPROVED IN THE GENERAL BODY MEETING HEL D ON 26.2.2007, PASSED A RESOLUTION TO THE EFFECT THAT ALL THE MEMBERS WOULD SURRENDER THEIR ALL RIGHTS IN THE PR OPERTY TO THE SOCIETY AND THE SOCIETY WOULD ENTER INTO AN AGREEMENT ON BEHALF OF THE MEMBERS WITH THDC/HASH. THE ASSESSING OFFICER HAS REFERRED TO THIS RESOLUT ION AS WELL AS VARIOUS IMPORTANT CLAUSES OF THE JDA AND H AS PLACED LOT OF RELIANCE ON CLAUSE 2.1 OF THE JDA WH ICH IS AS UNDER: THE OWNER HEREBY IRREVOCABOY AND UNEQUIVOCALLY GRANTS AND ASSIGNS IN PERPETUITY ALL ITS RIGHTS TO DEVELOP, CONSTRUCT, MORTAGE, LEASE, LICENSE SELL AN D TRANSFER THE PROPERTY ALONG WITH ANY AND ALL THE CONSTRUCTIONS, PREMISES, HEREDITAMENTS, EASEMENTS, TREES THEREON IN FAVOUR OF THDC FOR THE PURPOSE OF DEVELOPMENT, CONSTRUCTION, MORTGAGE, SALE, TRANSFER , LEASE, LICENSE AND/OR EXPLOITATION FOR FULL UTILIZA TION OF THE PROPERTY (RIGHTS) AND TO EXECUTE ALL THE DOCUMENTS NECESSARY TO CARRY OUT, FACILITATE AND ENFORCE THE RIGHTS IN THE PROPERTY INCLUDING TO EXECUTE LEASE AGREEMENT. LICENSE AGREEMENTS, CONSTRUCTION CONTRACTS, SUPPLIE R CONTRACTS, AGREEMENT FOR SALE. CONVEYANCE, MORTGAG E DEEDS, FINANCE DOCUMENTS AND ALL DOCUMENTS AND AGREEMENTS NECESSARY TO CREATE AND REGISTER THE MORTGAGE, CONVEYANCE, LEASE DEEDS, LICENSE AGREEMEN T, POA, AFFIDAVITS, DECLARATIONS, INDEMNITIES AND ALL SUCH OTHER DOCUMENTS, LETTERS AS MAY BE NECESSARY TO CAR RY OUT, FACILITATE AND ENFORCE THE RIGHTS AND TO REGIS TER THE SAME WITH THE REVENUE/COMPETENT AUTHORITIES AND TO APPEAR ON OUR BEHALF BEFORE ALL AUTHORITIES, STATUT ORY OR OTHERWISE AND BEFORE ANY COURT OF LAW (THE DEVELOP MENT RIGHTS). THE OWNER HEREBY HANDS OVER THE ORIGINAL TITLE DEEDS OF THE PROPERTY AS MENTIONED IN THE LIS T ANNEXUED HERETO AND MARKED AS ANNEXURE IV AND PHYSICAL, VACANT POSSESSION OF THE PROPERTY HAS BEE N HANDED OVER TO THDC SIMULTANEOUSLY TO THE EXECUTION 33 AND REGISTRATION OF THIS AGREEMENT TO DEVELOP THE S AME AS SET OUT HEREIN. 18 IT WAS FURTHER NOTICED THAT TILL DATE A MEMBER HAVING 500 SQYD PLOT IN SOCIETY HAD RECEIVED RS. 33.00 LA KHS EACH AND A MEMBER HAVING 1000 SQYD PLOT HAD RECEIV ED RS. 66.00 LAKH. THE ASSESSEE WAS ALSO A MEMBER AN D PRESIDENT OF THE SOCIETY AND WAS OWNER OF A PLOT MEASURING 1000 SQYD. THEREFORE, AS PER JDA, HE W AS TO RECEIVE RS. 1.65 CRORES AS MONETARY CONSIDERATION AND TWO FURNISHED FLATS AS CONSIDERATION IN KIND AND T HE COST OF THE SAME AS PER ASSESSING OFFICER WAS RS. 2,02,50,000/- AND TOTAL CONSIDERATION WOULD BE RS. 3,67,50,000/-. 19 ACCORDING TO THE ASSESSING OFFICER SINCE THE SOCIETY HAS ASSIGNED ALL RIGHTS IN 21.2 ACRES OF L AND BELONGING TO THE SOCIETY IN TERMS OF JDA TO THDC/H ASH AND ALSO HANDED OVER THE PHYSICAL VACANT POSSESSIO N OF THE PROPERTY TO THDC/HASH, THEREFORE, THE ASSESSE E BECAME LIABLE TO CAPITAL GAIN TAX ON HIS SHARE OF CONSIDERATION. ACCORDINGLY A LETTER DATED 7.12.2 008 WAS ISSUED INTIMATING THE ASSESSEE THAT AFTER CONSIDER ATION OF THE VARIOUS CLAUSES OF JDA DATED 25.2.2007 AND THE RESOLUTION PASSED BY THE SOCIETY ON 26.2.2007, CAP ITAL GAIN WAS TO BE CHARGED IN THE HANDS OF THE ASSESSE E IN ASSESSMENT YEAR 2007-08 BY TAKING FULL VALUE OF TH E CONSTRUCTION AT RS. 3,67,50,000/-. THE ASSESSEE F ILED VARIOUS REPLIES WHICH HAVE BEEN EXTRACTED BY THE ASSESSING OFFICER AS UNDER: THIS HAS REFERENCE TO YOUR LETTER DATED 7.12.2009, WE SUBMITTED THAT UNDER: 1 THE AGREEMENT UNDER REFERENCE IS ONLY IN THE NAT URE OF AN AGREEMENT TO SELL AND NOT A SALE DEED AND THEREFORE NO CAPITAL GAIN CAN ARISE UNDER THE SAID AGREEMENT. THE AMOUNTS RECEIVED UNDER THE SAID AGREEMENT ARE A CTUALLY THE ADVANCES RECEIVED AND NOT THE SALE CONSIDERATI ON AND THE LAND TRANSFERRED IN FAVOUR OF THDC LTD. IS ONLY ON ACCOU NT OF SECURITY. A LETTER FROM M/S HASH BUILDERS TO THAT EFFECT IS ENC LOSED HEREWITH. THERE ARE MANY CONDITIONS ENVISAGED IN THE AGREEMEN T WHICH NEED TO 34 BE FULFILLED BEFORE THE FULL EXECUTION OF THE AGREE MENT AND TRANSFER OF PROPERTY TO THDC LID. AND RECEIPT OF THE CONSIDERAT ION. 4 UNDER THE PARTIAL EXECUTION, THE PART OF PROPERTY MEASURING APPROX, 72 SQ YARDS WAS REGISTERED IN FAVOUR OF THDC AND SUM OF RS. 12 LACS WAS RECEIVED AS STATED EARLIER, THE AMOUNT WAS RECEIVED AS ADVANCE UNDER THE AGREEMENT AND THE PROPERTY WAS TR ANSFERRED AS SECURITY TOWARDS THAT ADVANCE. THERE WERE DIFFERE NT LEGAL OPINIONS ON THE TAXABILITY OF THE AMOUNTS RECEIVED. HOWEVER IN DISCHARGE OF THE DUTIES AS RESPONSIBLE CITIZENS AND AVOID LITIGATION, THE MEMBERS DECIDED TO PAY CAPITAL GAIN TAX ON THE AMOUNTS RECEIVED VOLUNTARILY AND SUCH AS THE ASSESSEE HAS P AID DUE AMOUNT OF TAXES VOLUNTARILY DURING THE COURSE OF PR OCEEDINGS IT MAY KINDLY BE APPRECIATED THAT TAX LIABILITY WILL ARISE ONLY TO EXTENT OF COMPLETED TRANSACTIONS I.E. THE CAPITAL GAIN ARISING ON THE LAND WHICH HAS BEEN TRANSFERRED AND FOR WHICH CONSIDERATION HAS BEEN RECEIVED. THE ASSESSEE HAS F ULLY DISCHARGED HIS LIABILITY TO THAT EXTENT THERE CANNOT BE ANY TA X LIABILITY ON INCOMPLETE TRANSACTION I.E. WHERE THE LAND HAS NOT BEEN TRANSFERRED AND THE CONSIDERATION HAS NOT BEEN RECEIVED, 5 IN YOUR LETTER UNDER CONSIDERATION, YOU HAVE CONSIDERED THE NATIONAL 'VALUE OF THE PROPOSED FLAT MEASURING 2250 SQ. FEET AS A PART OF THE CONSIDERATION HERE THE FOLLOWING POINTS NEED TO BE CONSIDERED. 1.) THE FLAT SHALL BE GIVEN ONLY AFTER THE FULL LAN D I.E. 500 SQ. YARD, HAS BEEN TRANSFERRED TO THE BUYER. 2) THERE IS NO PROVISION IN THE AGREEMENT TO ALLOT PRO PORTIONATE FLAT OR MAKE EQUIVALENT PROPORTIONATE PAYMENT. SO F OR THE PRESENT TRANSACTION WHERE ONLY A PART OF THE LAND H AS BEEN TRANSFERRED, NO CONSIDERATION ON ACCOUNT OF FLAT IS AVAILABLE. SO NO QUESTION OF ANY TAX LIABILITY ARISE. 3) IT MAY KINDLY BE APPRECIATED THAT THE DEVELOPER HAS NOT EVEN ' ACQUIRED THE LAND TILL DATE AND HAS NOT EVEN OBTAINED PERMISSION TO START DEVELOPMENT. SO THERE IS NO QUE STION OF ANY CONSTRUCTION OF FIATS NOW OR NEAR FUTURE THAT I S TO SAY, THERE IS NO CAPITA! ASSET IN EXISTENCE AS ON DATE FOR WHICH THE NATIONAL VALUE CAN BE CONSIDERED. 4) CLAUSE NO 14 IS TERMINATION CLAUSE OF THE AGR EEMENT UNDER REFERENCE (COPY ENCLOSED), VERY CLEARLY STA TES THE RIGHTS OF THDC TO TERMINATE THE AGREEMENT AND IN TH AT SITUATION, THE LAND ALREADY TRANSFERRED TO THDC WILL BE RETAIN ED BY THEM AND NO FURTHER LAND WILL BE PURCHASED BY THDC AND NO FU RTHER PAYMENT 35 SHALL BE MADE BY THEM. IN THAT EVENT THE AMOUNT REC EIVED BY ASSESSEE WILL BE CONSIDERED AS FULL, AND FINAL CONS IDERATION. SO THERE IS NO QUESTION OF CONSIDERING THE NATIONAL VA LUE OF PROPOSED FLAT AS THE UNREALIZED CONSIDERATION FOR T HE PURPOSE OF CAPITAL GAIN OF THE ASSESSEE. THE ASSESSEE IS A HON 'BLE CITIZEN AND REGULAR INCOME TAX PAYEE AND SHALL DISCHARGE HIS LI ABILITY UNDER INCOME TAX WHEN THE WHOLE LAND WILL BE TRANSFERRED. 5.) WHILE MAKING THE CALCULATION OF CAPITAL GAIN TA X, THE AMOUNT OF CONSIDERATION HAS BEEN WRONGLY TAKEN OF RS. 15 LACS INSTEAD OF RS,12 LACS. AS PER THE AGREEMENT, SUM OF RS. 3 LACS IS ADJUSTABLE ADVANCE. YOU ARE REQUESTED TO KINDLY RE COMPUTED TAX LIABILITY, 6.) THERE ARE VARIOUS JUDGMENTS ON THIS ISSUE. THE FOLLOWING CASES ARE ENCLOSED HEREWITH FOR THE REFERENCE. A. CIT VS. ATAM PRAKASH & SONS (2008) 219 CTR (DEL) B. SMT. RAJ RANI DEVI RAMNA VS. CIT (1993) 201 ITR 1032 (PAT) C. ZUARI ESTATE DEVELOPMENT & INVESTMENTS CO. (P) LTD. VS. J.R.KANEKAR, DEPUTY CIT. (2004) 191 CTR (BOM) IN VIEW OF THE ABOVE YOU ARE REQUESTED TO KINDLY CO NSIDERATION THE CAPITA! GAIN AS SUBMITTED BY US.' 9. THE CASE WAS FURTHER FIXED FOR 24.12.2009, ON THE SAID DATE THE COUNSEL OF THE ASSESSEE FIFED ANOTHER REPL Y WHICH IS REPRODUCED AS UNDER: 1AS PER PARA 6.1 OF YOUR LETTER, YOU HAVE MENTIONED THAT THERE IS A TRANSFER OF PROPERTY UPON THE SURRENDER OF ALL OTMENT RIGHTS. YOU MAY KINDLY REFER TO THE AGREEMENT DATED 25,02.2007 WHEREIN IT IS CLEARLY MENTIONED THAT ALL OTMENT RIGHTS HAVE BEEN SURRENDERED BY THE MEMBERS IN FAVO UR OF THE OWNER I.E. 'PUNJABI CO-OPERATIVE HOUSE BUILDING , SOCIETY LTD' AND NOT IN FAVOUR OF THE BUYERS. SO THEREFORE, THERE IS NO TRANSFER OF PROPERTY U/S 2(14) AND 2(47). 2REGARDING YOUR OBSERVATION OF HAVING ACCEPTED THE POSITION OF TRANSFER, PLEASE NOTE THAT WE UNDERSTAND THAT TR ANSFER OF PROPERTY IS ONLY TO THE EXTENT OF THE LAND TRANSFER RED BY WAY OF SALE DEED. 36 3 IT IS VERY CLEAR FROM THE AGREEMENT THAT NO TRANSFER OF PROPERTY HAVE TAKEN PLACE ONLY THE DEVE LOPMENT RIGHT HAS BEEN TRANSFERRED. THEREFORE, THERE IS NO TRANSFER OF PROPERTY UNDER SECTION 53A OF TRANSFER OF PROPERTY ACT, 4. CLAUSE 9.3 OF THE AGREEMENT IS VERY CLEAR LY STATING THAT THE OWNERSHIP HAS NOT BEEN TRANSFERRED. IN VIEW OF OUR SUBMISSION YOU ARE REQUESTED TO COMP LETE THE CAPITA! GAINS TAX IN ACCORDANCE WITH OUR RETURN. TH E ASSESSEE WANTS TO BE PERSONALLY HEARD AND MAKE FURT HER SUBMISSION. YOU ARE REQUESTED TO KINDLY ADJOURN THE CASE TILL 29-12-2009.' 11. VIDE THE ABOVE SAID LETTER THE ASSESSEE REQUE STED TO BE PERSONALLY HEARD HOWEVER ON 29.12.2009 HE DID NOT A PPEAR. THE COUNSEL OF THE ASSESSEE FILED WRITTEN SUBMISSION WH ICH IS REPRODUCED AS UNDER: 1 IN PARA 6,1 OF YOUR LETTER DATED 7.12.2009, YOU HAVE WRITTEN THAT THERE IS GRANT AND ASSIGNMENT OF DEVELOPMENT RIGHTS IN THE PROPERTY AND THERE IS TRA NSFER OF PROPERTY UPON THE SURRENDER OF ALLOTMENT RIGHT. THI S IS NOT A TRUE FACTUAL POSITION. THE ALLOTMENT RIGHTS HAVE NOT BEEN SURRENDERED BY THE MEMBERS IN FAVOUR OF THDC LTD OR M/S HASH BUILDERS LTD. THE FACTUAL POSITION IS THAT THE SOCIETY I.E. M/S PUNJABI CO-OP HOUSE BLDG. SOCIETY LTD. HAS ENTERED INTO AN AGREEMENT WITH M/S THDC LID. M/S HA SH BUILDERS LTD. AS PER CLAUSE 2.1 OF THE AGREEMENT IT IS VERY CLEARLY MENTIONED THAT THE POSSESSION OF THE PROPERTY HAS BEEN HANDED OVER TO THDC LTD. ONLY TO DEVELOP THE SAME. A CLOSE EXAMINATION OF THE AGREEMENT CLEA RLY REVEALS THAT THE AGREEMENT IS A JOINT DEVELOPMENT AGREEMENT. THE SOCIETY INTENDED TO DEVELOP THE LAND OWNED BY IT. HOWEVER SINCE THE REQUISITE EXPERTISE WERE N OT AVAILABLE WITH THE SOCIETY, THE OTHER TWO DEVELOPERS WERE INVOLVED IN THE PROJECT. THE COST O F DEVELOPMENT WAS TO BE BORNE BY THE THDC. THE PAYMEN T TO THE SOCIETY WAS TO BE MADE PRO-RATA ON TRANSFER OF LAND IN 37 FAVOUR OF THDC LTD, IT IS VERY CLEAR FROM THE AGREE MENT THAT NO CONSIDERATION WAS PAYABLE TO THE ASSESSEE UNLESS THE LAND WAS TRANSFERRED. SO THERE IS A CLEAR CUT RELAT ION BETWEEN THE LAND TRANSFER AND CONSIDERATION. NO CONSIDERATION WILL BE RECEIVED IF THE LAND IS NOT T RANSFERRED. AS FAR AS THE POSSESSION AS MENTIONED IN THE AGREEM ENT IS CONCERNED, THE SAME IS FOR DEVELOPMENT ONLY AND THE TERMINATION CLAUSE VERY CLEARLY STATES THAT IF THE AGREEMENT IS TERMINATED, THDC LTD WILL RETAIN ONLY THAT MUCH LAN D WHICH HAS BEEN TRANSFERRED TO THEM AND THE REMAINING LAND WILL BE RETAINED BY THE SOCIETY/MEMBERS. THE ACTUAL POSITIO N IS SUCH THAT NO DEVELOPMENT WORK HAS TILL DATE BEEN UN DERTAKEN BY THE THDC LID BECAUSE THE VARIOUS CONDITIONS STIP ULATED IN THE AGREEMENT HAVE NOT BEEN FULFILLED. THE POSSE SSION AS MENTIONED IN THE AGREEMENT AND WHICH IS BEING MADE THE BASIS BY YOU TO CONSIDER THE TRANSACTION AS TRANSFE R U/S 53A OF THE TRANSFER OF PROPERTY ACT IS ACTUALLY NOT OF ANY CONSEQUENCES AND ACTUALLY THERE IS NO TRANSFER EXCE PT TO THE EXTENT OF LAND TRANSFERRED BY WAY OF REGISTERED SAL E-DEED. 2 CLAUSE 6.1 OF THE AGREEMENT CLEARLY STATES THAT HANDING OVER THE ORIGINAL TITLE -DEEDS IS AS SECURI TY FOR THE ADJUSTABLE ADVANCE. 3 AS PER CLAUSE 9.2 OF THE AGREEMENT, IT IS V ERY CLEARLY MENTIONED THAT THE OWNER SHALL EXECUTE IN F AVOUR OF M/S THDC LTD: THE SALE-DEEDS TO COMPLE TE THE AFORESAID TRANSACTION. SO IT IS EVIDENT THAT THE EXECUTION OF SALE-DEEDS IS AN INTEGRAL PART OF THE TRANSACTION A ND THE TRANSACTION SHALL REMAIN INCOMPLETE. IF THE SALE DE EDS ARE NOT EXECUTED. 4 THE CLAUSE 13 VERY CLEARLY STATES THAT TH E RIGHTS TRANSFERRED RELATE TO DEVELOPMENT/CONSTRUCTION WORK AND M/S THDC LTD SHALL NOT DO ANYTHING WHICH ADVERSELY AFFE CT THE RIGHT OF THE OWNER TO RECEIVE THE ENTIRE CONSIDERAT ION. 5 KEEPING IN VIEW THE CONDITIONS IN THE AGREEMENT AND TO THE FACT THAT M/S THDC LTD: M/S HASH BUILDER LTD HAVE NOT DONE ANY DEVELOPMENT WORK ON THE LAND UNDER CONSIDERATION TILL DATE IN PURSUANCE OF THE AGREEME NT DATED 25.2.2007 OR IN FURTHERANCE OF THE SAID AGREEMENT, NO TRANSFER SHOULD BE CONSIDERED TO HAVE BEEN TAKEN PL ACE IN RESPECT OF THE LAND WHICH IS NOT YET TRANSFERRED, 38 IF THE VIEWS OF THE DEPARTMENT ARE HELD TO BE CORRE CT FOR THE SAKE OF DISCUSSION, THE FOLLOWING SITUATION WILL ARISE: 1, ASSESSES WILL BE DEPRIVED FROM AVAILING THE EXEM PTION U/S 54EC SINCE NO FUNDS ARE AVAILABLE WITH THE ASSESSEE FOR INVESTMENT. 2, ASSESSEE WILL BE DEPRIVED FROM AVAILING EXEMPTIO N U/S 54F AS NO RESIDENTIAL HOUSE HAS YET BEEN CONSTRUCTED. THIS IS AN IRONICAL SITUATION WHERE ASSESSEE IS HAV ING TO PAY TAX ON THE NOTIONAL VALUE OF THE FLAT TO BE GIVEN IN THE F UTURE TO HIM AS CONSIDERATION BUT EXEMPTION UNDER SECTION 54F WILL BE DENIED BECAUSE THE RESIDENTIAL HOUSE DID NOT EXIST, 3. FURTHER AS PER THE TERMINATION CLAUSE OF THE A GREEMENT VARIOUS CONDITIONS HAVE BEEN PRESCRIBED UNDER WHICH THE AGREEMENT CAN BE TERMINATED. IT IS VERY CLEARLY MEN TIONED IN THE AGREEMENT THAT IN THE EVENT OF TERMINATION OF THE A GREEMENT THE LAND TRANSFERRED BY THE MEMBERS WILL BE RETAINED BY THDC LTD AND CONSEQUENTLY NO FURTHER CONSIDERATION SHALL BE GIVEN TO THE MEMBERS. IT IS EVIDENT FROM THE FACTS IN THE CASE T HAT INORDINATE DELAY HAS ALREADY TAKEN PLACE IN THIS CASE. THE AGR EEMENT WAS ORIGINALLY ENVISAGED TO BE FULLY EXECUTED IN F.Y 20 07-08. BUT NOW EVEN FY 2009-10 IS ALSO GOING TO EXPIRE. IN THA T CASE THE ASSESSEE WILL HAVE NO REMEDY AVAILABLE AGAINST THE TAX PAID ON CONSIDERATION WHICH WILL NEVER BE RECEIVED BY HIM. UNDER SUCH CIRCUMSTANCES IT WILL BE FULLY UNLAWFUL TO CHARGE T AX. 4. THE VALUE OF PROPOSED FLAT IS UNDETERMINABLE A ND THERE IS NO WAY TO DETERMINE THE SAME. THERE IS NO PROVISION TO PAY TAX ON THE NOTIONAL VALUE. CLAUSE 6.18 OF THE AGREEMENT ENTITLED THE ASSESSEE TO SURRENDER HIS PROPOSED FLAT TO THDC LTD . AND IN THAT CASE ONLY 75% OF THE FUTURE MARKET-PRICE WILL BE RE CEIVED BY HIM. IN THE LIGHT OF ABOVE DISCUSSION IT IS ONCE AGAIN R EQUESTED THAT TAX MAY BE CALCULATED AS PER THE RETURN FILED BY THE AS SESSEE. HOWEVER IF THE DEPARTMENT CHOOSE TO DISAGREE WITH O UR SUBMISSIONS THEN IT IS SUBMITTED THAT THE CAPITA! G AIN SHOULD BE CHARGED IN THE HANDS OF THE PUNJABI CO-OPERATIVE HO USE BLDG. SOCIETY. IT WILL BE PERTINENT TO NOTE HERE THAT T HE PROCEEDINGS IN THE CASE OF THE SOCIETY HAVE BEEN REOPENED U/S 148 OF T HE I.T ACT 1961 BY THE LEARNED D.C.I.T MOHALI. IN THE REASONS RE CORDED BY THE LEARNED D.C.I.T, IT HAS CLEARLY BEEN MENTIONED THAT HE PROPOSES TO 39 TAX THE CAPITAL-GAIN IN THE HANDS OF THE SOCIETY. COPY OF THE REASONS RECORDED IS ENCLOSED. IT MAY BE APPRECIATE D THAT THE SAME AMOUNT CAN'T BE TAXED TWICE'. ON 29,12,2009 AGAIN THE COUNSEL OF THE ASSESSEE FIL ED A LETTER AND SUBMITTED AS UNDER: 'THIS BEING REFERRED TO THE CAPTIONED PROCEEDINGS R EGARDING YOUR QUERY ABOUT THE COST OF ACQUISITION IS RS. 11 LACS WHICH IS PAID AS PER FOLLOWING DATES. RECEIPT NO, 307 09-11-01 5,04,000/- RECEIPT NO. 426 12-02-04 7,00,007/- OUT OF ABOVE AMOUNT RS. 1,00.000/- WAS REFUNDED TO THE ASSESSEE AND RS, 4000/- WAS TOWARDS MEMBERSHIP CHAR GES AND OTHER FUNDS OF THE SOCIETY. IN CONTINUATION TO OUR EARLIER REPLY SUBMITTED, WE ONCE AGAIN REITERATE THAT THE POSSESSION GIVEN BY THE ASSESSEE IS ONLY TO THE EXTENT OF LAND SOLD BY WAY OF REGISTERED SALE DEED. THERE ARE CERTAIN ADDENDUMS TO THE AGREEMENT WHICH ARE NOT PR ESENTLY AVAILABLE WITH THE ASSESSEE & CANNOT BE SUBMITTED I MMEDIATELY. 20 THE ASSESSING OFFICER AFTER CONSIDERING THE SUBMISSIONS DID NOT FIND ANY FORCE IN THE SAME AND OBSERVED AS UNDER: (I) THERE IS NO FORCE IN THE ARGUMENT THAT THE JDA WAS ONLY AN AGREEMENT TO SELL AND NOT A SALE DEED BECA USE JDA RESULTED IN THE TRANSFER OF ASSETS. ALL THE I NGREDIENTS OF TRANSFER I.E. CONSIDERATION FROM SCHEDULE OF PA YMENTS, RIGHTS AND LIABILITIES OF THE PARTIES ETC. WERE ME NTIONED IN THE JDA, CAPITAL GAIN AROSE BECAUSE OF THE FACT TH AT IT WAS A CASE OF TRANSFER OF CAPITAL ASSET IN VIEW OF SECTION 2(47)(II), 2(47)(V) AND 2(47)(VI). ACCORDING TO H IM AS PER CLAUSE 2.1 OF THE JDA OWNER OF THE LAND MADE AGREE MENT AND IRREVOCABLY AND UNEQUIVOCALLY GRANTED AND ASS IGNED IN PERPETUITY ALL OF ITS RIGHTS TO DEVELOP, CONSTR UCT, MORTGAGE, LEASE, LICENSE, SELL AND TRANSFER THE PR OPERTY (21.2 ACRES OF LAND) ALONG WITH ANY AND ALL CONSTR UCTIONS TREES ETC. IN FAVOUR OF THDC/HASH FOR THE PURPOSE OF DEVELOPMENT, CONSTRUCTION, MORTGAGE, SELL, TRANSFE R, LEASE, LICENSE AND/OR EXPLOITATION FOR FULL UTILIZ ATION OF THE PROPERTY AND TO EXECUTE ALL DOCUMENTS NECESSARY TO CARRY OUT FACILITIES AND RIGHTS IN THE PROPERTY. THUS T RANSFER OF PROPERTY WAS EFFECTED THROUGH THIS AGREEMENT. 40 (II) THE OWNER HAD ALSO HANDED OVER THE ORIGINAL T ITLE DEEDS OF THE PROPERTY AND ALSO HANDED OVER THE PHY SICAL, VACANT POSSESSION OF THE PROPERTY TO THDC/HASH SIMULTANEOUSLY TO THE EXECUTION AND REGISTRATION O F THIS JDA AND THEREFORE, THE CASE OF THE ASSESSEE WAS C OVERED BY THE PROVISIONS OF SECTION 2(47)(V) OF THE ACT R .W.S 53A OF T.P. ACT. AS PART CONSIDERATION HAD ALSO BEEN R ECEIVED. ACCORDING TO THE ASSESSING OFFICER THE FACTS OF TH E CASE WERE SIMILAR TO THE FACTS IN CASE OF CIT V. K. JEE LANI BASHA, 256 ITR 282 (MAD) WHEREIN HON'BLE HIGH COUR T AFTER ANALYZING THE PROVISIONS OF SECTION 2(47)(V) HAD HELD THAT ONCE THE POSSESSION EVEN FOR A PART OF THE PR OPERTY WAS HANDED OVER TO THE TRANSFEREE, FOR THE PURPOSE OF SECTION 2(47)(V) R.W.S 45, THE TRANSFER WAS COMPLE TE. (III) THE ASSESSEES CASE WAS ALSO COVERED BY THE PROVISIONS OF SECTION 2(47)(VI) WHICH DEALS WITH A NY TRANSACTION WHICH HAD EFFECT OF TRANSFERRING OR EN ABLING THE ENJOYMENT OF ANY IMMOVABLE PROPERTY AND ASSIGN ING VARIOUS RIGHTS IN THE PROPERTY IN FAVOUR OF THDC AND HANDING OVER THE ORIGINAL TITLE DEEDS AS WELL AS H ANDING OVER OF THE PHYSICAL VACANT POSSESSION OF LAND HAS THE EFFECT OF TRANSFERRING OR ENABLING THE ENJOYMENT O F THE SAID PROPERTY TO THDC/HASH. (IV) THERE WAS NO FORCE IN THE CONTENTION THAT THE AMOUNTS RECEIVED UNDER THE SAID AGREEMENT WERE ADVANCES RECEIVED AND NOT THE SALE CONSIDERATION BECAUSE TOTAL CONSIDERATION WAS STRUCTURED IN THE JDA AND THE CONSIDERATION WAS TO BE RECEIVED AS PER CLAUSE 4(IV) OF THE JDA. IN FACT THE ASSESSEE HAS HIMSELF SHOW N THE RECEIPT AND RETURNED THE SAME AS CAPITAL GAIN WHIC H CONTRADICTS THESE ARGUMENTS OF THE ASSESSEE. AS P ER SECTION 45 OF IT ACT, INCOME-TAX WAS TO BE CHARGED UNDER THE HEAD CAPITAL GAIN ON TRANSFER OF A CAPITAL A SSET AND SHALL BE DEEMED TO BE THE INCOME OF THE PREVIOUS Y EAR IN WHICH TRANSFER TOOK PLACE. THE YEAR OF TRANSFER I S THE CRUCIAL YEAR AND NOT THE TIME OF THE RECEIPT. (V) THERE WAS NO FORCE IN THE CONTENTION THAT THE VALUE OF THE FLAT SHOULD NOT BE INCLUDED BECAUSE THE ASS ESSEE HAS NOT RECEIVED SUCH FLAT, BECAUSE THE FLAT WAS T O BE RECEIVED BY EACH MEMBER OF THE SOCIETY WAS PART OF THE ENTIRE CONSIDERATION AS PER CLAUSE 4.2 OF JDA. IN ANY CASE AS PER SECTION 45 R.W.S. 48, ITS FULL VALUE O F 41 CONSIDERATION RECEIVED OR ACCRUED WHICH HAS TO BE CONSIDERED. (VI) IT WAS ALSO OBSERVED THAT SURRENDER OF ALLOT MENT LETTER BY THE MEMBERS INCLUDING ASSESSEE WAS PROCE SSED IN ORDER TO ENABLE THE SOCIETY TO ENTER INTO TRIPA RTITE JDA WITH HASH AND THDC. BY SURRENDERING THE ALLOTMENT LETTER, THE RIGHT OF THE ASSESSEE IN IMMOVABLE PRO PERTY OWNED BY HIM GOT EXTINGUISHED AND THIS EXTINGUISHM ENT WAS IN LIEU OF ENTIRE CONSIDERATION WHICH WAS RECE IVED BY THE MEMBERS INCLUDING THE ASSESSEE. THUS THIS CAS E WAS ALSO COVERED U/S 2(47)(II) OF THE ACT. (VII) IT WAS OBSERVED THAT THERE IS NO MERIT IN TH E CONTENTION THAT THE ASSESSEE WOULD NOT BE COVERED U/S 54EC DUE TO LACK OF FUNDS OR EXEMPTION U/S 54 WAS NOT RELEVANT TO THE ISSUE ABOUT TAXABILITY OF LONG TER M CAPITAL GAINS WHICH WAS DEPENDENT ONLY ON TRANSFER. (VIII) IT WAS OBSERVED THAT THERE WAS NO FORCE IN THE CONTENTION THAT THE VALUE OF THE FLATS WAS UNDETER MINABLE BECAUSE THE VALUE OF THE FLAT WAS VERY MUCH DETERM INABLE AS PER THE MARKET RATE PREVAILING WHICH COULD ALSO BE ASCERTAINED FROM THE RATE AT WHICH THE FLATS WERE BEING OFFERED TO THE GENERAL PUBLIC. (X) THE ASSESSING OFFICER WAS OF THE VIEW THAT THE CASE LAWS RELIED ON BY THE ASSESSEE WERE DISTINGUISHABL E FOR WHICH THE REASONS HAVE BEEN GIVEN AT PAGE 23 AND 2 4 OF THE ASSESSMENT ORDER. 21 IN THIS BACKGROUND THE ASSESSEE WAS CHARGED TO CAPITAL GAIN TAX U/S 45 FOR THE TOTAL CONSIDERATIO N RECEIVED AND RECEIVABLE BY BEING A MEMBER OF THE SOCIETY IN VIEW OF JDA. 22 ON APPEAL BEFORE THE LD. CIT(A) DETAILED SUBMISSIONS WERE MADE (IN THE IMPUGNED ORDER REFER ENCE IS MADE TO WRITTEN SUBMISSIONS WITHOUT DISCUSSING THE ARGUMENTS). THE LD. CIT(A) REFERRED TO THE PROVIS IONS OF SECTION 45 AND 2(47) OF THE ACT AND OBSERVED THAT CLAUSES (V) TO (VI) WERE INSERTED IN SECTION 2(47) W.E.F. 1.4.1988. HE OBSERVED THAT BEFORE INSERTION OF THIS PROVISIO N, IT WAS ALWAYS POSSIBLE TO AVOID OR POSTPONE CAPITAL GAIN BY EITHER NOT EXECUTING CONVEYANCE DEED OR POSTPONE S UCH 42 EXECUTION BECAUSE VENDOR OF THE PROPERTY COULD GIV E THE PRIVILEGE OF OWNERSHIP OR ENJOYMENT OF THE PROPERT Y BY EXECUTING A POWER OF ATTORNEY ETC. TO AVOID SUCH LEAKAGE OF REVENUE CLAUSES (V) AND (VI) WERE INSERTED TO S ECTION 2(47) OF THE ACT. HE THEN DISCUSSED THE DECISION OF HON'BLE BOMBAY HIGH COURT IN CASE OF CHATURBHUJ DWARKADAS KAPADIA V. CIT, 260 ITR 491 (BOM) AND EXTRACTED THE FOLLOWING CONDITIONS WHICH WERE REQU IRED TO BE SATISFIED TO COVER THE CASE U/S 2(47)(V) R.W.S. 53A OF T.P. ACT. (A) THERE SHOULD BE CONTRACT FOR CONSIDERATION (B) IT SHOULD BE IN WRITING (C) IT SHOULD BE SIGNED BY THE TRANSFEROR OR ON HI S BEHALF (D) IT SHOULD PERTAIN TO TRANSFER OF IMMOVEABLE PR OPERTY (E) TRANSFEREE HAS IN PART PERFORMANCE OF CONTRACT HAS TAKEN POSSESSION OR PART POSSESSION OF THE PROPERTY . (F) LASTLY, TRANSFEREE SHOULD BE READY AND WILLING TO PERFORM HIS PART OF CONTRACT. 23 IF THE ABOVE CONDITIONS WERE SATISFIED THEN THE TRANSFER CAN BE SAID TO HAVE TAKEN PLACE FOR THE P URPOSE OF SECTION 45. ACCORDING TO HIM AS PER THE DECISI ON OF CHATURBHUJ DWARKADAS KAPADIA V. CIT (SUPRA) ONCE T HE POSSESSION OR PART POSSESSION OF THE PROPERTY WAS GIVEN BY THE TRANSFEROR TO THE TRANSFEREE THEN THE TRANSFER CAN BE SAID TO HAVE TAKEN PLACE. HE ALSO REFERRED TO THE DECISION OF AUTHORITY FOR ADV ANCE RULING IN CASE OF JASBIR SINGH SARKARIA, 164 TAXMAN 108: 294 ITR 196 . HE REFERRED TO VARIOUS OBSERVATIONS OF THE AUTHORITY IN THIS CASE AND CONCLUDED THAT THE RECEIPT OF ENTIRE CONSIDERATION WAS NOT A FACTOR T O BE SEEN FOR APPLICATION OF SECTION 2(47)(V). ONCE THESE TWO DECISIONS WER E CONSIDERED ALONG WITH THE PROVISIONS OF SECTION 45 R.W.S. 2(47)(V) THEN IT WOULD EMERGE AS UNDER: (A) THE JOINT DEVELOPMENT AGREEMENT HAS BEEN ENTER ED INTO BETWEEN THE PUNJAB COOP HOUSING BUILDING SOCIETY LTD. MOH ALI, OF WHICH ASSESSEE IS MEMBER, AND. M/S HASH BUILDERS (P) LTD. AND M/S TATA HOUSING DEVELOPMENT COMPANY LTD. MUMBAI AS ON 25.2. 2007. B) THE MEMBERS OF THE SOCIETY SURRENDERED THEIR ALLOTMENT RIGHTS AND THE SOCIETY ON BEHALF OF MEMBERS ENTERED INTO THE JOINT DEVELOPMENT AGREEMENT IN LIEU OF 'ENTIRE CONSIDERATION' AS DESC RIBED IN THE JOINT DEVELOPMENT AGREEMENT IN THE PREVIOUS YEAR 2006-07 . 43 (C) THE RECEIPT OF CONSIDERATION WAS STRUCTURED AND THE ASSESSEE RECEIVED PART OF THE ENTIRE CONSIDERATION' DURING THE FINANCIAL YEAR 2006- 07. THIS CLEARLY SHOWS THAT THE TRANSFEREE IS READY AND WILLING TO PERFORM HIS PART OF CONTRACT. (D) IN VIEW OF CLAUSE 2.1 OF THE JOINT DEVELOPMENT AGREEMENT, THE OWNER HAS AT THE TIME OF MAKING THE AGREEMENT IRREV OCABLY AND UNEQUIVOCALLY GRANTED AND-ASSIGNED IN PERPETUITY AL L ITS RIGHTS TO DEVELOP, CONSTRUCT, MORTGAGE, LEASE, LICENSE, SELL AND TRANS FER THE PROPERTY I.E (21.2 ACRES OF LAND) ALONGWLTH ANY AND ALL CONSTRUCTIONS, TREES ETC. IN FAVOUR OF M/S TATA HOUSING DEVELOPMENT COMPANY LTD, FOR THE P URPOSE OF DEVELOPMENT, CONSTRUCTION, MORTGAGE, SALE , TRANSFE R, LEASE, LICENSE AND/OR EXPLOITATION FOR THE FULL UTILIZATION OF THE PROPER TY AND TO EXECUTE ALL THE DOCUMENTS NECESSARY TO CARRY OUT, FACILITATE AND EN FORCE THE RIGHTS IN THE PROPERTY. THUS, IN FACT THE OWNER HAS IRREVOCABLY AND UNEQUIVOCALLY GRANTED AND ASSIGNED IN PERPETUITY ALL THE RIGHTS W HICH AN OWNER CAN HAVE IN AN IMMOVEABLE PROPERTY. ALL THESE RIGHTS HAVE BE EN GIVEN ON DATE OF AGREEMENT I.E. 25.02.2007 AND EVEN POSSESSION HAS B EEN HANDED OVER IN THE FINANCIAL YEAR 2006-2007. THE PARA 2.1 CLEARLY STATES THAT ' THE OWNER HEREBY HANDS OVER THE ORIGINAL TITLE DEEDS OF THE P ROPERTY AS MENTIONED IN THE LIST ANNEXED HERETO AND MARKED AS ANNEXURE IV A ND PHYSICAL, VACANT POSSESSION OF THE PROPERTY HAS BEEN HANDED OVER TO THDC SIMULTANEOUSLY TO THE EXECUTION AND REGISTRATION OF THIS AGREEMENT TO DEVELOP THE SAME AS SET OUT THEREIN. THUS POSSESSI ON IN PART PERFORMANCE OF CONTRACT HAS BEEN HANDED OVER TO THE TRANSFEREE WITHOUT ANY AMBIGUITY IN THE PREVIOUS YEAR 2006-07 ITSELF. E) AN IRREVOCABLE TRANSFER HAS THUS BEEN MADE WHICH IS NOT DEPENDENT ON ANY CONDITION TO BE FULFILLED. F) FURTHER COINING TO 'CONSIDERATION' PART . AS P ER PARA 4,1 RS,6,00,000 PER HOLDER OF 1000 SQ,YARDS HAS TO BE PAID BY TRANS FEREE ON ACCOUNT OF EARNEST MONEY , WHICH HAS BEEN PAID TO THE ASSESSEE , FURTHER AS PER PARA 4.1 (II) CLEARLY STATES THAT IN LIEU OF. RS, 1 2,00,000 PER PLOT HOLDER OF 500 SQ. YARDS AND RS.24,00,000 PER PLOT HOLDER OF 1 000 SQ. YARDS IS BEING PAID ON THE EXECUTION OF AGREEMENT AGAINST' W HICH THE SOCIETY ON BEHALF OF MEMBERS WILL TRANSFER 3.08 ACRES OF THE C ONTIGUOUS LAND OUT OF PROPERTY, IT HAS BEEN CONFIRMED THAT AGAINST THE AB OVE PAYMENT THE LAND MEASURING,3.08 ACRES HAS BEEN TRANSFERRED IN THE N AME OF THDC AND REGISTERED VIDE SALE DEED DATED 02/03/2007 I.E. IN THE PREVIOUS YEAR 2006- 07. G) THUS IT IS CLEAR FROM ABOVE TRANSACTIONS THAT TRANSFEREE, M/S TATA HOUSING DEVELOPMENT COMPANY LTD,, MUMABI, HAS PERFO RMED AND IS WILLING TO PERFORM HIS PART OF CONTRACT AND IN THIS PART PERFORMANCE OF 44 CONTRACT, THE ASSESSEE AND OTHER MEMBERS OF THE PUN JAB COOP HOUSING BUILDING SOCIETY LTD, MOHALI HAVE GIVEN POSSESSION OF THE WHOLE OF LAND OF 21.2 ACRES TO THE THDC AND HAVE FURTHER IRREVOCABLY AND UNEQUIVOCALLY GRANTED AND ASSIGNED ALL RIGHTS IN PERPETUITY TO TH DC IN THE SAID PREVIOUS YEAR I.E. 2006-07. H) HENCE IT IS ESTABLISHED BEYOND DOUBT THAT TRANS FER HAS TAKEN PLACE AS ENVISAGED AS PER SECTION 2(47)(V) OF THE-INCOME TAX ACT AND SINCE IT HAS TAKEN PLACE THROUGH SOCIETY OF WHICH ASSESSEE IS AL SO MEMBER SO SECTIONS 2(47) (VI) AND 2(47)(II) WOULD ALSO SUPPOR T SECTION 2(47)(V) OF THE INCOME TAX ACT. (I) NOW ONCE IT HAS BEEN ESTABLISHED THAT TRANSFER HAS TAKEN PLACE, THEN THE NEXT IMPORTANT QUESTION IS THE YEAR IN WHI CH THE TRANSFER HAS TAKEN PLACE AND IT IS THE YEAR IN WHICH THE TRANSFE R HAS TAKEN PLACE, WHOLE OF THE CONSIDERATION , WHETHER RECEIVED OR RECEIVAB LE IN CASH OR KIND, WOULD BE CHARGEABLE TO CAPITAL GAINS U/S 45, WHETHE R THE ENTIRE CONSIDERATION HAS BEEN RECEIVED IN THE YEAR OF TRAN SFER OR NOT. J) FROM THE DISCUSSION IN ABOVE PARAS IT IS CLEAR T HAT NOT ONLY AGREEMENT HAS BEEN ENTERED INTO IN, THE PERVIOUS YEAR 2006-07 BUT THE OWNER HAS AT THE TIME OF MAKING THE AGREEMENT IRREVOCABLY AND UN EQUIVOCALLY GRANTED AND ASSIGNED IN PERPETUITY ALL ITS RIGHTS TO DEVEL OP, CONSTRUCT, MORTGAGE, LEASE, LICENSE, SELL AND TRANSFER THE PROPERTY I.E (21.2 ACRES OF LAND) ALONGWITH ANY AND ALL CONSTRUCTIONS, TREES ETC. IN FAVOUR OF M/S TATA HOUSING DEVELOPMENT COMPANY LTD. K) FURTHUR M/S TATA HOUSING DEVELOPMENT COMPANY LTD HAS ALSO IN PART PERFORMANCE OF CONTRACT HAS MADE THE PAYMENTS TO THE OWNERS AND IS WILLING TO PERFORM HIS PART, OF CONTRACT AND THE ME MBERS OF SOCIETY IN THIS PART PERFORMANCE OF CONTRACT HAVE ASSIGNED FULL RIG HTS IN THE FAVOUR OF TRANSFEREE IN THE PREVIOUS YEAR 2006-07 ITSELF AND SURRENDERED ALLOTMENT LETTERS TO ENABLE THE SOCIETY TO ENTER INTO TRIPAR TITE AGREEMENT WITH HASH AND THDC. L) MOST IMPORTANTLY PHYSICAL AND VACANT POSSESSION OF WHOLE OF THE LAND OF 21.2 ACRES HAS BEEN HANDED TO M/S TATA HOUSING DEVE LOPMENT COMPANY LTD. IN THE PREVIOUS YEAR 2006-07, SAME IS CLEAR FR OM PARA 2.1 OF THE JOINT DEVELOPMENT AGREEMENT AND DISCUSSED IN DETAIL IN PR ECEEDING PARAGRAPHS. M) THUS THE TRANSFER WOULD BE DEEMED TO HAPPEN IN THE PREVIOUS YEAR 2006-07 ITSELF. N) IT HAS ALREADY BEEN DISCUSSED IN DETAIL THAT REG ISTRATION OF CONVEYANCE DEED AND RECEIPT OF ENTIRE CONSIDERATION IS NOT AT ALL IMPORTANT 45 IN THE YEAR IN WHICH DEEMED TRANSFER U/S 2(47)(V) O F IT ACT HAS TAKEN PLACE. O) FURTHER THE AGREEMENT IS CLEAR AND THERE IS NO AMBIGUITY REGARDING IRREVOCABLE RIGHTS BEING GIVEN TO THE TRANSFEREE. A S REGARDS CERTAIN PETTY CONDITIONS AND PROVISIONS RELATING TO TERMINATION O F THE CONTRACT, IT IS OBSERVED THAT THESE CLAUSES ARE NECESSARY PART OF S UCH TYPE OF JOINT DEVELOPMENT AGREEMENT. AT THE SAME TIME SUCH AGREEM ENTS INCLUDING THIS AGREEMENT HAS THE PROVISIONS OF 'DISCLAIMER' 'PARTI AL INVALIDITY' 'INDEMNITY' AND 'ARBITRATION'. THE DISPUTES ARISING, IF ANY, SH ALL BE RESOLVED AS PER THE PROVISIONS AND AWARDS SHALL BE GRANTED, IN APPROPRI ATE CASES BY THE ARBITRATOR. THESE PROVISIONS ARE THERE TO SAFEGUARD THE INTEREST OF ALL THE PARTIES TO THE JOINT DEVELOPMENT AGREEMENT AND PART IES WOULD BE INDEMNIFIED BY EACH OTHER AND SHALL ALSO RECEIVE AW ARD IF THE TERMS/CONDITIONS ARE NOT FULFILLED. P) AS REGARDS APPLICABILITY OF SECTION 54F, THERE A RE-CERTAIN CONDITIONS WHICH ARE ATTACHED WITH SECTION 54F ALSO WHICH HAVE TO BE FULFILLED BEFORE WHICH EXEMPTION UNDER THAT SECTION IS AVAILABLE TO THE ASSESSEE. THE ASSESSEE HAS NOT EVEN TRIED TO MAKE ANY CLAIM BY SH OWING THAT HE HAS FULFILLED THE SAID CONDITIONS TO BE ELIGIBLE FOR EX EMPTION UNDER SECTION 54F, SO EXEMPTION CANNOT BE GIVEN IN SUCH A SITUATION U/ S 54F. Q) THE JUDGMENT RELIED UPON BY THE ASSESSEE ARE NOT APPLICABLE TO THE CASE OF ASSESSEE AS MOST OF THEM PERTAIN TO THE PRE VIOUS YEAR BEFORE SECTION 2(47)(V) AND 2(47)(VI) WAS INSERTED W.E.F. 1.4.1988. OTHER JUDGMENTS REFERRED BY ASSESSEE ARE DISTINGUISHABLE AS FOLLOWS: ACIT VS PUSPA DEVI: THIS RULING HAS BEEN IN FACT IN FAVOUR OF REVENUE AND COMPLETELY RATIFIES THE PRINCIPLES LAID DOWN IN THE JUDGMENT OF CHATURBHUH DWARKADAS KAPADIA VS CIT AS IT SAYS THAT TRANSFER O F CAPITAL ASSET TOOK PLACE BY VIRTUE OF AGREEMENT DATED 07/09/1991 IN TH E FINANCIAL YEAR 1991- 92 AND AS SUCH, THE AO WAS FULLY JUSTIFIED IN LEVYI NG CAPITAL GAINS IN THE SAME PREVIOUS YEAR. II) CIT VS K. JEEIANI BASHA: THIS RULING SUPPORTS T HE CONTENTION OF REVENUE THAT ENTIRE CONSIDERATION RECEIVABLE FOR THAT PART OF PROPERTY WOULD 'BE' TAXABLE WHICH HAS BEEN PARTED WITH OR TRANSFERRED E VEN WHEN WHOLE OF THE CONSIDERATION LIES NOT BEEN RECEIVED. . III) ZUARI ESTATE DEVELOPMENT & INVESTMENT CO. (P) LTD, VS DCIT: THIS CASE IS ALSO NOT RELEVANT AS IT PERTAINS TO AGREEME NT ENTERED INTO IN 1984 MUCH BEFORE SECTION 2(47(V) WAS INSERTED . 24. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE MAD E DETAILED SUBMISSIONS. FURTHER WRITTEN SUBMISSIONS HAS 46 ALSO BEEN FILED. HE CARRIED US THROUGH THE FACTS OF THE CASE BY REFERRING TO VARIOUS DOCUMENTS IN PAPER BO OK AND ALSO CASE LAWS AS WELL AS COMMENTARY BY, MULLA DINSHAW FREDERICK MULLA ON THE INTERPRETATION OF SECTION 53A OF TRANSFER OF PROPERTY ACT. THE SUBMISSIONS C AN BE SUMMARIZED AS UNDER: I FIRST OF ALL HE REFERRED TO PROVISIONS OF SECTIO N 2(47)(V) OF IT ACT AND SECTION 53A OF T.P. ACT AND SUBMITTED THAT FOLLOWING CONDITIONS EMERGED FOR AT TRACTING THESE PROVISIONS- A THERE MUST BE CONTRACT OF TRANSFER FOR CONSIDERA TION FOR AN IMMOVABLE PROPERTY; B CONTRACT MUST BE IN WRITING C TERMS NECESSARY TO CONSTITUTE TRANSFER SHOULD BE ASCERTAINABLE WITH REASONABLE CERTAINTY. D THE TRANSFEREE MUST HAVE IN PART PERFORMANCE TAK EN THE POSSESSION OF THE PROPERTY OR PART THEREOF FRO M THE TRANSFEROR AND IF ALREADY IN POSSESSION, CONTINUES IN THE POSSESSION IN PART PERFORMANCE OF THE CONTRACT. E TRANSFEREE MUST HAVE DONE SOMETHING IN FURTHERAN CE OF THE CONTRACT. F THE TRANSFEREE MUST HAVE PERFORMED OR WILLING TO PERFORM HIS OBLIGATIONS IN SUCH CONTRACT. IN VIEW OF THE ABOVE CONDITIONS IN THE PRESENT CAS E, CONDITION NO. (D) AND (F) HAVE NOT BEEN COMPLIED B ECAUSE THE ASSESSEE AND/OR SOCIETY HAS NOT HANDED OVER TH E POSSESSION TO THDC/HASH. IN THIS REGARD HE PARTICU LARLY REFERRED TO CLAUSE 2(1) OF THE JDA AND POINTED OUT THAT THE POSSESSION WAS TO BE HANDED OVER TO THDC/HASH SIMULTANEOUSLY WITH THE EXECUTION AND REGISTRATION OF THE JDA. SINCE THE JDA WAS NOT REGISTERED THEREFORE, IT IS CLEAR THAT THE POSSESSION WAS NOT HANDED OVER. IN ANY CASE THE POSSESSION IF AT ALL WAS GRANTED AS PERMI SSIVE LICENSE WITH RIGHT TO DEVELOPERS I.E. THDC/HASH ON LY FOR THE PURPOSE OF DEVELOPMENT OF THE LAND AND NOT AS PART OF PERFORMANCE OF THE CONTRACT OF TRANSFER OF LAND. THE FACT 47 THAT POSSESSION WAS NOT HANDED OVER TO THE THDC/HA SH ALSO BECOMES CLEAR FROM THE SALE DEED DATED 2.3.20 07 (PLACED AT PAGE 119 TO 136). HE REFERRED TO CLAUS E A OF RECITATION CLAUSES AT PAGE 120 WHICH CLEARLY PROVI DES THAT VENDOR I.E. THE SOCIETY WAS OWNER AND IN POSSESSIO N OF TOTAL LAND MEASURING 160 KANAL AND 7 MARLAS EQUIVA LENT TO 21.2 ACRES IN VILLAGE KANSAL DISTT. MOHALI. THIS DEED WAS FOR SALE OF PART OF THE PROPERTY MEASURING ABOUT 3 .08 ACRES OUT OF TOTAL LAND CONTRACTED TO BE GIVEN TO THDC/HASH MEASURING ABOUT 21.2 ACRES. HE POINTED OUT THAT SALE DEED HAS BEEN EXECUTED ON 2.3.2007 WHERE AS JDA WAS EXECUTED ON 25.2.2007. THUS IT IS CLEAR T HAT NO POSSESSION WAS GIVEN ON 25.2.2007 OTHERWISE THE SO CIETY WOULD NOT BE IN POSSESSION ON 2.3.2007. SIMILARLY ONE MORE PART OF THE LAND WAS SOLD BY SECOND DEED EXEC UTED ON 25.4.2007 WHEREIN SIMILAR CLAUSE A AS IN THE FIRST DEED IS THERE (REFER PAGE 138 OF THE PAPER BOOK) S HOWS THAT THE SOCIETY WAS IN POSSESSION OF THE LAND ON LATER DATE. THESE TWO SALE DEEDS CLEARLY SHOW THAT NO POSSESSION WAS GIVEN ON THE DATE OF EXECUTION OF T HE JDA. IN ANY CASE THE JDA MAKES IT CLEAR THAT THE POSSESSION WAS TO BE GIVEN SIMULTANEOUSLY TO THE REGISTRATION OF JDA AND SINCE JDA WAS NOT REGISTER ED, NO POSSESSION WAS GIVEN. II IT WAS SUBMITTED THAT THE POSSESSION, IF AT AL L, WAS GIVEN TO THE DEVELOPERS I.E THDC/HASH WHICH WAS A PERMISSIVE LICENSE TO DEVELOP THE PROJECT AND NOT AS PERFORMANCE OF THE CONTRACT. REFERENCE WAS MADE T O SECTION 52 OF THE INDIAN EASEMENT ACT, 1882 WHICH READS AS UNDER: 52. LICENCE DEFINED WHERE ONE PERSON GRANTS TO ANOTHER, OR TO A DEFINI TE NUMBER OF OTHER PERSONS, A RIGHT TO DO, OR CONTINUE TO DO, IN OR UPON THE IMMOVABLE PROPERTY ALL THE GRANTOR, SOMETHING WHICH WOULD, IN THE ABSENCE OF SUCH RIGHT , BE UNLAWFUL AND SUCH RIGHT DOES NOT AMOUNT TO AN EASEM ENT OR AN INTEREST IN WHICH THE PROPERTY, THE RIGHT IS CALLED A LICENSE. IT WAS CONTENDED THAT SECTION 2(47)(V) R.W.S. 53A OF T.P ACT REFERS TO LEGAL POSSESSION WHEREBY THE TRANSFE REE HAS A LEGAL RIGHT TO ENTER UPON AND EXERCISE RIGHTS OF 48 POSSESSION I.E. CONTROL OVER THE PROPERTY. IN THI S CONNECTION HE REFERRED TO THE OBSERVATION OF AUTHO RITY FOR ADVANCE RULING IN CASE OF JASVIR SINGH SARKARIA, 2 94 ITR 196. HE PARTICULARLY REFERRED TO PARA 26 TO 28 OF THE JUDGMENT. HE FURTHER REFERRED TO CLAUSE F (PAGE 17 OF THE PAPER BOOK) I.E., CLAUSE 2.1 OF THE JDA (PAGE 24 OF THE PAPER BOOK) AND SUBMITTED THAT CONTENTS OF THE SE CLAUSES WILL ENTIRELY SHOW THAT POSSESSION WAS GIV EN AND WAS ENVISAGED IN THE SHAPE OF LICENSE TO THE DEVEL OPERS FOR UNDERTAKING THE DEVELOPMENT OF PROPERTY AND LE GAL POSSESSION WAS NEITHER HANDED OVER OR INTENDED TO BE HANDED OVER. III MONEY WHICH IS RECEIVED AT THE TIME OF EXECUTI ON OF JDA CAN BE TERMED AS ADVANCE PAYMENT. IN ANY CASE WHEN THESE AMOUNTS WERE ADJUSTED AS PART OF SALE CONSIDERATION FOR SALE OF PART OF THE PROPERTY AND THE SAME HAVE BEEN RETUNED BY THE ASSESSEE AS LONG TE RM CAPITAL GAINS THROUGH REVISED RETURN IN THE YEAR O F RECEIPT. IV IT WAS EMPHASIZED THAT IN ANY CASE SECTION 53A OF T.P. ACT HAS BEEN AMENDED BY AMENDMENT ACT, 2001 WHEREBY REGISTRATION OF AGREEMENT HAS BEEN MADE MANDATORY FOR THE SAME TO BE ENFORCEABLE. SINCE J DA WAS NEVER REGISTERED THEREFORE, RECOURSE COULD NO T BE TAKEN TO SECTION 2(47)(V) OF THE ACT BECAUSE JDA W AS NOT REGISTERED. PURSUANT TO AMENDMENT IN SECTION 53A OF T.P. ACT WITH EFFECT FROM 24.9.2001 IT WAS ONLY T HE AMENDED PROVISION WHICH CAN BE READ WITH SECTION 2(47)(V) OF THE ACT. IN THIS REGARD HE REFERRED T O DECISION OF HON'BLE SUPREME COURT IN CASE OF SURANA STEELS P LTD. V. CIT, 237 ITR 777. IN THAT CASE IT WAS OBSERVED THAT WHEN A SECTION OR AN ACT OF PARLIAMENT IS INTRODUC ED INTO ANOTHER ACT, IT MUST BE READ IN THE SENSE IT BORE IN THE ORIGINAL ACT. IN OTHER WORDS, THE MEANING ATTACHE D TO THE ORIGINAL SECTION WHICH HAS BEEN REFERRED IN ANOTHE R ACT, HAS TO BE UNDERSTOOD AS SAME. THEREFORE, ONCE TH E ORIGINAL SECTION 53A OF T.P. ACT UNDERGOES AMENDME NT THE SAME HAS TO BE READ IN SECTION 2(47)(V) AS AMENDED AND THEREFORE, AS JDA IS NOT REGISTERED SECTION 2(47) (V) WILL NOT BE APPLICABLE. V THE LD. COUNSEL OF THE ASSESSEE REFERRED TO THE DECISION OF HON'BLE BOMAY HIGH COURT IN CASE OF CHATURBHUJ DWARKADAS KAPADIA V CIT (SUPRA) AND TRI ED TO DISTINGUISH THE SAME. HE SUBMITTED THAT THIS DECI SION 49 CANNOT BE TAKEN AS AN AUTHORITY FOR THE PROPOSITIO N THAT DATE OF AGREEMENT SHOULD BE RECKONED AS DATE OF TR ANSFER. IN ANY CASE, THE DECISION HAS TO BE SEEN FOR WHAT HAS BEEN HELD IN THE DECISION AND IN THIS CASE ULTIMAT ELY THE APPEAL OF THE ASSESSEE WAS ALLOWED WHICH MEANS THE TRANSFER WAS HELD TO HAVE TAKEN EFFECT ONLY AFTER RECEIPT OF SUBSTANTIAL PAYMENT OF CONSIDERATION. VI THE LD. COUNSEL OF THE ASSESSEE FURTHER POINTED OUT THAT THERE IS ANOTHER IMPORTANT CONDITION IN INVOK ING SECTION 2(47)(V) OF THE ACT R.W.S 53A OF T.P. ACT I.E. THE TRANSFEREE MUST HAVE PERFORMED OR WILLING TO PERFO RM HIS PART OF THE CONTRACT. IT WAS ARGUED THAT WILLINGN ESS OF THE TRANSFEREE TO PERFORM HIS PART OF THE CONTRACT IS NOT AN EMPTY FORMALITY AND IT HAS TO BE ABSOLUTE AND UNQU ALIFIED. THUS WILLINGNESS CANNOT BE CONDITIONAL OR CONTINGE NT ON SUBSEQUENT EVENTS. IN THE JDA FOLLOWING OBLIGATION S WERE TO BE COMPLIED BY THE TRANSFEREE (A) AS PER CLAUSE J OF THE JDA THE GOVERNMENT APPROVALS WERE TO BE OBTAINED BY THE TRANSFEREE I. E. THDC/HASH. (B) AS PER CLAUSE 3.1 OF JDA ALL BUILDING, PLANS A ND DESIGNS AND DRAWINGS ETC. FOR CONSTRUCTION OF THE PROJECT WERE TO BE PREPARED BY THE TRANSFEREE I.E. THDC/HA SH. (C) CLAUSE 4.1 AND 7.10 OF JDA PROVIDED REGARDING TIMELY PAYMENT OF CONSIDERATION. (D) CLAUSE 7.9 OF THE JDA PROVIDED THAT THDC/HASH SHALL OBTAIN ALL APPROVALS AND COMMENCE CONSTRUCTI ON WITHIN 6 MONTHS OF HAND OVER OF FINAL PLANS. (E) CLAUSE 8.4 PROVIDED OBLIGATION TO TAKE TIMELY APPROVAL AND CLAUSE 8.6 PROVIDED FOR PAYMENT OF VA RIOUS STATUTORY CHARGES IN RESPECT OF DEVELOPMENT CHARGE S, LICENSE FEE AND EXTERNAL DEFAULT ETC. FURTHER TO ABOVE OBLIGATION, TIME WAS OF ESSENCE IN THE CONTRACT WHICH BECOMES CLEAR FROM CLAUSE 1.2( A), 4.1 AND 7.10 REGARDING TIMELY PAYMENT AND CLAUSE 14(IV ) REGARDING TERMINATION OF CONTRACT. 50 IN THE CASE BEFORE US, THERE WAS NO WILLINGNESS ON THE PART OF DEVELOPER I.E. THDC/HASH TO PERFORM THE AB OVE OBLIGATION BECAUSE OF THE FOLLOWING (I) THDC/HASH FAILED TO OBTAIN NECESSARY APPROVAL AND DID NOT UNDERTAKE ANY DEVELOPMENT WORK ON LAND. (II) THDC/HASH I.E. DEVELOPER HAS NOT PAID TIMELY PAYMENT IN TIMELY INSTALLMENTS OF AGREED CONSIDERA TION. (III) HASH HAS NOT OBTAINED APPROVAL FROM VARIOUS AUTHORITIES AND HAD NOT COMMENCED CONSTRUCTION WIT HIN SIX MONTHS OF HANDING OVER ALL FINAL PLANS. (REFE RENCE WAS MADE TO PAGE 34 OF THE PAPER BOOK). (IV) THDC/HASH VIDE LETTER DATED 4.2.2001 (PAGE 23 TO 24 OF THE ADDITIONAL EVIDENCE) REFUSED TO MAKE FUR THER PAYMENT AS STIPULATED IN THE AGREEMENT. (V) THE TRANSFEROR HAS GONE BACK ON THEIR REPRESEN TATION TO COMPLETE CONSTRUCTION IN THE TIME BOUND MANNER AND IN HANDING OVER THE FLATS TO THE SOCIETY /ITS MEMBERS . IN THIS REGARD HE ALSO REFERRED TO PARA 16 OF THE COMMENTARY BY MULLA DINSHAW FREDERICK MULLA (C OPY OF WHICH HAS BEEN FILED AT PAGE 102 AND 103 OF THE PAPER BOOK). HE POINTED OUT HOW THE LD. AUTHORS HAVE DI SCUSSED THE SIGNIFICANCE OF THE WILLINGNESS OF THE TRANSFE REE TO PERFORM THEIR PART OF THE CONTRACT. IN THIS REGAR D HE ALSO REFERRED TO VARIOUS OBSERVATIONS IN THE FOLLOWING CASE LAWS: GENERAL GLASS CO. PVT LTD. V DCIT, 14 SOT 132 (MUM ) K RADHIKA V DCIT, 149 TTJ 736 (HYD) DCIT V. TEJ SINGH, 138 ITD 489 (AGRA) THE FACTS OF THESE CASE LAWS AND THE FACTS IN THE PRESENT CASE BEFORE US ARE IDENTICAL AND THEREFORE, SINCE AS PER THESE DECISIONS THERE WAS NO WILLINGNESS ON THE PA RT OF THE TRANSFEREE TO PERFORM HIS/ITS OBLIGATION THE P ROVISIONS 51 OF SECTION 2(47) (V) R.W.S. 53A OF T.P. ACT COULD NOT BE APPLIED. VII IT WAS CONTENDED THAT REVENUE HAS ALSO HELD TH AT CLAUSE (VI) OF SECTION 2(47) IS ALSO APPLICABLE WH ICH IS NOT CORRECT BECAUSE THAT PROVISION IS APPLICABLE WHERE A PERSON BECOMES OWNER OF THE IMMOVABLE PROPERTY PURSUANT TO TAKING MEMBERSHIP OF COOPERATIVE SOCIE TY ETC. IN THE PRESENT CASE, THE JDA WAS ENTERED INT O BETWEEN SOCIETY AND TWO DEVELOPERS I.E. THDC/HASH AND THEREFORE, THERE WAS NO TRANSACTION INVOLVING MEMB ERSHIP OF COOPERATIVE SOCIETY/ COMPANY ETC. THEREFORE, CLEARLY CLAUSE (VI) OF SEC 2(47) IS NOT APPLICABLE IN THE PRESENT CASE. VIII THE LD. COUNSEL OF THE ASSESSEE ALSO SUBMITTE D THAT AS PER CLAUSE 4.1 OF THE JDA TRANSFER/SALE OF 21.2 ACRES OF LAND WAS TO BE MADE IN FAVOUR OF THDC/HASH ON A P RO- RATA BASIS CORRESPONDING TO PRO-RATA PAYMENTS RECE IVED BY THE SOCIETY AND RESPECTIVE MEMBERS OF THE SOCIETY FROM THDC/HASH BY EXECUTING THE SALE DEED. THIS CLEARLY SHOWS THAT TRANSFER WAS WHOLLY DEPENDENT ON TIMELY RECEIPT OF THE CONSIDERATION. AS POINTED OUT EARL IER ONLY TWO SALE DEEDS COULD BE EXECUTED AND WHATEVER PAYM ENTS HAVE BEEN RECEIVED, HAVE BEEN OFFERED FOR TAXATION UNDER THE HEAD CAPITAL GAIN. HOWEVER, THE ASSESSING O FFICER HAS SUBJECTED TO TAX WHOLE OF THE CONSIDERATION UN DER THE JDA AS CAPITAL GAIN WHICH IS TOTALLY UNCALLED FOR PARTICULARLY IN VIEW OF THE FACT THAT AN AGREEMENT HAS BEEN SUBSEQUENTLY TERMINATED AND THIS ACTION OF TH E ASSESSING OFFICER AMOUNTS TO TAXATION OF NOTIONAL SUM WHICH IS NOT PERMISSIBLE UNDER THE LAW. UNDER THE VARIOUS PROVISIONS OF THE ACT, ONLY REAL INCOME CAN BE TAX ED WHICH HAS BEEN EARNED BY THE ASSESSEE AND NO NOTIONAL IN COME CAN BE SUBJECTED TO TAX. IN THIS REGARD, RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS OF THE HON'BLE SUPREME COURT: SHOORJI VALLABHDAS & CO., 46 ITR 144 (S.C) CIT V. RAMAN AND CO. 67 ITR 11 (S.C) GODHRA ELECTRICITY CO. LTD. V CIT, 225 ITR 746 (S. C) 52 CIT V. BALRAMPUR COMMERCIAL ENTERPRISES LTD., 262 ITR 439 (CAL) CIT V. K. JEELANI BASHA, 256 ITR 282 FOBEOZ INDIA (P) LTD. V ITO, ITA NO. 9231/MUM/2010 (COPY FILED) IT WAS CLAIMED THAT SINCE THE FLATS WERE NEVER CON STRUCTED AND GIVEN TO THE ASSESSEE, THEREFORE, IF THE VALU E OF THE FLAT IS ADDED IN THE TOTAL CONSIDERATION THEN IT W ILL BE TOTALLY ON NOTIONAL BASIS AND SINCE NOTIONAL INCOM E CANNOT BE TAXED, THEREFORE, THE VALUE OF THESE FLATS, IN NO CASE, SHOULD BE CONSIDERED IN THE TOTAL CONSIDERATION. F URTHER IF NOTIONAL RECEIPTS WERE TAXED THEN THE ASSESSEE WOU LD BE DEPRIVED TO TAKE BENEFIT AVAILABLE IN THE IT ACT. FOR EXAMPLE IF WHOLE CONSIDERATION WAS RECEIVED THE AS SESSEE COULD HAVE EASILY TAKEN BENEFIT OF SECTION 54EC AN D OTHER PROVISIONS LIKE SECTION 54 BY INVESTING IN ANY SPE CIFIED ASSET OR A HOUSE. SINCE FULL CONSIDERATION HAS NO T BEEN RECEIVED AND THE ASSESSMENT OF THE WHOLE CONSIDERA TION WILL LEAD TO UNINTENDED CONSEQUENCES LIKE DENIAL O F DEDUCTION U/S 54 EC ETC. IX IT WAS CONTENDED THAT SINCE JDA HAS ALREADY BEE N TERMINATED VIDE SOCIETYS RESOLUTION DATED 13.6.20 11 AND THEREAFTER ON 31.10.2011 EVEN SPECIAL POWER OF ATT ORNEY EXECUTED EARLIER HAS BEEN REVOKED, THEREFORE, IN VIEW OF THE SUBSEQUENT EVENTS, THE BALANCE OF CONSIDERATIO N RECEIVABLE COULD NOT BE TAXED IN THE HANDS OF THE ASSESSEE. SUBSEQUENT EVENTS TO THE DATE OF TRANSA CTIONS HAVE TO BE RECKONED BEFORE TAXING A PARTICULAR TRANSACTION. HE ALSO SUBMITTED THAT IN ALMOST SIMI LAR CIRCUMSTANCES, SUBSEQUENT EVENTS WERE RECKONED BY MUMBAI BENCH OF THE TRIBUNAL IN CASE OF CHEMOSYN L TD. V ACIT, 139 ITD 68. HE REFERRED TO VARIOUS PARAS AN D POINTED OUT HOW THE SUBSEQUENT EVENTS WERE RECKONE D BY THE TRIBUNAL. X THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT WITHOUT PREJUDICE TO THE ABOVE IF IT IS CONSIDERED A CASE OF TRANSFER THEN THE VALUE OF FLAT TO BE ALLOTTED TO EACH OF THE MEMBER OF THE SOCIETY HAS NOT BEEN VALUED CORRECTL Y. THE ASSESSING OFFICER HAS REFERRED TO CLAUSE 3.5 OF IN TER-SE AGREEMENT ENTERED INTO BETWEEN THDC AND HASH. THE 53 LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASS ESSEE WAS NOT PARTY TO SUCH AGREEMENT AND PRICE AT WHICH THDC WAS SELLING FLATS TO HASH COULD NOT BE ADOPTED IN THE CASE OF THE ASSESSEE. IT WAS SUBMITTED THAT IF CL AUSE (5) WAS REFERRED TO IT CAN BE SEEN THAT REFERENCE HAS BEEN MADE TO TWO PRICES IE. RS. 2000/SQFT FOR 126 FLATS AND RS. 4500 PER SQFT FOR THREE FLATS. THIS PRICE IS NOTI ONALLY FIXED BY TWO DEVELOPERS AND DID NOT REFLECT THE PRICE OF THE FLATS. IN ANY CASE THE DEVELOPERS HAVE NOT BEEN A BLE TO OBTAIN NECESSARY APPROVAL FROM THE CONCERNED AUTHO RITIES, THEREFORE, CONSTRUCTION OF SUCH FLATS HAS NOT COM MENCED AND NO FLATS HAVE BEEN CONSTRUCTED AND ALLOTTED TO THE ASSESSEE, THEREFORE, NOTIONAL VALUE OF THE SAME C OULD NOT BE ADOPTED AND TAXED IN THE HANDS OF THE ASSESSEE . AT BEST THE ASSESSING OFFICER COULD HAVE TAKEN THE PR ICE OF RS. 2000 PER SQFT. XI IT WAS CONTENDED THAT IF THE VALUE OF THE FLAT WAS TO BE RECOGNIZED FOR THE PURPOSE OF COMPUTING THE CAP ITAL GAIN, THE CORRESPONDING DEDUCTION U/S54F OF THE AC T SHOULD HAVE BEEN ALLOWED PARTICULARLY IN VIEW OF C IRCULAR NO. 472 DATED 15.10.1986. IN THIS REGARD HE RELIE D ON THE FOLLOWING DECISIONS: CIT V. SARDARMAL KOTHARI AND ANOTHER, 302 ITR 286 (MAD) CIT V. R.L. SOOD, 245 ITR 727 (DELHI) CIT V. MRS. HILLA J.B. WADIA, 216 ITR 376 (BOM) MRS. SEETHA SUBRAMANIAN V ACIT, 59 ITD 94 (MAD BEN CH) USHA VAID V ITO, 53 SOT 385 SMT. RANJIT SANDHU V DCIT, 133 TTJ 46 (CHD) 25 ON THE OTHER HAND, THE LD. CIT DR FOR THE REVENUE MADE DETAILED SUBMISSIONS AND HAVE ALSO FILED WRIT TEN SUBMISSIONS. IT WAS POINTED OUT BY THE CIT-DR FOR THE REVENUE THAT THOUGH COPY OF THE SPECIAL POWER OF A TTORNEY HAS BEEN FILED AT PAGES 153 TO 165 BUT TWO OF THE MOST IMPORTANT CRUCIAL PAGES CONTAINING CLAUSE U TO Z AND LAST PAGE NO. 9 ARE MISSING. HE MADE AN ALLEGATIO N THAT THIS HAS BEEN DONE DELIBERATELY WHICH WAS CONTROVE RTED BY THE LD. COUNSEL OF THE ASSESSEE AND HE SUBMITTE D THAT 54 THIS IS A SIMPLE MISTAKE AND HE WOULD FILE THOSE P APERS. THE LD. DR FOR THE REVENUE IN VIEW OF THESE SUBMIS SIONS SUBMITTED THAT THESE PAGES CAN BE REFERRED IN CASE OF PUNJABI COOP HOUSE BUILDING SOCIETY LTD. IN ITA NO . 310& 556/CHD/2012 AT PAGE 40 TO 52 OF THE PAPER BOOK IN THAT CASE. THE SUBMISSIONS OF THE REVENUE CAN BE SUMMA RIZED AS UNDER: (I) THE SOCIETY PASSED A RESOLUTION IN ITS EXECUTI VE COMMITTEE ON 4.01.2007 WHICH WAS CONFIRMED / RATIF IED IN THE GENERAL BODY MEETING ON 25.2.2007. IN THE SOC IETY THERE WERE TWO TYPES OF MEMBERS HOLDING PLOTS OF 5 00 SQYD AND 1000 SQYD. IT WAS RESOLVED THAT MEMBERS WOULD SURRENDER THE RESPECTIVE PLOTS OF 500 SQYD AND 100 0 SQYD IN FAVOUR OF THE SOCIETY FOR FURTHER TRANSFER OF THE ENTIRE LAND BY THE SOCIETY IN FAVOUR OF THDC/HASH FOR TH E DEVELOPMENT OF PROPERTY IN LIEU OF CONSIDERATION O F RS. 82,50,000/- TO A MEMBER HOLDING 500 SQYD PLOT AND RS. 1,65,00,000/- TO A MEMBER HOLDING 1000 SQYD PLOT T O BE PAID IN FOUR INSTALLMENTS BY HASH DIRECTLY TO THE MEMBERS OF THE SOCIETY. IN ADDITION TO THIS CONSIDERATION MEMBER HOLDING 500 SQYD PLOT WAS TO RECEIVE A FURNISHED F LAT WITH SUPER AREA OF 2250 SQFT TO BE CONSTRUCTED BY THDC/ HASH AND TWO FLATS IN CASE OF MEMBERS HOLDING 1000 SQYD PLOTS. IT WAS ALSO RESOLVED THROUGH THIS RESOLUTION TO HA ND OVER THE POSSESSION OF THE PROPERTY AND ORIGINAL TITLE DEEDS OF THE PROPERTY TO THDC/HASH. THE SOCIETY WAS FURTHE R PERMITTED TO ALLOW THDC/HASH TO MORTGAGE, SELL THE PROPERTY AND CREATE CHANGE IN PROPERTY. THE SOCIE TY ALSO RESOLVED TO EXECUTE IRREVOCABLE POWER OF ATTORNEY IN FAVOUR OF THDC/HASH WHICH WAS ACTUALLY EXECUTED ON 26.2.2007 WHICH WAS DULY REGISTERED ALSO. PURSUAN CE TO THIS RESOLUTION, THE JDA WAS EXECUTED ON 25.2.2007 . THROUGH CLAUSE 2.1 IT WAS SPECIFICALLY AGREED THAT OWNER I.E. THE SOCIETY HAS IRREVOCABLY AND UNEQUIVOCALLY GRANTED AND ASSIGNED IN PERPETUITY ALL THE RIGHTS TO DEVEL OP / CONSTRUCT / MORTGAGE / LEASE / LICENSE, SELL AND T RANSFER THE PROPERTY. CLAUSE 6.7 OF THE JDA PROVIDES FOR EXECUTION OF IRREVOCABLE SPECIAL POWER OF ATTORNEY THROUGH WHICH RIGHTS OF DEVELOPMENT WERE GRANTED IN FAVOUR OF THDC/HASH AND RIGHT TO RAISE FINANCE BY MORTGAGE I N THE PROPERTY AND TO REGISTER THE CHARGE WITH COMPETENT AUTHORITY AND FURTHER POWER OF SALE ETC. WERE ALSO GIVEN THROUGH THIS POWER OF ATTORNEY. IT WAS AGREED THA T THE SOCIETY WOULD NOT REVOKE SUCH POWER OF ATTORNEY WI THOUT OBTAINING A SPECIFIC PRIOR WRITTEN CONSENT OF THDC /HASH. 55 THE ABOVE CLAUSES CLEARLY SHOW THAT POSSESSION OF THE PROPERTY WAS HANDED OVER TO THDC/HASH AND FURTHER RIGHTS TO MORTGAGE AND SALE OF THE PROPERTY WAS AL SO GIVEN. THE COMBINED READING OF VARIOUS CLAUSES IN THE JDA AND POWER OF ATTORNEY SHOW THAT: (I) ALL THE MEMBERS OF THE SOCIETY EXPRESSLY AND WILLINGLY HAD SURRENDERED THEIR RESPECTIVE PLOTS I N FAVOUR OF THE SOCIETY AND THE SOCIETY WAS AUTHORIZED TO SELL/TRANSFER THE ENTIRE LAND IN FAVOUR OF THDC/H ASH FOR A CONSIDERATION WHICH WAS SET OUT IN THE CLAUSES O F JDA. THE SOCIETY WAS ALSO AUTHORIZED TO HAND OVER ORIGI NAL TITLE DEEDS AND POSSESSION OF LAND TO THDC/ HASH. (II) THE SOCIETY HANDED OVER THE POSSESSION OF THE LAND AND ORIGINAL TITLE DEEDS OF THE PROPERTY TO THDC/ HASH. (III) SOCIETY PERMITTED THDC/HASH TO MORTGAGE, SEL L AND CREATE CHARGE IN THE PROPERTY. (IV) THE SOCIETY RESOLVED TO EXECUTE AN IRREVOCABL E SPECIAL POWER OF ATTORNEY WHICH COULD NOT BE REVOK ED IN ANY CIRCUMSTANCES WITHOUT PROPER CONSENT OF THDC/H ASH AND SUCH POWER OF ATTORNEY WAS ACTUALLY EXECUTED O N 26.2.2007. THROUGH THIS POWER OF ATTORNEY THDC/HAS H HAS BEEN AUTHORIZED TO MORTGAGE OR CREATE CHARGE B Y THE SOCIETY. THDC/HASH WAS AUTHORIZED TO GIVE THE POSSESSION OF THE PROPERTY OR ANY PART THEREOF TO THE AUTHORITIES TO WHOM SAME WAS REQUIRED TO BE HANDED OVER WHICH WAS NOT POSSIBLE UNLESS THDC/HASH WAS HANDED OVER THE POSSESSION OF THE PROPERTY AND THE RIGHTS OF THE OWNERSHIP. THROUGH THIS POWER OF ATTORNEY THE RIG HT TO SELL WAS ALSO GIVEN WHICH IS AGAIN NOT POSSIBLE WI THOUT TRANSFER OF POSSESSION OR OWNERSHIP. THESE CLAUSE S CLEARLY SHOW THAT COMPLETE CONTROL OVER THE PROPER TY CONFIRMING ALL PRIVILEGE OF OWNERSHIP WAS GIVEN IN FAVOUR OF THDC/HASH AND THUS SUCH TRANSFER OF OWNERSHIP SATISFIES THE REQUIREMENTS OF SECTION 45 R.W. CLAU SE (II), (V), (VI) OF SECTION 2(47) OF THE ACT. (II) THE LD. CIT DR FOR THE REVENUE CONTENDED THAT HON'BLE SUPREME COURT IN CASE OF SUNIL SIDHHARATH BHAI V CIT, 156 ITR 509 AND CIT V. NARANG PRODUCTS, 219 I TR 478 HAS CLEARLY HELD THAT DEFINITION OF TRANSFER U /S 2(47) IS INCLUSIVE ONE AND DOES NOT EXCLUDE CONTEXTUAL OR O RDINARY 56 WORD MEANING OF TRANSFER. FURTHER IN CASE OF AJ AY KUMAR SHAH JAGATI V CIT, 168 TAXMAN 53 IT WAS OBSE RVED THAT FOR THE PURPOSE OF SECTION 45 OF THE ACT THE WORD TRANSFER AS DEFINED IN IT ACT IS REQUIRED TO BE CONSIDERED AND NOT SALE AS INDICATED IN THE TRANSF ER OF PROPERTY ACT. THEREFORE, U/S 2(47) OF THE ACT, IT IS TRANSFER WHICH IS ONE OF THE MOST IMPORTANT INGR EDIENT FOR LEVY OF TAXATION U/S 45 WHICH IS TO BE COMPLIE D WITH. FOR INVOKING SECTION 2(47) (V) WHAT IS REQUIRED IS THAT AN AGREEMENT TO SELL HAS BEEN ENTERED BY THE TRANSFER OR WITH THE TRANSFEREE AND POSSESSION HAS BEEN HANDED OVER BY THE TRANSFEROR TO THE TRANSFEREE IN PART PERFORMAN CE OF THE CONTRACT U/S 53A OF T.P. ACT. IN THIS REGARD HE R ELIED ON THE FOLLOWING DECISIONS:- 1) AUTHORITY FOR ADVANCE RULING (AAR) NEW DELHI IN THE CASE OF JASBIR SINGH SARKARIA 294 ITR 196 2) CHATURBHUJ DWARKADAS KAPADIA V CIT 260 ITR 491 (BOM.) 3) C.RAVI VS DCIT IN 325 ITR 417 (KER) 4) CIT V DR. T.K. DAYALU 202 TAXMAN 531 (KAR.) 5) D. KASTURI V CIT & ANR 323 ITR 40 (MAD.) 6) CIT V DHIR & CO. COLONISERS (P) LTA 288 ITR 561 (P&H) (III) THE LD. CIT DR FURTHER SUBMITTED THAT ASSESS EES CASE APART FROM BEING COVERED UNDER CLAUSE (V) OF SECTION 2(47) IS ALSO COVERED BY CLAUSE (VI) OF SECTION 2( 47) OF THE ACT. CLAUSE (VI) IS APPLICABLE IN CASES WHERE ANY TRANSACTION IS ENTERED INTO WHICH HAS THE EFFECT O F TRANSFERRING AND ENABLING THE ENJOYMENT OF IMMOVA BLE PROPERTY. IN THIS REGARD HE RELIED ON THE DECISI ONS OF MUMBAI BENCH D OF THE TRIBUNAL IN MS RUBAB M. KAZERANI V JCIT 91 ITR 429(MUM.), ITAT HYDERABAD A BENCH IN D. ACHUTHA RAO VS ACIT 106 ITD 388 (HYD) AND ITAT DELHI BENCH D BENCH IN ACIT V SMT. PUSHPA DEVI JAIN 93 ITD 289 (DELHI). 57 (IV) HE FURTHER SUBMITTED THAT CLAUSE (V) & (VI) O F SECTION 2(47) OF THE ACT WERE INSERTED W.E.F. 1.4.1988 BY FINANCE ACT, 1987. BEFORE THAT, PASSING OF THE TITLE IN TH E PROPERTY WAS NECESSARY CONDITION TO CONSTITUTE A TRANSFER U NDER THE ACT IN VIEW OF THE VARIOUS PRONOUNCEMENTS OF THE C OURTS. IN THE MEANTIME IT WAS NOTICED BY THE GOVERNMENT T HAT MANY PROPERTIES WERE BEING TRANSFERRED WITHOUT EXE CUTION OF SALE DEED THROUGH VARIOUS DOCUMENTS WHAT IS POP ULARLY KNOWN AS POWER OF ATTORNEY TRANSACTIONS. TO CURB THE LEAKAGE OF REVENUE, THROUGH SUCH TRANSACTION, CLAU SES (V) & (VI) WERE ADDED TO SECTION 2(47) WHICH DEFINES T RANSFER. THIS HAS BEEN EXPLAINED BY CIRCULAR NO. 495 DATED 22.9.1987. THE BOARD HAS CLARIFIED THROUGH PARAS 11.1 & 11.2 THAT NEWLY INSERTED CLAUSES (V) & (VI) WOULD ENLARGE THE DEFINITION OF TRANSFER WHEREBY THE CASES OF TR ANSFER WHAT IS POPULARLY KNOWN AS POWER OF ATTORNEY TRANSACTION WHICH ALLOWS THE ENJOYMENT OF RIGHT IN THE PROPERTY WOULD BE COVERED BY NEW DEFINITION. THE N EW CLAUSES WOULD ALSO COVER ARRANGEMENTS BY WHICH THE PROPERTY COULD BE ENJOYED BY BECOMING A MEMBER OF THE COMPANY OR SUCH OTHER ARRANGEMENT. ACCORDING TO H IM IT MAY NOT BE OUT OF PLACE TO INVOKE HEYDONS RULE OF INTERPRETATION OF STATUTES FOR INTERPRETING THESE CLAUSES. THE HEYDONS RULE IS MAINLY APPLICABLE WHEREVER TH E TRUE MEANING OF AMENDED PROVISIONS IS TO BE UNDERSTOOD. IF THE AMENDMENTS ARE SEEN THROUGH PRISM OF HEYDONS RULE, IT WOULD BECOME CLEAR THAT AMENDED CLAUSES H AVE BEEN BROUGHT ON THE STATUTE TO OVERCOME THE EARLIE R MISCHIEF. PROPERTIES COULD BE TRANSFERRED WITHOUT EXECUTION OF PROPER SALE DEEDS AND THE SAME COULD BE ENJOYED BY THE RESPECTIVE BUYERS WITHOUT ANY TAXAT ION ON THE PART OF SELLERS. (V) THE LD. DR POINTED OUT THAT THERE IS NO FORCE IN THE SUBMISSIONS THAT SINCE SECTION 53A OF THE TRANSFER OF PROPERTY ACT HAS ITSELF GONE UNDER AMENDMENT W.E.F . 24.9.2011 WHEREIN THE REGISTRATION OF THE AGREEMEN T HAS BEEN MADE MANDATORY AND, THEREFORE, SINCE JDA WAS NOT REGISTERED IT CANNOT BE CONSTRUED TO BE COVERED UN DER CLAUSE (V) OF SECTION 2(47). IT WAS CONTENDED THA T DOCTRINE OF PART PERFORMANCE WAS GIVEN STATUTORY RECOGNITION IN SECTION 53A OF THE TRANSFER OF PROP ERTY ACT AND IT WAS DESIRED ONLY TO PROTECT POSSESSION OF A TRANSFEREE WHEN THE TRANSFER FALLS SHORT OF REQUIR EMENT LAID DOWN BY LAW. THE PLEA OF THE PART PERFORMANCE COULD BE TAKEN ONLY AS SHIELD IN DEFENCE AND NOT AS A SW ORD. 58 THE MOST IMPORT INGREDIENT OF SECTION 53A OF T.P. ACT WAS THE CHANGE OF POSSESSION. THE AMENDMENT TO SECTIO N 53A OF THE TRANSFER OF PROPERTY ACT HAS BEEN DONE PERH APS TO COLLECT REVENUE. IN ANY CASE, THE SAME CANNOT HA VE A IMPACT ON THE CLAUSE (V) OF SECTION 2(47). THIS I S SO BECAUSE CLAUSE (V) CLEARLY EMPLOYS LANGUAGE BY USI NG THE EXPRESSION PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROP ERTY ACT. THE LEGISLATURE INTENTIONALLY NOT EMPLOYED THE EXP RESSION IN PART PERFORMANCE OF CONTRACT AS DEFINED UNDER SECTION 53A OF TRANSFER OF PROPERTY ACT. THEREFORE, IT I S NATURE OF CONTACT WHICH IS SIMILAR TO THE NATURE OF CONTR ACT U/S 53A OF THE TRANSFER OF PROPERTY ACT WHICH IS RELEV ANT TO SECTION 2(47)(V). IN ANY CASE HON'BLE SUPREME COU RT IN THE CASE OF CIT VS PODAR CEMENT (P) LTD 226 ITR 62 5 HAS CLEARLY HELD THAT PRINCIPLE OF COMMON LAW, THE TR ANSFER OF PROPERTY ACT AND THE REGISTRATION ACT WERE NOT CON CLUSIVE FOR INTERPRETATION OF PROVISION OF INCOME TAX ACT ON THE QUESTION OF OWNERSHIP OF THE PROPERTY. IF CONSEQUE NT TO THE AMENDMENT IN SECTION 53A OF THE TRANSFER OF PR OPERTY ACT, THE REGISTRATION OF AGREEMENT WAS CONSIDERED AS ONE OF THE ESSENTIAL INGREDIENT THEN SECTION 2(47)(V) WOULD BECOME REDUNDANT. THE INCOME TAX ACT CANNOT BE INTERPRETED IN SUCH A WAY THAT A PARTICULAR PROVIS ION BECOMES REDUNDANT. IN ANY CASE IT HAS BEEN HELD BY MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF SURESH CHAND AGGARWAL VS ITO (48 SOT 2010) THAT AMENDMENT MADE IN SECTION 53A OF THE TRANSFER OF PROPERTY AC T BY WHICH REQUIREMENT OF REGISTRATION OF TRANSFER HAS BEEN BROUGHT ON STATUTE NEED NOT BE APPLICABLE FOR CONS TRUING THE MEANING OF THE TRANSFER WITH REFERENCE TO SE CTION 2(47) OF THE ACT. SIMILAR VIEW HAS BEEN TAKEN BY T HE ITAT COCHIN BENCH IN THE CASE OF G. SREENIVASAN VS DCIT 140 ITD 235 AND PUNE BENCH OF THE TRIBUNAL IN THE CASE OF MAHESH MEMICHANDRA GANESHWADE 51 SOT 155. (VI) IT WAS CONTENDED THAT THERE IS NO FORCE IN TH E SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE TH AT THDC/HASH WERE NOT WILLING TO PERFORM THEIR PART O F THE CONTRACT. IT WAS POINTED OUT THAT DEVELOPERS I.E THDC/HASH HAVE MADE PAYMENTS AS PER CLAUSE 4(I)(II ) &(III) OF THE JDA. THE DEVELOPERS HAVE ALSO APPROA CHED THE CONCERNED AUTHORITIES FOR PERMISSIONS AND APPR OVALS AS PER THE OBLIGATION AGREED IN THE JDA. HOWEVER, A PIL WAS FILED AGAINST THE DEVELOPERS AGAINST TATA CAME LOT PROJECT (THIS IS THE NAME OF THE PROJECT WHICH WAS TO BE 59 DEVELOPED BY THDC ON THE LAND ACQUIRED FROM THE SOCIETY). THE PIL WAS DISMISSED VIDE ORDER DATED 26.3.2012 (COPY OF ORDER FILED ON RECORD). A REFE RENCE TO PARAS 3, 4, 25 & 26 OF THIS ORDER WOULD CLEARLY SH OW THAT HON'BLE HIGH COURT HAS OBSERVED THAT AGAINST THE R ULES OF SANCTION UNDER THE ENVIRONMENT (PROTECTION) ACT, T HE RESPONDENT I.E. DEVELOPERS HAVE SOUGHT A REVIEW OF THE ORDER BECAUSE OF THE FINDINGS ARRIVED AT WERE EX.P ARTE. NO ORDER IN THE REVIEW MATTER HAS BEEN PASSED BY THE COMPETENT AUTHORITY BECAUSE THE INTERIM ORDER PASS ED IN THE PIL WHICH WAS LATER ON CLARIFIED BY THE HON'BL E SUPREME COURT VIDE ORDER DATED 31.01.2012 PERMITTI NG THE CONCERNED AUTHORITIES UNDER THE DIFFERENT STATUTES GOVERNING THE MATTER TO EXERCISE THEIR RESPECTIVE JURISDICTION IN ACCORDANCE WITH THE LAW AND SUCH CLARIFICATIONS CAME IN LATER DECISION OF THE HIGH COURT. AS THE REJECTION UNDER THE WILDLIFE (PROTECTION) ACT HAS BEEN MADE BY THE AUTHORITY NOT COMPETENT TO DO SO, THE PROMOTERS HAVE SOUGHT REVIEW OF THE ORDER WHICH IS STILL PENDING FOR SOME OTHER REASONS. ALL THESE STEPS CL EARLY SHOWS THAT DEVELOPERS WERE WILLING TO PERFORM ALL THE OBLIGATIONS UNDERTAKEN UNDER JDA AND WERE PERUSING THE MATTER OF SANCTION OF THE PROJECT AT DIFFERENT LEV ELS VIGOROUSLY. THE COPY OF THE ORDER OF HON'BLE PUNJ AB & HARYANA HIGH COURT AND HON'BLE SUPREME COURT FILED AT PAGES 172 TO 174 OF THE PAPER BOOK ARE ON THE ISSU E OF LAND FALLING WITHIN CATCHMENT AREA OF SUKHNA LAKE AND LITIGATION IN THIS CASE IS BEING VIGOROUSLY FOLLOW ED BY DEVELOPERS . THE ASSESSEE HAS NOT LED ANY EVIDENCE TO SHOW THAT EITHER THE HASH OR THDC HAVE SHOWN RELUCTANCE TO TAKE THE VARIOUS STEPS REQUIRED FOR EXECUTION OF PROJECT. THE LD. CIT DR ALSO CONTEND ED THAT IT WAS ARGUED ON BEHALF OF THE ASSESSEE THAT DEVEL OPER HAVE NOT MADE THE PAYMENTS AS AGREED IN THE JDA, W HICH IS NOT CORRECT. IN THIS CONNECTION, HE REFERRED TO CLAUSE 4 (IV) WHICH CLEARLY STATES THAT PAYMENT OF RS. 31,92,75,000/- WAS TO BE MADE TO THE OWNER AND OR RESPECTIVE MEMBERS OF THE OWNER WITHIN SIX MONTHS FROM THE DATE OF EXECUTION OF THIS AGREEMENT OR WITHIN TWO MONTHS FROM THE DATE OF APPROVAL OF PLAN / DESIGN AND THE GRANT AND DRAWINGS OF FINAL LICENSE TO DEVELOP WHE REUPON THE CONSTRUCTION CAN COMMENCE WHICH EVER IS LATER. THIS CLEARLY SHOWS THAT PAYMENTS WAS TO BE MADE ON HAPPENING OF TWO EVENTS AND THE TIME LIMIT WAS TO BE APPLIED ON THE EVENT TAKING PLACE LATER ON. AS PE R CLAUSE 3.3 OF THE THDC/HASH WAS REQUIRED TO TAKE PERMISSI ON 60 FROM COMPETENT AUTHORITY AND THE COMPETENT AUTHOR ITY HAS BEEN DEFINED IN JDA AS PUNJAB URBAN PLANNING A ND DEVELOPMENT AUTHORITY (PUDA), DEPARTMENT OF TOWN A ND COUNTRY PLANNING, NAGAR PANCHYAT, NAYAGON, DEPARTM ENT OF LOCAL BODIES (PUNJAB) AND ANY OTHER AUTHORITY U NDER MUNICIPAL AUTHORITY. IT ALSO INCLUDES DEPARTMENT OF ENVIRONMENT, ELECTRICITY BOARD ETC. SINCE PERMISS ION FROM DEPARTMENT OF ENVIRONMENT ETC WAS NOT AVAILABLE BE CAUSE OF ONGOING LITIGATION WHICH WAS FILED THROUGH A PI L, THEREFORE, IT CANNOT BE SAID THAT DEVELOPER WAS NO T WILING TO MAKE THE PAYMENT. AS PER THE JDA, THE PAYMENT W OULD BECOME DUE ONLY WHEN SUCH PERMISSION WERE GRANTED BY VARIOUS AUTHORITIES. IN FACT M/S HASH BUILDER WRO TE A LETTER ON 04.02.2011 THROUGH WHICH IT WAS STATED T HAT SINCE HIGH COURT HAS STAYED THE CONSTRUCTION, THER EFORE, PAYMENT COULD NOT BE MADE. FURTHER, AS PIL WAS FI LED IN THE HON'BLE HIGH COURT AND THE MATTER HAD GONE EVE N TO THE HON'BLE SUPREME COURT AND THDC/HASH HAS VIGOROUSLY DEFENDED THE SAME. THIS FACT CLEARLY S HOWS THAT DEVELOPER I.E. THDC/HASH WAS WILLING TO PERFO RM IN ALL RESPECTS TO THE JDA. (VII) IT WAS ALSO CONTENDED THAT THE SOCIETY HAS A LREADY TERMINATED THE CONTRACT AND IN THIS RESPECT REFERE NCE WAS MADE TO THE RESOLUTION PASSED BY GENERAL BODY OF T HE MEETING DATED 13.6.2011 AND LEGAL NOTICE WAS ISSUE D TO THDC/HASH. FIRST OF ALL, THERE IS NO EVIDENCE ON RECORD TO SHOW THAT SUCH NOTICE WAS SERVED UPON THDC/HASH . IN ANY CASE, AS CONTENDED EARLIER, POWER OF ATTORNEY COULD NOT HAVE BEEN REVOKED BECAUSE IT WAS IRREVOCABLE P OWER OF ATTORNEY AS PER CLAUSE 6.7 OF THE JDA. FURTHER, THERE WAS ARBITRATION CLAUSE AND THAT MEANS A NOTICE FOR ARBITRATION WAS REQUIRED TO GIVEN OTHERWISE SUCH U NILATERAL CANCELLATION WAS NOT VALID IN THE EYES OF LAW. IF THE JDA WAS CANCELED THEN THERE SHOULD BE DOCUMENT SHOWING RETURN OF WHATEVER POSSESSION WAS GIVEN BY THE SOC IETY. THE DOCUMENTS SHOWING CANCELLATION IS ONLY A SELF SERVING DOCUMENT, WHICH CANNOT BE RELIED TO REFUSE THE EXI STENCE OF JDA AND FACT OF GIVING POSSESSION BY THE SOCIET Y TO THE DEVELOPER. FURTHER, THE SUBSEQUENT EVENT CANNOT INVALIDATE THE CONTRACT FOR TRANSFER OF THE PROPER TY BECAUSE UNDER THE TAX LAWS INCOME HAS TO BE DETERM INED FOR EACH YEAR SEPARATELY AND ONCE TRANSFER TOOK EF FECT IN ASSESSMENT YEAR 2007-08, THEN A SUBSEQUENT EVENT TAKING PLACE IN 2011 WILL NOT HAVE ANY EFFECT ON S UCH TRANSFER. IT HAS BEEN CONTENDED THROUGH WRITTEN 61 SUBMISSIONS THAT TOTAL CONSIDERATION OF THE PROPER TY WAS 2,37,03,75,000/- WHICH WAS CALCULATED AS UNDER:- (I) CONSIDERATION IN CASH (RS. 82,50,000 X 129 PLOTS) RS. 106,42,50,000/- (II) CONSIDERATION IN KIND (RS. 101,25,000/- X 129 PLOTS) RS. 130,61,25,000/- TOTAL RS. 237,03,75,000/- THE ABOVE TOTAL CONSIDERATION WOULD BE ENHANCED FI GURE BECAUSE TOTAL CONSIDERATION RECEIVED AND OR AGREED AGAINST THE SALE OF PROPERTY BY THE MEMBERS IS RE QUIRED TO CONSIDER THE VALUE OF FLATS WHICH WERE CONTRACT ED TO BE RECEIVED BY THE MEMBERS. ON THE BASIS OF ABOVE CALCULATION, THE CONSIDERATION PER ACRE OF LAND WO ULD COME TO ABOUT RS. 11.18 CRORES WHEREAS SOCIETY HAD REGI STERED A SALE DEED FOR LAND MEASURING 3.08 ACRES FOR ONLY RS. 15.48 CRORES WHEREAS THE ACTUAL CONSIDERATION SHOU LD BE ` 34.43 CRORES. THIS ONLY SHOWS THAT VALUE OF THE F LATS TO BE RECEIVED WAS NOT REFLECTED IN SUCH SALE DEED. N OW, IF IT IS BELIEVED THAT CONTRACT WAS CANCELLED AND DEVELO PER WAS ALLOWED TO RETAIN THE LAND WHICH HAS ALREADY B EEN REGISTERED IN THE NAME OF DEVELOPER THEN WHAT WOUL D HAPPEN TO THE FLATS WHICH WERE TO BE RECEIVED BY T HE VARIOUS MEMBERS OF THE SOCIETY. NO LEGAL ACTION W AS TAKEN AGAINST THE DEVELOPER FOR RECOVERY OF BALANC E OF CONSIDERATION IN THE FORM OF FLATS. THIS ONLY GOE S TO PROVE THAT CANCELLATION IS ONLY A MAKE BELIEVE STORY AND ACTUALLY NO CANCELLATION HAS BEEN DONE. 62 (VIII) IT WAS CONTENDED THAT THERE IS NO FORCE IN THE SUBMISSIONS THAT THE VALUE OF THE FLATS WHICH HAS NOT BEEN CONSTRUCTED, CANNOT BE INCLUDED IN THE TOTAL CONSI DERATION BECAUSE THAT WOULD BE A CASE OF TAXING THE NOTIONA L INCOME. HE REFERRED TO CLAUSE 4 OF THE JDA WHICH D EALS WITH THE CONSIDERATION AND POINTED OUT THAT ALLOTM ENT OF FLAT WAS PART OF THE CONSIDERATION. AS PER THE RE SOLUTION OF THE EXECUTIVE BODY OF THE SOCIETY WHICH WAS LA TTER RATIFIED BY THE GENERAL BODY AS WELL AS THE TERMS OF THE JDA VERY CLEARLY SHOW THAT IN ADDITION TO MONETARY CONSIDERATION EACH MEMBER HAVING 500SQYD PLOT WAS ENTITLED TO RECEIVE ONE FULLY FURNISHED FLAT MEASU RING 2250 SQFT AND THE MEMBERS HOLDING 1000 SQYD PLOT WERE ENTITLED TO TWO SUCH FLATS. THIS CLEARLY SHOWS TH AT UPON ENTERING THE JDA, THE MEMBERS GOT VESTED RIGHTS TO RECEIVE SUCH FLATS AND THEREFORE, AS PER THE DEFI NITION OF CAPITAL GAIN IN SECTION 45 SUCH FLAT HAS ALSO ARO SEN FROM THE JDA AND THEREFORE, HAS TO BE INCLUDED IN THE TOTAL CONSIDERATION. HE AGAIN EMPHASIZED THAT RECEIPT O F CONSIDERATION HAS NOTHING TO DO WITH ITS TAXABILIT Y U/S 45 AND IT IS THE ACCRUAL OF CONSIDERATION WHICH MEANS A PORTION OF THE CONSIDERATION WHICH CAN BE RECEIVED LATER ALSO. HE ALSO SUBMITTED THAT AS FAR AS THE VALUE OF THE FLAT IS CONCERNED, THE SAME HAS BEEN TAKEN BY THE ASSESSING OFFICER ON THE BASIS OF AGREEMENT ENTER ED BETWEEN THDC AND HASH AMONG THEMSELVES AND THE RAT E ADOPTED IS THE SAME AT WHICH THDC HAD AGREED TO SE LL THE FLAT TO HASH. HE ALSO REFERRED TO A FEW PAPER BOO KS FILED BY OTHER ASSESSEES WHEREIN VARIOUS NEWS PAPER CLIP PING HAS BEEN INCLUDED WHICH CLEARLY SHOW THAT FLATS WE RE BOOKED @ RS. 8000/- APPROXIMATELY IN THE PRE LAUN CH BOOKINGS. SUCH PRE LAUNCH BOOKINGS GENERALLY TAKE PLACE AT LOWER RATES OFFERED THEN IN THE GENERAL BOOKING S BY THE PUBLIC. THEREFORE, THE VALUE OF RS. 4500/- IS MOS T REASONABLE WHICH HAS BEEN ADOPTED BY THE ASSESSING OFFICER. 26 IN THE REJOINDER, THE LD. COUNSEL OF THE ASSES SEE SUBMITTED THAT THE ASSESSEE AND SOCIETY HAD NEVER HANDED OVER THE POS SESSION, THEREFORE, THERE IS NO QUESTION OF EXECUTING THE DOCUMENTS AT THE TIME OF CANCELLATION OF THE AGREEMENT FOR REVERSING THE POSSESSION. AS NO POSSESSION WAS GIVEN, THEREFORE, THERE IS NO QUESTION OF TAKING THE BACK POSSESSION. HE FURTHER SUBMITTED: (A) THAT NORMAL RULES OF INTERPRETATION SHOULD BE A PPLIED TO UNDERSTAND THE MEANING OF CLAUSE (V) AND (VI) OF SECTION 2(47) AND THIS IS NOT A FIT 63 CASE FOR INVOCATION OF HEYDONS RULE. HE SUBMITTED THAT LOT OF EMPHASIS HAS BEEN LAID BY THE LD. DR FOR THE REVENUE ON PARA 2.1 OF JDA TO PROVE THAT THE POSSESSION WAS HANDED OVER. HOWEVER, A CA REFUL READING OF THIS PARA WOULD SHOW THAT WHAT WAS CONTEMPLATED THR OUGH THIS PARA, WAS TO HAND OVER THE POSSESSION ON THE EXECUTION AND RE GISTRATION OF THE AGREEMENT. WHEN AN AGREEMENT IS READ IT HAS TO BE READ IN WHOLE AND THEREFORE, IT MAY NOT BE PROPER TO IGNORE THE WORD REGISTERED. (B) HE ALSO CONTENDED THAT LOT OF EMPHASIS WAS GIVE N ON THE IRREVOCABILITY CLAUSE IN RESPECT OF SPECIAL POWER OF ATTORNEY WHICH IS NOT CORRECT BECAUSE ONCE THE JDA IS TERMINATED, IRREVOC ABLE POWER OF ATTORNEY WOULD COME TO AN END AUTOMATICALLY. (C) HE CONTENDED THAT SIMPLY SAYING THAT THE CANCEL LATION WAS AN UNILATERAL ACT OF THE ASSESSEE, WOULD NOT SERVE ANY PURPOSE BECAUSE THE REVENUE CAN NOT SIT IN THE JUDGMENT WHEN THE ASSESS EE SHOULD CANCEL THE AGREEMENT OR NOT. CLAUSE 14 OF THE JDA SPECIFI CALLY PROVIDED FOR TERMINATION OF THE AGREEMENT ONLY IN THE EVENT OF D EFAULT AND THE ASSESSEE WAS REQUIRED TO GIVE NOTICE OF 30 DAYS IN TERMS OF CLAUSE 14(IV) AND SUCH NOTICE HAS ALREADY BEEN GIVEN. JDA WAS EN TERED IN 2007 AND ENDED IN 2011 AND THAT IS WHY THE ASSESSEE WAS FORC ED TO CANCEL THIS AGREEMENT. IN ANY CASE THDC/HASH ARE NOT RELATED TO THE ASSESSEE, THEREFORE, IT WAS NOT POSSIBLE TO CREATE SELF SERV ING DOCUMENTS. 27. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAREFULLY GONE THROUGH THE WRITTEN SUBMISSIONS FILE D BY BOTH THE PARTIES IN THE LIGHT OF MATERIAL ON RECORD , PAPER BOOKS AND VARIOUS JUDGMENTS CITED BY THE PARTIES. THE MAIN ISSUE IS WHETHER ASSESSEE IS LIABLE TO CAPITAL GAIN TAX IN THE YEAR UNDER CONSIDERATION I.E ASSESSMENT YEAR 2007-08 IN VIEW OF THE JDA. FOR CHARGING CAPITAL G AINS, THE CHARGING SECTION IS 45 AND THE RELEVANT PORTION IS AS UNDER:- SECTION 45. [(1)] ANY PROFITS OR GAINS ARISING FRO M THE TRANSFER OF A CAPITAL ASSET EFFECTED IN THE PREVIOU S YEAR SHALL, SAVE AS OTHERWISE PROVIDED IN SECTIONS [54, 54B, [ [54D, [54E, [54EA, 54EB,] 54F [ 54G AND 54H], BE CHARGEABLE TO INCOME- TAX UNDER THE HEAD CAPITAL GAINS, AND SHALL BE DEEMED TO BE THE INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE. 28 THE PLAIN READING OF THE ABOVE PROVISION WOULD S HOW THAT CHARGING AN ITEM OF INCOME UNDER THE HEAD CAP ITAL GAINS REQUIRE THREE INGREDIENTS I.E. (I) THERE SHO ULD BE SOME PROFIT. (II) SUCH PROFIT MUST BE ARISING ON A CCOUNT OF TRANSFER AND (III) THERE SHOULD BE CAPITAL ASSET W HICH HAS 64 BEEN TRANSFERRED. THERE IS NO DISPUTE THAT A CAPITA L ASSET WAS INVOLVED AND THERE WAS SOME PROFIT ALSO I.E. WH Y ASSESSEE HAS HIMSELF RETURNED INCOME UNDER THE HEAD CAPITAL GAINS;. THE DISPUTE IS MAINLY ON ACCOUNT OF TRANSFER AND THAT TOO WHETHER THE TRANSFER COULD BE COVERED UNDER CLAUSES (II), (V) & (VI) OF SECTION 2(47) SO AS TO BRING INTO PICTURE THE WHOLE OF CONSIDERATION ARISING ON TRANSFER OF SUCH ASSETS. WE SHALL DEAL WITH EACH OF THE ASPE CT IN DETAIL AT APPROPRIATE TIME. 29. APART FROM CHARGING PROVISIONS U/S 45 ANOTHER IMPORTANT PROVISION IS SECTION 48 WHICH DEALS WITH THE MODE OF COMPUTATION AND RELEVANT PORTION READS AS UNDER:- 48. THE INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAINS SHALL BE COMPUTED, BY DEDUCTING FROM THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF T HE TRANSFER OF THE CAPITAL ASSET THE FOLLOWING AMOUNTS, NAMELY : (I) EXPENDITURE INCURRED WHOLLY AND EXCLUSIVEL Y IN CONNECTION WITH SUCH TRANSFER; (II) THE COST OF ACQUISITION OF THE ASSET AND THE COST OF ANY IMPROVEMENT THERETO : 30 AGAIN PLAIN READING WOULD SHOW THAT CAPITAL GAIN WOULD BE COMPUTED BY CONSIDERING THE FULL VALUE OF CONSIDERATION WHETHER RECEIVED OR ACCRUING AS A RES ULT OF THE TRANSFER. THEREFORE, IT IS NOT ONLY THE CONSID ERATION RECEIVED WHICH IS RELEVANT BUT THE CONSIDERATION WH ICH HAS ACCRUED IS ALSO RELEVANT. 31. THE EXPRESSION TRANSFER HAS BEEN DEFINED U/S 2(47) OF THE ACT WHICH READS AS UNDER:- 2 (47) [TRANSFER, IN RELATION TO A CAPITAL ASSE T, INCLUDES, (I) THE SALE , EXCHANGE OR RELINQUISHMENT OF THE ASSET ; 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, SUCH CONVERSION OR TREATMENT ;] [OR] 65 [(IVA) THE MATURITY OR REDEMPTION OF A ZERO COUPON BOND; OR] [(V) ANY TRANSACTION INVOLVING THE ALLOWING OF T HE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A O F 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 CO-OPERATIVE SOCIETY, COMPAN Y OR OTHER ASSOCIATION OF PERSONS OR BY WAY OF ANY AGREEMENT O R ANY ARRANGEMENT OR IN ANY OTHER MANNER WHATSOEVER) WHIC H HAS THE EFFECT OF TRANSFERRING, OR ENABLING THE ENJOYMENT O F, ANY IMMOVABLE PROPERTY. EXPLANATION.FOR THE PURPOSES OF SUB-CLAUSES (V) AND (VI), IMMOVABLE PROPERTY SHALL HAVE THE SAME MEANING AS IN CLAUSE (D) OF SECTION 269UA ;] CLAUSES (V) & (VI) TO SECTION 2(47) OF THE ACT HAVE BEEN INSERTED BY FINANCE ACT, 1987 W.E.F. 1.4.1988. THE PURPOSE OF THIS INSERTION HAS BEEN EXPLAINED BY CBD T IN CIRCULAR NO. 495 DATED 22.9.1987. THE RELEVANT PAR T 11.1 AND 11.2 OF THE CIRCULAR READS AS UNDER:- 11.1 THE EXISTING DEFINITION OF THE WORD ' TRANSF ER ' IN SECTION 2(47) DOES NOT INCLUDE TRANSFER OF CERTAIN RIGHTS ACCRUIN G TO A PURCHASER, BY WAY OF BECOMING A MEMBER OR ACQUIRING SHARES IN A CO-OPERATIVE SOCIETY, COMPANY, OR AS WAY OF ANY AGREEMENT OR ANY ARRANGEMENT WHEREBY SUCH ANY BUILDING WHICH IS EITHER BEING CON STRUCTED OR WHICH IS TO BE CONSTRUCTED. TRANSACTIONS OF THE NATURE R EFERRED TO ABOVE ARE NOT REQUIRED TO BE REGISTERED UNDER THE REGISTRATIO N ACT, 1908. SUCH ARRANGEMENTS CONFER THE PRIVILEGES OF OWNERSHIP WIT HOUT TRANSFER OF TITLE IN THE BUILDING AND ARE A COMMON MODE OF ACQU IRING FLATS PARTICULARLY IN MULTI-STOREYED CONSTRUCTIONS IN BIG CITES. THE DEFINITION ALSO DOES NOT COVER CASES WHERE POSSESSION IS ALLOW ED TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT, OF T HE NATURE REFERRED TO IN SECTION 53A OF TRANSFER OF PROPERTY ACT, 1882. N EW SUB-CLAUSES (V) & (VI) HAVE BEEN INSERTED IN SECTION2(47) TO PREVEN T AVOIDANCE OF CAPITAL GAINS LIABILITY BY RECOURSE TO TRANSFER OF RIGHTS IN THE MANNER REFERRED TO ABOVE. 11.2 THE NEWLY INSERTED SUB-CLAUSE (VI) OF SECTION 2(47) HAS BROUGHT IN TO THE AMBIT OF TRANSFER, THE PRACTICE OF ENJOYMENT OF PROPERTY RIGHTS THROUGH WHAT IS COMMONLY KNOWN AS P OWER OF ATTORNEY ARRANGEMENTS. THE PRACTICE IN SUCH CASES I S ADOPTED NORMALLY WHERE TRANSFER OF OWNERSHIP IS LEGALLY NOT PERMITTED. A 66 PERSON HOLDING THE POWER OF ATTORNEY IS AUTHORIZED THE POWERS OF OWNER, INCLUDING THAT OF MAKING CONSTRUCTION. THE LEGAL OWNERSHIP IN SUCH CASES CONTINUES TO BE WITH THE TRANSFEROR. 32 BEFORE INSERTION OF THE CLAUSE (V) & (VI) TO SE CTION 2(47) OF THE ACT, THE POSITION OF LAW WAS THAT UNLE SS AND UNTIL A SALE DEED WAS EXECUTED FOR TRANSFER OF IMMO VABLE PROPERTY, THE SAME COULD NOT BE CONSTRUED AS TRANSF ER FOR THE PURPOSE OF CHARGING CAPITAL GAIN TAX. THIS WAS PARTICULARLY SO IN THE LIGHT OF VARIOUS JUDGMENTS PARTICULARLY THE JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF ALAPATI VENKATRAMIAN V CIT (57 ITR 185) (SC ). IN THIS CASE IT WAS HELD THAT IN THE CONTEXT OF TRANSF ER FOR THE PURPOSE OF CAPITAL GAIN TAX, WHAT IS MEANT BY TRANS FER IS THE EFFECTIVE CONVEYANCE OF THE CAPITAL ASSET BY A TRANSFEROR TO THE TRANSFEREE. DELIVERY OF POSSESSI ON AND AGREEMENT TO SELL BY ITSELF COULD NOT CONSTITUTE CONVEYANCE OF THE IMMOVABLE PROPERTY. IN THE MEANT IME APART FROM THIS DECISION A PRACTICE CAME INTO VOGU E BY WHICH CERTAIN PROPERTIES WERE BEING TRANSFERRED WIT HOUT EXECUTING THE PROPER SALE DEEDS. THIS WAS BEING DO NE BECAUSE THERE WAS RESTRICTION ON SALE OF PROPERTIES IN VARIOUS TOWNS E.G. IN CASE OF LEASE HOLD PLOTS AND FLATS IN DELHI IF THE SAME WERE TO BE TRANSFERRED, PERMISSIO N WAS REQUIRED TO BE TAKEN FROM THE GOVERNMENT / DDA AND TRANSFEROR WAS REQUIRED TO PAY 50% OF THE MARKET VA LUE COST (I.E. UNEARNED INCREASE) TO THE GOVERNMENT. TO AVOID SUCH PAYMENTS AND / OR ALSO TO AVOID THE PAYMENT OF STAMP DUTY OR CUMBERSOME PROCEDURE OF OBTAINING PERMISSION, SOME PROPERTIES WERE BEING SOLD BY WAY OF SALE AGREEMENT AND ALSO EXECUTION OF GENERAL POWER OF ATTORNEY AND POSSESSION WAS GIVEN ON RECEIPT OF FUL L CONSIDERATION WITHOUT EXECUTING THE PROPER SALE DEE DS ETC. WHICH AS MENTIONED EARLIER WAS NOT EVEN PERMIS SIBLE IN SOME CASES. THESE TRANSACTIONS ARE POPULARLY CA LLED POWER OF ATTORNEY TRANSACTIONS. TO AVOID THESE AND TO STOP THE LEAKAGE OF REVENUE, THE PARLIAMENT HAS INS ERTED CLAUSES (V) & (VI) TO SECTION 2(47) SO AS SUCH TYPE OF TRANSACTIONS ARE ALSO BE BROUGHT IN TO TAXATION NET . HOWEVER, INTERPRETATIONS OF THESE CLAUSES HAS LED T O LOT OF LITIGATION AND THE MAIN POINT OF LITIGATION WAS TH AT AT WHAT POINT OF TIME THE POSSESSION CAN BE SAID TO HAVE BE EN GIVEN. IN THE PRESENT CASE, THE REVENUE HAS MAINLY RELIED ON TWO DECISIONS NAMELY (I) CHATURBHUJ DWARKADAS KAPADIA V CIT 260 ITR 491 (BOM.) AND; (II) AUTHORIT Y FOR 67 ADVANCE RULING (AAR) NEW DELHI IN THE CASE OF JASBI R SINGH SARKARIA 294 ITR 196. 33. IN THE CASE OF CHATURBHUJ DWARKADAS KAPADIA V C IT (SUPRA), THE FACTS BEFORE THE HON'BLE BOMBAY HIGH COURT WERE THAT ASSESSEE WHO WAS AN INDIVIDUAL HAD 44/19 2 UNDIVIDED SHARE IN AN IMMOVABLE PROPERTY IN GREATER BOMBAY WHICH CONSISTED OF VARIOUS LANDS AND BUILDIN GS. BY AGREEMENT DATED AUGUST 18, 1994, THE ASSESSEE AGREED TO SELL TO FLOREAT INVESTMENT LTD, (HEREIN R EFERRED TO FLOREAT) HIS SHARE OF IMMOVABLE PROPERTY FOR A TOTAL CONSIDERATION OF RS. 1,85,63,220/- WITH RIGHT TO S AID FLOREAT TO DEVELOP THE PROPERTY IN ACCORDANCE WITH THE RULES / REGULATIONS FRAMED BY LOCAL AUTHORITIES. F OR THIS PURPOSE, THE ASSESSEE ALSO AGREED TO EXECUTE A LIMI TED POWER OF ATTORNEY AUTHORIZING FLOREAT TO DEAL WITH THE PROPERTY AND ALSO OBTAIN PERMISSIONS AND APPROVALS FROM VARIOUS AUTHORITIES. UNDER CLAUSE 11 OF THE AGREEM ENT, IT WAS PROVIDED THAT AFTER FLOREAT WAS GIVEN AN IRREVO CABLE LICENSE TO ENTER UPON THE ASSESSEES SHARE OF PROPE RTY AND AFTER FLORET INVESTMENT HAVE OBTAINED ALL NECES SARY APPROVALS, THE FLORET WAS ENTITLED TO DEMOLISH VARI OUS BUILDINGS FOR SETTLING THE CLAIMS OF THE TENANTS. U NDER CLAUSE 14 OF THE AGREEMENT, THE ASSESSEE WAS ENTITL ED TO RECEIVE PROPORTIONATE RENT TILL THE PAYMENT OF LAST INSTALLMENTS AND TILL THAT TIME ASSESSEE WAS BOUND TO PAY ALL OUTGOINGS. UNDER CLAUSE 20 OF THE AGREEMENT, IT WAS AGREED THAT SALE SHALL BE COMPLETED BY EXECUTION OF CONVEYANCE, HOWEVER, TILL THE MATTER WAS ADJUDICATE D BY THE HON'BLE HIGH COURT, NO CONVEYANCE WAS EXECUTED. PURSUANT TO THIS AGREEMENT, FLOREAT OBTAINED VARIOU S PERMISSIONS NAMELY (I) CLEARANCE FROM CRZ AUTHORITY DATED FEBRUARY 7, 1996; (II) LETTER FROM ULC FOR REDEVELOPMENT OF PROPERTY DATED APRIL 26, 1995. OT HER PERMISSIONS WERE ALSO OBTAINED DURING THE FINANCIAL YEAR ENDING MARCH 31, 1996 RELEVANT TO ASSESSMENT YEAR 1 996- 97. BY MARCH, 31, 1996, FLOREAT HAD PAID ALMOST TH E ENTIRE CONSIDERATION EXPECT FOR A SMALL SUM OF RS. 9,98,000/-. HOWEVER, THE COMMENCEMENT CERTIFICATE PERMITTING CONSTRUCTION OF THE BUILDING WAS ISSUED ON NOVEMBER 15, 1996. THE POWER OF ATTORNEY WAS EXECU TED ON MARCH 12, 1999. THE QUESTION AROSE WHETHER LIAB ILITY OF THE ASSESSEE FOR CAPITAL GAIN AROSE IN THE ASSES SMENT YEAR 1996-97 OR 1999-2000. THE OBSERVATION OF THE COURT HAS BEEN SUMMARIZED IN HEAD NOTE AS UNDER:- 68 CLAUSES (V) AND (VI) WERE INTRODUCED IN SECTION 2( 47) OF THE INCOME-TAX ACT, 1961, WITH EFFECT FROM APRIL 1, 1988. THEY PROVIDE THAT TRANSFER INCLUDES (I) ANY TRANSACTION WHICH ALLOWS POSSESSION TO BE TAKEN/RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER O F PROPERTY ACT, 1882, AND (II) ANY TRANSACTION ENTERE D INTO IN ANY MANNER WHICH HAS THE EFFECT OF TRANSFER RING OR ENABLING THE ENJOYMENT OF ANY IMMOVABLE PROPERTY . THEREFORE, IN THESE TWO CASES CAPITAL GAINS WOULD B E TAXABLE IN THE YEAR IN WHICH SUCH TRANSACTIONS ARE ENTERED INTO, EVEN IF THE TRANSFER OF THE IMMOVABLE PROPERTY IS NOT EFFECTIVE OR COMPLETE UNDER THE GENERAL LAW. UNDER SECTION 2(47)(V) ANY TRANSACTION INVOLVING ALLOWING OF POSSESSION TO BE TAKEN OVER O R RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER O F PROPERTY ACT WOULD COME WITHIN THE AMBIT OF SECTION 2(47)(V). IN ORDER TO ATTRACT SECTION 53A, THE FOLL OWING CONDITIONS NEED TO BE FULFILLED. THERE SHOULD BE A CONTRACT FOR CONSIDERATION ; IT SHOULD BE IN WRITIN G ; IT SHOULD BE SIGNED BY THE TRANSFEROR ; IT SHOULD PERT AIN TO TRANSFER OF IMMOVABLE PROPERTY ; THE TRANSFEREE SHOULD HAVE TAKEN POSSESSION OF THE PROPERTY ; LAST LY, THE TRANSFEREE SHOULD BE READY AND WILLING TO PERFO RM HIS PART OF THE CONTRACT. EVEN ARRANGEMENTS CONFIRMING PRIVILEGES OF OWNERSHIP WITHOUT TRANSFER OF TITLE COULD FALL UNDER SECTION 2(47)(V). SECTION 2( 47)(V) WAS INTRODUCED IN THE ACT FROM THE ASSESSMENT YEAR 1988-89 BECAUSE PRIOR THERETO, IN MOST CASES, IT WA S ARGUED ON BEHALF OF THE ASSESSEE THAT NO TRANSFER T OOK PLACE TILL EXECUTION OF THE CONVEYANCE. ASSESSEES USED TO ENTER INTO AGREEMENTS FOR DEVELOPING PROPERTIES WITH BUILDERS AND UNDER THE ARRANGEMENT WITH THE BUILDERS, THEY USED TO CONFER PRIVILEGES O F OWNERSHIP WITHOUT EXECUTING CONVEYANCE AND TO PLUG THAT LOOPHOLE, SECTION 2(47)(V) CAME TO BE INTRODUC ED IN THE ACT. . HELD, THAT SECTION 2(47)(V) READ WITH SECTION 45 INDICATES THAT CAPITAL GAINS WAS TAXABLE IN THE YEA R 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 THIS CASE, THE T EST 69 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 A S 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 D ATE OF THE CONTRACT, VIZ., AUGUST 18, 1994, WOULD BE TH E RELEVANT DATE TO DECIDE THE DATE OF TRANSFER UNDER SECTION 2(47)(V) AND, IN WHICH EVENT, THE QUESTION OF SUBSTANTIAL PERFORMANCE OF THE CONTRACT THEREAFTER WOULD NOT ARISE 34. THE HON'BLE COURT REFERRED TO CLAUSES (V) & (VI) OF SECTION 2(47) AND MADE THE FOLLOWING OBSERVATIONS A T PAGE 499 OF THE REPORT: .. THE ABOVE TWO CLAUSES WERE INTRODUCED WITH EFFECT FROM APRIL 1,1988. THEY PROVIDE THAT TRANSF ER INCLUDES (I) ANY TRANSACTION WHICH ALLOWS POSSESSIO N TO BE TAKEN/RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, AND (I I) ANY TRANSACTION ENTERED INTO IN ANY MANNER WHICH HAS THE EFFECT OF TRANSFERRING OR ENABLING THE ENJOYMENT OF ANY IMMOVABLE PROPERTY (SEE SECTION 269UA(D)). THEREFORE, IN THESE TWO CASES CAPITAL GAINS WOULD BE TAXABLE IN THE YEAR IN WHICH SUCH TRANSACTIONS ARE ENTERED INTO, EVEN IF THE TRANSFER OF THE IMMOVABLE PROPERTY IS NOT EFFECTIVE OR COMPLETE UNDER THE GENERAL LAW (SEE KANGA AND PALKHIVALAS LAW AND PRACTICE OF INCOME-TAX-VIII EDITION, PAGE 766). THIS TEST IS IMPORTANT TO DECIDE THE YEAR OF CHARGEABILITY OF THE CAPITAL GAINS. 35 THE ABOVE OBSERVATIONS WERE MADE ON THE BASIS OF OPINION EXPRESSED BY LD. AUTHOR IN THE COMMENTARY THE L AW AND PRACTICE OF INCOME TAX BY KANGA AND PALKHIVALA EIGHTH EDITION A T PAGE 766. RELEVANT OBSERVATIONS READ AS UNDER: CLS. (V) AND (VI) OF S. 2(47), INSERTED BY THE FIN ANCE ACT 1987 WITH EFFECT FROM 1 ST APRIL 1988, PROVIDE THAT TRANSFER INCLUDES (A) A NY TRANSACTION WHICH INVOLVES THE ALLOWING OF THE POSSESSION OF AN IMMOVABLE PROPERTY (S. 269UA(D)) TO BE TAKEN OR RETAINED IN PART PERFO RMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN S.53A OF THE TRANSFER OF PROPERTY ACT 1882, AND (B) ANY TRANSACTION ENTERED INTO IN ANY MANNER WHICH HA S THE EFFECT OF 70 TRANSFERRING, OR ENABLING THE ENJOYMENT OF, ANY IMM OVABLE PROPERTY (S. 269UA(D)). THEREFORE IN THESE TWO CASES CAPITAL GAI NS WOULD BE TAXABLE IN THE YEAR IN WHICH SUCH TRANSACTIONS ARE ENTERED INT O, EVEN IF THE TRANSFER OF THE IMMOVABLE PROPERTY IS NOT EFFECTIVE OR COMPLETE UNDER GENERAL LAW. 36 FROM THE ABOVE, IT IS CLEAR THAT COURT WAS OF TH E VIEW THAT IN CASE ANY TRANSACTION COVERED BY CLAUSE (V) AND (VI) TO SECTION 2(47) THE LIABILITY FOR CAPITOL GAIN WOULD ARISE ON THE DATE WHEN SUCH TRANSACTIONS ARE ENTERE D INTO. IN THE JUDGMENT AT SOME OTHER PLACES, THE SIMILAR OBSERVATIONS HAVE BEEN MADE. HOWEVER, DESPITE THIS OBSERVATION THE CASE WAS DECIDED IN FAVOUR OF THE ASSESSEE. THE REASON FOR THE SAME HAVE BEEN GIVEN IN THE JUDGMENT ITSELF. FIRSTLY IT IS OBSERVED THAT PROVISION OF S ECTION 2(47)(V) OF THE ACT WERE NOT INVOKED BY THE REVENUE ITSELF. THIS BECOM ES CLEAR FROM THE FOLLOWING PARA: IT WAS ARGUED ON BEHALF OF THE ASSESSEE THAT THERE WAS NO EFFECTIVE TRANSFER TILL GRANT OF IRREVOCABLE LICENCE. IN THI S CONNECTION, THE JUDGMENT OF THE HON'BLE SUPREME COURT WERE CITED ON BEHALF OF T HE ASSESSEE, BUT ALL THOSE JUDGMENT WERE PRIOR TO INTRODUCTION OF THE CO NCEPT OF DEEMED TRANSFER U/S 2(47)(V). IN THIS MATTER, THE AGREEME NT IN QUESTION IS A DEVELOPMENT AGREEMENT. SUCH DEVELOPMENT AGREEMENTS DO NOT CONSTITUTE TRANSFER IN GENERAL LAW. THEY ARE SPREAD OVER A PER IOD OF TIME. THEY CONTEMPLATE VARIOUS STAGES. THE BOMBAY HIGH COURT I N VARIOUS JUDGMENTS HAS TAKEN THE VIEW IN SEVERAL MATTERS THAT THE OBJE CT OF ENTERING INTO A DEVELOPMENT AGREEMENT IS TO ENABLE A PROFESSIONAL B UILDER / CONTRACTOR TO MAKE PROFITS BY COMPLETING THE BUILDING AND SELLING THE FLATS AT A PROFIT. THAT THE AIM OF THESE PROFESSIONAL CONTRACTORS WAS ONLY TO MAKE PROFITS BY COMPLETING THE BUILDING AND, THEREFORE, NO INTEREST IN THE LAND STANDS CREATED IN THEIR FAVOUR UNDER SUCH AGREEMENTS. THAT SUCH AGREEMENTS ARE ONLY A MODE OF REMUNERATING THE BUILDER FOR HIS SER VICES OF CONSTRUCTING THE BUILDING (SEE GURUDEV DEVELOPERS V. KURLA KONKA N NIWAS CO- OPERATIVE HOUSING SOCIETY [2003] 3 MAH LJ 131). IT IS PRECISELY FOR THIS REASON THAT THE LEGISLATURE HAS INTRODUCED SECTION 2(47)(V) READ WITH SECTION 45 WHICH INDICATES THAT CAPITAL GAINS IS TA XABLE IN THE YEAR IN WHICH SUCH TRANSACTIONS ARE ENTERED INTO EVEN IF THE TRAN SFER OF IMMOVABLE PROPERTY IS NOT EFFECTIVE OR COMPLETE UNDER THE GEN ERAL LAW. IN THIS CASE THAT TEST HAS NOT BEEN APPLIED BY THE DEPARTMENT. N O REASON HAS BEEN GIVEN WHY THAT TEST HAS NOT BEEN APPLIED, PART ICULARLY WHEN THE AGREEMENT IN QUESTION, READ AS A WHOLE, SHOWS THAT IT IS A DEVELOPMENT AGREEMENT. THERE IS A DIFFERENCE BETWEE N THE CONTRACT ON THE ONE HAND AND THE PERFORMANCE ON THE OTHER HA ND. IN THIS CASE, THE TRIBUNAL AS WELL AS THE DEPARTMENT HAVE COME TO THE CONCLUSION THAT THE TRANSFER TOOK PLACE DURING THE ACCOUNTING YEAR ENDING MARCH 31,1996, AS SUBSTANTIAL PAYMENTS WERE EFFECTED DURING THAT Y EAR AND SUBSTANTIAL 71 PERMISSIONS WERE OBTAINED. IN SUCH CASES OF DEVELOP MENT AGREEMENTS, ONE CANNOT GO BY SUBSTANTIAL PERFORMANCE OF A CONTR ACT. IN SUCH CASES, THE YEAR OF CHARGEABILITY IS THE YEAR IN WHICH THE CONTRACT IS EXECUTED. THIS IS IN VIEW OF SECTION 2 (47)(V) OF T HE ACT. SECONDLY IT IS MENTIONED IN THE ORDER OF THE COURT THAT LAW WAS NOT VERY CLEAR ON THIS POINT AND SINCE THE ASSESSEE HAS ADMI TTED AND PAID CAPITAL GAIN IN THE ASSESSMENT YEAR 1999-2000, THEREFORE, TAX WAS HELD TO BE CHARGEABLE IN ASSESSMENT YEAR 1999-2000. THIRDLY CERTAIN SHORTCOMINGS WERE ALSO NOTED IN TH E ORDER OF THE TRIBUNAL WHERE CERTAIN DOCUMENTS WERE MENTIONED TO HAVE BEEN EXECUTED BEFORE MARCH 31, 1996 E.G. THE FOLLOW ING OBSERVATION OF THE TRIBUNAL WAS NOT FOUND CORRECT A S SOMETHING IS DONE ON IST APRIL, 1997 THEN THE SAME CANNOT FALL IN THE YEAR ENDING 31.3.1996. FROM THE DATES IT IS EVIDENT THAT FROM THE VERY NE XT DAY, I.E., APRIL 1, 1997, FROM THE END OF THE FINANCIAL YEAR ENDING ON MARCH 31, 1996, THE BUILDER WAS USING THE WELL WATER AGAINST PAYMENT OF RELEVANT CHARGES TO THE ASSESSEE. 37 THUS IT IS VERY CLEAR THAT IN CASES WHERE AN ARRANGEMENT HAD BEEN ENTERED INTO BY AN ASSESSEE IN TERMS OF CLAUSE (V) OF SECTION 2(47) WHICH HAS EFFE CT OF HANDING OVER THE POSSESSION THEN THE TRANSFER IS SA ID TO HAVE BEEN TAKEN PLACE ON THE DATE OF ENTERING INTO SUCH ARRANGEMENT. 38. WE DO NOT FIND ANY FORCE IN THE CONTENTION OF T HE LD. COUNSEL FOR THE ASSESSEE THAT JUDGMENT HAS TO BE R EAD IN THE CONTEXT OF THE DECISION MADE IN SUCH JUDGMENT. IN FACT, IT IS WELL SETTLED THAT DOCTRINE OF PRECEDENT WHICH MEANS WHAT NEEDS TO BE FOLLOWED LATER ON PARTICULAR LY BY SUBORDINATE TRIBUNALS AND COURTS IS THE RATIO OF A PARTICULAR JUDGMENT GIVEN BY THE HIGHER COURT OR FO RUM. FURTHER, THERE IS NO FORCE IN THE CONTENTION THAT D ECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CHATURBHUJ DWARKADAS KAPADIA V CIT (SUPRA) DOES NOT SHOW THAT THE DATE OF AGREEMENT ITSELF CONSTITUTE T HE TRANSFER. AGAIN THERE IS NO FORCE EVEN IN THE CONT ENTION THAT IN THAT CASE IT WAS ULTIMATELY DECIDED THAT CA PITAL GAIN TAXES IS CHARGEABLE IN ASSESSMENT YEAR 1999-20 00 BECAUSE OF THE REASONS GIVEN IN ABOVE NOTED PARAS PARTICULARLY BECAUSE THE REVENUE ITSELF NEVER INVOK ED THE 72 PROVISIONS OF SECTION 2(47)(V) OF THE ACT AND HELD IT TO BE TAXABLE IN ASSESSMENT YEAR 1996-97. NO DOUBT IN TH AT CASE ULTIMATELY IT WAS HELD THAT CAPITAL GAIN WAS I N ASSESSMENT YEAR 1999-2000 BUT COURT HAD MADE IT VER Y CLEAR THAT THIS IS FIRST TIME THAT LAW IS BEING LAI D DOWN AND GUIDELINES ARE BEING ISSUED WHICH MEANS THAT THERE WAS A CONFUSION EARLIER. CLAUSES (V) & (VI) TO SECTION 2 (47) WERE INTRODUCED IN THE YEAR ONLY IN 1998. PERHAPS COURT TOOK A LENIENT VIEW BECAUSE OF THESE REASONS AND HELD THAT CAPITAL GAIN WAS TAXABLE IN ASSESSMENT YEAR 1999-20 00. IT IS QUITE CLEAR THAT RATIO OF THE ABOVE DECISION IS THAT IN CASE OF ANY ARRANGEMENTS OR TRANSACTIONS WHEREBY THE OTHER PARTY BECOMES ENTITLED TO ENJOY THE PROPE RTY THEN THAT DATE OF SUCH TRANSACTION ITSELF NEEDS TO BE CONSTRUED AS THE DATE OF TRANSFER. 39. THE SECOND RELEVANT DECISION CITED BY THE REVEN UE IS BY AUTHORITY FOR ADVANCE RULING (AAR) NEW DELHI IN THE CASE OF JASBIR SINGH SARKARIA (SUPRA) . IN THAT CASE THE ASSESSEE WAS CO-OWNER OF AGRICULTURAL LAND MEASURIN G ABOUT 27.7 ACRES AND HIS SHARE WAS 4/9. THE CO-OWN ER DECIDED TO DEVELOP THE LAND BY CONSTRUCTING RESIDEN TIAL COMPLEX THROUGH DEVELOPER AND ENTERED INTO A COLLABORATION AGREEMENT ON 8.6.2005 WITH M/S SANTUR DEVELOPER PVT LTD, NEW DELHI (HEREIN AFTER CALLED DEVELOPER). ACCORDING TO THE TERMS OF AGREEMENT, THE DEVELOPER SHOULD OBTAIN A LETTER OF INTENT FROM THE CONCERNED GOVERNMENT DEPARTMENT AND OBTAIN OTHER PERMISSIONS AND SANCTIONS FOR DEVELOPING THE LAND A T ITS OWN RISK AND COST. THE DEVELOPER WAS TO TAKE 84% O F THE BUILT UP AREA AND BALANCE 16% WOULD BELONG TO ASSES SEE AND OTHER CO-OWNER. THE CONSIDERATION FOR THE AGREE MENT WAS TAKEN AS THE BUILT UP AREA TO BE HANDED OVER TO THE OWNERS FREE OF COST. THE OWNERS WERE ENTITLED TO V ISIT THE SITE IN ORDER TO REVIEW THE PROGRESS OF THE PROJECT . IT WAS CLARIFIED BY CLAUSE 18 THAT OWNERSHIP WOULD REMAIN EXCLUSIVELY WITH THE OWNERS TILL IT VESTS WITH BOTH THE PARTIES AS PER THEIR RESPECTIVE SHARES ON THE COMPL ETION OF THE PROJECT. THE OTHER CLAUSES AND THE STEPS IN THE AGREEMENT WERE THAT A SUM OF RS. 1 CRORE TOWARDS PAYMENT OF EARNEST MONEY AT THE TIME OF ENTERING IN TO AGREEMENT; A SPECIAL POWER OF ATTORNEY WAS TO BE EXECUTED IN FAVOUR OF THE DEVELOPER TO ENABLE TO DE AL WITH THE STATUTORY AUTHORITIES ETC. FOR OBTAINING NECESS ARY APPROVALS / SANCTIONS; LETTER OF INTENT WAS TO BE OBTAINED NOT LATER THAN MARCH 8, 2006 AND IN CASE OF A FAILU RE TO DO SO, THE AGREEMENT SHALL STAND TERMINATED. LETTER O F INTENT 73 IS BASICALLY A LICENSE GRANTED BY THE DIRECTOR OF T OWN PLANTING TO DEVELOPER OF LAND FOR THE PURPOSE OF CONSTRUCTING RESIDENTIAL FLATS SUBJECT TO PAYMENT O F CERTAIN CHARGES AND COMPLIANCE OF OTHER CONDITIONS. IT WAS FURTHER STATED IN THE AGREEMENT THAT ON FULFILLMENT OF THE REQUIREMENT IN THE LETTER OF INTENT, OWNERS WILL HA VE TO EXECUTE IRREVOCABLE GENERAL POWER OF ATTORNEY IN FA VOUR OF THE DEVELOPER AUTHORIZING THE DEVELOPER TO TOOK AND SELL THE DWELLING UNITS OUT OF DEVELOPERS SHARE AND COL LECT THE MONEY FOR THE SAME. HOWEVER, FINALLY SALE DEEDS COU LD BE EXECUTED ONLY AFTER THE OWNER RECEIVED THEIR SHARE OF CONSTRUCTED AREA. THREE MONTHS LATER, A SUPPLEMENT ARY AGREEMENT WAS ENTERED ON SEPTEMBER 15, 2005 BETWEEN THE ASSESSEE AND OTHER CO-OWNERS AND DEVELOPERS THROUGH WHICH IT WAS AGREED THAT OWNERS WILL SELL T HEIR 16% SHARE IN THE BUILT UP AREA TO THE DEVELOPER OR ITS NOMINEE FOR CONSIDERATION OF RS. 42 CRORES. A SUM O F RS. 2 CRORES WAS RECEIVED. THIS COLLABORATION AGREEMENT AND BALANCE OF RS. 40 CRORES WAS PAYABLE BY THE DEVELOP ER TO THE OWNERS IN SIX INSTALLMENTS FROM MARCH 06, 2008. THE INSTALLMENTS COULD BE EXTENDED SUBJECT TO PAYMENT O F INTEREST AND FURTHER SUBJECT TO MAXIMUM EXTENSION O F THREE MONTHS. THERE WERE VARIOUS OTHER CLAUSES WHI CH ARE NOT RELEVANT FOR OUR PURPOSES. THE QUESTION AR OSE WHETHER CAPITAL GAIN ACCRUE / ARISE TO THE ASSESSEE DURING THE FINANCIAL YEAR 2006-07 RELEVANT TO ASSESSMENT Y EAR 2007-08 OR DURING FINANCIAL YEAR 2007-08 RELEVANT T O ASSESSMENT YEAR 2008-09. 40. ON THE ABOVE, THE HON'BLE AUTHORITY AFTER REFER RING TO THE PROVISIONS OF SECTION 45 AND OBSERVED AS UNDER: - .THE SECTION CAN BE ANALYSED THUS : (A) TRANSFER OF A CAPITAL ASSET EFFECTED IN THE PRE VIOUS YEAR, (B) RESULTANT PROFITS OR GAINS FROM SUCH TRANSFER, (C) THOSE PROFITS OR GAINS WOULD CONSTITUTE THE INC OME OF THE ASSESSEE/ TRANSFEROR (D) SUCH INCOME SHALL BE DEEMED TO BE THE INCOME OF THE SAME PREVIOUS YEAR IN WHICH THE TRANSFER HAD TAKEN PLACE . 74 TWO ASPECTS MAY BE NOTED AT THIS JUNCTURE. FIRSTLY , THE EXPRESSION USED IS ARISING WHICH IS NOT TO BE EQUATED WITH THE E XPRESSION RECEIVED. BOTH THESE EXPRESSIONS AND IN ADDITION THERETO, TH E EXPRESSION ACCRUE ARE USED IN THE INCOME-TAX ACT EITHER COL LECTIVELY OR SEPARATELY ACCORDING TO THE CONTEXT AND NATURE OF T HE CHARGING PROVISION. THE SECOND POINT WHICH DESERVES NOTICE IS THAT BY A DEEMING PROVISION, THE PROFITS OR GAINS THAT HAVE A RISEN WOULD BE TREATED AS THE INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE. THAT MEANS, THE INCOME ON ACCOUNT OF ARISAL OF CAPITAL GAIN SHOULD BE CHARGED TO TAX IN THE SAME PREVIOUS YEAR IN WHICH THE TRANSFER WAS EFFECTED OR DEEMED TO HAVE TAKEN PLAC E. THE EFFECT AND AMBIT OF THE DEEMING PROVISION CONT AINED IN SECTION 45 HAS BEEN CONSIDERED IN DECIDED CASES AND LEADIN G TEXT BOOKS. THE FOLLOWING STATEMENT OF LAW IN SAMPATH IYENGARS CO MMENTARY (10TH EDITION REVISED BY SHRI S. RAJARATNAM) BRINGS OUT THE CORRECT LEGAL POSITION : SECTION 45 ENACTS THAT THE CAPITAL GAINS SHALL BY FICTION BE DEEMED TO BE THE INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE. SINCE THIS IS A STATUTORY FICTION, THE ACTU AL YEAR IN WHICH THE SALE PRICE WAS RECEIVED, WHETHER IT WAS ONE YEAR, T WO YEARS, THREE YEARS, FOUR YEARS ETC. PREVIOUS TO THE PREVIOUS YEA R OF TRANSFER, IS BESIDE THE POINT. THE ENTIRETY OF THE SUM OR SUMS R ECEIVED IN ANY EARLIER YEAR OR YEARS WOULD BE REGARDED AS THE CAPI TAL GAINS ARISING IN THE PREVIOUS YEAR OF TRANSFER. . . . . IN THE WORDS OF SECTION 45, THE CAPITAL GAI NS ARISING FROM THE TRANSFER 'SHALL BE THE INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE'. SO, THE PAYMENTS OF CONSIDER ATION STIPULATED TO BE PAID IN FUTURE WOULD HAVE TO BE ATTRIBUTED, BY STATUTORY MANDATE, TO THE YEAR OF TRANSFER, EVEN AS PAYMENTS MADE PRIOR TO THE YEAR OF TRANSFER. 41. THEREAFTER, THE AUTHORITY REFERRED TO SECTION 2(47) AND OBJECTS OF THE INTRODUCTION OF CLAUSES (V) & (V I) AND ALSO REFERRED TO PARAS 11.1 & 11.2 OF THE BOARD CIR CULAR NO. 495 (WHICH WE HAVE ALREADY DISCUSSED EARLIER). THE HON'BLE AUTHORITY HAS DISCUSSED VARIOUS IMPLICATION S OF CLAUSE (V) OF SECTION 2(47) AND ALSO IMPLICATION OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT AS WELL AS OBSERVATIONS OF HON'BLE BOMBAY HIGH COURT IN THE CA SE OF CHATURBHUJ DWARKADAS KAPADIA V CIT (SUPRA). THE AUTHORITY OBSERVED THAT TO UNDERSTAND THIS PROVISIO N 75 PROPERLY MEANING OF POSSESSION HAS TO BE UNDERSTO OD PROPERLY AND WENT ON TO DISCUSS THE MEANING OF TERM POSSESSION, AND HOW THE SAME IS TO BE UNDERSTOOD I N THE CONTEXT OF CLAUSE (V). THESE ARE VERY IMPORTANT OBSERVATIONS AND HAVE BEEN DISCUSSED IN MOST ELUCID ATED FASHION. THESE OBSERVATIONS WILL ANSWER MANY OF THE QUESTIONS RAISED BEFORE US AND, THEREFORE, WE ARE EXTRACTING THESE OBSERVATIONS AS UNDER:- MEANING OF POSSESSION AND HOW SHOULD IT BE UNDE RSTOOD IN THE CONTEXT OF CLAUSE (V) THE NEXT QUESTION IS, IN WHAT SENSE WE HAVE TO UND ERSTAND THE TERM POSSESSION IN THE CONTEXT OF CLAUSE (V) OF SECTION 2(47). SHOULD IT ONLY MEAN THE RIGHT TO EXCLUSIVE POSSESS IONWHICH THE TRANSFEREE CAN MAINTAIN IN HIS OWN RIGHT TO THE EX CLUSION OF EVERYONE INCLUDING THE TRANSFEROR FROM WHOM HE DERIVED THE P OSSESSION ? SUCH A CRITERION WILL BE SATISFIED ONLY AFTER THE ENTIR E SALE CONSIDERATION IS PAID AND THE TRANSFEROR HAS FORFEITED HIS RIGHT TO EXERCISE ACTS OF POSSESSION OVER THE LAND OR TO RESUME POSSESSION. I N OUR VIEW, THERE IS NO WARRANT TO PLACE SUCH A RESTRICTED INTERPRETA TION ON THE WORD POSSESSION OCCURRING IN CLAUSE (V) OF SECTION 2(4 7). POSSESSION IS AN ABSTRACT CONCEPT. IT HAS DIFFERENT SHADES OF MEA NING. IT IS VARIOUSLY DESCRIBED AS A POLYMORPHOUS TERM HAVING DIFFERENT MEANINGS IN DIFFERENT CONTEXTS (PER R. S. SARKARI A J. IN SUPERINTENDENT AND REMEMBRANCE OF LEGAL AFFAIRS, W. B. V. ANIL KUMAR BHUNJA [1979] 4 SCC 274 AND AS A WORD OF OP EN TEXTURE (SEE SALMOND ON JURISPRUDENCE, PARAGRAPH 51, TWELF TH EDITION, INDIAN REPRINT). SALMOND OBSERVED : TO LOOK FOR A DEFINITION THAT WILL SUMMARIZE THE MEANINGS OF THE TERM POSSESSION IN ORDINARY LANGUAGE, IN ALL AREAS OF LAW AND IN ALL LEGAL SYST EMS, IS TO ASK FOR THE IMPOSSIBLE. IN THE ABOVE CASE OF ANIL KUMAR BHUNJA [1979] 4 SCC 274, SARKARIA J. SPEAKING FOR A THREE-JUDGE BENCH A LSO REFERRED TO THE COMMENTS OF DIAS AND HUGHES IN THEIR BOOK ON JURISP RUDENCE THAT IF A TOPIC EVER SUFFERED TOO MUCH THEORIZING IT IS TH AT OF POSSESSION. MUCH OF THE DIFFICULTY IS CAUSED BY THE FACT THAT POSSESSION IS NOT A PURE LEGAL CONCEPT, AS POINTED OUT BY SALMOND. THE LEARNED JUDGE THEN EXPLAINED THE CONNOTATION OF THE EXPRESSION POSSESSION BY REFERRING TO THE WELL KNOWN TREATISES ON JURISPRUD ENCE (PAGE 278) : POSSESSION, IMPLIES A RIGHT AND A FACT : THE RIG HT TO ENJOY ANNEXED TO THE RIGHT TO PROPERTY AND THE FACT OF T HE REAL INTENTION. IT INVOLVES POWER OF CONTROL AND INTENT TO CONTROL, (SEE DIAS AND HUGHES) 76 14 . . . . 15. WHILE RECOGNIZING THAT POSSESSION IS NOT A PU RELY LEGAL CONCEPT BUT ALSO A MATTER OF FACT, SALMOND (12TH ED ., 52) DESCRIBES POSSESSION, IN FACT, AS A RELATIONSHIP B ETWEEN A PERSON AND A THING. ACCORDING TO THE LEARNED AUTHO R, THE TEST FOR DETERMINING WHETHER A PERSON IS IN POSSESSION OF ANYTHING IS WHETHER HE IS IN GENERAL CONTROL OF IT. IN SALMONDS JURISPRUDENCE, AT PARAGRAPH 54, WE FI ND AN ILLUMINATING DISCUSSION ON IMMEDIATE AND MED IATE POSSESSION. THE LEARNED AUTHOR STATES IN LAW ONE PERSON MAY POSSESS A THING FOR AND ON ACCOUNT OF SOME ONE ELSE. IN SUCH A CASE THE LATTER IS IN POSSESSION BY THE AGEN CY OF HIM WHO SO HOLDS THE THING ON HIS BEHALF. THE POSSESSI ON THUS HELD BY ONE MAN THROUGH ANOTHER MAY BE TERMED MEDI ATE, WHILE THAT WHICH IS ACQUIRED OR RETAINED DIRECTLY OR PERSONALLY MAY BE DISTINGUISHED AS IMMEDIATE OR DIRECT. SA LMOND MAKES REFERENCE TO THREE TYPES OF MEDIATE POSSESSIO N. IN ALL CASES OF MEDIATE POSSESSION, TWO PERSONS ARE IN P OSSESSION OF THE SAME THING AT THE SAME TIME. AN ALLIED CONCE PT OF CONCURRENT POSSESSION HAS ALSO BEEN EXPLAINED IN P ARAGRAPH 55 OF SALMONDS JURISPRUDENCE IN THE FOLLOWING WOR DS : IT WAS A MAXIM OF THE CIVIL LAW THAT TWO PERSONS C OULD NOT BE IN POSSESSION OF THE SAME THING AT THE SAME TIME. AS A GENERAL PROPOSITION THIS IS TRUE : FOR EXCLUSIVENES S IS OF THE ESSENCE OF POSSESSION. TWO ADVERSE CLAIMS OF EXCLU SIVE USE CANNOT BOTH BE EFFECTUALLY REALIZED AT THE SAME TI ME. CLAIMS, HOWEVER, WHICH ARE NOT ADVERSE, AND WHICH ARE NOT, THEREFORE, MUTUALLY DESTRUCTIVE, ADMIT OF CONCURRENT REALIZATI ON. HENCE, THERE ARE SEVERAL POSSIBLE CASES OF DUPLICATE POSS ESSION. 1. MEDIATE AND IMMEDIATE POSSESSION CO-EXIST IN RESPECT OF THE SAME THING AS ALREADY EXPLAINED. 2. TWO OR MORE PERSONS MAY POSSESS THE SAME THING IN COMMON, JUST AS THEY MAY OWE IT IN COMMON . ON A FAIR AND REASONABLE INTERPRETATION AND ON ADO PTING THE PRINCIPLE OF PURPOSIVE CONSTRUCTION, IT MUST B E HELD THAT POSSESSION CONTEMPLATED BY CLAUSE (V) NEED NOT NEC ESSARILY 77 BE SOLE AND EXCLUSIVE POSSESSION. SO LONG AS THE T RANSFEREE IS, BY VIRTUE OF THE POSSESSION GIVEN, ENABLED TO E XERCISE GENERAL CONTROL OVER THE PROPERTY AND TO MAKE USE O F IT FOR THE INTENDED PURPOSE, THE MERE FACT THAT THE OWNER HAS ALSO THE RIGHT TO ENTER THE PROPERTY TO OVERSEE THE DEV ELOPMENT WORK OR TO ENSURE PERFORMANCE OF THE TERMS OF AGRE EMENT DOES NOT INTRODUCE ANY INCOMPATIBILITY. THE CONCURR ENT POSSESSION OF THE OWNER WHO CAN EXERCISE POSSESSORY RIGHTS TO A LIMITED EXTENT AND FOR A LIMITED PURPOSE AND T HAT OF THE BUYER/DEVELOPER WHO HAS A GENERAL CONTROL AND CUST ODY OF THE LAND CAN VERY WELL BE RECONCILED. CLAUSE (V) OF SECTION 2(47) WILL HAVE ITS FULL PLAY EVEN IN SUCH A SITUAT ION. THERE IS NO WARRANT TO POSTPONE THE OPERATION OF CLAUSE (V) AND THE RESULTANT ACCRUAL OF CAPITAL GAIN TO A POINT OF TIM E WHEN THE CONCURRENT POSSESSION WILL BECOME EXCLUSIVE POSSESS ION OF DEVELOPER/TRANSFEREE AFTER HE PAYS FULL CONSIDERATI ON. FURTHER, IF POSSESSION REFERRED TO IN CLAUSE (V) IS TO BE UNDERSTOOD AS EXCLUSIVE POSSESSION OF THE TRANSFEREE/DEVELOPER, THEN, THE VERY PURPOSE OF THE AMENDMENT EXPANDING THE DEFINITION OF TRANSFER FOR THE PURPOSE OF CAPITAL GAINS MAY BE DEFEATED. THE REASO N IS THIS: THE OWNER OF THE PROPERTY CAN VERY WELL CONTE ND, AS IS BEING CONTENDED IN THE PRESENT CASE, THAT THE DEVEL OPER WILL HAVE SUCH EXCLUSIVE POSSESSION IN HIS OWN RIGHT ONL Y AFTER THE ENTIRE AMOUNT IS PAID TO THE OWNER TO THE LAST PIE. THERE IS THEN A POSSIBILITY OF STAGGERING THE LAST INSTAL MENT OF A SMALL AMOUNT TO A DISTANT DATE, MAY BE, WHEN THE EN TIRE BUILDING COMPLEX GETS READY. EVEN IF SOME AMOUNT, S AY 10 PER CENT., REMAINS TO BE PAID AND THE DEVELOPER/TRA NSFEREE FAILS TO PAY, LEADING TO A DISPUTE BETWEEN THE PART IES, THE RIGHT TO EXCLUSIVE AND INDEFEASIBLE POSSESSION MAY BE IN JEOPARDY. IN THIS STATE OF AFFAIRS, THE TRANSACTION WITHIN THE MEANING OF CLAUSE (V) CANNOT BE SAID TO HAVE BEEN EFFECTED AND THE LIABILITY TO PAY CAPITAL GAINS MAY BE INDEF INITELY POSTPONED. TRUE, IT MAY NOT BE PROFITABLE FOR THE DEVELOPER TO ALLOW THIS SITUATION TO LINGER FOR LONG AS THE P ROCESS OF TRANSFER OF FLATS TO THE PROSPECTIVE PURCHASERS WIL L GET DELAYED. AT THE SAME TIME, THE OTHER SIDE OF THE PI CTURE CANNOT BE OVER-LOOKED. THERE IS A POSSIBILITY OF TH E OWNER WITH THE CONNIVANCE OF THE TRANSFEREE POSTPONING TH E PAYMENT OF CAPITAL GAINS TAX ON THE OSTENSIBLE GRO UND THAT THE ENTIRE CONSIDERATION HAS NOT BEEN RECEIVED AND SOME BALANCE IS LEFT. THE MISCHIEF SOUGHT TO BE REMEDIED , WILL THEN PERPETUATE. WE ARE, THEREFORE OF THE VIEW THAT POSS ESSION GIVEN TO THE DEVELOPERS NEED NOT RIPEN ITSELF INTO EXCLUSIVE 78 POSSESSION ON PAYMENT OF ALL THE INSTALMENTS IN EN TIRETY FOR THE PURPOSE OF DETERMINING THE DATE OF TRANSFER. WHILE ON THE POINT OF POSSESSION, WE WOULD LIKE TO CLARIFY ONE MORE ASPECT. WHAT IS SPOKEN TO IN CLAU SE (V) OF SECTION 2(47) IS THE TRANSACTION WHICH INVOLVES A LLOWING THE POSSESSION TO BE TAKEN. BY MEANS OF SUCH TRANSACTIO N, A TRANSFEREE LIKE A DEVELOPER IS ALLOWED TO UNDERTAKE DEVELOPMENT WORK ON THE LAND BY ASSUMING GENERAL CO NTROL OVER THE PROPERTY IN PART PERFORMANCE OF THE CONTR ACT. THE DATE OF THAT TRANSACTION DETERMINES THE DATE OF TR ANSFER. THE ACTUAL DATE OF TAKING PHYSICAL POSSESSION OR THE IN STANCES OF POSSESSORY ACTS EXERCISED IS NOT VERY RELEVANT. THE ASCERTAINMENT OF SUCH DATE, IF CALLED FOR, LEADS TO COMPLICATED INQUIRIES, WHICH MAY FRUSTRATE THE OBJE CTIVE OF THE LEGISLATIVE PROVISION. IT IS ENOUGH IF THE TRAN SFEREE HAS, BY VIRTUE OF THAT TRANSACTION, A RIGHT TO ENTER UPON A ND EXERCISE ACTS OF POSSESSION EFFECTIVELY PURSUANT TO THE COVE NANTS IN THE CONTRACT. THAT TANTAMOUNTS TO LEGAL POSSESSION . WE ARE REFERRING TO THIS ASPECT BECAUSE THE AUTHORIZED REPRESENTATIVE HAS SUBMITTED WHEN HE APPEARED BEFO RE US IN THE LAST WEEK OF MAY, 2007, THAT EVEN BY THAT DA TE THE DEVELOPMENT WORK COULD NOT BE COMMENCED FOR WANT OF CERTAIN APPROVALS, AND THEREFORE, THE DEVELOPER WA S NOT WILLING TO TAKE POSSESSION OF THE LAND. SUCH AN UNSUBSTANTIATED STATEMENT WHICH IS NOT FOUND IN THE ORIGINAL APPLICATION OR EVEN WRITTEN SUBMISSIONS FILED EARLI ER NEED NOT BE PROBED INTO ESPECIALLY WHEN IT IS NOT HIS CASE THAT THE DEVELOPER WAS NOT ALLOWED TO TAKE POSSESSION IN TE RMS OF THE AGREEMENT. 42. AFTER THE ABOVE DISCUSSION, THE AUTHORITY DISCU SSED THE FACTS OF THE CASE BEFORE IT. IT WAS OBSERVED THAT P ARAGRAPH 18 OF THE COLLABORATION AGREEMENT PROVIDES THAT ON ISSUANCE OF LETTER OF INTENT, THE OWNERS WILL ALLOW AND PERMIT THE DEVELOPER TO ENTER UPON AND SURVEY THE L AND, ERECT SITE / SALES OFFICE, CARRY OUT THE SITE DEVEL OPMENT WORK AND DO ACTIVITIES FOR ADVANCING & SALE PROMOTI ON, CONSTRUCTION ETC. THE AUTHORITY FURTHER OBSERVED T HAT IF THIS CLAUSE IS READ IN ISOLATION THIS WOULD SUGGEST ON PASSING OF POSSESSION BUT ACCORDING TO AUTHORITY TH E OTHER FACTORS ARE TO BE CONSIDERED. CLAUSE 15 PROVIDED T HAT ON FULFILLMENT OF THE REQUIREMENTS LAID DOWN IN THE LE TTER OF INTENT WHICH IS PROVISIONAL LICENSE, THE OWNERS SH OULD EXECUTE AN IRREVOCABLE GENERAL POWER OF ATTORNEY IN 79 FAVOUR OF THE DEVELOPER ALLOWING INTER ALIA TO BOOK AND SELL THE DWELLING UNIT FAILING UNDER THEIR SHARE. THI S WAS POSSIBLE ONLY AFTER DEPOSIT OF REQUISITE CHARGES ET C. AND PERHAPS THERE WAS LITIGATION REGARDING OWNERSHIP OF LAND WHICH HAS ALSO TO BE WITHDRAWN. THE AUTHORITY HAS DISCUSSED THE SIGNIFICANCE OF GENERAL POWER OF ATTO RNEY AND THE TERMS OF THE GENERAL POWER OF ATTORNEY AT PARA 33 AND THE RELEVANT PORTION OF THE SAME IS AS UNDER:- A COPY OF THE IRREVOCABLE GPA EXECUTED IN TERMS O F PARAGRAPH 15 OF THE AGREEMENT HAS BEEN FURNISHED B Y THE APPLICANT. IT AUTHORIZES THE DEVELOPER : (I) TO ENTER UPON AND SURVEY THE LAND, PREPARE THE LAYOUT PLAN, APPLY FO R RENEWAL/EXTENSION OF LICENCE, SUBMIT THE BUILDING P LANS FOR SANCTION OF THE APPROPRIATE AUTHORITY AND TO CARRY OUT THE W ORK OF DEVELOPMENT OF A MULTI-STORIED RESIDENTIAL COMPLEX , (II) TO MANAGE AND CONTROL, LOOK AFTER AND SUPERVISE THE PROPERTY IN ANY MANNER AS THE ATTORNEY DEEMS FIT AND PROPER, (III) TO OBTAIN WATER, SEWAGE DISPOSAL AND ELECTRICITY CONNECTIONS. THE DEVELOPE R IS ALSO AUTHORIZED TO BORROW MONEY FOR MEETING THE COST OF CONSTRUCTION ON THE SECURITY AND MORTGAGE OF LAND FALLING TO THE DE VELOPERS SHARE. THE OTHER CLAUSES IN THE GPA ARE NOT RELEVANT FOR O UR PURPOSE. THE GPA UNEQUIVOCALLY GRANTS TO THE DEVELOPER A BUNDLE OF POSSESSORY RIGHTS. THE ACTS OF MANAGEMENT, CONTROL AND SUPERV ISION OF PROPERTY ARE EXPLICITLY MENTIONED. IT IS FAIRLY CLE AR THAT THE GPA IS NOT A MERE LICENCE TO ENTER THE LAND FOR DOING SOM E PRELIMINARY ACTS IN RELATION TO THE DEVELOPMENT WORK. THE POWE R OF CONTROL OF THE LAND WHICH IS AN INCIDENCE OF POSSESSION AS EXP LAINED SUPRA HAS BEEN CONFERRED ON THE DEVELOPER UNDER THIS GPA. THE DEVELOPER ARMED WITH THE GPA CANNOT BE REGARDED MER ELY AS A LICENSEE OR AN AGENT SUBJECT TO THE CONTROL OF THE OWNERS. HIS POSSESSION CANNOT BE CHARACTERIZED AS PRECARIOUS O R TENTATIVE IN NATURE. THE FACT THAT THE AGREEMENT DESCRIBES THE G PA AS IRREVOCABLE AND AN EXPRESS DECLARATION TO THAT EFFE CT IS FOUND IN THE GPA ITSELF IS NOT WITHOUT SIGNIFICANCE. HAVING REGA RD TO THE SECOND AND SUPPLEMENTAL AGREEMENT BY VIRTUE OF WHICH THE E NTIRE DEVELOPED PROPERTY INCLUDING THE OWNERS SHARE HAS BEEN AGREED TO BE SOLD TO THE DEVELOPER OR HIS NOMINEES FOR VALUA BLE MONEY CONSIDERATION, THE DEVELOPER HAS A VITAL STAKE IN THE ENTIRE PROPERTY. AS FAR AS THE QUALITY OF POSSESSION IS C ONCERNED, HE IS ON A HIGHER PEDESTAL THAN A DEVELOPER WHO APPORTIONS BUILT UP AREA WITH THE OWNER. EVEN IF HE IS AN AGENT IN ONE SENSE IN THE COURSE OF DEVELOPING THE LAND, THAT AGENCY IS COUPLED WITH IN TEREST. FOR THESE REASONS, THE PREFIX IRREVOCABLE IS DELIBERATELY C HOSEN. AS DISCUSSED EARLIER, THE OWNER'S LIMITED RIGHT TO ENT ER THE LAND AND OVERSEE THE DEVELOPMENT WORK IS NOT INCOMPATIBLE WI TH THE 80 DEVELOPERS RIGHT OF CONTROL OVER THE LAND WHICH HE DERIVES FROM THE GPA. EXCLUSIVE POSSESSION, AS ALREADY POINTED OUT, IS NOT NECESSARY FOR THE PURPOSE OF SATISFYING THE INGREDI ENTS OF CLAUSE (V) OF SECTION 2(47). WE ARE THEREFORE, OF THE VIEW THA T THE IRREVOCABLE GPA EXECUTED BY THE OWNERS IN FAVOUR OF THE DEVELOP ER MUST BE REGARDED AS A TRANSACTION IN THE EYE OF LAW WHICH A LLOWS POSSESSION TO BE TAKEN IN PART PERFORMANCE OF THE C ONTRACT FOR TRANSFER OF THE PROPERTY IN QUESTION.. 43 THUS, THE ABOVE CLEARLY SHOWS THAT IRREVOCABLE GENERAL POWER OF ATTORNEY WHICH LEADS TO OVER ALL CONTROL OF THE PROPERTY IN THE HANDS OF THE DEVELOPER, EVEN IF THAT MEANS NO EXCLUSIVE POSSESSION BY THE DEVELOPER WOUL D CONSTITUTE TRANSFER. IT CAN BE SAID THAT IT HAS TO BE CONSTRUED AS POSSESSION IN TERMS OF CLAUSE (V) OF SECTION 2(47) OF THE ACT. 44 A QUESTION MAY ARISE THAT WHY THE TRANSFER WAS NOT HELD TO BE TAKEN PLACE IN ASSESSMENT YEAR 2006-07 WHEN FIRST AGREEME NT WAS ENTERED INTO ON JUNE 8, 2005. THE SUPPLEMENTARY AGREEMENT WAS A LSO ENTERED INTO ON SEPT 15, 2005 BOTH OF WHICH FALL IN FINANCIAL YEAR 2005-06 RELEVANT TO ASSESSMENT YEAR 2006-07. THEN WHY TRANSFER WAS NOT CONSTRUED IN ASSESSMENT YEAR 2006-07 IT WAS BECAUSE THE FIRST AG REEMENT ITSELF CONTAINED A CONDITION THAT LETTER OF INTENT SHOUL D BE PROCURED NOT LATER THAN MARCH 8, 2006. IN CASE OF FAILURE TO DO SO TH E AGREEMENT SHALL STAND TERMINATED. THEREFORE, OBTAINING THE LETTER OF I NTENT WAS THE CRUCIAL FACTOR. IT HAS BEEN EXPLAINED IN THE DECISION THAT THE LETTER OF INTENT BASICALLY IS A LICENSE ISSUED BY THE DIRECTOR OF TO WN AND COUNTRY PLANNING, HARYANA WHICH GIVES PERMISSION FOR CONSTR UCTION OF THE FLATS. THE OTHER CRUCIAL POINT WAS EXECUTION OF IRREVOCABL E OF GPA WHICH WAS EXECUTED ON MAY 8, 2006 WHICH ACCORDING TO THE LD. AUTHORITY DEPICTS THE INTENTION OF THE HANDING OVER OF THE POSSESSION. T HEREFORE, IT BECOMES VERY CLEAR THAT IT IS NOT NECESSARY THAT TRANSFER W OULD TAKE PLACE ON THE SIGNING OF DEVELOPMENT AGREEMENT BUT THE SAME HAS T O BE INFERRED ONLY WHEN THE POSSESSION HAS BEEN HANDED OVER BY THE TRA NSFEROR TO THE DEVELOPER WHICH CAN BE INFERRED FROM THE DOCUMENTS E.G. POWER OF 81 ATTORNEY. AFTER ABOVE DISCUSSION HON'BLE AUTHORITY HAS SUMMARIZED THE DECISION IN PARA 41 WHICH IS AS UNDER: THE FOLLOWING IS THE SUMMARY OF CONCLUSIONS: 1. WHERE THE AGREEMENT FOR TRANSFER OF IMMOVABLE PR OPERTY BY ITSELF DOES NOT PROVIDE FOR IMMEDIATE TRANSFER OF POSSESSION, T HE DATE OF ENTERING INTO THE AGREEMENT CANNOT BE CONSIDERED TO BE THE D ATE OF TRANSFER WITHIN THE MEANING OF CLAUSE (V) OF SECTION 2 (47) OF THE INCOME-TAX ACT. 2. TO ATTRACT CLAUSE (V) OF SECTION 2(47), IT IS NO T NECESSARY THAT THE ENTIRE SALE CONSIDERATION UP TO THE LAST INSTALLMENT SHOUL D BE RECEIVED BY THE OWNER. 3. IN THE INSTANT CASE, HAVING REGARD TO THE TERMS OF THE TWO AGREEMENTS AND THE IRREVOCABLE GPA EXECUTED PURSUANT TO THE AG REEMENT, THE EXECUTION OF THE GPA SHALL BE REGARDED AS THE TRAN SACTION INVOLVING THE ALLOWING OF THE POSSESSION OF LAND TO BE TAKEN IN PART PERFORMANCE OF THE CONTRACT AND THEREFORE, THE TRANSFER WITHIN THE MEANING OF SECTION 2(47)(V) MUST BE DEEMED TO HAVE TAKEN PLACE ON THE DATE OF EXECUTION OF SUCH GPA. THE IRREVOCABLE GPA WAS EXECUTED ON MA Y 8, 2006, I.E., DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2007-08 AND THE CAPITAL GAINS MUST BE HELD TO HAVE ARISEN DURIN G THAT YEAR. INCIDENTALLY, IT MAY BE MENTIONED THAT DURING THE S AID YEAR, I.E., FINANCIAL YEAR 2006-07, A FINAL LICENSE WAS GRANTED AND THE APPLICANT/OWNERS RECEIVED NEARLY 2/3RDS OF THE CONS IDERATION. 45. LEGAL POSITION HAS BEEN DISCUSSED IN ABOVE NOT ED PARAS AND NOW LET US DISCUSS THE FACTS OF THE CASE IN THE LIGHT OF ABOVE NOTED LEGAL POSITION. 46 UNDISPUTED FACTS OF THE CASE ARE THAT THE ASSES SEE IS A MEMBER OF PUNJABI COOP HOUSE BUILDING SOCIETY LTD. WHICH HAD 96 MEMBERS (NUMBER OF MEMBERS WERE STATED AS 95 DURING ARGUMENTS BUT CLAUSE 13 OF THE JDA REF ERS TO NUMBER OF MEMBERS AS 96). THE SOCIETY WAS OWNING 21 .2 ACRES OF LAND IN VILLAGE KANSAL DISTT. MOHALI ADJAC ENT TO CHANDIGARH. THERE WERE TWO TYPES OF MEMBERS FIRSTL Y THE MEMBERS WHO WERE OWNING PLOT OF 500 SQYD AND SECOND LY THE MEMBERS WHO ARE HOLDING PLOT OF 1000 SQYD. SOMEWHERE IN 2006 IT WAS DECIDED TO DEVELOP A GROUP HOUSING COMMERCIAL PROJECT AND DO DEVELOPMENT AS PE R THE APPLICABLE MUNICIPAL BUILDING BYE-LAWS IN FORCE AND ACCORDINGLY A BID WAS INVITED THROUGH ADVERTISEMEN T IN THE TRIBUNE DATED 31.5.2006. HASH A DEVELOPER, APPROACHED THE SOCIETY WITH PROPOSAL FOR DEVELOPMEN T OF 82 THE PROPERTY. SINCE HASH DID NOT HAVE SUFFICIENT M EANS TO DEVELOP THE PROPERTY, HASH HAD APPROACHED THDC FOR DEVELOPMENT OF THE PROPERTY BY CONSTRUCTING THE BUI LDING AND/OR STRUCTURES TO BE USED FOR INTERALIA RESIDENT IAL, PUBLIC USE AND COMMERCIAL PURPOSES. THIS PROPOSAL WAS DISCUSSED BY THE SOCIETY IN ITS EXECUTIVE COMMITTEE MEETING ON 4.1.2007. MINUTES OF THE MEETING ARE PL ACED AT PAGE 58 TO 65 OF THE PAPER BOOK. IN THE EXECUTI VE COMMITTEE IT WAS DECIDED TO APPOINT HASH WHO WAS AC TING ALONGWITH THE JOINT DEVELOPER THDC AS JOINT DEVELO PER ON THE TERMS AND CONDITIONS TO BE MENTIONED IN THE JDA . IT WAS FURTHER RESOLVED THAT MEMBER OWING PLOT OF 500 SQYD WOULD RECEIVE A CONSIDERATION OF RS. 82,50,000/- EA CH TO BE PAID IN FOUR INSTALLMENTS BY HASH DIRECTLY IN FA VOUR OF THE MEMBERS AND ONE FLAT WITH SUPER AREA OF 2250 SQ F TO BE CONSTRUCTED BY THDC. THE MEMBERS WHO HELD THE P LOT OF 1000SQYD WERE TO RECEIVE A CONSIDERATION OF RS. 1,65,00,000/- AND TWO FLATS CONSISTING OF 2250SQFT TO BE CONSTRUCTED BY THE THDC. IT WAS FURTHER RESOLVED TO ENTER INTO A JDA WITH THDC/HASH. IT WAS ALSO RESOL VED TO EXECUTE IRREVOCABLE POWER OF ATTORNEY BY THE SOC IETY IN FAVOUR OF THDC FOR THIS PURPOSE. THIS RESOLUTION WA S ULTIMATELY RATIFIED IN THE GENERAL BODY MEETING HEL D BY THE SOCIETY ON 25.2.2007. PURSUANT TO THE ABOVE RESOLUTION, TRIPARTITE JDA WAS EXECUTED (COPY OF T HE SAME IS AVAILABLE AT PAGE 15 TO 54 OF FIRST PAPER BOOK). THROUGH RECITATION CLAUSE IT HAS BEEN MENTIONED THA T OWNER IS IN POSSESSION OF LAND MEASURING ABOUT 21.2 ACRES OF LAND WHICH HAS COME IN THE PURVIEW OF NAGA R PANCHAYAT, NAYA GAON VIDE NOTIFICATION ISSUED ON 18.10.2006 DULY SUBSTITUTED BY ANOTHER NOTIFICATION DATED 21.11.2006 AND THAT NO PART OF LAND OF THE PROPERTY FALLS UNDER FOREST AREA UNDER THE PUNJAB LAND PRESERVATIO N ACT. IT HAS BEEN FURTHER RECITED THAT THE SOCIETY HAS AGREED TO ACCEPT THE PROPOSALS OF HASH AND FURTHER EXECUTED THIS AGREEMENT WITH THDC/HASH. HASH WAS RESPONSIBLE TO MAKE PAYMENT TO THE OWNER AS DESCRIB ED EARLIER AND THE FLATS WERE TO BE PROVIDED BY THDC. IN CASE OF HASH FAILS TO MAKE THE PAYMENT, THDC AGREED TO MAKE THE PAYMENTS. COPY OF THE RESOLUTION OF THE EXECUTIVE COMMITTEE OF THE SOCIETY DATED 4.1.2007 A S WELL AS RESOLUTION OF THE GENERAL BODY MEETING OF T HE SOCIETY DATED 25.2.2007 WERE MADE PART OF JDA BY WA Y OF ANNEXURE. THE SOCIETY AGREED TO EXECUTE AN IRREVOC ABLE SPECIAL POWER OF ATTORNEY IN FAVOUR OF THDC AND AL L 83 OTHER NECESSARY DOCUMENTS, AT THE REQUEST OF THE DEVELOPERS. 47 IN CLAUSE 1 OF JDA VARIOUS EXPRESSIONS HAVE BEE N DEFINED. CLAUSE 2 DESCRIBES THE PROJECT AS UNDER: 2.1 THE OWNER HEREBY IRREVOCABLY AND UNEQUIVOCALLY GRANTS AND ASSIGNS IN PERPETUITY ALL ITS RIGHTS TO DEVELOP, CONSTRUCT, MORTGAGE, LEASE, LICENSE, SELL AND TRANSFER THE PROPERTY ALONG WITH ANY AND ALL THE CONSTRUCTION, PREMISES, HEREDITAMENTS, EASEMENTS, TREES THEREON IN FAVOUR OF THDC FOR THE PURPOSE OF DEVELOPMENT, CONSTRUCTION, MORTGAGE, SALE, TRANSFER , LEASE, LICENSE AND OR EXPLOITATION FOR FULL UTILIZA TION OF THE PROPERTY (RIGHTS) AND TO EXECUTE ALL THE DOCUMENTS NECESSARY TO CARRY OUT, FACILITATE AND ENFORCE THE RIGHTS IN THE PROPERTY INCLUDING TO EXECUTE LEASE AGREEMENT, LICENSE AGREEMENTS, CONSTRUCTION CONTRACTS, SUPPLIE R CONTRACTS, AGREEMENT FOR SALE, CONVEYANCE, MORTGAGE DEEDS, FINANCE DOCUMENTS AND ALL DOCUMENTS AND AGREEMENTS NECESSARY TO CREATE AND REGISTER THE MORTGAGE, CONVEYANCE, LEASE DEEDS, LICENSE AGREEMEN T, POWER OF ATTORNEY, AFFIDAVITS, DECLARATION, INDEMNI TIES AND ALL SUCH OTHER DOCUMENTS, LETTERS AS MAY BE NECESSA RY TO CARRY OUT, FACILITATE AND ENFORCE THE RIGHTS AND TO REGISTER THE SAME WITH THE REVENUE/COMPETENT AUTHORITY AND T O APPEAR ON OUR BEHALF BEFORE ALL AUTHORITIES, STATUT ORY OR OTHERWISE, AND BEFORE ANY COURT OF LAW (THE DEVELO PMENT RIGHTS). THE OWNER HEREBY HANDS OVER THE ORIGINAL TITLE DEEDS OF THE PROPERTY AS MENTIONED IN THE LIS T ANNEXED HERETO AND MARKED AS ANNEXURE IV AND PHYSICAL, VACANT POSSESSION OF THE PROPERTY HAS BEE N HANDED OVER TO THDC SIMULTANEOUS TO THE EXECUTION AND REGISTRATION OF THIS AGREEMENT TO DEVELOP THE S AME AS SET OUT HEREIN. IT IS HEREBY AGREED AND CONFIRMED THAT WHAT IS STAT ED IN THE RECITALS HEREINABOVE, SHALL BE DEEMED TO BE DECLARATIONS AND REPRESENTATIONS ON THE PART OF THE OWNER AS IF THE SAME WERE SET OUT HEREIN VERBATIM AND FOR MING AN INTEGRAL PART OF THE AGREEMENT. 2.2 THE PROJECT SHALL COMPRISE OF DEVELOPMENT/CONSTRUCTION OF THE PROPERTY INTO THE PREMISES AS PERMISSIBLE UNDER PUNJAB MUNICIPAL BUIL DING 84 BYE-LAWS/PUNJAB URBAN DEVELOPMENT AUTHORITY OR ANY OTHER COMPETENT AUTHORITY BY THE DEVELOPER AT THEIR OWN COST AND EXPENSE. THE PROJECT SHALL BE DEVELOPED A S MAY BE SANCTIONED BY THE CONCERNED LOCAL AUTHORITY I.E. DEPARTMENT OF LOCAL BODIES, PUNJAB/PUNJAB URBAN PLANNING AND DEVELOPMENT AUTHORITY (PUDA) OR ANY OT HER COMPETENT AUTHORITY. 2.3 THE OWNER HEREBY IRREVOCABLY AND UNEQUIVOCALLY GRANTS AND ASSIGNS ALL ITS DEVELOPMENT RIGHTS IN TH E PROPERTY TO THDC TO DEVELOP THE PROPERTY AND UNDERT AKE THE PROJECT AT ITS OWN COSTS, EFFORTS AND EXPENSES WHEREUPON THE DEVELOPER SHALL BE ENTITLED TO APPLY FOR AND OBTAIN NECESSARY SANCTIONS, LICENSES AND PERMIS SIONS FROM ALL THE CONCERNED AUTHORITIES FOR THE COMMENCE MENT, DEVELOPMENT AND COMPLETION OF THE PROJECT ON THE PROPERTY. 48 CLAUSE 3 DESCRIBES THE OBLIGATIONS OF THE DEVELO PERS & SOCIETY FOR GETTING THE PLANS, ETC. SANCTIONED FR OM COMPETENT AUTHORITY / APPLICATIONS TO BE SIGNED BY OWNER FOR PLANS, DRAWINGS ETC., CONSTRUCTION. CLAUSE 4 D EALS WITH CONSIDERATION CLAUSES 5 TO 8 DEALS VARIOUS AS PECTS OF PROJECT AND OBLIGATIONS OF SOCIETY AND DEVELOPER . CLAUSE 9 TALKS ABOUT OWNERSHIP AND RIGHTS AND READ AS UNDER: 9 TRANSFER OF OWNERSHIP/RIGHTS 9.1 THE OWNER SHALL SIMULTANEOUSLY ON RECEIPT OF PAYMENT AS SET OUT IN CLAUSE 4.1 ABOVE, EXECUTE AN IRREVOCABLE SPECIAL POWER OF ATTORNEY TO THDC FOR DEVELOPMENT OF THE PROPERTY AUTHORIZING THDC TO DO ALL LAWFUL ACTS, DEEDS, MATTERS AND THINGS PERTAINI NG TO THE DEVELOPMENT OF THE PROPERTY FOR THE PROJECT ALO NG WITH INTERALIA RIGHT TO MORTGAGE THE PROPERTY AND/O R PREMISES, SELL, LEASE, LICENSE THE PREMISES AND RECEIVE/COLLECT MONIES IN ITS NAME IN RESPECT OF THE SAME AND APPROACH INTERACT, COMMUNICATE WITH THE COMPETENT AUTHORITIES AND FOR DOING ALL ACTS, DEEDS , MATTERS AND THINGS TO BE DONE OR INCURRED BY THDC I N THAT BEHALF AS ALSO TO SIGN ALL LETTERS, APPLICATIONS, A GREEMENTS AND REGISTER THE SAME IF NECESSARY, DOCUMENTS, COUR T PROCEEDINGS, AFFIDAVITS AND SUCH OTHER PAPERS CONT AINING 85 TRUE FACTS AND CORRECT PARTICULARS AS MADE FROM TIM E TO TIME BE REQUIRED IN THIS BEHALF. 9.2 THE OWNER SHALL EXECUTE IN FAVOUR OF THDC THE SALE DEED IS IN ACCORDANCE WITH THE PROVISIONS OF CLAUSE 4.1(II) TO CLAUSE 4.1(IV) OF THIS AGREEMENT AND EXECUTE ALL OTHER NECESSARY DOCUMENTS AND PAPERS TO COMPLETE THE AFORESAID TRANSACTION. 9.3 THAT ALL THE ORIGINAL TITLE DEEDS PERTAINING T O PROPERTY AS MENTIONED IN ANNEXURE IV HAS BEEN HANDED OVER TO THDC BY THE OWNER AT THE TIME OF SIGNING OF THIS AGREEMENT AND IN FURTHERANCE OF THE COMMON INTEREST OF THE PARTIES FOR THE DEVELOPMENT OF THE PROJECT AND EXCEPT THE SALE TRANSACTION MADE BY THE OWNER IN FAVOUR OF THDC AS ET OUT IN CLAUSE 4.1 ABOVE. THDC HEREBY UNDERTAKE AND ASSURE THE OWNER THAT THE Y SHALL USE THE TITLE DEEDS ONLY FOR THE PURPOSE OF FURTHERANCE OF THE PROJECT IN THE MANNER THAT IT DO ES NOT ADVERSELY EFFECT THE OWNER/ALLOTTEE IN ANY MANNER WHATSOEVER. 49 CLAUSE 10 DESCRIBES THE CONSENT GIVEN BY THE SOCIETY TO THDC FOR RAISING FINANCE FOR DEVELOPMENT AND COMPLETION OF PROJECT. CLAUSE 11 TALKS ABOUT FORMA TION OF MAINTENANCE SOCIETY FOR THE PROJECT AFTER ITS COMPL ETION. CLAUSE 13 TALKS ABOUT TRANSFER OF RIGHTS WHICH READ S AS UNDER: 13 TRANSFER OF RIGHTS THE OWNER HEREIN I.E. THE PUNJABI COOP HOUSE BUILDI NG SOCIETY LTD. ALONG WITH ALL ITS NINETY SIX (96) MEM BERS HAVE GIVEN THEIR EXPRESS, FREE AND CLEAR CONSENT IN WRITING IN THE FORM OF AN AFFIDAVIT/NO OBJECTION CERTIFICATE/CONSENT LETTER WHEREBY THE DEVELOPERS H AVE BEEN ALLOWED TO DEVELOP THE PROPERTY IN ACCORDANCE WITH THE PROJECT AND THAT THDC SHALL BE ENTITLED TO TRAN SFER THE RIGHTS OBTAINED UNDER THIS AGREEMENT TO ANY THIRD P ARTY AND TO GET THE DEVELOPMENT / CONSTRUCTION WORK COMP LETED ON SUCH TERMS AND CONDITIONS AS THDC MAY DEEM FIT S O LONG AS IT DOES NOT ADVERSELY EFFECT THE OWNER IN T ERMS OF THEIR RIGHT TO RECEIVE ENTIRE CONSIDERATION AS MENT IONED IN THIS AGREEMENT SUBJECT TO ALL OTHER CONDITIONS MENT IONED 86 THEREIN AS WELL. THE OWNER SHALL AT ALL TIMES PROV IDE FULL SUPPORT TO THE DEVELOPERS HEREIN. 50 OTHER CLAUSES PROVIDE FOR TERMINATION, GENERAL PROVISIONS, DISCLAIMER, PARTIAL INVALIDITY, ARBITRA TION, NOTICES AND FORCE MAJEURE & JURISDICTION. 51 IN ADDITION TO ABOVE AN IRREVOCABLE SPECIAL POWE R OF ATTORNEY HAS ALSO BEEN EXECUTED BY THE SOCIETY IN F AVOUR OF THE DEVELOPERS I.E. THDC. (COPY OF WHICH IS AVA ILABLE AT PAGES 40 TO 52 OF THE PAPER BOOK IN CASE OF SOCI ETY IN ITA NO. 556 OF 2012 AS DISCUSSED EARLIER IN PARA 25 (COMPLETE COPY OF SUPPLEMENTARY POWER OF ATTORNEY W AS NOT AVAILABLE IN THE PAPER BOOK OF THE ASSESSEE, THEREFORE, REFERENCE WAS MADE TO THE PAPER BOOK IN CASE OF THE SOCIETY). 52 THE FIRST MAJOR CONTENTION OF THE LD. COUNSEL OF THE ASSESSEE IS THAT THE POSSESSION WAS NOT GIVEN BY TH E SOCIETY BECAUSE ACCORDING TO HIM AS PER CLAUSE 2.1 OF THE JDA THE POSSESSION OF THE PROPERTY WAS TO BE HANDED OVER SIMULTANEOUSLY TO THE EXECUTION AND REGISTRATION OF JDA AND SINCE THE JDA WAS NOT REGISTERED, THEREFORE, T HE POSSESSION WAS NOT GIVEN. WE CAN NOT ACCEPT THIS CONTENTION BECAUSE IN POWER OF ATTORNEY TRANSACTI ONS, IT IS NOT NECESSARY TO REGISTER THE JDA IF A SPECIAL P OWER OF ATTORNEY HAS BEEN GIVEN AND SAME IS REGISTERED. SECONDLY CLAUSE 9.3 OF THE JDA AS REPRODUCED ABOVE CLEARLY SHOW THAT ORIGINAL TITLE DEED WHICH HAVE BE EN MENTIONED ALONG WITH THE POSSESSION IN PARA 2.1 WHI CH ACCORDING TO THE LD. COUNSEL OF THE ASSESSEE WERE T O BE HANDED OVER SIMULTANEOUSLY TO EXECUTION AND REGISTR ATION OF THE JDA, IS NOT CORRECT BECAUSE CLAUSE 9.3 CLEAR LY MENTION THAT ORIGINAL TITLE DEED OF THE PROPERTY HA VE BEEN HANDED OVER TO THE THDC AT THE TIME OF SIGNING OF T HIS AGREEMENT BECAUSE CLAUSE 9.3 THERE IS NO MENTION AB OUT REGISTRATION OF JDA. 53 SPECIAL POWER OF ATTORNEY WHICH HAS BEEN EXECUTE D ON 26.2.2007 AND HAS BEEN REGISTERED ALSO. THE IRREVOCABLE SPECIAL POWER OF ATTORNEY HAS BEEN EXEC UTED AS PROVIDED IN CLAUSE 6.7 OF THE JDA WHICH READS AS UNDER: 87 6.7 THE OWNER SHALL EXECUTE AN IRREVOCABLE SPECIAL POWER OF ATTORNEY GRANTING ITS COMPLETE DEVELOPMENT RIGHTS IN THE PROPERTY IN FAVOUR OF THDC INTERALIA INCLUDING THE RIGHT TO RAISE FINANCE BY MORTGAGING THE PROPERTY AND REGISTER THE CHARGE WITH THE COMPETENT AUTHORITY AND EXECUTE REGISTERED SALE DEEDS) AS SET OUT IN CLAUSE 4.1 (II), (III), (IV) AND (V) AND THE OWNER CONFIRMS, UNDERTAKES, DECLARES AND BINDS ITSELF NOT TO REVOKE THE SAME FOR ANY REASON WHATSOEVER OUT OF IT S OWN WILL AND DISCRETION WITHOUT OBTAINING A SPECIFI C PRIOR WRITTEN CONSENT OF THDC OR ANY OF ITS DULY CONSTITUTED ATTORNEYS. THROUGH THIS POWER OF ATTORNEY VARIOUS POWERS HAVE BEEN GIVEN LIKE TO ASSIGN, FILE, AMEND ETC. VARIOUS PLA NS, DESIGNS TO REPRESENT BEFORE VARIOUS AUTHORITIES, T O APPOINT ARCHITECT, LAWYERS. SOME OF THE SPECIFIC CLAUSES RELEVANT, ARE EXTRACTED BELOW: (J) TO NEGOTIATE AND AGREE TO ANY/OR TO ENTER INTO AGREEMENT(S) TO CONSTRUCT/SELL AND TO UNDERTAKE CONSTRUCTION/SALE OF THE PREMISES ON THE PROPERTY O R ANY PORTION THEREOF WITH/TO SUCH PERSONS(S) OR BODY AND FOR SUCH CONSIDERATION AND UPON SUCH TERMS AND CONDITIO NS AS THE ATTORNEY DEEM FIT. (N) TO ENTER UPON THE PROPERTY EITHER ALONE OR WITH OTHERS FOR THE PURPOSE OF DEVELOPMENT, COORDINATION , EXECUTION, IMPLEMENTATION OF THE PROJECT AND COMMERCIALIZATION OF THE PROPERTY/PREMISES. (T) TO AMALGAMATE THE PROPERTY WITH ANY OTHER CONTIGUOUS, ADJACENT AND ADJOINING LAND SAND PROPER TIES WHEREIN DEVELOPMENT AND/OR OTHER RIGHT, BENEFITS AN D INTERESTS ARE ACQUIRED AND/OR PROPOSED TO BE ACQUIR ED AND DEVELOPED OR PROPOSED TO BE DEVELOPED BY THDC AND/O R THEIR ASSOCIATE AND/OR GROUP CONCERNS/S AND/OR UTIL IZE THE FSI, FAR, DR AND TDR OF THE CONTIGUOUS, ADJACENT AN D ADJOINING LANDS FOR THE PURPOSE OF CONSTRUCTING BUI LDINGS AND/OR STRUCTURES THEREON AND/OR ON THE PROPERTY O R UTILIZE SUCH LANDS AND PROPERTIES FOR MAKING PROVIS ION OF PARKING SPACES THEREON, AND/OR MAY UTILIZE THE SAME FOR ANY OTHER LAWFUL PURPOSE, AS THDC AND/OR THEIR ASSO CIATE AND/OR GROUP CONCERNS MAY IN THEIR SOLD, ABSOLUTE A ND UNFETTERED DISCRETION THINK FIT. 88 (W) TO HAND OVER THE POSSESSION OF THE PROPERTY OR ANY PART OR PORTION THEREOF TO THE AUTHORITIES TO WHOM THE SAME IS REQUIRED TO BE HANDED OVER OR OTHERWISE AND TO EXECUTE AND DELIVER ANY UNDERTAKINGS, DECLARATIONS, AFFIDAVITS, BONDS, DEEDS, DOCUMENTS, ETC. AS MAY BE REQUIRED BY THE AUTHORITIES CONCERNED FOR VESTING S UCH A PART OR PORTION IN SUCH AUTHORITY AND TO ADMIT EXEC UTION THEREOF BEFORE THE CONCERNED COMPETENT AUTHORITY AN D GET THE SAME REGISTERED WITH THE CONCERNED SUB-REGISTRA R. (Y) REASONABLE OPPORTUNITY OF HEARING SHALL BE GIVE N TO MORTGAGE, ENCUMBER OR CREATE A CHARGE ON THE PROPER TY OR ANY PART OR PORTION THEREOF AND EXECUTE THE NECESSA RY SECURITY DOCUMENTS IN FAVOUR OF ANY BANK/FINANCIAL INSTITUTION TO RAISE FUNDS FOR THE CONSTRUCTION/DEV ELOPMENT OF THE PROPERTY AND FOR THE SAID PURPOSE TO DEPOSIT TITLE DEEDS (IF REQUIRED) IN RESPECT OF THE PROPERTY IN F AVOUR OF SUCH BANK/FINANCIAL INSTITUTION, EXECUTE THE NECESS ARY DOCUMENTS AND REGISTER THE CHARGE CREATED ON THE PROPERTY IF SO REQUIRED IN THE REVENUE RECORDS AND/ OR DESIRED BY THE ATTORNEY. (AA) TO SELL, TRANSFER, LEASE, LICENSE THE PREMISE S THAT MAY BE CONSTRUCTED ON THE PROPERTY ON OWNERSHIP BAS IS, LEASE, LICENSE AND/OR IN ANY OTHER MANNER FOR SUCH PRICE AS THE ATTORNEYS MAY DEEM FIT AND PROPER. TO COLLE CT AND RECEIVE FROM THE PURCHASED, TRANSFEREES, LESSEES, LICENSEES OF THE PREMISES, MONIES/PRICE AND/OR CONSIDERATION AND/OR MAINTENANCE CHARGES AND TO SIG N AND EXECUTE AND/OR GIVE PROPER AND LAWFUL DISCHARGE FOR THE RECEIPTS. (BB) TO EXECUTE FROM TIME TO TIME ALL THE WRITING, AGREEMENT, DEEDS ETC. IN RESPECT OF THE PREMISES WH ICH MAYBE CONSTRUCTED ON THE PROPERTY AND ALSO TO EXECU TE AND SIGN CONVEYANCE, TRANSFER OR SURRENDER IN RESPE CT OF THE PROPERTY OR ANY PART THEREOF. (CC) TO SIGN, EXECUTE AND REGISTER THE CONVEYANCES OR ASSIGNMENTS AND/OR POWER OF ATTORNEYS AND/OR OTHER DOCUMENTS AND/OR AGREEMENTS AND/OR ANY OTHER WRITIN GS IN RESPECT OF THE PROPERTY IN PART OR FULL AND/OR THE PREMISES CONSTRUCTED THEREON OR ANY PART THEREOF IN FAVOUR O F ANY PERSON AS THE ATTORNEYS MAY DETERMINE INCLUDING IN FAVOUR OF ANY INDIVIDUAL AND/OR LEGAL ENTITLES AND/OR CO- 89 OPERATIVE SOCIETY AND/OR LIMITED COMPANY AND/OR ANY OTHER ENTITY THAT MAY BE FORMED FOR SUCH PURPOSE. (DD) TO ISSUE LETTER OF LIEN/NOCS AND TO SIGN DOCU MENTS ON BEHALF OF THE OWNER AS REQUIRED BY THE PROSPECTI VE BUYERS/LENDING INSTRUCTIONS TO CREATE A CHARGE ON T HE ALLOTTED PREMISES. (GG) TO LOOK AFTER AND MAINTAIN THE PROPERTY AND TH E PREMISES CONSTRUCTED THEREON TILL ITS TRANSFER IN F AVOUR OF THE CO-OPERATIVE SOCIETY OR LIMITED COMPANY OR ANY OTHER ORGANISATION. 54 IT IS PERTINENT TO NOTE THAT POWER/AUTHORIZATIO N WHICH HAVE BEEN GIVEN BY THE SOCIETY TO THE DEVELOPER, WERE IN FACT WERE REQUIRED TO BE GIVEN IN TERMS OF VARIOUS CLAUSES OF THE JDA. CLAU SE 6.7 REPRODUCED ABOVE ITSELF SHOWS THAT THE SOCIETY WAS REQUIRED TO GIVE POWERS TO RAISE FINANCE TO MORTGAGE THE PROPERTY AND EVEN THE REGIS TRATION OF CHARGE WAS ALSO REQUIRED TO BE GIVEN. FURTHER THROUGH CLAUSE 6.15 IT WAS AGREED THAT DOCUMENTS OF ORIGINAL TITLE DEEDS OF THE PROPERTY W OULD BE HANDED OVER TO THE DEVELOPER I.E. THDC/HASH SO THAT SAME CAN BE US ED IN FURTHERANCE OF DEVELOPMENT OF THE PROJECT AS WELL AS SECURITY F OR THE MONEY PAID BY THE OWNER. THROUGH CLAUSE 6.24 IT WAS AGREED THAT DEVE LOPER THDC/HASH WAS ALWAYS PERMITTED BY OWNER TO AMALGAMATE THE PRO PERTY WITH ANY OTHER CONTIGUOUS, ADJACENT AND ADJOINING LAND AND THE PRO PERTIES WHEREIN DEVELOPMENTAL AND OR OTHER RIGHTS, BENEFITS AND IN TEREST WERE ACQUIRED BY THE DEVELOPER OR WOULD BE ACQUIRED IN FUTURE. THIS CLEARLY SHOWS THAT THE SOCIETY WAS UNDER OBLIGATION IN TERMS OF AGREEMENT ITSELF TO ALLOW THE DEVELOPER TO AMALGAMATE THE PROJECT. TOWARDS THE E ND OF CLAUSE 6.24 IT HAS BEEN CLEARLY STATED THAT IN THE EVENT OF TERMIN ATION OF JDA, PROVISION OF CLAUSE 6 WOULD BE SURVIVING WHICH CLEARLY SHOWS THA T DEVELOPER CONTINUES TO BE IN POSSESSION FOR THE PURPOSE OF DEVELOPMENT, MORTGAGE ETC. EVEN AFTER TERMINATION. CLAUSE 8 WHICH DESCRIBES THE OB LIGATION AND UNDERTAKING OF THE THDC/HASH AND PROVIDES SPECIFICA LLY THAT ALL ENVIRONMENTAL CLEARANCE SHALL BE OBTAINED BY THDC/H ASH OUT OF ITS OWN SOURCES. THUS IT WAS CLEARLY UNDERSTOOD BY THE PAR TIES THAT REQUISITE ENVIRONMENTAL CLEARANCES HAD TO BE OBTAINED BEFORE START OF THE PROJECT. CLAUSE 10 AGAIN CASTS SPECIFIC OBLIGATION ON THE OW NER SOCIETY TO GIVE CONSENT TO THDC/HASH TO RAISE FINANCE FOR THE DEVEL OPMENT AND COMPLETION OF THE PROJECT ON THE SECURITY OF THE PR OPERTY BY WAY OF MORTGAGING THE PROPERTY. THUS WHATEVER POWER/AUTHO RIZATION HAVE BEEN GIVEN THROUGH IRREVOCABLE SPECIAL POWER OF ATTORNEY ARE EMANATING FROM THE TERMS AND CONDITIONS AGREED TO AMONG THE PARTIE S FROM THE JDA. 90 55 THE COMBINED READING OF THE ABOVE CLAUSES OF TH E IRREVOCABLE SPECIAL POWER OF ATTORNEY AND JDA CLEAR LY SHOW THAT THE DEVELOPER WAS AUTHORIZED TO ENTER UPO N THE PROPERTY FOR NOT ONLY FOR THE PURPOSE OF DEVELOPMEN T BUT OTHER PURPOSES ALSO. THDC WAS AUTHORIZED TO AMALGAMATE THE PROJECT WITH ANY OTHER PROJECT IN TH E ADJACENT AREA OR ADJOINING AREA AS PER CLAUSE (T) O F THE SPECIAL POWER OF ATTORNEY. IF THE POSSESSION WAS N EVER GIVEN TO THE DEVELOPER BY THE SOCIETY THEN HOW THE DEVELOPER COULD AMALGAMATE THE PROJECT WITH ANOTHE R PROJECT WHICH MAY BE ACQUIRED LATTER IN THE ADJOINI NG AREA. THROUGH CLAUSE (W) THDC WAS AUTHORIZED TO HAND OVER THE POSSESSION OF PROPERTY OR PORTION THEREOF TO THE AU THORITY TO WHOM THE SAME IS REQUIRED. IN LARGE HOUSING SOC IETY PROJECTS SOMETIMES MUNICIPAL AUTHORITIES TAKES SOME PORTION OF LAND FOR THE PURPOSE OF ROADS, PARKS OR OTHER GENERAL UTILITY PURPOSES LIKE INSTALLATION OF ELECT RICITY TRANSFORMERS AND BEFORE SANCTIONING THE PLANS THE DEVELOPER IS REQUIRED TO UNDERTAKE THAT SUCH PORTIO NS OF LAND WOULD BE GIVEN FOR SUCH A COMMON PURPOSE. IF POSSESSION WAS NOT GIVEN THEN HOW THDC WAS AUTHORIZ ED TO HAND OVER SUCH LAND OR PORTIONS THEREOF WHICH HA VE NOT BEEN IDENTIFIED IN THE JDA OUT OF THE TOTAL LAND. SIMILARLY THROUGH CLAUSE (Y) THDC HAS BEEN AUTHORIZED TO MORTGAGE, ENCUMBRANCE OR CREATE CHARGE ON THE PROPE RTY IN FAVOUR OF ANY BANK OR FINANCIAL INSTITUTION FOR RAISING THE FUNDS FOR THE PROJECT. IN THE ABSENCE OF POSSE SSION SUCH POWERS CANNOT BE GIVEN. CLAUSE (AA) CLEARLY AUTHORIZED THE THDC TO SELL, TRANSFER, LEASE, LICEN SE THE PREMISES WHICH WERE TO BE CONSTRUCTED ON OWNERSHIP BASIS AND FURTHER TO RECEIVE MONEYS AGAINST SUCH SA LE ETC. AND TO ISSUE FINAL RECEIPT. NOWHERE IT IS MENTIONE D IN THIS CLAUSE THAT SUCH SALE DEEDS WERE TO BE SINGED BY TH E SOCIETY AS CONFIRMING PARTY. IN THE ABSENCE OF POSSESSION IT IS JUST NOT POSSIBLE FOR THE DEVELOPE R TO SELL AND TRANSFER THE PREMISES WHICH WERE TO BE CONSTRUC TED. THIS IS FURTHER CLARIFIED BY CLAUSE (BB) AND (CC) W HICH GIVES THE POWER OF EXECUTION OF CONVEYANCE AND OTHE R DOCUMENTS INVOLVING IN RESPECT OF THE PREMISES TO B E CONSTRUCTED WITHOUT ANY INTERFERENCE OF THE SOCIETY BEING MADE CONFIRMING PARTY. ALL THESE CLAUSES CLEARLY S HOW THAT THE POSSESSION WAS GIVEN BY THE SOCIETY AND/OR ITS MEMBERS TO THDC/HASH ON THE EXECUTION OF IRREVOCABL E POWER OF ATTORNEY. THROUGH THESE CLAUSES OF JDA AN D IRREVOCABLE POWER OF ATTORNEY THE DEVELOPER WAS AB LE TO COMPLETELY CONTROL THE PROPERTY AND MAKE USE OF IT NOT 91 ONLY FOR THE PURPOSE OF DEVELOPMENT BUT ALSO FOR TH E PURPOSE OF AMALGAMATION, SALE, MORTGAGE ETC. WHEN T HE ABOVE CLAUSES ARE COMPARED ON TOUCH STONE OF THE DISCUSSION ON POSSESSION IN PARA 26 TO 28 IN THE CA SE OF JASBIR SINGH SARKARIA (SUPRA) WHICH WE HAVE REPRODU CED ABOVE, IT BECOMES CLEAR THAT THE POSSESSION HAS BEE N GIVEN. 56 IN THAT DISCUSSION, IT HAS BEEN CLEARLY MENTION ED THAT THE POSITION CONTEMPLATED BY CLAUSE (V) OF SECTION 2(47) OF THE ACT NEED NOT TO BE EXCLUSIVE POSSESSION. WHAT IS REQUIRED IS THAT THE TRANSFEREE BY VIRTUE OF POSSES SION SHOULD BE ABLE TO EXERCISE CONTROL FROM OVERALL INT ENDED PURPOSES. WE DO NOT THINK IN THE PRESENT CASE THE ASSESSEE HAS GIVEN ONLY A LICENSE AS CLAIMED BY LD. COUNSEL OF THE ASSESSEE BECAUSE OF THE POWERS OF SE LLING, AMALGAMATING ETC. MENTIONED IN THE JDA AND IRREVOC ABLE SPECIAL POWER OF ATTORNEY. THE ISSUE HAS BEEN DISC USSED IN HE JUDGMENT OF JASBIR SINGH SARKARIA (SUPRA) IN FURTHER DISCUSSION WHICH HAS BEEN MADE IN PARA 33 REGARDING POWER OF ATTORNEY (WHICH HAS BEEN REPRODUCED EARLIE R). IN THAT CASE THE POWERS WERE GIVEN TO ENTER UPON AN D SURVEY THE LAND, PREPARE LAY OUT PLANS, SUBMIT BUIL DING PLAN FOR SANCTION WITH THE APPROPRIATE AUTHORITIES TO CONTROL, MANAGE AND LOOK AFTER AND SUPERVISE THE PROPERTY, TO OBTAIN WATER AND SEWERAGE, DISPOSAL AN D ELECTRICITY CONNECTION. IN THAT CASE THE DEVELOPER WAS AUTHORIZED TO MORTGAGE THE PROPERTY TO OBTAIN MONEY FOR MEETING THE COST OF CONSTRUCTION ON SECURITY AND MO RTGAGE OF LAND FALLING ONLY TO THE DEVELOPERS SHARE. IN T HAT CASE IT WAS HELD THAT GPA WAS NOT A LICENSE TO ENTER UPO N FOR DOING SOME PRELIMINARY ACTS IN RELATION TO DEVELOPM ENT OF WORK BUT THE POWER TO CONTROL THE LAND HAS ALSO BEE N CONFIRMED. IT HAS ALSO BEEN NOTED THAT THE AGREEME NT DESCRIBED THE POWER OF ATTORNEY AS IRREVOCABLE AND EXTRA DECLARATION TO THAT EFFECT IN THE POWER OF ATTORNEY IS NOT WITHOUT SIGNIFICANCE. IN CASE BEFORE US, MANY MORE POWERS HAVE BEEN GIVEN TO THDC IN ADDITION TO POWER S WHICH HAVE BEEN DESCRIBED IN THAT JUDGMENT AND POWE R OF ATTORNEY HAS BEEN DESCRIBED AS IRREVOCABLE IN CLAUS E 6.7 OF JDA. THEREFORE, IT IS CLEAR THAT THE ASSESSEE S PLEA THAT THE POSSESSION WAS TO BE GIVEN ONLY AT THE TIM E OF REGISTRATION OF THE JDA, IS NOT CORRECT. ONCE IRRE VOCABLE POWER WAS GIVEN THEN IT CANNOT BE SAID THAT THE POSSESSION WAS NOT GIVEN. THE ISSUE REGARDING REVOCATION OF IRREVOCABLE POWER OF ATTORNEY AND 92 CANCELLATION OF THE JDA WOULD BE DISCUSSED LATER ON WHILE DEALING WITH THAT CONTENTION. 57 WE FIND FORCE IN THE SUBMISSIONS OF THE LD. DR FOR THE REVENUE THAT INTERPRETATION OF CLAUSE (V) TO SE CTION 2(47) SHOULD BE MADE IN THE LIGHT OF HEYDONS RULE. THERE IS NO FORCE IN THE OBJECTION OF THE LD. COUNS EL OF THE ASSESSEE THAT THIS CLAUSE SHOULD BE INTERPRETED ON GENERAL RULES OF INTERPRETATION PARTICULARLY IN THE LIGHT OF THE FACT THAT NO REASON HAS BEEN GIVEN FOR THE SAME . HEYDONS RULE HAS BEEN APPLIED BY THE INDIAN COURTS MANY TIMES. THE RULE WAS APPLIED AND INITIATED IN HEYDONS CASE (1584) 3 CO. REP 7A. THIS RULE WAS UPHELD BY THE CONSTITUTION BENCH OF HON'BLE APEX CO URT IN CASE OF BENGAL IMMUNITY CO. LTD. V STATE OF BIHAR (1955) 2 SCR 603 FOR CONSIDERATION OF ARTICLE 286 OF THE CONSTITUTION. IT HAS BEEN HELD IN CASE OF DR. BALI RAM WAMAN HIRAY V. MR. JUSTICE B. LENTIN AND ANOTHER, 176 ITR 1 THAT FOR UNDERSTANDING AMENDMENT IN THE ACT, PERHAPS HEYDONS RULE IS BEST RULE FOR INTERPRETATI ON OF SUCH AMENDMENT. WE FIND THAT WITHOUT MENTIONING THI S RULE LD. AUTHORITY FOR ADVANCE RULING HAS DISCUSSED THIS ISSUE IN PARA 27 OF THE JUDGMENT WHICH WE HAVE EXTR ACTED ABOVE. IT HAS BEEN HELD THAT IF POSSESSION REFER RED TO IN CLAUSE (V) IS TO BE UNDERSTOOD AS EXCLUSIVE BASIS O F THE TRANSFEREE THEN VERY PURPOSE OF THE AMENDMENT OR ENLARGEMENT OF THE DEFINITION OF TRANSFER WOULD GET DEFEATED. WE ARE REPRODUCING FOLLOWING HEAD NOTE O F THE HON'BLE APEX COURT IN CASE OF DR. BALIRAM WAMAN HIR AY V. MR. JUSTICE B. LENTIN AND ANOTHER (SUPRA): THE FOLLOWING PRINCIPLES ENUNCIATED IN HEYDONS CA ASE (1584) 3 CO. REP 7A AND FIRMLY ESTABLISHED, ARE STI LL IN FULL FORCE AND EFFECT: THAT FOR THE SURE AND TRUE INTER PRETATION OF ALL STATUTES IN GENERALS (BE THEY PENAL OR BENEF ICIAL, RESTRICTIVE OR ENLARGING OF THE COMMON LAW), FOUR T HINGS ARE TO BE DISCERNED AND CONSIDERED: (1) WHAT WAS TH E COMMON LAW BEFORE THE MAKING OF THE ACT; (2) WHAT W AS THE MISCHIEF AND DEFECT FOR WHICH THE COMMON LAW DI D NOT PROVIDE; (3) WHAT REMEDY PARLIAMENT HAS RESOLVED AN D APPOINTED TO CURE THE DISEASE OF THE COMMON WEALTH AND (4) THE TRUE REASON OF THE REMEDY. AND THEN, THE O FFICE OF ALL THE JUDGES IS ALWAYS TO MAKE SUCH CONSTRUCTION AS SHALL SUPPRESS THE EVASIONS FOR THE CONTINUANCE OF THE MISCHIEF AND PRO PRIVATE COMMANDO AND TO ADD FORCE AND LIFE TO THE CURE AND REMEDY ACCORDING TO THE TRUE I NTENT OF 93 THE MAKERS OF THE ACT PRO BONO PUBLIC. THERE IS NO W THE FURTHER ADDITION THAT REGARD MUST BE HAD NOT ONLY T O THE EXISTING LAW BUT ALSO TO PRIOR LEGISLATION AND TO T HE JUDICIAL INTERPRETATION THEREOF. 58 GOING BY THE HEYDONS RULE OF INTERPRETATION IF WE ANALYZE THE PURPOSE OF CLAUSE (V) OF SECTION 2(47) THEN IT WOULD EMERGE THAT LAW BEFORE MAKING THE AMENDMENT W AS THAT CAPITAL GAIN COULD BE CHARGED ONLY IF A TRANSF ER HAS BEEN EFFECTED AND TRANSFER WAS INTERPRETED BY VARIO US COURTS INCLUDING THE DECISION OF HON'BLE SUPREME CO URT IN CASE OF ALAPATI VENKATRAMIAN V CIT, 57 ITR 185 ( SC) THAT PROPER CONVEYANCE OF THE PROPERTY HAS BEEN MAD E UNDER THE COMMON LAW. THE MISCHIEF WAS WITH REGARD TO TRANSFER IN THE SENSE THAT THERE WAS COMMON PRACTIC E THAT PROPERTIES WERE BEING TRANSFERRED IN SUCH A MANNER THAT TRANSFEREE COULD ENJOY THE BENEFIT OF THE PROPERTY WITHOUT EXECUTION OF THE CONVEYANCE DEED. THIRDLY WE NEED T O EXAMINE THE REMEDY WHICH WAS INSERTION OF CLAUSE (V ) AND (VI) SO THAT CASES OF GIVING POSSESSION OF THE PROP ERTY, WERE ALSO COVERED BY THE DEFINITION OF TRANSFER. F OURTHLY, TRUE REASON FOR THIS AMENDMENT WAS TO PLUG A LOOP H OLE IN THE LAW. THEREFORE, CONSIDERING THE PURPOSE OF IN SERTION OF CLAUSE (V) AND (VI) OF SECTION 2(47) AND VARIOUS CLAUSES OF POWER OF ATTORNEY AND JDA IT BECOMES ABSOLUTELY CLEAR THAT THE SOCIETY HAS HANDED OVER THE POSSESSION OF THE PROPERTY TO THDC/HASH. 59 SECOND IMPORTANT CONTENTION ON BEHALF OF THE ASSESSEE IS THAT JDA WAS EXECUTED ON 25.2.2007 AND IF POSSESSION WAS GIVEN THEN HOW THE ASSESSEE WAS HAVI NG POSSESSION IN TERMS OF LATER SALE DEEDS EXECUTED ON 2.3.2007 AND 25.4.2007. THE SOCIETY HAS EXECUTED T WO SALE DEEDS FOR CONVEYANCE OF PARTS OF THE TOTAL LA ND. FIRST SALE DEED HAS BEEN EXECUTED ON 2.3.2007 FOR 3 .08 ACRES AND RECITATION CLAUSE (A) READS AS UNDER: CLAUSE (A) - THE VENDOR IS THE ABSOLUTE OWNER AND I N POSSESSION OF LAND TOTAL MEASURING 169 KANAL 7 MARL AS EQUIVALENT TO APPROX. 21.2 ACRES IN VILLAGE KANSAL, TEHSIL MOHALI AND MORE PARTICULARLY DESCRIBED IN SCHEDULE A HEREUNDER WRITTEN AND DELINEATED IN GREEN COLOUR BOUNDARY LINE IN THE SHIZRA PLAN ISSUED BY THE PATW ARI DATED 23.2.2007. 94 60 ACCORDING TO THE LD. COUNSEL OF THE ASSESSEE IF SOCIETY HAD ALREADY GIVEN THE POSSESSION THEN THE S OCIETY WOULD NOT HAVE / HAD POSSESSION ON 2.3.2007 OF THE LAND. AT FACE VALUE THIS ARGUMENT LOOKS ATTRACTIVE BUT WH EN EXAMINED IN TERMS OF POSSESSION WHICH HAS BEEN EXPLAINED IN CASE OF JASBIR SINGH SARKARIA (SUPRA), ACTUAL REALITY WILL COME FORWARD. IN THIS JUDGMENT CONCEP T OF CONCURRENT POSSESSION HAS ALSO BEEN DISCUSSED AND FOLLOWING EXTRACT OF PARAGRAPH 55 OF SALMONDS JURISPRUDENCE HAS BEEN EXTRACTED WHICH READS AS UN DER: IT WAS A MAXIM OF THE CIVIL LAW THAT TWO PERSONS C OULD NOT BE IN POSSESSION OF THE SAME THING AT THE SAME TIME . AS A GENERAL PROPOSITION THIS IS TRUE: FOR EXCLUSIVENE SS IS OF THE ESSENCE OF POSSESSION. TWO ADVERSE CLAIMS OF EXCLUSIVE USE CANNOT BOTH BE EFFECTUALLY REALIZED A T THE SAME TIME. CLAIMS, HOWEVER, WHICH ARE NOT ADVERSE, AND WHICH ARE NOT, THEREFORE, MUTUALLY DESTRUCTIVE, ADM IT OF CONCURRENT REALIZATION. HENCE THERE ARE SEVERAL PO SSIBLE CASES OF DUPLICATE POSSESSION. 1 MEDIATE AND IMMEDIATE POSSESSION CROSS- OBJECTIONS-EXIST IN RESPECT OF THE SAME THING AS ALREADY EXPLAINED. 2 TWO OR MORE PERSONS MAY POSSESS THE SAME THING IN COMMON; JUST AS THEY MAY OWE IT IN COMMON. THE CONCURRENT POSSESSION OF THE OWNER WHO CAN EXER CISE POSSESSION RIGHT TO A LIMITED EXTENT AND FOR A LIMI TED PURPOSE AND THAT OF THE BUYER/DEVELOPER WHO HAS A GENERAL CONTROL AND CUSTODY OF THE LAND CAN VERY WE LL BE RECONCILED. 61 IN FURTHER DISCUSSION IN PARA 26 TO 28 OF THE AB OVE DECISION IT HAS BEEN HELD THAT IT IS NOT NECESSARY IN TERMS OF CLAUSE (V) THAT THE DEVELOPER SHOULD HAVE EXCLUS IVE POSSESSION. THE CONCURRENT POSSESSION OF THE OWNER IS POSSIBLE WHICH GIVES RIGHTS TO A LIMITED EXTENT FOR A LIMITED PURPOSE. THUS IT IS VERY MUCH POSSIBLE TO H OLD CONCURRENT POSSESSION. MERE RECITATION IN THE SALE DEED TO THE EFFECT THAT THE SOCIETY WAS OWNER OF AND IN POSSESSION OF LAND MEASURING 21.2 ACRES, DOES NOT S HOW THAT THE SOCIETY WAS HAVING ACTUAL POSSESSION. WHA T THE SOCIETY WAS HAVING IS ONLY OWNERSHIP RIGHT AND THE 95 POSSESSION WAS ONLY CONCURRENT AS THE POSSESSARY RI GHT. FURTHER IT IS A STANDARD CLAUSE IN THE CONVEYANCE D EED AND IT DOES NOT PROVE OR INDICATE ANYTHING EXCEPT T HAT A PORTION OF LAND MEASURING 3.08 ACRES, HAS BEEN SOLD / CONVEYED TO THE DEVELOPER. IN THE LIGHT OF THIS POS ITION, THIS CONTENTION IS REJECTED. 62 WE FIND NO FORCE IN THE NEXT CONTENTION OF THE LD. COUNSEL OF THE ASSESSEE THAT POSSESSION IF AT ALL W AS GIVEN SHOULD BE HELD TO BE ONLY A LICENSE AS DEFINE D IN SECTION 52 OF INDIAN EASEMENT ACT BECAUSE CLEARLY A S PER SECTION 52 OF THIS ACT, WHERE ONE PERSON GRANTS TO ANOTHER OR MANY OTHER PERSONS TO DO SOMETHING UPON IMMOVEABLE PROPERTY WHICH IN THE ABSENCE OF SUCH RI GHT WOULD BE UNLAWFUL. 63 HERE IN CASE BEFORE US, THE RIGHT HAS NOT BEEN GIVEN FOR THE PURPOSE OF DOING SOMETHING BUT ALL THE POSS IBLE RIGHTS IN PROPERTY INCLUDING RIGHT TO SELL, RIGHT T O AMALGAMATE THE PROJECT WITH ANOTHER PROJECT IN THE ADJOINING AREA WHICH MAY BE ACQUIRED LATER, RIGHT T O MORTGAGE ETC. CLEARLY SHOW THAT RIGHTS GIVEN BY THE SOCIETY ARE MUCH MORE LARGER THAN WHAT IS COVERED I N THE TERM LICENSE. 64 FOURTH CONTENTION IS THAT THE MONEY RECEIVED AT THE TIME OF EXECUTION OF JDA CAN BE TERMED AS ADVANCE AND WHAT EVER MONEY HAS BEEN RECEIVED HAS ALREADY BEEN SHOWN AS CAPITAL GAI N. WE FIND NO FORCE IN THIS SUBMISSION BECAUSE SECTION 45 WHICH HAS BEE N EXTRACTED ABOVE CLEARLY PROVIDE FOR TAXING OF PROFITS AND GAINS ARI SING FROM THE TRANSFER. WE HAVE ALREADY DISCUSSED THE IMPLICATION OF SECTION 4 5 R.W.S. 48 WHILE DISCUSSING THE LEGAL POSITION. WE HAD ALSO DISCUSS ED THIS ISSUE IN THE LIGHT OF THE DECISION IN CASE OF JASBIR SINGH SARKARIA (S UPRA) AND POINTED OUT THAT WHEN SECTION 45 IS READ ALONG WITH SECTION 48 IT BECOMES CLEAR THAT WHOLE OF THE CONSIDERATION WHICH IS RECEIVED OR ACC RUED IS TO BE TAXED ONCE CAPITAL ASSET IS TRANSFERRED IN A PARTICULAR Y EAR. 65 WE WOULD LIKE TO DISCUSS THIS ASPECT OF THE ISS UE IN LITTLE MORE DETAIL AND TRY TO UNDERSTAND WHY THE WHOLE OF THE CONSIDER ATION IS REQUIRED TO BE TAXED. AT THE COST OF REPETITION LET US AGAIN REPR ODUCE THE OBSERVATIONS OF THE LD. AUTHORITY IN CASE OF JASBIR SINGH SARKARIA (SUPRA) WHICH WE HAVE EARLIER EXTRACTED AT PARA 40 AND THE RELEVANT PORTI ON IS AS UNDER: 40. ON THE ABOVE, THE HON'BLE AUTHORITY AFTER REFE RRING TO THE PROVISIONS OF SECTION 45 AND OBSERVED AS UNDER: - 96 .THE SECTION CAN BE ANALYSED THUS : (A) TRANSFER OF A CAPITAL ASSET EFFECTED IN THE PRE VIOUS YEAR, (B) RESULTANT PROFITS OR GAINS FROM SUCH TRANSFER, (C) THOSE PROFITS OR GAINS WOULD CONSTITUTE THE INC OME OF THE ASSESSEE/ TRANSFEROR (D) SUCH INCOME SHALL BE DEEMED TO BE THE INCOME OF THE SAME PREVIOUS YEAR IN WHICH THE TRANSFER HAD TAKEN PLACE . TWO ASPECTS MAY BE NOTED AT THIS JUNCTURE. FIRSTLY , THE EXPRESSION USED IS ARISING WHICH IS NOT TO BE EQUATED WITH THE EXPRESSION RECEIVED. BOTH THESE EXPRESSIONS AND IN ADDITION THERETO, THE EXPRESSION ACCRUE ARE USED IN THE INCOME-TAX ACT EITHER COL LECTIVELY OR SEPARATELY ACCORDING TO THE CONTEXT AND NATURE OF THE CHARGING PROVISION. THE SECOND POINT WHICH DESERVES NOTICE IS THAT BY A DEEMING P ROVISION, THE PROFITS OR GAINS THAT HAVE ARISEN WOULD BE TREATED AS THE INC OME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE. THAT MEANS, THE INCOME ON ACCOUNT OF ARISAL OF CAPITAL GAIN SHOULD BE CHARGED TO TAX IN THE SAME PREVIOUS YEAR IN WHICH THE TRANSFER WAS EFFECTED OR DEEMED TO HAVE TAKEN PLACE. THE EFFECT AND AMBIT OF THE DEEMING PROVISION CONT AINED IN SECTION 45 HAS BEEN CONSIDERED IN DECIDED CASES AND LEADIN G TEXT BOOKS. THE FOLLOWING STATEMENT OF LAW IN SAMPATH IYENGARS CO MMENTARY (10TH EDITION REVISED BY SHRI S. RAJARATNAM) BRINGS OUT THE CORRECT LEGAL POSITION : SECTION 45 ENACTS THAT THE CAPITAL GAINS SHALL BY FICTION BE DEEMED TO BE THE INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE. SINCE THIS IS A STATUTORY FICTION, THE ACTU AL YEAR IN WHICH THE SALE PRICE WAS RECEIVED, WHETHER IT WAS ONE YEAR, T WO YEARS, THREE YEARS, FOUR YEARS ETC. PREVIOUS TO THE PREVIOUS YEA R OF TRANSFER, IS BESIDE THE POINT. THE ENTIRETY OF THE SUM OR SUMS R ECEIVED IN ANY EARLIER YEAR OR YEARS WOULD BE REGARDED AS THE CAPI TAL GAINS ARISING IN THE PREVIOUS YEAR OF TRANSFER. . . . . IN THE WORDS OF SECTION 45, THE CAPITAL GAI NS ARISING FROM THE TRANSFER 'SHALL BE THE INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE'. SO, THE PAYMENTS OF CONSIDER ATION STIPULATED TO BE PAID IN FUTURE WOULD HAVE TO BE ATTRIBUTED, BY STATUTORY MANDATE, TO THE YEAR OF TRANSFER, EVEN AS PAYMENTS MADE PRIOR TO THE YEAR OF TRANSFER. 97 66 THE ABOVE CLEARLY SHOWS THAT IT IS BECAUSE OF EX PRESSION USED IN SECTION 45 THAT IS ARISING WHICH CANNOT BE EQUATE D WITH RECEIPT. IN THIS RESPECT THE LD. AUTHORITY HAS QUOTED A VERY OLD DEC ISION OF HON'BLE MADRAS HIGH COURT IN CASE OF T.V. SUNDARAM IYENGAAR AND SO NS LTD. V. CIT, 37 ITR 26 (MAD). AT PARA 13 OF THE SAID DECISION IS E XTRACTED IN THE FOLLOWING MANNER: 13. IN T.V. SUNDARAM IYENGAR AND SONS LTD. V. CIT [ 1959] 37 ITR 26, A DIVISION BENCH OF THE MADRAS HIGH COURT WHILE CONST RUING SECTION 12 B OF THE INDIAN INCOME-TAX ACT, 1922 CLARIFIED THE IMPOR T OF THE EXPRESSION ARISE AS FOLLOWS SECTION 12B DOES NOT REQUIRE THAT PROFITS SHOULD HAVE BEEN ACTUALLY RECEIVED. IT IS SUFFICIENT IF THEY HAVE ARISEN. THR OUGHOUT THE INCOME-TAX ACT THE WORDS ACCRUE AND ARISE ARE USED IN CONTRADI STINCTION TO THE WORD RECEIVE AND INDICATE A RIGHT TO RECEIVE. THIS WAS EXPLAINED BY FRY L.J., IN COLQUHOUN V. BROOKS. THE LEARNED JUDGE OBSERVED: I THINK, THEREFORE, THAT THE WORDS ARISE OR ACCR UING ARE GENERAL WORDS DESCRIPTIVE OF A RIGHT TO RECEIVE PROFITS. SEE ALSO CIT V. ANAMALLAIS TIMBER TRUST LTD. TO ATT RACT THE OPERATION OF SECTION 12B IT IS THEREFORE SUFFICIENT IF THE PROFI TS AROSE. THEY NEED NOT HAVE BEEN ACTUALLY RECEIVED. 14. THUS THE CRITERION OF RIGHT TO RECEIVE THE PROF ITS / GAINS WAS APPLIED IN THAT CASE. 15. THE LEGAL POSITION DOES NOT THEREFORE ADMIT OF ANY DOUBT THAT THE ACTUAL RECEIPT OF THE ENTIRE SALE CONSIDERATION DURING THE YEAR OF TRANSFER IS NOT NECESSARY FOR THE PURPOSE OF COMPUTING CAPITAL GAINS. FURTHER THE EXPRESSION ARISING HAS BEEN DEFINED IN THE ADVANCED LAW LEXICON BY P. RAMANATHA AIYER EDITED BY Y.V. CHANDR ACHUD, FORMER CHIEF JUSTICE OF INDIA: THE WORDS ARISING OR ACCRUING DESCRIBE A RIGHT T O RECEIVE PROFITS, AND THAT THERE MUST BE A DEBT OWED BY SOMEBODY. LD. CO MMISSIONER OF INCOME TAX, WEST BENGAL-II, CALCUTTA V. HINDUSTAN H OUSING AND LAND DEVELOPMENT TRUST LTD. AIR 1986 S.C 1805, 1807. THE EXPRESSION ACCRUAL OF INCOME HAS BEEN DEFINE D IN THE SAME LEXICON AS UNDER: 98 ACCRUAL OF INCOME. E.D JASSOON & C. LTD. V LD. COM MISSIONER OF INCOME TAX, AIR 1954 S.C 470 QUOTED INCOME MAY ACCRUE TO AN ASSESSEE WITHOUT THE ACTUAL RECEIPT OF THE SAME. IF THE ASS ESSEE ACQUIRES A RIGHT TO RECEIVE THE INCOME, THE INCOME CAN BE SAID TO HAVE ACCRUED TO HIM THOUGH IT MAY BE RECEIVED LATER ON ITS BEING ASCERTAINED. THE BASIC CONCEPTION IS THAT HE MUST HAVE ACQUIRED A RIGHT TO RECEIVE THE I NCOME. BHOGILAL V INCOME TAX LD. COMMISSIONER, AIR 1956 BOM 411, 414 (INCOME TAX ACT (11 OF 1992) SS. 16(1) AND (3)} 67 THE COMBINED READING OF THESE TWO DEFINITIONS SH OW THAT IT (I.E. ACCRUAL) IS NOT EQUAL TO THE RECEIPT OF INCOME. IN FACT IT IS A STAGE BEFORE THE POINT OF TIME WHEN THE INCOME BECOMES RECEIVABL E. IN OTHER WORDS, ONCE THE VESTED RIGHTS COME TO A PERSON THEN IT CAN BE SAID THAT SUCH RIGHT OR INCOME HAS ACCRUED TO SUCH PERSON. THE CONCEPT OF ACCRUAL OR AROUSAL OF INCOME HAS ALSO BEEN DISCUSSED BY THE LD. AUTHOR S. RAJARATNAM IN THE COMMENTARY OF LAW OF INCOME TAX BY SAMPATH IYENGAR XITH EDITION BY DISCUSSING THE MEANING OF ACCRUED AND ARISE AT PA GE 1300 IT HAS BEEN OBSERVE AS UNDER: (1) IMPORTANT PRINCIPLES.- (A) MEANING ACCRUE MEANS TO ARISE OR SPRING AS A NATURAL GROWTH OR RESULT, TO COME BY WAY OF I NCREASE. ARISING MEANS COMING INTO EXISTENCE OR NOTICE OR PRESENTING ITSE LF. ACCRUE CONNOTES GROWTH OR ACCUMULATION WITH A TANGIBLE SHAPE SO AS TO BE RECEIVABLE. IN A SECONDARY SENSE, THE TWO WORDS TOGETHER MEAN TO BE COME A PRESENT AND ENFORCEABLE RIGHT AND TO BECOME A PRESENT RIGHT OF DEMAND. IN THE ACT, THE TWO WORDS ARE USED SYNONYMOUSLY WITH EACH OTHER TO DENOTE THE SAME IDEA OR IDEAS VERY SIMILAR, AND THE DIFFERENCE LIES ONLY IN THIS THAT ONE IS MORE APPROPRIATE THAN THE OTHER, WHEN APPLIED, TO A PARTICULAR CASE. IT WILL INDEED BE DIFFICULT TO DISTINGUISH BETWEEN THE TWO WORDS, BUT IT IS CLEAR THAT BOTH THE WORDS ARE USED IN CONTRADISTINCTION TO THE WORD RECEIVE AND INDICATE A RIGHT TO RECEIVE. THEY REPRESENT A STAGE ANTERIOR TO THE POINT OF TIME WHEN THE INCOME BECOMES RECEIVABLE AND CONNOTE A CHARACTER OF THE INCOME, WHICH IS MORE OR LESS INCHOATE AND WHICH IS SOMETHING LESS THAN A RECEIPT. AN UNENFORCEABLE CLAIM TO RECEIVE AN UNDET ERMINED OR UNDEFINED SUM DOES NOT GIVE RISE TO ACCRUAL. 68 THEREFORE, IT IS NOT ONLY THE MONEY WHICH HAS BEEN RECEIVED BY THE ASSESSEE WHICH IS REQUIRED TO BE TAXED BUT THE CONS IDERATION WHICH HAS ACCRUED TO THE ASSESSEE IS ALSO REQUIRED TO BE TAXE D. IN VIEW OF THIS, THIS CONTENTION IS REJECTED. 69 THE FIFTH CONTENTION MADE BY THE LD. COUNSEL F OR THE ASSESSEE WAS THAT SINCE SECTION 53A OF THE TRANSFER OF PROPERTY ACT ITSELF HAS UNDERGONE AMENDMENT W.E.F. 24.9.2001 BY WHICH THE AGREEMENT REFERRED TO IN THA T 99 SECTION IS REQUIRED TO BE REGISTERED AND THEREFORE, NOW IN SECTION 2(47)(V) ONLY THE AMENDED PROVISIONS CAN BE READ. WE FIND NO FORCE IN THIS CONTENTION. IT IS WELL KN OWN THAT SECTION 53A OF THE TRANSFER OF PROPERTY ACT WAS PAS SED ON EQUITABLE DOCTRINE SO AS TO PROTECT THE TAKING OVER OR RETENTION OF THE POSSESSION BY THE TRANSFEREE. IT WAS NOT A SOURCE BY WHICH TITLE OF IMMOVABLE PROPERTY COULD BE ACQUIRED. SECTION 53A OF TP ACT READ AS UNDER:- 53A. PART PERFORMANCE.- WHERE ANY PERSON CONTRACTS TO TRANSFER FOR CONSIDERATION ANY IMMOVEABLE PROPERTY BY WRITING SI GNED BY HIM OR ON HIS BEHALF FROM WHICH THE TERMS NECESSARY TO CON STITUTE THE TRANSFER CAN BE ASCERTAINED WITH REASONABLE CERTAIN TY, AND THE TRANSFEREE HAS, IN PART PERFORMANCE OF THE CONTRACT, TAKEN POSSESSION OF THE PROPERTY OR ANY PART THEREOF, OR THE TRANSFEREE, BEING ALREADY IN POSSESSION, CONTINUES IN POSSESSIO N IN PART PERFORMANCE OF THE CONTRACT AND HAS DONE SOME ACT I N FURTHERANCE OF THE CONTRACT, AND THE TRANSFEREE HAS PERFORMED OR IS WILLING TO P ERFORM HIS PART OF THE CONTRACT, THEN, NOTWITHSTANDING THAT THE CONTR ACT, [***]WHERE THERE IS AN INSTRUMENT OF TRANSFER, THAT THE TRANSF ER HAS NOT BEEN COMPLETED IN THE MANNER PRESCRIBED THEREFOR BY THE LAW FOR THE TIME BEING IN FORCE, THE TRANSFEROR OR ANY PERSON CLAIMI NG UNDER HIM SHALL BE DEBARRED FROM ENFORCING AGAINST THE TRANSFEREE A ND PERSONS CLAIMING UNDER HIM ANY RIGHT IN RESPECT OF THE PROP ERTY OF WHICH THE TRANSFEREE HAS TAKEN OR CONTINUED IN POSSESSION, OT HER THAN A RIGHT EXPRESSLY PROVIDED BY THE TERMS OF THE CONTRACT 70 A PLAIN READING OF THE ABOVE PROVISION SHOWS THAT IT PROVIDES A SAFETY MEASURE OR A SHIELD IN THE HANDS OF THE TRANSFEREE TO PROTECT THE POSSESSION OF ANY PROPERT Y WHICH HAS BEEN GIVEN BY THE TRANSFEROR AS LAWFUL POSSESSI ON UNDER A PARTICULAR AGREEMENT OF SALE. THIS POSITIO N OF LAW WAS INCORPORATED IN THE DEFINITION OF TRANSFER BY INSERTION OF CLAUSES (V) & (VI) IN SECTION 2(47) OF THE ACT. IT IS IMPORTANT TO NOTE THAT CLAUSE (V) USES THE EXPRESSI ON CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF T.P. ACT, THEREFORE, CLEARLY THE IDEA IS THAT AN AGREEME NT WHICH PROVIDES SOME DEFENSE IN THE HANDS OF TRANSFEREE WA S INCORPORATED UNDER THE DEFINITION OF TRANSFER IN THE INCOME TAX ACT. NOW ORIGINALLY SECTION 53A OF T.P. ACT PROVIDED THAT EVEN IF THE CONTRACT THOUGH REQUIRED TO BE 100 REGISTERED HAS NOT BEEN REGISTERED, WHICH MEANS TH E RIGHT OF DEFENDING THE POSSESSION WAS AVAILABLE EVE N IF THE CONTRACT WAS NOT REGISTERED BUT BY AMENDMENT AC T 48 OF 2001, THE EXPRESSION THOUGH REQUIRED TO BE REGI STERED HAS NOT BEEN REGISTERED, HAS BEEN OMITTED WHICH ME ANS FOR THE PURPOSE OF POSSESSION U/S 53A OF T.P. ACT, A PERSON HAS TO PROVE THAT POSSESSION HAS BEEN GIVEN UNDER A REGISTERED AGREEMENT. IN OTHER WORDS, NOW U/S 53A OF T.P. ACT, THE AGREEMENT REFERRED IS REQUIRED TO BE REGISTERED. THIS REQUIREMENT CANNOT BE READ IN CLAU SE (V) OF SECTION 2(47) BECAUSE THAT REFERS ONLY TO THE C ONTRACT OF THE NATURE OF SECTION 53A OF T.P. ACT WITHOUT GO ING INTO THE CONTROVERSY WHETHER SUCH AGREEMENT IS REQUIRED TO BE REGISTERED OR NOT. THE LD. COUNSEL FOR THE ASSESSE E HAD REFERRED TO THE DECISION OF HON'BLE SUPREME COURT I N THE CASE OF SURANA STEELS V DCIT 237 ITR 777 (SC) FOR THE PROPOSITION THAT WHEN A SECTION OF A PARTICULAR STA TUTE IS INTRODUCED INTO ANOTHER ACT IT MUST BE READ IN THE SAME SENSE AS IT BORE IN THE ORIGINAL ACT. THE CAREFUL PERUSAL OF THAT JUDGMENT WOULD SHOW THAT SITUATION IS APPLI CABLE ONLY WHEN A PARTICULAR PROVISION OF AN ACT HAS BEEN INCORPORATED IN THE LATER ACT. IN THAT CASE A QUES TION AROSE THAT FOR THE PURPOSE OF MAT PROVISION WHAT I S THE MEANING OF PAST LOSSES OR UNABSORBED DEPRECIATION. IT WAS FOUND THAT IN EXPLANATION TO SECTION 115J CLAUS E (IV), THE FOLLOWING EXPRESSION WAS USED:- (IV) THE AMOUNT OF THE LOSS OR THE AMOUNT OF DEPRECIATION WHICH WOULD BE REQUIRED TO BE SET OFF AGAINST THE PROFIT OF THE RELEVANT PREVIOUS YEAR AS IF THE PROVISIONS OF CLAUSE (B) OF THE FIRST PROVISO T O SUB SECTION (I) OF SECTION 205 OF THE COMPANIES ACT, 1956 (1 OF 1956) ARE APPLICABLE. 71 THE HON'BLE APEX COURT REFERRED TO THE PRINCIPL ES OF STATUTORY INTERPRETATION BY SHRI G.P.SINGH AND EXTR ACTED FOLLOWING PIECE: SECTION 115J, EXPLANATION CLAUSE (IV), IS A PIECE OF LEGISLATION BY INCORPORATION. DEALING WITH THE SUBJECT, JUSTICE G.P. SINGH STATES IN PRINCIPLES OF STATUTORY INTERPRETATION (7TH EDITION, 1999). 101 INCORPORATION OF AN EARLIER ACT INTO A LATER ACT IS A LEGISLATIVE DEVICE ADOPTED FOR THE SAKE OF CONVENIENCE IN ORDER TO AVOID VERBATIM REPRODUCTION OF THE PROVISIONS OF THE EARLIER ACT INTO THE LATER . WHEN AN EARLIER ACT OR CERTAIN OF ITS PROVISIONS AR E INCORPORATED BY REFERENCE INTO A LATER ACT, THE PROVISIONS SO INCORPORATED BECOME PART AND PARCEL OF THE LATER ACT AS IF THEY HAD BEEN 'BODILY TRANSPOSED INTO IT'. THE EFFECT OF INCORPORATION IS ADMIRABLY STATED BY LORD ESHER, M.R. : 'IF A SUBSEQUENT ACT BRINGS INTO ITSELF BY REFERENCE SOME OF THE CLAUSES OF A FORMER ACT, THE LEGAL EFFECT OF THAT, AS HAS OFTEN BEEN HELD, IS TO WRITE THOSE SECTIONS INTO THE NEW ACT AS IF THEY HAD BEEN ACTUALLY WRITTEN IN IT WITH THE PEN, OR PRINTED IN IT.(P.233) EVEN THOUGH ONLY PARTICULAR SECTIONS OF AN EARLIER ACT ARE INCORPORATED INTO LATER, IN CONSTRUING THE INCORPORATED SECTIONS IT MAY BE AT TIMES NECESSARY AND PERMISSIBLE TO REFER TO OTHER PARTS OF THE EARL IER STATUTE WHICH ARE NOT INCORPORATED. AS WAS STATED B Y LORD BLACKBURN: 'WHEN A SINGLE SECTION OF AN ACT OF PARLIAMENT IS INTRODUCED INTO ANOTHER ACT, I THINK IT MUST BE READ IN THE SENSE IT BORE IN THE ORIGINAL ACT FROM WHICH IT WAS TAKEN, AND THAT CONSEQUENTLY IT IS PERFECTLY LEGITIMATE TO REFER TO ALL THE REST OF THAT ACT IN ORDER TO ASCERTAIN WHAT THE SECTIONS MEANT, THOUGH THOSE OTHER SECTIONS ARE NOT INCORPORATED IN THE NEW ACT. (P.244) 72 ON THE BASIS OF ABOVE OBSERVATION, IT WAS HELD T HAT MEANING OF PAST LOSSES OR UNABSORBED DEPRECIATION H AS TO BE TAKEN SAME AS WAS DEFINED IN THE COMPANIES ACT. IN THIS CASE IT IS CLEAR THAT PROVISION ITSELF REFERS TO CLAUSE (B) OF SUB SECTION (1) OF SECTION 205 OF COMPANYS ACT 1956 AND THEREFORE, SAME MEANING WAS GIVEN TO PAST LOSSES OR UNABSORBED DEPRECIATION AS IS GIVEN UNDER THE COMPANIES ACT, 1956. 73 IN CASE OF CLAUSE (V) TO SECTION 2(47), CLEARLY THE EXPRESSION USED IS CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF T.P. ACT, WHICH MEANS IT IS NOT A C ASE OF INCORPORATION OF ONE PIECE OF LEGISLATION INTO ANOT HER 102 PIECE OF LEGISLATION. IF THAT WAS THE INTENTION OF THE PARLIAMENT, OBVIOUSLY CLAUSE (V) WOULD CONTAIN THE EXPRESSION CONTRACT AS DEFINED UNDER SECTION 53A O F TRANSFER OF PROPERTY ACT, 1882. FURTHER, IT IS SE TTLED POSITION OF LAW THAT ANY INTERPRETATION WHICH COULD RENDER A PARTICULAR PROVISION REDUNDANT SHOULD BE AVOIDED. IF THE CONTENTION OF THE LD. COUNSEL WAS TO BE ACCEPTED, OBVIOUSLY THE PROVISIONS OF CLAUSE (V) OF SECTION 2 (47) OF THE ACT WOULD BECOME REDUNDANT IN THE SENSE THAT REGISTRATION OF AGREEMENT WOULD AGAIN BE MADE COMPULSORY BUT SINCE PROPERTIES WERE BEING SOLD IN THE MARKET ON POWER OF ATTORNEY BASIS THROUGH UNREGIS TERED AGREEMENTS WHICH WOULD MAKE THIS PROVISION REDUNDAN T. THIS POSITION WE HAVE ALREADY DISCUSSED EARLIER WHI LE DISCUSSING THE HEYDONS RULE IN THE INTERPRETATIONS OF THIS CLAUSE. FURTHER THE ISSUE OF INTERPRETATION OF CLA USE (V) AND AMENDMENT TO SECTION 53A OF THE TRANSFER OF PRO PERTY ACT CAME FOR CONSIDERATION BEFORE THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF SURESH CHANDER AGGARWAL VS ITO 48 SOT 2010. THE TRIBUNAL DISCUSSED THIS ISSUE AT PAGE 7 AND AFTER QUOTING THE PROVISIONS OF SECTION 2(47) AND ALSO SECTION 53A BEFORE AND AFTER AMENDMENT AS WALL AS PARA NOS. 11.1 TO 11.2 OF THE BOARDS CIRCULAR N O. 495 DATED 22.9.1987 OBSERVED AS UNDER:- THE ABOVE CLEARLY SHOWS THAT THERE WAS CERTAIN SIT UATION WHERE PROPERTIES WERE BEING TRANSFERRED WITHOUT REGISTRAT ION OF TRANSFER INSTRUMENTS AND PEOPLE WERE ESCAPING TAX LIABILITIE S ON TRANSFER OF SUCH PROPERTIES BECAUSE THE SAME COULD NOT BE BROUG HT IN THE DEFINITION OF 'TRANSFER' PARTICULARLY IN MANY STATE S OF THE COUNTRY PROPERTIES WERE BEING HELD BY VARIOUS PEOPLE AS LEA SED PROPERTIES WHICH WERE ALLOTTED BY THE VARIOUS GOVT. DEPARTMENT S AND TRANSFERS OF SUCH LEASE WERE NOT PERMISSIBLE. PEOPLE WERE TRA NSFERRING SUCH PROPERTIES BY EXECUTING AGREEMENT TO SELL AND GENER AL POWER OF ATTORNEY AS WELL AS WILL AND RECEIVING FULL CONSIDE RATION, BUT SINCE THE AGREEMENT TO SELL WAS NOT REGISTERED AND THOUGH FUL L CONSIDERATION WAS RECEIVED AND EVEN POSSESSION WAS GIVEN, STILL T HE SAME TRANSACTIONS COULD NOT BE SUBJECTED TO TAX BECAUSE THE SAME COULD NOT COVERED BY THE DEFINITION OF 'TRANSFER'. TO BRI NG SUCH TRANSACTIONS WITHIN THE TAX NET, THIS AMENDMENT WAS MADE. IT HAS TO BE APPRECIATED THAT CLAUSE (V) IN SECTION 2(47) DOES N OT LIFT THE DEFINITION OF PART PERFORMANCE FROM SECTION 53A OF THE TRANSFE R OF PROPERTY ACT, 1882. RATHER, IT DEFINES ANY TRANSACTION INVOLVING ALLOWING OF POSSESSION 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. THIS MEANS SUCH TRANS FER IS HOT REQUIRED 103 TO BE EXACTLY SIMILAR TO THE ONE DEFINED U/S.53A OF THE TRANSFER OF PROPERTY ACT, OTHERWISE LEGISLATURE WOULD HAVE SIMP LY STATED THAT TRANSFER WOULD INCLUDE TRANSACTIONS DEFINED IN SEC. 53A OF THE TRANSFER OF PROPERTY ACT. BUT THE LEGISLATURE IN IT S WISDOM HAS USED THE WORDS 'OF A CONTRACT, OF THE NATURE REFERRED IN SECTION 53A'. THEREFORE, IT IS ONLY THE NATURE WHICH HAS TO BE SE EN. AS DISCUSSED ABOVE, THE PURPOSE OF INSERTION OF CLAUSE (V) WAS T O TAX THOSE TRANSACTIONS WHERE PROPERTIES WERE BEING TRANSFERRE D BY WAY OF GIVING POSSESSION AND RECEIVING FULL CONSIDERATION. THEREFORE, IN OUR HUMBLE OPINION, IN THE CASE OF A TRANSFER WHERE POS SESSION HAS BEEN GIVEN AND FULL CONSIDERATION HAS BEEN RECEIVED, THE N SUCH TRANSACTION NEEDS TO BE CONSTRUED AS 'TRANSFER'. THEREFORE, THE AMENDMENT MADE IN SECTION 53A BY WHICH THE REQUIREMENT OF REG ISTRATION HAS BEEN INDIRECTLY BROUGHT ON THE STATUTE NEED NOT BE APPLIED WHILE CONSTRUING THE MEANING OF 'TRANSFER' WITH REFERENCE TO THE INCOME-TAX ACT. 8. THE ABOVE SITUATION FURTHER BECOMES CLEAR IF WE REFER TO THE CELEBRATED DECISION OF HON'BLE SUPREME COURT IN THE CASE OF PODAR CEMENT (P.) LTD. (SUPRA}. IN THAT CASE, THE ASSESSE E WAS OWNER OF FOUR FLATS IN A BUILDING CALLED 'SILVER ARCH'/ON NE PEAN SEA ROAD, BOMBAY. OUT OF THESE FOUR FLATS, TWO WERE PURCHASED DIRECTLY FROM THE BUILDERS, MALABAR INDUSTRIES PVT. LTD., AND TWO WER E PURCHASED BY ITS SISTER CONCERNS WHICH WERE LATER PURCHASED BY THE A SSESSEE. THE POSSESSION OF THE FLATS WAS TAKEN AFTER FULL PAYMEN T OF CONSIDERATION. THE FLATS WERE LET OUT. THE ASSESSEE CONTENDED THAT THE RENTAL INCOME FROM THESE FLATS WAS ASSESSABLE AS 'INCOME F ROM OTHER SOURCES' BECAUSE THE ASSESSEE WAS NOT THE LEGAL OWN ER BECAUSE THE TITLE OF THE PROPERTY HAD NOT BEEN CONVEYED TO THE CO-OPERATIVE SOCIETY WHICH WAS FORMED BY THE PURCHASERS OF THE F LATS. THE HON'BLE COURT NOTED THAT SECTION 27 HAD BEEN AMENDED VIDE C LAUSE 3(A) WHEREIN WHEN A PERSON WAS ALLOWED TO TAKE POSSESSIO N OF THE BUILDING IN PART PERFORMANCE OF THE NATURE REFERRED TO IN SECTION 53A, SUCH PERSON SHALL BE DEEMED TO BE THE OWNER. IT WAS FURTHER OBSERVED THAT FOR ALL PRACTICABLE PURPOSES THE ASSE SSEE WAS THE OWNER AND POSSIBLY THERE CANNOT BE TWO OWNERS OF SA ME PROPERTY AT THE SAME TIME. IN FACT, THE AMENDMENTS TO SECTION 2 7 WERE MADE LATER ON BUT WERE TAKEN INTO COGNIZANCE ON THE BASI S OF ABOVE PRINCIPLE AND ULTIMATELY IT WAS HELD AS UNDER: 'HENCE, THOUGH UNDER THE COMMON LAW 'OWNER' MEANS A PERSON WHO HAS GOT VALID TITLE LEGALLY CONVEYED TO HIM AFTER COMPLY WITH THE REQUIREMENTS OF LAW SUCH AS THE TRA NSFER OF PROPERTY ACT, THE REGISTRATION ACT, ETC., IN THE CO NTEXT SECTION 22 OF THE INCOME-TAX ACT, 1961, HAVING REGARD TO TH E GROUND 104 REALITIES AND FURTHER HAVING REGARD TO THE OBJECT O F THE INCOME- TAX ACT, NAMELY, TO TAX THE INCOME, 'OWNER' IS A P ERSON WHO IS ENTITLED TO RECEIVE INCOME FROM THE PROPERTY IN HIS OWN RIGHT. THE REQUIREMENT OF REGISTRATION OF THE SALE DEED IN THE CONTEXT OF SECTION 22 IS NOT WARRANTED.' THUS, FROM THE ABOVE, IT IS CLEAR THAT IT IS NOT NE CESSARY TO GET THE INSTRUMENT OF TRANSFER REGISTERED FOR THE PURPOSE O F INCOME-TAX ACT WHEN A PERSON HAS GOT A VALID LEGALLY CONVEYED AFTE R COMPLYING WITH THE REQUIREMENTS OF THE LAW. 9. SIMILARLY, IN THE CASE OF MYSORE MINERALS LTD. V. CIT [1999] 239 ITR 775/106 TAXMAN 166 (SC), THE ASSESSEE HAD PURCH ASED FOR THE USE OF ITS STAFF SEVEN LOW INCOME GROUP HOUSES FROM A HOUSING BOARD. THE PAYMENT HAD BEEN MADE AND IN TUR N POSSESSION OF THE HOUSES WAS TAKEN OVER BY THE ASSESSEE. THE A CTUAL CONVEYANCE DEED WAS NOT EXECUTED. THE ASSESSEE CLAI MED DEPRECIATION WHICH WAS DENIED BY THE DEPARTMENT. AF TER GREAT DISCUSSION, IT WAS OBSERVED THAT FOR ALL PRACTICABL E PURPOSES AND FOR THE PURPOSE OF INCOME-TAX ACT, THE ASSESSEE SHALL B E CONSTRUED AS OWNER OF THE PROPERTY. IN FACT, IT WAS HELD AS UNDE R: - 'HELD, REVERSING THE JUDGMENT OF THE HIGH COURT, TH AT THE FINDING OF FACT ARRIVED AT IN THE CASE AT HAND WAS THAT THOUGH A DOCUMENT OF TITLE WAS NOT EXECUTED BY THE HOUSING B OARD IN FAVOUR OF THE ASSESSEE, THE HOUSES WERE ALLOTTED TO THE ASSESSEE BY THE HOUSING BOARD, PART PAYMENT RECEI VED AND POSSESSION DELIVERED SO AS TO CONFER DOMINION OVER THE PROPERTY ON THE ASSESSEE WHEREAFTER THE ASSESSEE HA D IN ITS OWN RIGHT ALLOTTED THE QUARTERS TO THE STAFF AND TH EY WERE BEING ACTUALLY USED BY THE STAFF OF THE ASSESSEE. THE ASS ESSEE WAS ENTITLED TO DEPRECIATION IN RESPECT OF THE SEVEN HO USES IN RESPECT OF WHICH THE ASSESSEE HAD NOT OBTAINED A DE ED OF CONVEYANCE FROM THE VENDOR ALTHOUGH IT HAD TAKEN PO SSESSION AND MADE PART PAYMENT OF THE CONSIDERATION'. THUS, FROM THE ABOVE TWO DECISIONS, IT BECOMES ABSO LUTELY CLEAR THAT FOR THE PURPOSE OF THE INCOME-TAX ACT THE GROUND RE ALITY HAS TO BE RECOGNIZED AND IF ALL THE INGREDIENTS OF TRANSFER HAVE BEEN COMPLETED, THEN SUCH TRANSFER HAS TO BE RECOGNIZ ED. MERELY BECAUSE THE PARTICULAR INSTRUMENT OF TRANSFER HAS N OT BEEN REGISTERED WILL NOT ALTER THE SITUATION. THIS POSITION IS FURT HER STRENGTHENED BY THE FACT THAT LEGISLATURE ITSELF HAS INSERTED CLAUSE (V ) TO SECTION 2(47) AND WHILE REFERRING TO THE PROVISIONS OF SECTION 53A, R EFERENCE HAS BEEN 105 MADE BY STATING THAT CONTRACTS IN THE NATURE OF SE CTION 53A SHOULD ALSO BE COVERED BY THE DEFINITION OF 'TRANSFER'. TH EREFORE, IN OUR HUMBLE VIEW, THE AMENDMENT TO SEC. 53A OF THE TRANS FER OF PROPERTY ACT, WHEREBY THE REQUIREMENT OF THE DOCUMENTS NOT B EING REGISTERED HAS BEEN OMITTED, WILL NOT ALTER THE SITUATION FOR HOLDING THE TRANSACTION TO BE A TRANSFER U/S.2(47)(V) IF ALL OT HER INGREDIENTS HAVE BEEN SATISFIED. 74 THUS, IT IS CLEAR THAT NON REGISTRATION OF AGREE MENT CANNOT LEAD TO THE CONCLUSION THAT PROVISION OF SEC TION 2(47) (V) IS NOT APPLICABLE. SIMILAR VIEW HAS BEEN TAKEN BY ITAT COCHIN BENCH OF THE TRIBUNAL IN CASE OF G.SREENIVASAN VS DCIT 28 TXMANN.COM 200 (COCH.) AND ITAT PUNE BENCH IN THE CASE OF MAHESH NEMICHANDRA GANESHWADE V ITO 21 TAXMANN.COM 136 (PUNE). IN VIE W OF THIS LEGAL POSITION, THIS CONTENTION IS REJECTED . 75 THE NEXT CONTENTION WAS THAT THE DECISION OF HON 'BLE BOMBAY HIGH COURT IN CASE OF CHATURBHUJ DWARKADAS KAPADIA (SUPR A) IS NOT APPLICABLE PARTICULARLY BECAUSE ULTIMATELY IN THAT CASE IT WAS HELD THAT CAPITAL GAIN TAX SHOULD BE CHARGED IN ASSESSMENT YEAR 1999-2000 WHER EAS AGREEMENT WAS EXECUTED IN AUGUST, 1994. 76 WE HAVE ALREADY DISCUSSED THE IMPLICATIONS OF TH E DECISION IN CASE OF CHATURBHUJ DWARKADAS KAPADIA (SUPRA) IN PARA 33 TO 38. WE HAD ALSO EXAMINED WHY IN THAT CASE CAPITAL GAIN WAS NOT HELD TO BE CHARGEABLE IN ASSESSMENT YEAR 1995-96.THERE IS NO NEED TO REPEAT THE SAME AND IN VIEW OF THE SAID OBSERVATIONS, WE REJECT THIS CONTE NTION. 77 THE NEXT CONTENTION IS THAT IT IS NECESSARY FOR INVOKING OF SECTION 2(47)(V) OF THE ACT TO COMPLY WITH THE PROVISIONS OF SECTION 53A OF THE TRANSFER OF PROPE RTY ACT TO THE EXTENT THAT THERE SHOULD BE WILLINGNESS ON THE PART OF THE TRANSFEREE TO PERFORM HIS PART OF THE CONTR ACT. 78 IN THIS ASPECT WE HAVE NO QUARREL WITH THE PROPOSITION THAT FOR INVOKING SECTION 53A PF T.P. ACT READ WITH CLAUSE (V) OF SECTION 2(47), THE TRANSFEREE HA S TO PERFORM OR IS WILLING TO PERFORM HIS PART OF THE CO NTRACT. IN THIS RESPECT AS REFERRED TO BY LD. COUNSEL FOR T HE ASSESSEE, THE COMMENTS OF THE LD. AUTHOR IN THE COMMENTARY BY MULLA DINSHAN FREDERICK MULLA VIDE PARA 106 16 ARE CLEAR AND SHOWS THAT THIS REQUIREMENT HAS TO BE ABSOLUTE AND UNCONDITIONAL. SOME OBSERVATIONS HAV E BEEN MADE IN THE CASE OF GENERAL GLASS COMPANY PVT LTD VS DCIT (SUPRA). IN THAT CASE IT WAS HELD THAT WIL LINGNESS TO PERFORM FOR THE PURPOSE OF SECTION 53A IS SOMETH ING MORE THAN A STATEMENT OF INTENT AND IT IS UNQUALIFI ED AND UNCONDITIONAL WILLINGNESS ON THE PART OF THE TRANSF EREE TO PERFORM HIS OBLIGATION. IN THAT CASE THE TRANSFERE E HAS AGREED TO MAKE CERTAIN PAYMENTS IN INSTALLMENTS IN CONSIDERATION OF THE DEVELOPMENT AGREEMENT BUT SUCH PAYMENTS WERE NOT MADE. LATER ON, THE AGREEMENT WA S MODIFIED AND MORE TIME WAS GIVEN TO THE TRANSFEREE FOR PAYMENT OF SUCH INSTALLMENTS. HOWEVER, THE INSTALL MENTS WERE NOT PAID EVEN UNDER THE MODIFIED TERMS AND TH AT IS WHY IT WAS ULTIMATELY HELD THAT SUCH AGREEMENT CANN OT BE CONSTRUED AS TRANSFER. 79 THE SECOND DECISION REFERRED TO BY LD. COUNSEL FOR THE ASSESSEE IS K. RADIKA V DCIT (SUPRA). IN T HIS CASE, SIMILAR OBSERVATIONS WERE MADE, THOUGH IT IS NOT POINTED OUT IN WHAT RESPECT THE TRANSFEREE HAS FAIL ED TO PERFORM HIS PART BUT IT HAS BEEN OBSERVED THAT THE FACTS OF THE CASE SHOWS THAT TRANSFEREE HAS NOT PERFORMED HI S PART OF THE CONTRACT. 80 THE THIRD JUDGMENT RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE IS IN THE CASE OF DCIT V T EJ SINGH (SUPRA). IN THAT CASE LAND WAS ACQUIRED BY T HE GOVERNMENT AND THE MATTER WENT FOR LITIGATION. DURI NG THE PENDENCY OF LITIGATION, THE ASSESSEE ENTERED INTO A DEVELOPMENT AGREEMENT WITH A DEVELOPER FOR THE PURP OSE OF DEVELOPMENT OF THE PROPERTY, HOWEVER, IT WAS CLA RIFIED IN THE AGREEMENT THAT THERE IS LITIGATION IN RESPEC T OF ACQUISITION OF PROPERTY AND THE DEVELOPER HAS TO TA KE CLEARANCE FROM THE GOVERNMENT IN THE MATTER OF DENOTIFICATION OF THE LAND. IT WAS HELD THAT SINCE THE LAND WAS UNDER COMPULSORY ACQUISITION AND NO COMPENSATIO N HAS BEEN RECEIVED, THEREFORE, THERE COULD NOT BE AN Y CAPITAL GAIN TAX U/S 2(47) (III) WHICH DEALS WITH T HE COMPULSORY ACQUISITION. IT WAS FURTHER OBSERVED TH AT ASSESSEE COULD NOT HAVE GIVEN POSSESSION UNLESS AND UNTIL THE LAND WAS DENOTIFIED. SINCE FACTS OF THE CASE ARE DIFFERENT THAN THE CASE IN HAND AND THEREFORE, SAM E ARE NOT RELEVANT FOR OUR PURPOSE. 107 81 NOW COMING TO THE FACTS, FIRSTLY IT WAS CONTENDED THAT DEVELOPER I.E TRANSFEREE HAS NOT OBT AINED VARIOUS PERMISSIONS WHICH WERE REQUIRED TO BE TAKE N BY THE DEVELOPER AS PER CLAUSES 3.1, 7.9, 8.4 AND 8.6 OF THE JDA. THIS IS NOT CORRECT AS POINTED OUT BY THE LD. CIT DR THAT ASSESSEE HAD ALREADY GOT THE MUNICIPAL PLAN SANCTIONED BUT IN THE MEANTIME PIL WAS FILED BEFORE THE HON'BLE PUNJAB & HARYANA HIGH COURT AGAINST THE IMPLEMENTATION OF THE PROJECT. INITIALLY, THE CONS TRUCTION WAS BANNED BY THE HON'BLE HIGH COURT. HOWEVER, LAT ER ON IT WAS OBSERVED IN THE CWP NO. 20425 OF 2010 AND AS CLARIFIED BY THE ORDER OF THE HON'BLE SUPREME COURT THAT REFUSAL OF SANCTION UNDER THE ENVIRONMENT (PROTECTI ON) ACT, THE SOCIETY HAVE SOUGHT A REVIEW OF THE ORDER BECAUSE THE FINDINGS ARRIVED WERE EX.PARTE. NO OR DER IN THE MATTER HAS BEEN PASSED BY THE COMPETENT AUTHORI TY PERHAPS BECAUSE OF THE ORDER OF HIGH COURT. IN THE INTERIM ORDER PASSED IN THE PIL IT HAS BEEN CLARI FIED BY THE HON'BLE SUPREME COURT VIDE ORDER DATED 31.1.201 2 PERMITTING THE CONCERNED AUTHORITY UNDER THE DIFFER ENT STATUTES GOVERNING THE MATTER TO THEIR RESPECTIVE JURISDICTION TO BE DECIDED IN ACCORDANCE WITH LAW. THUS, IT BECOMES CLEAR THAT DEVELOPER I.E. THDC HAS APPLIED FOR VARIOUS PERMISSIONS BEFORE THE RELEVANT AUTHORITIES AND IN SOME CASES PERMISSION WERE DECLINED ON EX.PARTE BAS IS AND IN SOME CASES THE SAME WERE DECLINED IN VIEW OF THE HIGH COURT ORDER BANNING THE CONSTRUCTION. AFTER TH E CLARIFICATION OF THE ORDER OF THE HIGH COURT BY HON 'BLE SUPREME COURT BY ORDER DATED 31.1.2012, THE AUTHORI TIES HAVE ALREADY BEEN PERMITTED TO EXAMINE THE ISSUE ON MERITS UNDER VARIOUS LAWS. FURTHER IN THE JDA THERE IS A CLAUSE 26 WHICH DEALS WITH THE FORCE MAJEURE CLAUSE S. THE CLAUSE 26 (I) TO (V) READS AS UNDER:- FORCE MAJEURE I) NONE OF THE PARTIES SHALL BE LIABLE TO THE OTHER PARTY OR BE DEEMED TO BE IN BREACH OF THIS AGREEMENT BY REASONS OF ANY DELAY IN PERFORMING OR ANY FAILURE T O PERFORM, ANY OF ITS OWN OBLIGATIONS IN RELATION TO THE AGREEMENT, IF THE DELAY OR FAILURE IS DUE TO ANY EV ENT OF FORCE MEJEURE. EVENT OF FORCE MAJEURE IS ANY EVENT CAUSED BEYOND THE PARTIES REASONABLE CONTROL. THE FOLLOWING SHALL BE REGARDED AS ISSUES BEYOND THE PARTIES REASONABLE CONTROL. 108 II) FOR THE PURPOSES OF THIS CLAUSE, AN EVENT OF FO RCE MAJEURE SHALL MEAN EVENTS OF WAR, WAR LIKE CONDITIO NS, BLOCKADES, EMBARGOES, INSURRECTION, GOVERNMENTAL DIRECTIONS, RIOTS, STRIKES, ACTS OF TERRORISM, CIVI L COMMOTION, LOCK-OUTS, SABOTAGE, PLAGUES OR OTHER EPIDEMICS, ACTS OF GOD INCLUDING FIRE, FLOODS, VOLC ANIC ERUPTIONS, TYPHOONS, HURRICANES, STORMS, TIDAL WAVE S, EARTHQUAKE, LANDSLIDES, LIGHTNING, EXPLOSIONS AND O THER NATURAL CALAMITIES, PROLONGED FAILURE OF ENERGY, CO URT ORDERS / INJUNCTIONS, CHARGE OF LAWS, ACTION AND / OR ORDER BY STATUTORY AND / OR GOVERNMENT AUTHORITY, T HIRD PARTY ACTIONS AFFECTING THE DEVELOPMENT OF THE PROJ ECT, ACQUISITION / REQUISITION OF THE PROPERTY OR ANY PA RT THEREOF BY THE GOVERNMENT OR ANY OTHER STATUTORY AUTHORITY AND SUCH CIRCUMSTANCES AFFECTING THE DEVELOPMENT OF THE PROJECT (EVENT OF FORCE MAJEURE) . III) ANY PARTY CLAIMING RESTRICTION ON THE PERFORMA NCE OF ANY OF ITS OBLIGATIONS UNDER THIS AGREEMENT DUE TO THE HAPPENING OR ARISING OF AN EVENT OF FORCE MAJEURE HEREOF SHALL NOTIFY THE OTHER PARTY OF THE HAPPENIN G OR ARISING AND THE ENDING OF CEASING OF SUCH EVENT OR CIRCUMSTANCE WITH THREE (3) DAYS OF DETERMINING THA T AN EVENT OF FORCE MAJEURE HAS OCCURRED. IN THE EVENT ANY PARTY ANTICIPATES THE HAPPENING OF AN EVENT OF FORC E MAJEURE, SUCH PARTY SHALL PROMPTLY NOTIFY THE OTHER PARTY. IV) THE PARTY CLAIMING EVENT OF FORCE MAJEURE CONDI TIONS SHALL, IN ALL INSTANCES AND TO THE EXTENT IT IS CAP ABLE OF DOING SO, USE ITS BEST EFFORTS TO REMOVE OR REMEDY THE CAUSE THEREOF AND MINIMIZE THE ECONOMIC DAMAGE ARISING THEREOF. V) EITHER PARTY MAY TERMINATE THIS AGREEMENT AFTER GIVING THE OTHER PARTY A PRIOR NOTICE OF FIFTEEN (15) DAYS IN WRITING OF THE EVENT OF FORCE MAJEURE CONTINUES FOR PERIOD OF NINETY (90) DAYS. IN THE EVENT OF TERMIN ATION OF THIS AGREEMENT ALL OBLIGATIONS OF THE PARTIES UN TIL SUCH DATE SHALL BE FULFILLED. 82 THE COMBINED READING OF THESE CLAUSES SHOW THAT IF ANY OF THE PARTY COULD NOT PERFORM ITS PART OF THE OBLIGATION BECAUSE OF THE UNFORESEEN CIRCUMSTANCES WHICH INCLUDED GOVERNMENT DIRECTIONS, COURT ORDERS, INJUN CTIONS 109 ETC. SUCH PARTY WOULD NOT BE LIABLE TO OTHER PARTY. IN VIEW OF FORCE MAJEURE CLAUSE WHICH INCLUDED COURT INJUNC TION IT CAN NOT BE SAID THAT THDC IS NOT WILLING TO PERFORM ITS OBLIGATION. IN FACT DEVELPERS I.E. THDC/HASH WERE PERUSING THE ISSUE OF PERMISSIONS/SANCTIONS VIGOROU SLY. THESE ASPECTS BECOME FURTHER CLEAR IF THE JUDGMENT OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN CWP NO. 204 25 OF 2010 VIDE ORDER DATED MARCH 26, 2012 IS PERUSED. PARAS 3, 4, 22, 25 & 26 OF THE JUDGMENT READ AS UND ER:- 3. THE BROAD CONTOURS OF THE PRESENT PROCEEDING HAVING BEEN OUTLINED, WE MAY NOW PROCEED TO TAKE NOTE OF THE SPECIFIC CONTENTIONS OF THE CONTESTING PARTIES AS MADE BEFORE US. HOWEVER, BEFORE WE DO SO, IT MAY BE APPROPRIATE TO MENTION THE SOMEWHAT CONFLICTING STAND OF THE PARTIES WITH REGARD TO THE PRESENT STAGE OF THE APPLICATIONS FILED UNDER THE PROVISIONS OF THE ENVIRONMENT (PROTECTION) ACT AS WELL AS THE WILD LIFE (PROTECTION) ACT. WHILE THE PETITIONER, WHO IS SUPPORTED BY THE RESPONDENT NO.6 - CHANDIGARH ADMINISTRATION, ASSERTS THAT NECESSARY SANCTION/PERMISSION UNDER BOTH THE ACTS HAVE BEEN REFUSED BY ORDERS PASSED BY THE COMPETENT AUTHORITIES, THE PROMOTERS OF THE PROJECT CONTEND T O THE CONTRARY. THE FACTS, AS UNFOLDED BEFORE US, INDICATE THAT AGAINST THE REFUSAL OF SANCTION UNDER THE ENVIRONMENT (PROTECTION) ACT, THE RESPONDENTS HAVE SOUGHT A REVIEW OF THE ORDER ON THE GROUND THA T THE FINDINGS ARRIVED AT, WHICH HAVE FORMED THE BASI S OF THE REFUSAL, ARE EX-PARTE. NO ORDER IN THE REVIE W MATTER HAS BEEN PASSED BY THE COMPETENT AUTHORITY, PERHAPS, BECAUSE OF THE INTERIM ORDER PASSED IN THE PIL WHICH HAS BEEN CLARIFIED BY THE HON'BLE SUPREME COURT BY ORDER DATED 31.1.2012 PERMITTING THE CONCERNED AUTHORITY UNDER THE DIFFERENT STATUTES GOVERNING THE MATTER TO EXERCISE THEIR RESPECTIVE JURISDICTIONS IN ACCORDANCE WITH LAW. INSOFAR AS TH E WILD LIFE (PROTECTION) ACT IS CONCERNED, IT APPEARS THAT THE REJECTION HAS BEEN MADE BY THE CHIEF WILD LIFE WARDEN WHO, THE RESPONDENTS CLAIM, IS MERELY A RECOMMENDING AUTHORITY AND IS REQUIRED TO FORWARD HIS RECOMMENDATION TO THE CENTRAL GOVERNMENT. AS THE REJECTION UNDER THE WILD LIFE (PROTECTION) ACT HAS BEEN MADE BY AN AUTHORITY NOT COMPETENT TO DO, THE PROMOTERS OF THE PROJECT HAVE SOUGHT A REVIEW OF TH E 110 ORDER WHICH IS STILL PENDING FOR THE SAME REASON(S) AS NOTICED ABOVE. 4. ON THESE FACTS WE ARE OF THE VIEW THAT IT WOULD BE PRUDENT ON OUR PART TO TAKE THE VIEW THAT THE ISSUE WITH REGARD TO CLEARANCE/SANCTION UNDER THE TWO ENACTMENTS I.E. ENVIRONMENT (PROTECTION) ACT AND WILD LIFE (PROTECTION) ACT IS PRESENTLY PENDING AND AS THE PROMOTERS OF THE PROJECT HAVE SUBMITTED THEMSELVES TO THE JURISDICTION OF THE AUTHORITIES UNDER THE SAID ENACTMENTS WE SHOULD REFRAIN FROM ADDRESSING OURSELVES ON ANY OF THE ISSUES CONNECTED WITH EITHER OF THE TWO STATUTORY ENACTMENTS AS ANY SUCH EXERCISE, EVEN THOUGH MAY BE UNINTENDED, MAY HAVE THE EFFECT OF FETTERING THE JURISDICTION OF STATUTORY AUTHORITIES FUNCTIONING UNDER THE TWO RELEVANT STATUTES. 22. INSOFAR AS THE PROVISIONS OF THE ENVIRONMENT (PROTECTION) ACT AND THE WILD LIFE (PROTECTION) ACT ARE CONCERNED, IT NEED NOT BE EMPHASISED THAT EVERY PROJECT ATTRACTING THE PROVISIONS OF THE PERIPHERY CONTROL ACT AND/OR THE PROVISIONS OF THE 1995 ACT MUST SATISFY THE ECOLOGICAL CONCERNS OF THE AREA IN THE LIGHT OF THE PROVISIONS OF THE TWO STATUES IN QUESTION. AS ALREADY HELD BY US, A PUBLIC TRUST HAS BEEN BESTOWED ON THE AUTHORITIES BY PROVISIONS OF THE SAID ACTS WHICH CAST ON SUCH AUTHORITIES A DUTY TO INTERDICT ANY PROJECT OR ACTIVITY WHICH EVEN REMOTELY SEEMS TO CREATE AN IMBALANCE IN THE PRISTINE ECOLOGY AND ENVIRONMENT OF THE AREA ON WHICH THE CITY OF CHANDIGARH IS SITUATED OR FOR THA T MATTER IN THE IMMEDIATE VICINITY THEREOF. AS ALREAD Y OBSERVED, NECESSARY CLEARANCES UNDER THE AFORESAID TWO ENACTMENTS, INSOFAR AS THE RESPONDENTS ARE CONCERNED, ARE PRESENTLY PENDING BEFORE THE CONCERNED AUTHORITIES AND, THEREFORE, IT WOULD BE HIGHLY INCORRECT ON OUR PART TO ENTER INTO ANY FURT HER DISCUSSION ON THE AFORESAID ASPECT OF THE CASE. 25. WE ALSO HASTEN TO EMPHASISE THAT A MORE RIGOROUS REGULATED DEVELOPMENT IN WHAT ARE NOW THE REMNANTS OF THE PERIPHERY AND THE AREAS ADJOINING T O IT IS THE NEED OF THE HOUR FOR WHICH THE STAKEHOLDE RS I.E. THE ADMINISTRATION OF CHANDIGARH, THE STATES O F PUNJAB AND HARYANA AS ALSO THE AUTHORITIES UNDER 111 THE ENVIRONMENT (PROTECTION) ACT AND THE WILD LIFE PROTECTION ACT HAVE TO DEMONSTRATE THE NEED TO ENGAGE THEMSELVES INTENSIVELY AND NOT ACQUIRE A PLACID APPROACH INDICATING AN ELOQUENT ACQUIESCENCE TO THE VIOLATION OF THE 1995 ACT, PERIPHERY CONTROL ACT AND THE PERIPHERY POLICY. 26. WE THUS CONCLUDE ON THE AFORESAID NOTE BY HOLDING AND OBSERVING THAT THE PROVISIONS OF THE PERIPHERY CONTROL ACT AND THE 1995 ACT ARE COMPLEMENTARY TO EACH OTHER AND THE PROVISIONS OF THE TWO STATUTES WOULD APPLY TO THE HOUSING PROJECT IN QUESTION. THE RESPONDENTS, THEREFORE, WILL HAVE TO COMPLY WITH ALL THE REQUIREMENTS SPELT OUT BY BOTH THE AFORESAID STATUTES. AS THE REQUIREMENT OF CLEARANCES UNDER THE WILD LIFE (PROTECTION) ACT AND ENVIRONMENT (PROTECTION) ACT IS NOT A CONTENTIOUS ISSUE, AND AS WE HAVE ALREADY HELD THAT THE PROCESS OF GRANT OF SUCH CLEARANCES IS PENDING BEFORE THE APPROPRIATE AUTHORITIES UNDER THE RESPECTIVE ACTS, THE SAME WILL NOW HAVE TO BE BROUGHT TO ITS LOGICAL CONCLUSION KEEPING IN MIND OUR OBSERVATIONS AND DIRECTIONS CONTAINED HEREINABOVE. 83 THE COMBINED READING OF THE ABOVE PARAS IN THE ORDER OF HON'BLE HIGH COURT CLEARLY SHOWS THAT DEVE LOPER THDC/ HASH I.E. TRANSFEREE HAVE MADE THEIR SINCERE EFFORTS FOR OBTAINING THE NECESSARY PERMISSIONS / SANCTIONS WHICH WERE REQUIRED UNDER THE JDA. HOWEV ER, SOME OF THE SANCTIONS COULD NOT BE TAKEN IN TIME BE CAUSE OF THE LITIGATION BY WAY OF PIL BUT SINCE NONE OF T HE PARTY WAS LIABLE TO THE OTHER PARTY IN VIEW OF THE CLAUSE 26 DEALING WITH FORCE MAJEURE IT CANNOT BE SAID THAT DEVELOPER WAS NOT WILLING TO PERFORM HIS PART OF CO NTRACT. IN ANY CASE NO SPECIFIC EVIDENCE HAS BEEN SHOWN US TO PROVE THAT THDC / HASH WERE DECLINING TO PERFORM PARTICULAR OBLIGATION PROVIDED IN JDA. IN VIEW OF THIS DISCUSSION, IT CANNOT BE SAID THAT TRANSFEREE I.E. DEVELOPER THDC/HASH IS NOT WILLING TO PERFORM HIS P ART OF CONTRACT. 84 SECONDLY, IT WAS CONTENDED THAT PAYMENTS HAVE NOT BEEN MADE AS PER THE JDA. HOWEVER, AGAIN THIS IS NO T CORRECT. AS PER CLAUSE 4(IV) OF THE JDA, THE INSTA LLMENT 112 FOR RS. 31,92,75,000/- WAS REQUIRED TO BE PAID. THE CLAUSE 4(IV) READ AS UNDER:- IV) PAYMENT BEING RS. 31,92,75,000/- (RUPEES ONE CRORE NINETY TWO LACS SEVENTY FIVE THOUSAND ONLY) CALCULATED @ RS. 24,75,000/- (RS. TWENTY FOUR LACS SEVENTY FIVE THOUSAND ONLY) PER PLOT HOLDER OF 500 SQ. YARDS AND (RS. 49,50,000/- (RS. FORTY NINE LACS FIFTY THOUSAND ONLY) AS PER PLOT HOLDER OF 1000 SQUARE YARDS TO BE MADE TO THE OWNER AND / OR THE RESPECTIVE MEMBERS OF THE OWNER (AS THE CASE MAY BE) WITHIN SIX(6) MONTHS FROM THE DATE OF EXECUTION OF THIS AGREEMENT OR WITHIN TWO (2) MONTHS FROM TH E DATE OF APPROVAL OF THE PLANS / DESIGN AND DRAWINGS AND GRANT OF THE FINAL LICENCE TO DEVELOP WHERE UPO N THE CONSTRUCTION CAN COMMENCE, WHICHEVER IS LATER, AGAINST WHICH THE OWNER SHALL EXECUTE A REGISTERED SALE DEED FOR LAND OF EQUIVALENT VALUE BEING 6.36 ACRES OUT OF THE PROPERTY AS DEMARCATED IN GREEN COLOUR (ALSO HATCHED IN GREEN COLOUR) IN THE DEMARCATION PLAN ANNEXED HERETO AS ANNEXURE V AND BEARING KHASRA NOS. 123/15, 123/6, 123/7 (BALANCE PART), 123/3 (PART), 123//4//1, 123///4//1 /2, 123//4/2, 123/5/1, 123//5/2, 123//5/3, 112/24/24 (PART) 85 THE CAREFUL READING OF THE SAID CLAUSE OF THE J DA WOULD SHOW THIS PAYMENT WAS REQUIRED TO BE MADE WIT HIN A PERIOD OF SIX MONTHS FROM THE DATE OF EXECUTION O F THIS AGREEMENT OR WITHIN TWO MONTHS FROM THE DATE OF APP ROVAL OF PLAN / SANCTION AND DRAWING GRANT OF FINAL LICEN SE TO DEVELOP WHERE UPON THE CONSTRUCTION CAN COMMENCE, WHICHEVER IS LATER. THUS, THIS INSTALLMENT WAS DEPE NDENT ON TWO CONTINGENCIES FIRST THE EXPIRATION OF A PERI OD OF SIX MONTHS FROM THE DATE OF AGREEMENT OR ALTERNATIVELY ON THE EXPIRATION OF A PERIOD OF TWO MONTHS FROM THE DATE OF APPROVAL OF PLANS / DESIGNS DRAWING ETC. LEADING TO GRANT OF FINAL LICENSES WHICH CAN LEAD TO COMMENCEMENT O F CONSTRUCTION, WHICHEVER IS LATER. THE MATTER WAS TA KEN UP BY WAY OF PIL BY CERTAIN CITIZENS AND ADMINISTRATIO N OF THE UNION TERRITORY BEFORE THE HON'BLE HIGH COURT WHICH INITIALLY STAYED THE SANCTION OF SUCH PLAN ETC. TH IS LED TO SITUATION WHERE CONSTRUCTION COULD NOT BE COMMENCED AND HENCE PAYMENT WAS NOT REQUIRED TO BE MADE IN VIEW O F THE PENDING LITIGATION. THE CLAUSES OF FORCE MAJEURE C AME INTO OPERATION AND THEREFORE, IT CANNOT BE SAID TH AT THE 113 DEVELOPER IS NOT WILLING TO PERFORM ITS PART OF THE CONTRACT. IN ANY CASE THERE IS NO DEFAULT ON THE PART OF THE DEVELOPER AS PAYMENT WAS NOT YET DUE AS PER CLAUSE 4(I)(IV) OF JDA. 86 THIS POSITION WAS INFORMED TO THE SOCIETY BY LE TTER DATED 4.2.2011 BY HASH BUILDER, COPY OF WHICH HAS B EEN FILED AT PAGES 23 & 24 OF THE PAPER BOOK DEALING WI TH THE ADDITIONAL EVIDENCE. THROUGH THIS LETTER IT HAS BE EN CLEARLY STATED THAT SINCE PERMISSION IS PENDING FRO M THE MINISTRY OF ENVIRONMENT AND FOREST DEPARTMENT AND THEREFORE CONSTRUCTIONS COULD NOT COMMENCE. THESE PERMISSIONS WERE PENDING BECAUSE OF THE PIL FILED B Y SHRI AALOK JAGGA BEFORE THE HON'BLE PUNJAB & HARYANA HIG H COURT. ALL THESE FACTS CLEARLY SHOWS THAT IN VIEW OF CLAUSE 4.1(IV) READ WITH CLAUSE 26(V) OF THE JDA, HASH BUI LDER WERE NOT REQUIRED TO MAKE THE PAYMENT AND IT CANNOT BE SAID THAT THEY WERE NOT WILLING TO PERFORM THEIR PA RT OF THE CONTRACT ON THIS ASPECT. THEREFORE, THIS CONTENTIO N IS REJECTED. 87 SEVENTH CONTENTION IS THAT REVENUE WRONGLY HELD THAT EVEN CLAUSE (VI) OF SECTION 2(47) IS APPLICABLE. WE FIND NO FO RCE IN THIS CONTENTION. CLAUSE (VI) TO SECTION 2(47) READS AS UNDER: ANY TRANSACTION (WHETHER BY WAY OF BECOMING A MEM BER OF, OR ACCRUING SHARES IN, A COOPERATIVE SOCIETY, COMPAN Y OR OTHER ASSOCIATION OF PERSONS OR BY WAY OF ANY AGREEMENT OR ANY ARRANGEMENT OR IN ANY OTHER MANNER WHATSOEVER) WH ICH HAS THE EFFECT OF TRANSFERRING, OR ENABLING THE ENJOYMENT OF, ANY IMMOVABLE PROPERTY. 88 THE PLAIN READING OF THE PROVISION SHOWS THAT A NY TRANSACTION BY WAY OF BECOMING A MEMBER OR ACQUIRING SHARES IN THE COOPERATIVE SOCIETY OR SHARES IN THE COMPANY WHICH HAS THE EFF ECT OF TRANSFERRING OR ENABLING THE ENJOYMENT OF ANY IMMOVEABLE PROPERTY W OULD BE COVERED BY THE DEFINITION OF TRANSFER. IN THE CASE BEFORE US, INITIALLY THE MEMBERS OF THE SOCIETY WERE HOLDING SHARES IN THE SOCIETY FOR OWNERSHIP OF PLOT OF 500 SQYD OR 1000 SQYD. THIS MEMBERSHIP WAS SURRENDERED TO THE SOCIETY VIDE RESOLUTION OF THE SOCIETY PASSED IN THE EXECUTIVE C OMMITTEE ON 4.1.2007 WHICH WAS LATER RATIFIED IN THE GENERAL BODY MEETIN G OF THE SOCIETY ON 25.1.2007, SO THAT THE SOCIETY COULD ENTER INTO JDA . IN THE JDA THE SOCIETY HAS AGREED TO TRANSFER THE LAND. THEREFORE , TECHNICALLY IT CAN BE SAID THAT THE DEVELOPER I.E. THDC/HASH HAS PURCHASE D THE MEMBERSHIP OF THE MEMBERS IN THE SOCIETY WHICH WOULD LEAD TO E NJOYMENT OF THE PROPERTY AND IN THAT TECHNICAL SENSE, CLAUSE (VI) O F SECTION 2(47) IS APPLICABLE. 114 89 EIGHTH CONTENTION IS THAT SINCE THE SOCIETY HAS TRANSFERRED THE LAND THROUGH JDA ON A PRO-RATA BASIS, THEREFORE, ONLY W HATEVER MONEY IS RECEIVED AGAINST WHICH SALE DEEDS HAVE ALSO BEEN EX ECUTED, CAN BE TAXED AND NOTIONAL INCOME I.E. THE MONEY TO BE RECEIVED L ATER, CAN NOT BE TAXED. IN THIS REGARD RELIANCE WAS PLACED ON CERTAIN SUPRE ME COURT DECISIONS AND OTHER CASES FOR THE PROPOSITION THAT NOTIONAL I NCOME CANNOT BE TAXED. THERE IS NO NEED TO DISCUSS THE CASES RELIED ON BY THE LD. COUNSEL OF THE ASSESSEE BECAUSE IT IS SETTLED POSITION OF LAW THAT NO NOTIONAL INCOME CAN BE TAXED. THOUGH THERE IS NO QUARREL THAT IT IS A S ETTLED PRINCIPLE OF LAW THAT NOTIONAL INCOME CAN NOT BE TAXED BUT IN CASE OF CAP ITAL GAIN, SECTION 45 WHICH IS CHARGING SECTION AND SECTION 48 WHICH IS C OMPUTATION SECTION, MAKES IT ABSOLUTELY CLEAR THAT RIGOR OF TAX IN CASE OF CAPITAL GAIN WOULD COME INTO PLAY ON THE TRANSFER OF CAPITAL ASSET AND TOTAL CONSIDERATION WHICH IS ARISING ON SUCH TRANSFER, HAS TO BE TAXED. SECTION 48 CLEARLY TALKS ABOUT FULL CONSIDERATION RECEIVED OR ACCRUING AS RE SULT OF TRANSFER. THIS ASPECT WE HAVE ALREADY DISCUSSED IN DETAIL AT PARAS 64 TO 68. 90 SECOND ASPECT OF THIS CONTENTION WAS THAT IF CONSIDERATION WHICH HAS NOT BEEN RECEIVED WAS TO BE TAXED THEN THE ASSESSEE WOULD BE DEPRIVED FOR CLAIM ING EXEMPTION U/S 54 AND 54EC. AS OBSERVED ABOVE AS PE R SECTION 45 R.W.S 48 WHOLE OF THE CONSIDERATION, REC EIVED OR ACCRUED HAS TO BE TAXED. EVERY PERSON IS SUPPOS ED TO KNOW THE LAW AND IF THE TRANSACTION IS STRUCTURED I N SUCH A WAY FOR THE TRANSFER OF CAPITAL ASSET THAT SOME OF THE CONSIDERATION WOULD BE RECEIVED LATER THEN SUCH PER SON IS SUPPOSED TO KNOW THE CONSEQUENCES OF THE DENIAL OF SUCH BENEFITS. HOWEVER, IF THE SECTION IS INTERPRETED IN THE MANNER SUGGESTED BY THE LD. COUNSEL OF THE ASSESSEE THEN NO PERSON WOULD PAY CAPITAL GAIN TAX ON TRANSFER O F A PROPERTY. THIS WILL BE CLEAR FROM A SIMPLE EXAMPLE . LET US ASSUME IF A SELLS THE PROPERTY TO B FOR A CONSI DERATION OF RS. 100 CRORES AND RECEIVE ONLY A CONSIDERATION OF 1.00 CRORE AND IT IS MENTIONED IN THE TRANSFER INSTRUMEN T THAT BALANCE OF CONSIDERATION WOULD BE PAID AFTER 20 YEA RS THEN NO TAX CAN BE LEVIED ON SUCH BALANCE CONSIDERA TION OF RS. 99.00 CRORES WHICH HAS NOT BEEN RECEIVED AS PER THE CONTENTION OF THE LD. COUNSEL OF THE ASSESSEE . BUT IN THAT CASE NO TAXES CAN BE LEVIED EVEN AFTER 20 YEAR S BECAUSE NO TRANSFER CAN BE SAID TO HAVE TAKEN PLACE AFTER 20 YEARS AND REVENUE CANNOT DO ANY THING BECAUSE CAPITAL GAIN CAN BE CHARGED U/S 45 ONLY ON TRANSFER OF CAPITAL ASSET. WE DO NOT THINK THAT THIS KIND OF INTERPRETATION CAN BE MADE WHILE INTERPRETING SECTI ON 45 R.W.S. 48 BY INVOKING THE RULE THAT THERE CAN NOT B E ANY 115 TAX ON NOTIONAL RECEIPT. GENERALLY SPEAKING IT IS O NLY THE REAL INCOME WHICH CAN BE TAXED BUT THIS HAS TO BE UNDERS TOOD SUBJECT TO LIMITATIONS. COMMENTING ON THESE LIMITA TIONS, THE LD. AUTHOR SHRI S. RAJARATNAM IN THE COMMENTARY OF LAW OF INCOME TAX BY SAMPAT IYENGARS VOLUME 1, (11 TH EDITION) HAS OBSERVED AT PAGE 343 AS UNDER:- 5. RESERVATIONS ON REAL INCOME THEORY. - WHETHER ACCRUAL OF INCOME HAS TAKEN PLACE OR NOT, MUST BE JUDGED ON THE PRINCIPLE OF THE REAL INCOME THEORY. AFTER ACCRUAL, NON-CHARGING OF TAX ON THE S AME BECAUSE OF CERTAIN CONDUCT BASED ON THE IPSE DIXIT OF A PARTICULAR ASS ESSEE CANNOT BE ACCEPTED. IN DETERMINING THE QUESTION WHETHER IT IS HYPOTHETI CAL INCOME OR WHETHER REAL INCOME HAS MATERIALIZED OR NOT, VARIOUS FACTOR S WILL HAVE TO BE TAKEN INTO ACCOUNT. IT WOULD BE DIFFICULT AND IMPROPER TO EXTEND THE C ONCEPT OF REAL INCOME TO ALL CASES DEPENDING UPON THE SELF-SE RVING STATEMENT OF THE ASSESSEE. WHAT HAS REALLY ACCRUED TO THE ASSESSEE H AS TO BE FOUND OUT AND WHAT HAS ACCRUED MUST BE CONSIDERED FROM THE PO INT OF VIEW OR REAL INCOME TAKING THE PROBABILITY OR IMPROBABILITY OF R EALIZATION IN A REALISTIC MANNER, BUT ONCE ACCRUAL TAKES PLACE, ON THE CONDUCT OF THE PARTIES SUBSEQUENT TO THE YEAR OF CLOSING, AN INCOM E WHICH HAS BEEN ACCRUED CANNOT BE MADE NO INCOME. 91 THE ABOVE POSITION CAN BE UNDERSTOOD BY EXAMINI NG SOME OF THE PROVISIONS OF THE ACT WHICH WOULD SHOW THAT CONCEPT OF NOTIONAL INCOME CAN NOT BE EXTENDED IF S PECIFIC PROVISION IS AVAILABLE IN THE ACT. FOR EXAMPLE IN CASE OF INCOME FROM HOUSE PROPERTY, THE INCOME HAS TO BE DETERMINED AS PER SECTION 23. SECTION 22 OF THE INC OME TAX ACT PROVIDES THAT IT IS THE ANNUAL VALUE OF THE PROPERTY WHICH CAN BE TAXED UNDER THE HEAD INCOME FROM HOUSE PROPERTY. SECTOR 23 PRESCRIBES TH E METHOD FOR DETERMINING THE ANNUAL VALUE. SECTION 23(1)(A) READS AS UNDER:- 23. (1) FOR THE PURPOSES OF SECTION 22 , THE ANNUAL VALUE OF ANY PROPERTY SHALL BE DEEMED TO BE (A) THE SUM FOR WHICH THE PROPERTY MIGHT REASONABLY BE EXPECTED TO LET FROM YEAR TO YEAR; OR (B) WHERE THE PROPERTY OR ANY PART OF THE PROPERTY IS L ET AND THE ACTUAL RENT RECEIVED OR RECEIVABLE BY THE OWNER IN RESPECT THEREOF IS IN EXCESS OF THE SUM REFERRED TO IN CLAUSE (A), THE AMOUNT SO RECEIVED O R RECEIVABLE; OR. 116 92 ON THIS ASPECT THE SETTLED POSITION OF THE LAW I S THAT THE ANNUAL VALUE HAS TO BE DETERMINED EVEN IF THE PROPERTY IS NOT LET OUT. THIS POSITION HAS BEEN DISCUSSED BY THE LD. AUTHOR CHATU RVEDI & PITHISARIAS IN COMMENTARY OF INCOME TAX LAW (FIFTH EDITION) VOLUME 1 IN THIS RESPECT AT PAGES 1275 & 1276 OBSERVED AS UNDER: ANNUAL VALUE- DETERMINATION OF SECTION 23(1)(A) PROVIDES THAT FOR THE PURPOSES OF SECTION 22, THE ANNUAL VALUE OF ANY PROPERTY SHALL BE DEEMED TO BE THE SUM FOR WHICH THE PROPERTY MIGHT R EASONABLY BE EXPECTED TO LET FROM YEAR TO YEAR. THE WORD USED IS MIGHT AND NOT CAN OR IS. IT IS THUS A NOTIONAL INCOME TO BE G ATHERED FROM WHAT A HYPOTHETICAL TENANT WOULD PAY WHICH IS TO BE OBJECT IVELY ASCERTAINED ON A REASONABLE BASIS IRRESPECTIVE OF THE FACT WHET HER THE PROPERTY IS LET OUT OR NOT [SULTAN BROS. PR. LTD. V. CIT, (1964 ) 51 ITR 353 (SC); JAMNADAS PRABHUDAS V. CIT, (1951)20 ITR 160(BOM); D .M. VAKIL V. CIT, (1946) 14 ITR 298, 302(BOM); CIT V. BIMAN BEHA RI SHAW, SHEBAIT, (1968) 68 ITR 815 (CAL); SRI SRI RADHA GOV INDA JEW V. CIT, (1972) 84 ITR 150, 156 (CAL); CIT V. GANGA PROPERTI ES LTD., (1970) 77 ITR 637, 647 (CAL); LIQUIDATOR, MAHMUDABAD PROPE RTIES LTD. V. CIT, (1972) 83 ITR 470 (CAL), AFFIRMED, (1980) 124 ITR 31 (SC); CIT V. ZOROSTRIAN BUILDING SOCIETY LTD., (1976) 102 ITR 499 (BOM); C.J. GEORGE V. CIT, (1973) 92 ITR 137 (KER); D.C. ANAND & SONS V. CIT, (1981) 131 ITR 77 (DEL). ALSO SEE, CIT V. PARBUTTY CHURN LAW, (1965) 57 ITR 609, 619 (CAL); IN THE MATTER OF KRISHNA LAL SEAL, AIR 1932 CAL 836; LALLA MAL SAMGHAM LAL V. CIT, (1936) 4 ITR 250 (LAH); NEW DELHI MUNICIPAL COMMITTEE V. NAND KUMAR BUSSI, (197 7) TAX LR 2130 (DEL)] 93 SIMILAR VIEW HAS BEEN EXPRESSED BY SHRI N.A. PAL KHIVALA IN HIS COMMENTARY ON THE LAW LAND PRACTICE OF INCOME TAX, VOLUME 2 (EIGHTH EDITION) BY KANGA AND PALKHIVALAS OBSERVATION AT P AGES 22 & 23. AGAIN EVEN SHRI S. RAJARATNAM IN THE COMMENTARY OF LAW OF INCOME TAX BY SAMPAT IYENGARS VOLUME 2, (11 TH EDITION) EXPRESSED IDENTICAL VIEWS IN HIS COMMENTARY AT PAGE 2738. 94 IN ALL THE LEADING COMMENTARIES CITED ABOVE, IT HAS BEEN OBSERVED THAT ANNUAL VALUE IS TO BE COMPUTED WHETHER PROPERTY HAS BEEN LET OUT OR NOT. THIS MEA NS THAT NOTIONAL VALUE OF THE PROPERTY HAS TO BE CHARGED TO THE INCOME TAX UNDER THE HEAD INCOME FROM HOUSE PROPER TY. FROM THE ABOVE, IT BECOMES CLEAR THAT THOUGH THERE IS NO REAL INCOME FROM LETTING OUT OF THE PROPERTY, STILL THE NOTIONAL ANNUAL VALUE IS SUBJECTED TO TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY. HOWEVER, WE MAY MENT ION THAT U/S 23(1)(C) OF THE ACT IF THE PROPERTY IS LET OUT AND 117 THEN REMAINED VACANT FOR SOME PART OF THE YEAR OR F OR WHOLE OF THE YEAR THEN VACANCY ALLOWANCE CAN BE CLA IMED. HERE, IT IS IMPORTANT TO NOTE THAT IF PROPERTY IS N OT LET OUT, THEN NOTIONAL INCOME BECOMES CHARGEABLE TO THE TAX BECAUSE OF PROVISIONS OF SECTIONS 22 AND 23 (1)(A) OF THE ACT. SIMILARLY, UNDER THE MAT PROVISIONS, IT IS BASICALLY THE NOTIONAL INCOME WHICH IS BEING SUBJECTED TO CHA RGE UNDER THE HEAD INCOME FROM BUSINESS AND PROFESSION . A BUSINESSMAN MAY HAVE INCOME OF RS. 100/- BUT BECAUS E OF HIGHER DEPRECIATION ALLOWABLE UNDER THE INCOME-T AX ACT OR SOME OTHER WEIGHTED DEDUCTIONS SAY FOR EXAMPLE I N CASE OF EXPENDITURE ON SCIENTIFIC RESEARCH, THE TA XABLE INCOME AS PER THE PROVISIONS OF THE ACT MAY BE ZERO BUT STILL BECAUSE OF THE MAT PROVISIONS, TAX HAS TO BE CHARGED ON BOOK PROFITS. SIMILARLY IN THE CASE OF PRESUMPT IVE TAX PROVISIONS E.G. U/S 44AD IF A PERSON IS CIVIL CONTR ACTOR AND DOES NOT MAINTAIN BOOKS OF ACCOUNT AND HIS TURNOVER IS LESS THAN RS. 60 LAKHS THEN THE PROFIT WOULD BE PRE SUMED TO BE 8% OF TURNOVER EVEN IF HE HAS SUFFERED A LOSS . ANOTHER EXAMPLE OF SECTION 2(22)(E) CAN BE TAKEN. U NDER THIS PROVISION A LOAN OR ADVANCE GIVEN BY CERTAIN COMPANIES TO A SUBSTANTIAL SHARE HOLDER IS TO BE TR EATED AS DEEMED DIVIDEND. SUCH LOAN UNDER THE NORMAL ACCOUNTING PRINCIPLE OR ON COMMERCIAL PRINCIPLES CA NNOT BE REGARDED AS INCOME BUT BECAUSE OF THIS SPECIFIC PROVISION REGARDING DEEMED DIVIDEND SUCH AMOUNT HAS TO BE TREATED AS INCOME OF THE PERSON RECEIVING SUCH L OANS. 95 THE ABOVE POSITION OF LAW MAKES IT ABSOLUTELY CL EAR THAT THEORY OF REAL INCOME IS SUBJECT TO THE PROVIS IONS OF THE ACT AND WHENEVER ANY SPECIFIC PROVISIONS OF THE ACT IS THERE FOR CHARGING OF A PARTICULAR ITEM OF INCOME, THEN THE SAME HAS TO BE CHARGED ACCORDINGLY. IT MAY BE SOMETIMES HARD TO THE ASSESSEES BUT AGAIN IT HAS B EEN HELD IN NUMEROUS DECISIONS THAT FISCAL STATUES HAVE TO BE INTERPRETED ON THE BASIS OF LANGUAGE USED AND THERE IS NO SCOPE FOR EQUITY OR INTENT. LD. AUTHOR SHRI S. RAJ ARATNAM IN THE COMMENTARY OF LAW OF INCOME TAX BY SAMPAT IYENGARS VOLUME 1, PAGE 236 IN THIS REGARD HAS OBS ERVED AS UNDER:- ONCE IT IS SHOWN THAT THE CASE OF THE ASSESSEE COM ES WITHIN THE LETTER OF THE LAW, HE MUST BE TAXED, HOWEVER, GREAT THE HARDSHIP MAY APPEAR TO THE JUDICIAL MIND. CONSIDERATIONS OF HARDSHIP, INJUSTICE OR ANOMALIES DO NOT PLAY ANY USEFUL ROLE IN CONSTRUING TAXING STATUTES UNLESS THERE BE SOME REAL AMBIGUITY . THUS, ANY 118 BENEVOLENT CONSTRUCTION IN FAVOUR OF THE ASSESSEE H AS BEEN HELD TO BE UNCALLED FOR. 96 THEREFORE, IT CAN BE SAID THAT GENERALLY SPEAKIN G NOTIONAL INCOME COULD NOT BE SUBJECTED TO TAX BUT WHENEVER THERE IS A SPECIFIC PROVISION, THE SAME HA S TO BE TAXED. NOW, IN CASE OF CAPITAL GAIN, SECTION 45 RE AD WITH SECTION 48 VERY CLEARLY PROVIDES THAT IT IS THE PRO FIT ARISING FROM THE TRANSFER OF A CAPITAL ASSET WHI CH WOULD BE SUBJECTED TO CHARGE OF CAPITAL GAIN TAX AND SECT ION 48 CLEARLY PROVIDES FOR TAKING THE TOTAL CONSIDERATION INTO ACCOUNT WHILE COMPUTING THE CAPITAL GAINS. THIS AS PECT WE HAVE ALREADY DISCUSSED IN DETAIL AT PARA NO. 64 TO 68 FROM WHICH IT BECOMES CLEAR THAT IT IS THE WHOLE CONSIDERATION WHETHER RECEIVED OR ACCRUED, WHICH HA S TO BE TAXED UNDER THE CAPITAL GAIN ONCE TRANSFER OF TH E CAPITAL ASSET TAKES PLACE. ACCORDINGLY, THERE IS N O FORCE IN THIS PART OF THE CONTENTION. 97 NOW LET US EXAMINE THE ISSUE OF TAXABILITY OF FL AT ON THE BASIS OF ABOVE PRINCIPLES. RELEVANT PORTION O F CLAUSE 4 OF THE JDA WHICH DEALS WITH CONSIDERATION ARE AS UNDER: 4. CONSIDERATION 4.1 IT IS SPECIFICALLY UNDERSTOOD AND AGREED AMONGS T THE PARTIES THAT THDC SHALL USE ITS EXPERTISE AND ITS BRAND NAME AND / OR ANY OTHER BRAND NAME AT ITS DISCRETION TO DEVELOP THE PROPERTY INTO THE PREMISES AS PER APPLICABLE BUILDING BYE-LAWS OF THE COMPETENT AUTHO RITY AND THE OWNER SHALL HAVE NO OBJECTION TO THE SAME IN WHATSOEVER M ANNER. IN CONSIDERATION OF THE OWNER GRANTING AND ASSIGNING, ITS DEVELOPMENT RIGHTS IN THE PROPERTY, IRREVOCABLY AND IN PERPETUI TY, TO THDC TO DEVELOP THE PROPERTY AND FOR TRANSFER OF THE PROPERTY UPON THE SURRENDER OF ALLOTMENT RIGHTS OF 500 SQ. YARDS AND/OR 1000 SQ. YARDS (AS THE CASE MAY BE) BY ITS MEMBERS TO THE OWNER, VIDE RESOLUTION DA TED 04.01.2007 AND 25.02.2007 (COPY ATTACHED AS PER ANNEXURE I & II), HASH IS COMMITTED TO PAY TO THE OWNER AND / OR THE RESPECTIVE MEMBERS OF THE OWNER (AS THE CASE MAY BE) A TOTAL AMOUNT OF RS. 106,42,50,000/- (RUPEES ONE HUNDRED SIX CRORES FORTY TWO LACS FIFTY THOUSANDS O NLY) CALCULATED @ RS. 82,50,000/- (RUPEES EIGHTY TWO LACS FIFTY THOUS ANDS ONLY) PAYABLE TO 65 MEMBERS HAVING PLOT OF 500 SQ. YARDS EACH, RS . 1,65,00,000/- (RUPEES ONE CRORE SIXTY FIVE LACS ONLY) PAYABLE TO 30 MEMBERS HAVING PLOT OF 1000 SQ. YARDS EACH AND RS. 3,30,00,000/- ( RUPEES THREE CRORES 119 THIRTY LACS ONLY) PAYABLE TO THE OWNER FOR THE 4 PL OTS OF 500 SQ. YARDS EACH, WHICH SHALL TANTAMOUNT TO THE FULL AND FINAL PAYMENT TO THE OWNER AND / OR THE RESPECTIVE MEMBERS OF THE OWNER (AS TH E CASE MAY BE) IN A MANNER SET OUT HEREIN BELOW (PAYMENT). FURTHER, T HE TRANSFER, SALE AND CONVEYANCE OF 21.2 ACRES OF LAND OF THE PROPERTY SH ALL BE MADE BY THE OWNER IN FAVOUR OF THDC PRO RATA TO THE PAYMENT REC EIVED BY THE OWNER AND/OR THE RESPECTIVE MEMBERS OF THE OWNER (AS THE CASE MAY BE) FROM HASH BY EXECUTING SALE DEEDS AND REGISTERING THE SA ME. IT IS EXPRESSLY PROVIDED THAT AS RESOLVED BY THE OWNER, THE TOTAL A MOUNT PAYABLE BY HASH TO THE OWNER AND / OR THE RESPECTIVE MEMBERS O F THE OWNER (AS THE CASE MAY BE) FOR ASSIGNMENT OF THE DEVELOPMENT RIGH TS AND FOR TRANSFER AND SALE OF 21.2 ACRES OF LAND OF THE PROPERTY SHAL L BE RS. 106,42,50,000/- (RUPEES ONE HUNDRED SIX CRORES FORTY TWO LACS FIFTY THOUSAND ONLY) AND ONE HUNDRED AND TWENTY NINE (129) FLATS CONSIST ING OF SUPER AREA OF 2250 SQ. FEET (FLATS); ONE FLAT EACH FOR SIXTY FI VE MEMBERS HAVING A PLOT OF 500 SQ. YARDS, TWO FLATS FOR THE (THIRTY) 30 MEMBER S HAVING A PLOT OF 1000 SQ. YARDS AND 4 FLATS TO THE OWNER FOR THE 4 PLOTS OF 500 SQ. YARDS EACH AS PER LIST ANNEXED WITH THIS AGREEMENT AS SCHEDULE B (SALE TRANSACTION) IT IS EXPRESSLY AGREED BETWEEN THE DEVELOPERS THAT HASH SHALL BE RESPONSIBLE FOR MAKING ALL PAYMENTS TO THE OWNER AN D/OR THE RESPECTIVE MEMBERS OF THE OWNER (AS THE CASE MAY BE) AS PER TH E NEGOTIATED AND AGREED TERMS BETWEEN THE OWNER AND HASH, HASH EXPRE SSLY UNDERTAKES TO MAKE TIMELY PAYMENTS OF THE PAYMENT TO THE OWNER AND / OR THE RESPECTIVE MEMBERS OF THE OWNER (AS THE CASE MAY BE ) AS UNDER: 4.2 AS RESOLVED BY THE OWNER, THDC EITHER BY ITSELF OR ALONG WITH HASH SHALL ALLOT THE FLATS IN THE NAME OF MEMBERS O F THE OWNER AS PER LIST ANNEXED WITH THIS AGREEMENT AS SCHEDULE B ATTACHED HEREIN (HEREINAFTER REFERRED TO AS THE ALLOTTEES). THE SPECIFICATIONS OF THE FLATS WOULD BE PROVIDED BY THE DEVELOPERS TO THE OWNER AND MORE PA RTICULARLY DESCRIBED IN THE SCHEDULE C ATTACHED HEREIN (HEREINAFTER REFE RRED TO AS THE SPECIFICATIONS). THE ALLOTMENT LETTERS SHALL BE I SSUED TO THE ALLOTTEES (MEMBERS OF THE OWNER) WITHIN FORTY-FIVE (45) DAYS FROM THE DATE OF SANCTION OF THE BUILDING PLANS / DESIGN AND DRAWING AND ON OBTAINING FINAL LICENSE/PERMISSION FOR THE DEVELOPMENT OF THE PROJE CT FROM THE COMPETENT AUTHORITY. THEREAFTER, THE POSSESSION OF THE FLATS SHALL BE HANDED OVER TO THE ALLOTTEES WITHIN THIRTY(30) MONTHS FORM THE DA TE OF ISSUANCE OF THE ALLOTMENT LETTER. 120 IT IS EXPRESSLY PROVIDED THAT THE PAYMENT TO BE MAD E BY HASH TO THE OWNER AND/OR TO THE RESPECTIVE MEMBE RS OF THE OWNER (AS THE CASE MAY BE) AND THE FLATS TO BE ALLOTTED TO THE ALLOTTEES AS SET OUT IN THIS CLAUSE 4.2 SHALL HEREINAFTER BE COLLECTIVELY REFERRED TO AS THE ENT IRE CONSIDERATION 98 FROM THIS CLAUSE IT BECOMES ABSOLUTELY CLEAR THAT EACH MEMBER HAVING 500 SQYD OF PLOT WAS ENTITL ED TO RECEIVE ONE FURNISHED FLAT MEASURING 2250SQFT AND MEMBERS HAVING 1000SQYD FLAT WERE ENTITLED TO RECEI VE TWO FURNISHED FLATS. THUS UPON EXECUTION OF THE JD A VESTED RIGHT CAME TO SUCH MEMBERS TO RECEIVE SUCH F LATS. ONCE THIS VESTED RIGHT ARISES OUT OF THE ABOVE CONT RACT IT CAN EASILY BE SAID THAT THIS RIGHT HAS ALSO ACCRUED TO THE ASSESSEE. CLAUSE 4.2 MAKES IT ABSOLUTELY CLEAR THA T DEVELOPER I.E. THDC/HASH WAS TO ALLOT THE LETTERS O F ALLOTMENT WITHIN 45 DAYS FROM FINAL SANCTION FROM T HE COMPETENT AUTHORITY AND SUCH FLATS WERE PART OF ENT IRE CONSIDERATION. MERELY BECAUSE SUCH ALLOTMENT LETTE R HAS NOT BEEN GIVEN BECAUSE OF SANCTIONS / PERMISSIONS C OULD NOT BE OBTAINED BECAUSE OF PUBLIC INTEREST LITIGATI ON BEFORE THE HON'BLE PUNJAB & HARYANA HIGH COURT, IT CANNOT BE SAID THAT SUCH RIGHT HAS NOT ACCRUED. TH OUGH IT MAY BE HARD ON THE ASSESSEE BUT IT IS WELL SETTLED THAT TAXATION AND EQUITY ARE STRANGERS. FURTHER COMMENT ING ON THIS ASPECT SHRI RAJARATHNAM IN HIS COMMENTARY HAS OBSERVED AT PAGE 5164 AS UNDER: IT IS HARD ON THE OWNERS WHEN REQUIRED TO PAY TAX, WHEN HANDING OVER THE POSSESSION FOR PURPOSES OF CONSTRUCTION WITHOUT BEING ABLE TO ENJOY THE CONSTRUCTION, WHICH IS YET TO COMMERCE OR IN THE PROCESS OF CONSTRUCTION BEING PUT UP BY THE DEVELOPER, BUT THE SOLUTION LIES IN STATUTORY CLARIFICATION IN SUCH CASES. IN VIEW OF THE INCRE ASING SCALE OF SUCH DEVELOPMENT AGREEMENTS TO SOLVE THE HOUSING PROBLEM IN THE CITIES, A STATUTORY CLARIFICATION OR CIRCULAR IS OVERDUE. 121 99 THESE COMMENTS AND THE OTHER DETAILED DISCUSSION ON THIS ASPECT CLEARLY SHOW THAT CAPITAL GAIN TAX HAS TO BE PAID ON THE TOTAL CONSIDERATION ARISI NG ON TRANSFER WHICH WOULD INCLUDE THE CONSIDERATION WHIC H HAS BEEN RECEIVED AS WELL AS THE CONSIDERATION WHICH HA S AROSEN AND BECOME DUE AND MAY BE RECEIVED LATER ON. IN VIEW OF THIS DISCUSSION THIS CONTENTION IS REJECTED . 100 NINTH CONTENTION IS THAT THE ASSESSEE HAS ALREA DY TERMINATED THE AGREEMENT AND HAS REVOKED THE POWER OF ATTORNEY . WE FIND NO FORCE IN THIS SUBMISSIONS. 101 IN THIS REGARD LD. COUNSEL OF THE ASSESSEE HAS RELIED ON THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN CASE OF CHEMOSYN LTD. V ACIT (SUPRA). IN THAT CASE THE ASSESSEE-COMPANY WA S OWNER OF TWO PLOTS BEARING 256 & 257 IN GUNDABALI ANDHERI MUMBAI. THE ASSESSEE- COMPANY ENTERED INTO A DEVELOPMENT AGREEMENT WITH D IPITI BUILDERS FOR THE DEVELOPMENT RIGHTS FOR A CONSIDERATION OF RS. 1 6.11 CRORES. DIPITI BUILDERS HAD ALSO AGREED TO CONSTRUCT 18000 SQFT CA RPET AREA FOR THE BENEFIT OF ASSESSEE ON PLOT NO. 256. IN THE RETURN OF INCOME TOTAL CONSIDERATION WAS SHOWN ONLY AT RS. 16.11 CRORES. IT WAS EXPLAINED THAT BEFORE DIPITI BUILDERS COULD START THE DEVELOPMENT /CONSTRUCTION WORK, ENTIRE PROPERTY COMPRISING OF PLOT NO. 256 & 257 WA S SOLD TO A THIRD PARTY M/S FINANCIAL TECHNOLOGY LTD. BY A TRIPARTITE CONVE YANCE DEED EXECUTED ON 5.7.2007 FOR RS. 29.11 CRORES AND THEREFORE, AD DITIONAL CONSIDERATION OF RS. 13 CRORES HAS BEEN OFFERED TO TAX IN ASSESSM ENT YEAR 2008-09. THIS EXPLANATION WAS REJECTED BY THE ASSESSING OFFI CER BECAUSE ACCORDING TO HIM IT WAS A CASE OF TRANSFER U/S 2(47)(V) AND T OTAL CONSIDERATION HAS TO BE CHARGED IN THE YEAR OF TRANSFER. THE TRIBUNAL A FTER CONSIDERING THE PROVISIONS OF SECTION 45 & 48 POSED A QUESTION TO I TSELF THAT WHAT SHOULD BE THE CONSIDERATION IN THE CASE BEFORE THE BENCH. THE CASE LAW RELIED ON BY THE DEPARTMENT WAS REJECTED BECAUSE SAME WAS REL EVANT TO ACCRUAL OF INTEREST. THE BENCH FOLLOWED THE DECISION OF KALPT ARU CONSTRUCTION OVERSEES PVT LTD. 13 SOT 194. IN THAT CASE THE ASS ESSEE HAD AGREED TO SELL TO ITS SUBSIDIARY EQUITY SHARES FOR A CONSIDE RATION OF RS. 1.25 CRORES WHICH WAS FINALLY SETTLED AT RS. 1.00 CRORE AND THE TRIBUNAL HELD THAT THE CONSIDERATION OF RS. 1.00 CRORE HAS TO BE ACCEPTED. 102. FROM THE ABOVE DECISION IT IS NOT CLEAR WHETHE R IN CASE OF KALAPTARU CONSTRUCTION OVERSEES PVT LTD. (SUPRA) WH ICH HAS BEEN FOLLOWED IN ABOVE CASE, WAS CONCERNING CAPITAL GAIN OR NOT? SECONDLY IT IS NOT CLEAR THAT WHETHER THE AMENDED CONSIDERATION I. E. SETTLEMENT FOR RS. 1.00 CRORE WAS MADE IN THE SAME YEAR OR NOT? AS OB SERVED EARLIER WHILE DISCUSSING THE ISSUE OF NOTIONAL INCOME THAT PROVIS IONS OF SECTION 45 R.W.S. 48, ARE ABSOLUTELY CLEAR AND THERE IS NO AMBIGUITY THAT ONCE A CAPITAL ASSET IS TRANSFERRED THEN WHOLE OF THE CONSIDERATION RECE IVED OR ACCRUING HAS TO 122 BE CONSIDERED FOR THE PURPOSE OF TAXATION IN THE YE AR IN WHICH THE TRANSFER HAS TAKEN PLACE. WE FURTHER FIND THAT IN THE JDA T HERE IS A CLAUSE FOR TERMINATION OF THE AGREEMENT. RELEVANT CLAUSE 14 R EADS AS UNDER: TERMINATION 14(I) SAVE AND EXCEPT THE PROVISION OF CLAUSE 26, THDC SHALL AT ALL TIMES HAVE THE RIGHT TO TERMINATE THIS AGREEMENT IN THE E VENT THERE IS ANY MATERIAL BREACH OF THE REPRESENTATIONS, WARRANTIES, UNDERTAKINGS, DECLARATIONS, COVENANTS AND/OR OBLIGATIONS GIVEN BY THE OWNER UNDER THIS AGREEMENT AFTER GIVING THIRTY (30) DAYS WRITTEN NOT ICE FOR RECTIFICATION OF SUCH BREACH. IN THE EVENT THE AGREEMENT IS TERMINA TION BY THDC, ALL THE LANDS REGISTERED IN THE NAME OF THDC AS PER THE TER MS OF THIS AGREEMENT UPTO THE DATE OF THE TERMINATION SHALL REMAIN WITH THDC AND THE BALANCE LANDS TO BE TRANSFERRED TO THDC AS PER THE TERMS OF THIS AGREEMENT SHALL NOT BE TRANSFERRED BY THE OWNER IN FAVOUR OF THDC. UPON THE TERMINATION, THE OWNER SHALL REFUND TO THDC THE ADJUSTABLE ADVAN CE/EARNEST MONEY MENTIONED IN CLAUSE 4.1(I) ABOVE WITHIN ONE MONTH O F SUCH TERMINATION. IN THE EVENT OF FAILURE OF THE OWNER TO REFUND THE SAI D AMOUNT, THE OWNER HEREBY AGREES TO EXECUTE A REGISTERED SALE DEED FOR LAND OF EQUIVALENT VALUE IN FAVOUR OF THDC. (II) IN THE EVENT ALL THE REQUISITE GOVERNMENT AND STATUTORY APPROVALS, AUTHORIZATIONS, CONSENTS, LICENSES, APPROVALS OF AL L THE PLANS/DESIGNS AND DRAWINGS AS MAY BE REQUIRED FOR THE DEVELOPMENT OF THIS PROPERTY IN RELATION TO THE PROJECT AND TO UNDERTAKE THE PROJEC T ARE NOT GRANTED WITHIN NINE (9) MONTHS OF THE SUBMISSION OF THE FINAL PLAN S/DESIGNS AND DRAWINGS TO THE COMPETENT AUTHORITY FOR APPROVAL THEN THDC M AY AS ITS SOLE DISCRETION EITHER DECIDE THAT IT DOES NOT DESIRE TO UNDERTAKE AND COMPLETE THE PROJECT AND HENCE TERMINATE THIS AGREEMENT AFTE R GIVING THIRTY (30) DAYS WRITTEN NOTICE IN THIS REGARD OR DECIDE TO WAI T FOR ANY FURTHER TIMES DEEMED FIT BY THDC FOR THE GRANT OF THE AFORESAID A PPROVALS AND LICENSES. IN THE EVENT THE AGREEMENT IS TERMINATED BY THDC, A LL THE LANDS REGISTERED IN THE NAME OF THDC AS PER THE TERMS OF THIS AGREEMENT UPTO THE DATE OF THE TERMINATION SHALL REMAIN WITH THDC AND THE BALANCE LANDS TO BE TRANSFERRED TO THDC AS PER THE TERMS OF THIS AGREEMENT SHALL NOT BE TRANSFERRED BY THE OWNER IN FAVOUR OF THDC. UPON T HE TERMINATION, THE OWNER SHALL REFUND TO THDC THE ADJUSTABLE ADVANCE/E ARNEST MONEY MENTIONED IN CLAUSE 4.1(I) ABOVE WITHIN ONE MONTH O F SUCH TERMINATION. IN THE EVENT OF FAILURE OF THE OWNER TO REFUND THE SAI D AMOUNT, THE OWNER HEREBY AGREES TO EXECUTE A REGISTERED SALE DEED FOR LAND OF EQUIVALENT VALUE IN FAVOUR OF THDC. 123 (III) IN THE EVENT THDC IS UNABLE TO DEVELOP THE PR OPERTY DUE TO REFUSAL/NON GRANT OF APPROVALS, CONSENTS, PERMISSIO N, LICENSES OR REVOCATION OF THE SAME BY THE APPROPRIATE STATUTORY AUTHORITY, THEN THDC MAY AT ITS SALE DISCRETION TERMINATE THIS AGREEMENT . IN THE EVENT THE AGREEMENT IS TERMINATED BY THDC, ALL THE LANDS REGI STERED IN THE NAME OF THDC AS PER THE TERMS OF THIS AGREEMENT UPTO THE DA TE OF THE TERMINATION SHALL REMAIN WITH THDC AND THE BALANCE LANDS TO BE TRANSFERRED TO THDC AS PER THE TERMS OF THIS AGREEMENT SHALL NOT BE TRA NSFERRED BY THE OWNER IN FAVOUR OF THDC. UPON THE TERMINATION, THE OWNE R SHALL REFUND TO THDC THE ADJUSTABLE ADVANCE/EARNEST MONEY MENTIONED IN CLAUSE 4.1(I) ABOVE WITHIN ONE MONTH OF SUCH TERMINATION. IN THE EVENT OF FAILURE OF THE OWNER TO REFUND THE SAID AMOUNT, THE OWNER HEREBY A GREES TO EXECUTE A REGISTERED SALE DEED FOR LAND OF EQUIVALENT VALUE I N FAVOUR OF THDC. (IV) THE OWNER SHALL HAVE THE RIGHT TO TERMINATE TH E AGREEMENT ONLY IN THE EVENT OF DEFAULT BY THE DEVELOPERS FOR MAKING T HE PAYMENT IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT AND THE ALLOTMENT OF FLATS WITHIN THE TIME PERIOD AS MENTIONED IN THIS AGREEME NT AFTER GIVING THIRTY (30) DAYS WRITTEN NOTICE FOR RECTIFICATION OF SUCH BREACH OR ANY FURTHER TIME AS MAY BE DESIRED BY THE OWNER. IN THE EVENT THE A GREEMENT IS TERMINATED BY OWNER, ALL THE LANDS REGISTERED IN TH E NAME OF THDC AS PER THE TERMS OF THIS AGREEMENT UPTO THE DATE OF THE TE RMINATION SHALL REMAIN WITH THDC AND THE BALANCE LANDS TO BE TRANSFERRED T O THDC AS PER THE TERMS OF THIS AGREEMENT SHALL NOT BE TRANSFERRED BY THE OWNER IN FAVOUR OF THDC. UPON THE TERMINATION, THE OWNER SHALL FORFEI T THE ADJUSTABLE ADVANCE/EARNEST MONEY MENTIONED IN CLAUSE 4(I). 103 THE READING OF THE ABOVE CLAUSE WOULD SHOW THAT POWER OF TERMINATION HAS BEEN GIVEN IN MANY CIRCUMSTANCES TO THDC VIDE CLAUSE 14(I), (II) AND (III). THE POWER FOR TERMINATION B Y THE OWNER HAS BEEN MENTIONED IN CLAUSE 14(IV) ONLY. READING OF THIS C LAUSE WOULD SHOW THAT RIGHT TO TERMINATE WITH THE OWNER I.E. THE SOCIETY WAS AVAILABLE ONLY IN CASE OF DEFAULT IN MAKING THE PAYMENT. THE ISSUE REGARD ING DEFAULT FOR MAKING PAYMENT HAS ALREADY BEEN DISCUSSED BY US IN PARAS 8 4 TO 86 ABOVE WHILE DISCUSSING THE ISSUE OF WILLINGNESS ON THE PART OF THE TRANSFEREE TO PERFORM ITS PART OF THE CONTRACT WE HAVE ALREADY HELD THAT THERE WAS NO DEFAULT ON THE PART OF DEVELOPER I.E. THDC/HASH IN MAKING THE PAYMENT, THEREFORE, THE ASSESSEE HAD NO RIGHT TO TERMINATE THE CONTRACT . IN ANY CASE WE FURTHER FIND THAT CLAUSE 20 OF THE JDA REFERS TO AR BITRATION AND IT IS CLEARLY 124 PROVIDED THAT ALL THE DISPUTES UNDER IT SHOULD BE R EFERRED TO THE ARBITRATION. THEREFORE, IF THE SOCIETY HAD SOME GRIEVANCE IT WA S DUTY BOUND TO GIVE A NOTICE FOR APPOINTMENT OF AN ARBITRATOR TO THE DEVE LOPER. IN THE ABSENCE OF SUCH NOTICE THE TERMINATION WILL NOT STAND SCRUTINY OF LAW. HERE IT IS ALSO PERTINENT TO NOTE THAT THOUGH IT WAS STATED THAT IR REVOCABLE POWER OF ATTORNEY HAS BEEN REVOKED AND SOME DOCUMENTS HAVE B EEN FILED BEFORE US FOR REVOCATION BUT CLAUSE 6.7 OF THE JDA WHICH W E HAVE REPRODUCED EARLIER CLEARLY PROVIDES THAT SUCH POWER OF ATTORNE Y CANNOT BE REVOKED. WE REPRODUCE CLAUSE 6.7 AGAIN WHICH IS AS UNDER: 6.7 THE OWNER SHALL EXECUTE AN IRREVOCABLE SPECIAL POWER OF ATTORNEY GRANTING ITS COMPLETE DEVELOPMENT RIGHTS IN THE PROPERTY IN FAVOUR OF THDC INTERALIA INCLUDING THE RIGHT TO RAISE FINANCE BY MORTGAGING THE PROPERTY AND REGISTER THE CHARGE WITH THE COMPETENT AUTHORITY AND EXECUTE REGISTERED SALE DEEDS) AS SET OUT IN CLAUSE 4.1 (II), (III), (IV) AND (V) AND THE OWNER CONFIRMS, UNDERTAKES, DECLARES AND BINDS ITSELF NOT TO REVOKE THE SAME FOR ANY REASON WHATSOEVER OUT OF IT S OWN WILL AND DISCRETION WITHOUT OBTAINING A SPECIFI C PRIOR WRITTEN CONSENT OF THDC OR ANY OF ITS DULY CONSTITUTED ATTORNEYS. 104 THE ABOVE CLEARLY SHOWS THAT THIS POWER OF ATTO RNEY COULD NOT BE REVOKED FOR ANY REASON WITHOUT OBTAINI NG SPECIFIC PRIOR WRITTEN CONSENT OF THDC/HASH. NO DOCUMENT SHOWING THE CONSENT OF THDC FOR REVOCATION OF THIS IRREVOCABLE POWER OF ATTORNEY HAS BEEN PRODUCE D BEFORE US. WE FAIL TO UNDERSTAND THAT IN THE ABSEN CE OF SUCH DOCUMENT HOW THE ASSESSEE CAN CLAIM THAT THIS POWER OF ATTORNEY HAS BEEN REVOKED. AS DISCUSSED EARLIER WHILE CONSIDERING THE LEGAL POSITION, WE WO ULD AGAIN RECALL THE WORDS OF HON'BLE AUTHORITY FOR ADV ANCE RULING IN CASE OF JASBIR SINGH SARKARIA (SUPRA) WHE REIN AT PARA 33 OF THE DECISION WHILE DISCUSSING THE ISSUE IN RESPECT OF POWER OF ATTORNEY, IT WAS HIGHLIGHTED T HAT EXECUTION OF IRREVOCABLE POWER OF ATTORNEY IS OF SIGNIFICANT NATURE AND THE WORDS IRREVOCABLE ARE VERY IMPORTANT. THE EXPRESSION IRREVOCABLE ITSELF SHO WS THAT NORMALLY SUCH ATTORNEY CANNOT BE REVOKED. THEREFOR E, NO COGNIZANCE CAN BE TAKEN IN RESPECT OF REVOCATION O F THE IRREVOCABLE POWER OF ATTORNEY. IN THE ABSENCE OF S PECIFIC CONSENT AS PROVIDED IN CLAUSE 6.7 OF THE JDA FROM T HDC. 125 105 WE MAY ALSO NOTE THAT CIT D.R HAS POINTED OUT T HAT TOTAL CONSIDERATION WAS TO BE DETERMINED AS UNDER: (I) CONSIDERATION IN CASH (RS. 82,50,000 X 129 PLOTS) RS. 106,42,50,000/- (II) CONSIDERATION IN KIND (RS. 101,25,000/- X 129 PLOTS) RS. 130,61,25,000/- TOTAL RS. 237,03,75,000/- AVERAGE COST OF CONSIDERATION RS. 11.18 CRORES PER ACRE (TOTAL CONSIDERATION OF RS. 237.03 CRORES DIVIDED BY 21.2 ACRES OF LAND) IT IS CLAIMED ON BEHALF OF THE ASSESSEE THAT JDA H AS BEEN CANCELLED AND THE DEVELOPER HAS BEEN ALLOWED TO RETAIN THE PROPER TY WHICH HAS ALSO BEEN CONVEYED TO DEVELOPER THROUGH TWO SALE DEEDS. IF THAT IS SO THEN WHAT WOULD HAPPEN TO THE BALANCE CONSIDERATION BECAUSE I N SUCH SITUATION THE ASSESSEE HAS RECEIVED CONSIDERATION OF ONLY ABOUT RS. 5 CRORESS PER ACRE BECAUSE THE ASSESSEE HAS REGISTERED LAND MEASURING 3.08 ACRES FOR RS. 15.48 CRORES THROUGH FIRST CONVEYANCE DEED, WHEREAS CONSIDERATION AS PER ORIGINAL AGREEMENT WAS RS. 11.18 CRORES PER ACRE AS SHOWN ABOVE. THE DIFFERENCE IS BECAUSE OF NON RECEIPT OF CONSIDERATI ON IN KIND AND THE ASSESSEE HAS NOT SHOWN ANY EVIDENCE THAT IT HAS MAD E THE CLAIM FOR RECEIPT OF BALANCE CONSIDERATION. THIS LEADS TO TH E CONCLUSION THAT THERE WAS NO CANCELLATION OF THE JDA. 106 SOME ARGUMENTS WERE MADE BY BOTH THE PARTIES T HAT IF THE CONTRACT IS FINALLY STAND ABANDONED THEN WHAT WOULD HAPPEN. THE CONTENTION ON BEHALF OF THE ASSESSEE IS THAT IF THE CONTRACT IS A BANDONED THEN THE ASSESSEE WOULD HAVE PAID TAX IN THE YEAR OF TRANSFE R AND WOULD BE LEFT WITH NO RECOURSE FOR RELIEF. THE CONTENTION ON BEHALF O F THE DEPARTMENT WAS THAT THE ASSESSEE COULD ALWAYS FILE REVISED RETURN OR MAKE A PETITION U/S 264 AND SOME RELIEF WAS POSSIBLE IN CASE OF THE ASS ESSEE. HOWEVER, IF REVENUE FAILS TO TAX THE TOTAL CONSIDERATION IN TH E YEAR OF TRANSFER THEN SAME CANNOT BE SUBJECTED TO TAX IN ANY OTHER YEAR. WE FIND THAT THIS QUESTION WAS SERIOUSLY CONSIDERED BY THE LD. AUTHOR ITY FOR ADVANCE RULING IN CASE OF JASBIR SINGH KATARIA (SUPRA) WHICH HAS B EEN RELIED ON BY BOTH THE PARTIES FOR VARIOUS ASPECTS. IN THAT CASE IT W AS OBSERVED AT PARA 39 AS UNDER: 126 WE HAVE TO ADVERT TO ONE ASPECT WHICH HAS CAUSED S OME CONCERN TO US. WHAT WILL HAPPEN IF DURING THE YEAR FOLLOWING THE O NE IN WHICH THE DEEMED TRANSFER TOOK PLACE, THE PROPOSED VENTURE COLLAPSES FOR REASONS SUCH AS REFUSAL OF PERMISSIONS, THE DEVELOPER FACING FINANC IAL CRUNCH ETC. BY THAT TIME, THE OWNER WOULD HAVE RECEIVED ONLY A PART OF THE AGREED CONSIDERATION, BUT HE IS OBLIGED TO FILE THE RETURN SHOWING THE ENTIRE CAPITAL GAIN BASED ON THE FULL SALE PRICE WHETHER OR NOT RE CEIVED DURING THE YEAR OF DEEMED TRANSFER. IN SUCH AN EVENTUALITY, HARDSHIP MAY BE CAUSED TO THE OWNER WHO WOULD HAVE PAID FULL TAX. NO DOUBT, SUCH A SITUATION COULD BE AVOIDED IF THE CONTENTION OF THE APPLICANT IS ACCEP TED. ON DEEP CONSIDERATION, HOWEVER, WE FIND THAT THE CONSTRUCTI ON OF THE RELEVANT PROVISION SHOULD NOT BE CONTROLLED BY GIVING UNDUE IMPORTANCE TO SUCH HYPOTHETICAL SITUATIONS. NORMALLY, THE OWNER EXECU TES A POWER OF ATTORNEY OR DOES SIMILAR ACT TO LEFT THE TRANSFEREE TAKE POS SESSION ONLY AFTER THE BASIC PERMISSIONS ARE GRANTED AND HE IS SATISFIED A BOUT THE ABILITY OF TRANSFEREE/DEVELOPER TO FULFIL THE CONTRACT. IN SP ITE OF THAT, IF SUCH RATE SITUATIONS TAKE PLACE, THE OWNER/TRANSFEROR WILL NO T BE WITHOUT REMEDY. HE CAN FILE A REVISED RETURN AND MAKE OUT A CASE FOR E XCLUSION OR REDUCTION OF INCOME. HOWEVER, IF THE TIME-LIMIT FOR FILING A RE VISED RETURN EXPIRES, THE DIFFICULTY WILL ARISE. IT IS FOR PARLIAMENT OR THE CENTRAL GOVERNMENT TO PROVIDE A REMEDY TO THE ASSESSEE IN SUCH CASES. MO REOVER, THE OTHER SIDE OF THE PICTURE AS DEPICTED IN PARAGRAPH 27 (SU PRA) SHOULD ALSO BE KEPT IN VIEW. HERE THE COMMENTS OF SHRI RAJARATNAM QUOTED AT PAR A 5164 ABOVE ARE ALSO RELEVANT AGAIN: IT IS HARD ON THE OWNERS WHEN REQUIRED TO PAY TAX, WHEN HANDING OVER THE POSSESSION FOR PURPOSES OF CONSTRU CTION WITHOUT BEING ABLE TO ENJOY THE CONSTRUCTION, WHICH IS YET TO COMMERCE OR IN THE PROCESS OF CONSTRUCTION BEING PUT UP BY THE DEVELOPER, BUT THE SOLUTION LIES IN STATU TORY CLARIFICATION IN SUCH CASES. IN VIEW OF THE INCREA SING SCALE OF SUCH DEVELOPMENT AGREEMENTS TO SOLVE THE HOUSING PROBLEM IN THE CITIES, A STATUTORY CLARIFIC ATION OR CIRCULAR IS OVERDUE. WE MAY MENTION HERE THAT NO DOUBT SOMETIMES AN ASS ESSEE MAY BE PUT IN A DIFFICULT SITUATION AND AS MENTIONED BY HON'BL E AUTHORITY IN CASE OF JASBIR SINGH SARKARIA (SUPRA) AS WELL AS LD. AUTHOR SHRI RAJARATNAM IT IS FOR THE LEGISLATURE TO TAKE CORRECTIVE STEPS. HOWE VER, IT MAY NOT BE OUT OF PLACE THAT IF CONSIDERING THE DIFFICULTY THE INTERP RETATION GIVEN BY THE LD. COUNSEL OF THE ASSESSEE IS ACCEPTED THEN THE REVENU E MAY NOT BE ABLE TO TAX SUCH ASSESSEES WHEN THESE DIFFICULTIES ARE REMO VED. FOR EXAMPLE IN THE PRESENT CASE IF TOMORROW WHEN ALL PERMISSIONS A RE OBTAINED AND 127 CONSTRUCTION IS COMPLETED AND IF NO TAXES ARE HELD TO BE PAYABLE THEN LATER ON ALSO THE ASSESSEE MAY NOT BE SUBJECTED TO ANY TA X UNDER THE HEAD CAPITAL GAIN BECAUSE THEN IT CAN BE EASILY CONTEN DED ON BEHALF OF THE ASSESSEE THAT THE TRANSFER HAS ALREADY TAKEN PLACE ON THE DATE WHEN IRREVOCABLE POWER OF ATTORNEY WAS EXECUTED. IN THA T SITUATION THE REVENUE WILL HAVE NO REMEDY. 107 THE ABOVE CLEARLY SHOWS THAT SUCH HYPOTHETICAL CONSIDERATION CANNOT BE CONSIDERED FOR GIVING TRUE MEANING TO A P ARTICULAR PROVISION. IT HAS ALSO BEEN OBSERVED THAT IN SOME GENUINE CASES T HE DIFFICULTIES MAY ARISE BUT IT WAS FOR THE PARLIAMENT OR THE GOVERNME NT TO PROVIDE REMEDY IN SUCH CASES AND JUDICIAL FORUMS CANNOT DO ANYTHING. THEREFORE, IN VIEW OF THE PROVISIONS OF SECTION 45 R.W.S. 48 WE ARE OF TH E OPINION THAT SUBSEQUENT EVENTS, IF AT ALL ANY WILL NOT MAKE ANY DIFFERENCE BECAUSE TOTAL CONSIDERATION RECEIVED OR ACCRUED HAS TO BE ASSESSE D IN THE YEAR OF TRANSFER. WE MAY ALSO NOTE THAT IT WAS STATED THAT IRREVOCABLE POWER OF ATTORNEY HAS BEEN REVOKED BUT THE WORD IRREVOCABLE ITSELF SHOWS THAT IN THE EYES OF LAW SPECIAL POWER OF ATTORNEY COULD NOT HAVE BEEN REVOKED. IN VIEW OF THIS ANALYSIS, WE ARE OF THE OPINION THA T EITHER THE JDA HAS NOT BEEN CANCELLED OR IN ANY CASE THE SAME CANNOT BE CO NSIDERED FOR DETERMINING THE TAXATION OF CAPITAL GAIN. ACCORDING LY THIS CONTENTION IS REJECTED. 108 THE NEXT CONTENTION OF THE ASSESSEE IS THAT EV EN IF THE WHOLE CONSIDERATION HAS TO BE TAXED THEN VALUE OF THE FLATS CANNOT BE TAKEN AT RS. 4,500/- PER SQ. FEET. IT IS ALSO POINTED OUT THAT IN VIEW OF THE AGREEMENT BETWEEN THE HASH & THDC CONSIDERATION HAS BEEN SHOWN AT RS. 2,000/- PER SQ. FEET FOR 126 FLATS WHEREAS IT IS RS . 4,500/- PER SQ. FEET FOR THREE FLATS. WE FIND NO FORCE IN T HESE SUBMISSIONS. THE ASSESSEE HAS FILED ALONG WITH THE WRITTEN SUBMISSIONS COPY OF THE ADDENDUM OF AGREEME NT BETWEEN THDC AND HASH BY JOINT DEVELOPER (AT PAGE 2 65 & 266) AND THIS ISSUE IS DISCUSSED IN CLAUSE 5 WHI CH IS AS UNDER:- 5. CLAUSES 4.1, 4.2, 4.3 AND 4.4 ON THE PAGE NOS. 18 AND 19 OF THE AGREEMENT SHALL STAND AMENDED, MODIFIED AND SUBSTITUTED BY THE FOLLOWING:- 4.1 IT IS EXPRESSLY AGREED AND UNDERSTOOD BY AND BETWEEN THE PARTIES HERETO 128 (A) IN THE RATIO OF 72,28 BETWEEN THDC AND HASH I N CASE GROSS SALES PROCEEDS DOES NOT EXCEED RS. 1272 CRORES; (B) IN THE RATIO OF 70: 30 BETWEEN THDC AND HASH IN CASE GROSS SALES PROCEEDS IS EQUAL TO RS. 1272 CRORES; (C) IN ADDITION (B), IN THE RATIO OF 60: 40 BETWE EN THDC AND HASH IN RESPECT OF GROSS SALES PROCEEDS IN EXCESS OF RS. 1272 CRORES. IT IS AGREED THAT THE MINIMUM GUARANTEED AMOUNT FR OM THE GROSS SALES PROCEEDS FOR THDC AND HASH IS RS. 890.40 CRORES AND RS. 225.76 CRORES RESPECTIVELY. T HE MINIMUM GUARANTEED AMOUNT OF RS. 225.76 CRORES TO HASH INCLUDES RS. 58.88 CRORES THAT SHALL BE EXPEND ED BY THDC TOWARDS CONSTRUCTION OF 126 FLATS EQUIVALEN T TO 2,83,500 SQ. FT,, WHICH FLATS ARE TO BE ALLOTTED IN THE NAMES OF THE MEMBERS OF THE SOCIETY OR OTHERWISE, A S THE CASE MAY BE, CALCULATED AS RS. 2000 PER SQ. FT. FOR THE AREA 2,83,500 SQ. FT. AND THE 72% SHARE OF 3 FLATS OF 2250 SQ. FT. TO BE PURCHASED BY HASH @ RS, 4500/- PER SQ . FT. SHOULD THE APPLICATION OF THE RATIO STIPULATED IN ( A) ABOVE RESULT IN HASH BEING ENTITLED TO A SUM GREATER THAN THE MINIMUM GUARANTEED AMOUNT AND THDC BEING ENTITLED T O A SUM LESS THAN THE MINIMUM GUARANTEED AMOUNT, THDC SHALL-BE ENTITLED TO THE ENTITLEMENT OF HASH WHICH IS IN EXCESS OF ITS MINIMUM, GUARANTEED AMOUNT UNTIL THD C ACHIEVES ITS MINIMUM GUARANTEED AMOUNT.-THE SAME IS ILLUSTRATED IN ANNEXURE I HERETO. 109 THE ABOVE CLEARLY SHOWS THAT HASH WAS ENTITLED TO TOTAL PROCEEDS OF RS. 225.76 CRORES OUT OF TOTAL PR OCEEDS OF THE PROJECT WHICH WERE AGREED TO BE SHARED BY TH DC AND HASH BUT THE PORTION OF HASH INCLUDES A SUM OF RS. 58.88 CRORES WHICH WAS REQUIRED TO BE SPENT TOWARDS CONSTRUCTION OF 126 FLATS EQUIVALENT TO 283500 SQUA RE FEET AREA WHICH WERE TO BE ALLOTTED TO THE MEMBERS OF TH E SOCIETY. THUS, IT IS CLEAR THAT FIGURE OF RS. 2,00 0/- PER SQ. FEET REPRESENTS ONLY THE COST OF CONSTRUCTIONS TO B E INCURRED BY THDC WHICH WAS DEBITED TO THE ACCOUNT O F 129 HASH. FURTHER, HASH HAS AGREED TO PURCHASE THREE F LATS @ 4,500/- PER SQUARE FEET. SOME NEWS REPORTS WERE QUOTED BEFORE US IN ONE OF THE CASES TO SHOW THAT V ARIOUS BROKERS HAD ISSUED VARIOUS ADVERTISEMENTS FOR SALE OF THESE FLATS AND THESE FLATS WERE ULTIMATELY TO BE S OLD AT RS. 7,000/- TO RS. 10,000/- PER SQUARE FEET. THIS A LSO BECOMES CLEAR FROM THE ADDENDUM OF AGREEMENT IN T ERMS OF TOTAL PROCEEDS OF 1272 CRORES. IN ANY CASE IF T HE COST OF CONSTRUCTION IS RS. 2,000/-, THEN COST OF LAND WHICH HAS BEEN PAID TO THE SOCIETY IS ALSO TO BE ADDED TO THE COST OF THE FLAT BECAUSE THIS PORTION OF CONSIDERAT ION IN ANY CASE WAS RECEIVED OR TO BE RECEIVED LATER BY TH E SOCIETY IN CASH. CONSIDERING THE PRESENT MARKET VA LUE OF THE FLATS IN AND AROUND CHANDIGARH AREA WHICH IS RS . 4,000/- TO 12,000/- PER SQUARE FEET WE ARE OF THE O PINION THAT VALUE OF THE FLAT AT RS. 4,500/- PER SQUARE FE ET IS ABSOLUTELY FAIR. IN ANY CASE M/S HASH HAS AGREED T O PURCHASE THE FLATS AT THIS RATE FROM M/S THDC. IT MAY BE NOTED AS POINTED OUT BY THE LD. DR FOR THE REVENUE SOME OF THE NEWS REPORT CLIPPINGS FILED BY VARIOUS ASSES SEES CLEARLY SHOWS THAT FLATS WERE BOOKED IN THE TATA CAMLEOT (THIS WAS THE NAME WHICH WAS GIVEN TO THE PROJECT WHICH WAS TO BE DEVELOPED ON THE LAND OF TW O SOCIETIES) IN THE PRE LAUNCH OFFER IN THE RANGE OF RS. 7500 TO 8000 PER SQFT. IT IS A COMMON KNOWLEDGE THAT RA TES IN PRE LAUNCH OFFER ARE LOWER THAN THE RATES WHEN BOOK INGS OPEN FOR THE PUBLIC. CONSIDERING THESE FACTS WE AR E OF THE OPINION THAT ASSESSING OFFICER HAS ESTIMATED TH E VALUE OF THE FLATS ON MOST REASONABLE BASIS. IN VIEW OF THESE OBSERVATIONS THIS CONTENTION IS REJECTED. 110 THE LD. COUNSEL FOR THE ASSESSEE HAD MADE SOME SUBMISSIONS ON THE ISSUE OF DEDUCTION U/S 54F. HE HAS POINTED OUT THAT THIS ISSUE HAS BEEN REJECTED WRONG LY BY CIT(A). HOWEVER, CAREFULLY PERUSAL OF THE GROUNDS OF APPEAL SHOW THAT NO GROUND IN RESPECT OF DEDUCTION U/S 54F HAS BEEN RAISED BEFORE US AND, THEREFORE, WE DE CLINE TO ADJUDICATE THIS ISSUE AND ALL THE ARGUMENTS MADE IN THIS BEHALF ARE REJECTED. THOUGH REFERENCE WAS MAD E TO GROUND NO. 2.3 IN THIS REGARD. THE PERUSAL OF GROU NDS NO. 2.3 WOULD SHOW THAT REFERENCE HAS BEEN MADE ONLY TO SECTION 54 AND SECTION 54EC. SECTION 54 DEALS WITH DEDUCTION IN CASE THE ASSESSEE BEING AN INDIVIDUAL OR HUF, TRANSFERS THE RESIDENTIAL HOUSE AND IN CASE BE FORE US, THE ASSESSEE HAS TRANSFERRED THE PLOT. THEREFO RE, IT CANNOT BE SAID THAT DEDUCTION U/S 54F AND 54 IS SAM E. 130 SINCE NO GROUND HAS BEEN RAISED FOR DEDUCTION U/S 5 4F, WE REJECT THIS CONTENTION. 111 GROUND NO. 3 - THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT WITHOUT PREJUDICE TO THE ISSUES RAI SED IN GROUNDS NO. 2, 5 & 6, CAPITAL GAIN SHOULD HAVE BEEN TAXED IN THE HANDS OF THE SOCIETY WHICH IS LEGAL OWNER OF THE LAND. 112 ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUBMITTED THAT THE SOCIETY WAS ACTING ON BEHALF OF THE MEMBERS AND THE MEMBERS HAVE SURRENDERED THEIR RIGH TS IN FAVOUR OF THE SOCIETY SO AS TO ENABLE THE SOCIE TY TO ENTER INTO JDA FOR TRANSFER OF PROPERTY IN FAVOUR O F THE DEVELOPER I.E. THDC/HASH. THEREFORE, CAPITAL ASSE T HAS BEEN SOLD BY THE MEMBERS. FURTHER THE CONSIDERATION WAS TO BE RECEIVED FROM HASH BY THE INDIVIDUAL PLOT OWN ERS. 113 WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY AND FIND THAT THE SOCIETY WAS FORMED BY VARIOUS MEMBERS FOR THE PURPOSE OF PURCHASE OF LAND AND TO DEVELOP THE SAME AND THEY ALLOTTED THE PLOTS TO THE MEMBERS. THE SO CIETY PURCHASED 21.2 ACRES OF LAND AND ULTIMATELY PLOTS I N THE SIZES OF 500SQYD AND 1000SQYD WERE ALLOTTED TO VARI OUS MEMBERS. WHEN THE PROPOSAL FOR DEVELOPMENT OF PROP ERTY CAME IT WAS RESOLVED IN THE GENERAL BODY MEETING OF THE SOCIETY THAT THE MEMBERS WOULD SURRENDER THEIR RIGH TS IN FAVOUR OF THE SOCIETY SO THAT THE SOCIETY CAN ENTE R INTO THE JDA. THUS IT IS CLEAR THAT THE SOCIETY HAS ENT ERED INTO JDA ON BEHALF OF THE MEMBERS. IT IS THE MEMBERS WH O ARE OWNING THE PLOTS AND THE SOCIETY WAS ONLY A FACILIT ATOR. IT BECOMES CLEAR FROM THE JDA THAT PAYMENT FOR CONSIDERATION WAS TO BE MADE TO AN INDIVIDUAL PLOT HOLDER AND IN FACT CONSIDERATION WAS MENTIONED IN TERMS OF PER MEMBER. EACH MEMBER HOLDING 500SQYD PLOT WAS TO RECEIVE A SUM OF RS. 82,50,000/- AND ONE FULLY FURN ISHED FLAT MEASURING 2250 SQFT AND THE MEMBERS HOLDING 1000SQYD PLOT WERE TO RECEIVE MONETARY CONSIDERATIO N OF RS. 1.65 CRORES PLUS TWO FLATS MEASURING 2250 SQFT. IN FACT THE PAYMENT OF CHEQUES IS MADE BY HASH BY ISSU ING CHEQUES IN THE NAME OF INDIVIDUAL MEMBER AND NOT TH E SOCIETY. THIS FACT STANDS ADMITTED BECAUSE ASSESSE E HAS FILED A RETURN DECLARING CAPITAL GAIN AGAINST PART MONEY RECEIVED AGAINST HIS PLOT. THUS IT BECOMES CLEAR T HAT IT IS THE INDIVIDUAL MEMBER WHO ARE LIABLE TO TAX IN RESP ECT OF 131 TRANSFER TO PLOTS AND THE SOCIETY BEING ONLY A FACI LITATOR OR POST OFFICE. SOME MORE DETAILS HAVE BEEN DISCUSSED IN THIS RESPECT WHILE ADJUDICATING THE APPEAL OF PUNJA BI COOP HOUSE BUILDING SOCIETY LTD. IN ITA NO. 310/CHD/2012 AND 556/CHD/2012 WHICH HAVE BEEN ADJUDICATED LITTLE LAT ER IN THIS ORDER ITSELF. ACCORDINGLY WE FIND NO FORCE IN THE SUBMISSIONS AND THIS GROUND IS REJECTED. 114 GROUND NO. 7 THE ISSUE REGARDING LEVY OF INT EREST U/S 234B AND WITHDRAWAL U/S 244A (3) IS OF CONSEQUE NTIAL NATURE AND THE ASSESSING OFFICER IS DIRECTED TO CHA RGE INTEREST U/S 234B OF THE ACT IN ACCORDANCE WITH LAW . WITHDRAWAL OF INTEREST U/S 244A (3) SHOULD ALSO BE DONE IN ACCORDANCE WITH LAW. 115 IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. 38. NOW, WE TAKE UP`THE 24 APPEALS BEFORE THIS BEN CH ONE BY ONE AS UNDER: 1) ITA NO.180(ASR)/2011 SHRI SATNAM SINGH KAINTH VS ITO I) GROUNDS NO. 1 & 2 RELATE TO REOPENING OF ASSESS MENT UNDER SECTION 147 OF THE ACT. THE FACTS OF THESE GROUNDS ARE IDENTICAL TO THE FACTS AS IN THE CASE OF SH.AVTAR SINGH BRAR (SUPRA)AND OTHER 30 APPEALS DECIDED BY THE ITAT CH ANDIGARH BENCH IN ITA NO. 448(ASR)/2011 AND OTHERS VIDE OR DER DATED 29.07.2013 (SUPRA) AND DECISION THEREIN IS, THEREF ORE, IDENTICALLY APPLICABLE IN THE PRESENT CASE. ACCORDINGLY, WE FI ND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO HAS RIGHTLY UPHELD THE ACTION OF THE A.O. IN REOPENING THE ASSESSMEN T. THUS, GROUNDS NO.1 & 2 OF THE ASSESSEE ARE DISMISSED. II) AS REGARDS GROUNDS NO. 3 TO 6, THE FACTS ARE I DENTICAL TO THE FACTS IN THE CASE OF SH.CHARANJIT SINGH ATWAL VS. ITO (SUPRA) HEREINABOVE ON THE TAXABILITY OF THE CAPI TAL GAIN. THEREFORE, THE DECISION IN THE CASE OF SH.CHARANJI T SINGH ATWAL VS. ITO (SUPRA) IS IDENTICALLY APPLICABLE IN THE P RESENT CASE. THEREFORE, GROUNDS NO. 3 TO 6 ARE DISMISSED. III) GROUNDS NO. 7 TO 11 ARE GENERAL IN NATURE AND THEREFORE, DO NOT REQUIRE ANY ADJUDICATION . 132 IV) IN THE RESULT, THE APPEAL IN ITA NO.180(ASR)/2 011 IS DISMISSED. 20. NOW, WE TAKE UP APPEAL OF THE ASSESSEE IN ITA NO.188(ASR)/2013 IN THE CASE SH. MANORANJAN KALIA, JALANDHAR . IN GROUNDS NO. 1 & 2, THE ASSESSEE HAS RAISED ISSUE WITH RESPECT TO THE VALID ITY OF ASSUMPTION OF JURISDICTION U/S 147/148 OF THE ACT. THE SAID ISSUE WAS RAISED BEFORE THE LD. CIT(A), WHO HAS DISMISSED THE GROUNDS OF THE ASSES SEE. 20.1. ON PERUSAL OF THE RECORD AND THE ARGUMENTS MA DE BY BOTH THE PARTIES, WE FIND THAT THE LD. CIT(A) HAS PASSED A WELL REASO NED ORDER IN PARA 13 & 14 OF HIS ORDER AND WE FIND NO INFIRMITY IN THIS RE GARD. ACCORDINGLY GROUNDS NO. 1 & 2 OF THE ASSESSEE ARE DISMISSED. 20.2. GROUNDS NO. 11 & 12 ARE GENERAL IN NATURE. TH EREFORE, THEY DO NOT REQUIRE ANY ADJUDICATION. 20.3. AS REGARDS GROUNDS NO.3 TO 10, THE FACTS IN T HESE GROUNDS ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATW AL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA), WHERE DETAILED ORDERS HAVE BEEN PASSED IN THE SAID CASES. SINCE THE FACTS IN THE PRESENT CASE IN GROUNDS NO. 3 TO 10 ARE IDENTIC AL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (S UPRA) AND IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA), THE REFORE, OUR ORDER IN THE 133 CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUP RA) IS IDENTICALLY APPLICABLE TO THE GROUNDS 3 TO 10 OF THE PRESENT A PPEAL, WHICH HAVE BEEN DISCUSSED IN DETAIL IN OUR ORDER IN THE CASE OF SH. SATNAM SINGH KAINTH VS ITO (SUPRA). THEREFORE, IN THE FACTS AND CIRCUMSTAN CES, ALL THE GROUNDS I.E.3 TO 10 OF THE ASSESSEE ARE DISMISSED. IN THE RESULT, THE APPEAL IN ITA NO.188(ASR)/20132 IS DISMISSED. 21. ITA NO.225(ASR)/2013 JATINDER SINGH KARIHA (DECD) L/H SMT. SATINDER KAUR. 21.1. THE FACTS IN THE GROUNDS TAKEN IN THE PRESEN T APPEAL ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA), WHERE DETAILED ORDERS HAVE BEEN PASSED IN THE SAID CASES. SINCE THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA), THEREFORE, OUR ORDER IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA) IS IDENTICALLY AP PLICABLE TO THE FACTS OF THE PRESENT APPEAL, WHICH HAVE BEEN DISCUSSED IN DETAIL IN OUR ORDER IN THE CASE OF SH. SATNAM SINGH KAINTH VS ITO (SUPRA). THEREFOR E, IN THE FACTS AND CIRCUMSTANCES, ALL THE GROUNDS I.E.3 TO 10 OF THE A SSESSEE ARE DISMISSED. IN THE RESULT, THE APPEAL IN ITA NO.188(ASR)/20132 IS DISMISSED. 134 22. ITA NO.301(ASR)/2013 SH.MANJIT PAL SINGH L/H OF SMT. HARJIT KAUR AS REGARDS GROUNDS NO. 1 & 3, THE SAME HAVE BEEN T AKEN BEFORE THE LD. CIT(A), WHO HAS DISMISSED THE SAME VIDE PARA 7 OF HIS ORDER. 22.1. AFTER CONSIDERING THE ARGUMENTS MADE BY THE A SSESSEE AND FACTS ON RECORD, WE FIND NO INFIRMITY IN THE ORDER OF THE LD . CIT(A) WHO HAS PASSED A VERY REASONED ORDER VIDE PARA 7 AND HAS RIGHTLY DIS MISSED THE GROUNDS OF THE ASSESSEE. ACCORDING GROUNDS NO. 1 & 3 OF THE ASSESS EE ARE DISMISSED. 22.2. AS REGARDS GROUNDS NO.2 & 4, THE LD. COUNSEL FOR THE ASSESSEE, MR. J.S.BHASIN, ADVOCATE ARGUED THAT SMT. HARJIT KAUR E XPIRED IN JANUARY, 2006 WHICH IS A FACT ON RECORD AVAILABLE AT PAGE 1 OF AO S ORDER. THEREFORE, NO ASSESSMENT CAN BE MADE ON DECEASED AND WHICH SHOULD HAVE BEEN ASSESSED IN THE HANDS OF AN AOP. THE AO HAS MADE ASSESSMENT IN THE NAME OF LEGAL HEIR SH. MANJIT PAL SINGH. THEREFORE, THE ORDER IT SELF IS BAD IN LAW. 22.3. THE LD. DR, ON THE OTHER HAND, ARGUED THAT LE GAL HEIR SH. MANJIT PAL SINGH WAS BROUGHT ON RECORD BEFORE THE AO AND THE ASSESSMENT HAS BEEN MADE ON THE LEGAL HEIR WHERE AS ALL THE CORRECT LEG AL HEIRS WERE BROUGHT ON RECORD BY THE LD. CIT(A) AND ACCORDINGLY, THE LD. C IT(A) HAS MADE THE RECTIFICATION HAVING CONCURRENT JURISDICTION AND TH ERE IS NO DEFECT IN THE ASSESSMENT SO MADE. HE OPPOSED THE ARGUMENTS MADE B Y THE LD. COUNSEL FOR THE ASSESSEE. 135 22.4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE FACTS OF THE CASE WITH REGARD TO GROUND NO. 2 & 4. THE ASSESSMENT HAS NOT BEEN MADE ON THE DECEASED AND THEREFORE, THE ARGUMENTS MADE BY THE L D. COUNSEL FOR THE ASSESSEE CANNOT BE ACCEPTED. THE ASSESSMENT HAS BEE N MADE ON THE LEGAL HEIRS AND ALL THE LEGAL HEIRS HAVE BEEN CORRECTED AS AND WHEN BROUGHT ON RECORD BEFORE THE LD. CIT(A) AND AS SUCH WE FIND NO ERROR IN THIS REGARD IN THE ASSESSMENT SO MADE. THE ARGUMENTS SO MADE BY TH E LD. COUNSEL FOR THE ASSESSEE, MR. J.S.BHASIN ARE THEREFORE REJECTED AND ACCORDINGLY GROUNDS NO. 2 & 4 OF THE ASSESSEE ARE DISMISSED. 22.5 AS REGARDS GROUNDS NO. 5 TO 10 RAISED BY THE ASSESSEE, THE FACTS IN THESE GROUNDS ARE IDENTICAL TO THE FACTS IN THE CA SE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA), WHERE DETAILED ORDERS HAVE BEEN PASSED IN THE SAID CASES. SINCE THE FACTS IN THE PRESENT CASE ARE IDEN TICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (S UPRA) AND IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA), THE REFORE, OUR ORDER IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUP RA) IS IDENTICALLY APPLICABLE TO THE FACTS OF GROUNDS NO. 5 TO 10 OF THE PRESENT APPEAL, WHICH HAVE BEEN DISCUSSED IN DETAIL IN OUR ORDER IN THE C ASE OF SH. SATNAM SINGH 136 KAINTH VS ITO (SUPRA). THEREFORE, IN THE FACTS AND CIRCUMSTANCES, ALL THE GROUNDS OF THE ASSESSEE IN ITA NO.301(ASR)/2013 ARE DISMISSED. 23. ITA NO.384(ASR)/2013 SMT. JAGDISH KAUR DHILLON AS REGARDS TO GROUNDS NO. 1 TO 3 WITH REGARD TO R EASSESSMENT U/S 147 OF THE ACT, THE SIMILAR GROUNDS WERE TAKEN BEFORE T HE LD. CIT(A), WHO HAS DISMISSED THE SAME FOR THE REASONS MENTIONED IN HIS ORDER. 23.1. AFTER HEARING THE LD. DR, WE FIND NO INFIRMIT Y IN THE ORDER OF THE LD. CIT(A) WHO HAS RIGHTLY REJECTED THE LEGAL GROUNDS O F THE ASSESSEE BY FOLLOWING THE CASE IN THE CASE OF NIRMAL SINGH KAHL ON WHICH IS PART OF THE CIT(A)S ORDER. ACCORDINGLY, GROUNDS NO. 1 TO 3 OF THE ASSESSEE ARE DISMISSED. 23.2. AS REGARDS GROUNDS NO. 4 TO 11, THE FACTS IN THESE GROUNDS ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAIN TH VS. ITO AND OTHERS (SUPRA), WHERE DETAILED ORDERS HAVE BEEN PASSED IN THE SAID CASES. SINCE THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACT S IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE C ASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA), THEREFORE, OUR O RDER IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA) IS IDENTICA LLY APPLICABLE TO THE FACTS OF THE PRESENT APPEAL, WHICH HAVE BEEN DISCUSSED IN DETAIL IN OUR ORDER IN THE 137 CASE OF SH. SATNAM SINGH KAINTH VS ITO (SUPRA). THE REFORE, IN THE FACTS AND CIRCUMSTANCES, ALL THE GROUNDS I.E.4 TO 11 OF THE A SSESSEE ARE DISMISSED. IN THE RESULT, THE APPEAL IN ITA NO.384(ASR)/2013 IS D ISMISSED. 24. ITA NO.439(ASR)/2013 BHAI HARNIRPAL SINGH THE ISSUE IN GROUNDS NO. 1 & 2 IS WITH REGARD TO REOPENING OF THE ASSESSMENT WAS RAISED BEFORE THE LD. CIT(A), WHO H AS RIGHTLY DISMISSED THE GROUNDS OF THE ASSESSEE. ACCORDINGLY, WE DISMISS GR OUNDS NO. 1 & 2 OF THE ASSESSEE. 24.1. AS REGARDS GROUNDS NO. 3 & 4, THE FACTS IN TH ESE GROUNDS ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATW AL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA), WHERE DETAILED ORDERS HAVE BEEN PASSED IN THE SAID CASES. SINCE THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA), THEREFORE, OUR ORDER IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA) IS IDENTICALLY AP PLICABLE TO THE FACTS OF THE PRESENT APPEAL, WHICH HAVE BEEN DISCUSSED IN DETAIL IN OUR ORDER IN THE CASE OF SH. SATNAM SINGH KAINTH VS ITO (SUPRA). THEREFOR E, IN THE FACTS AND CIRCUMSTANCES, GROUNDS 3 & 4 OF THE ASSESSEE ARE DISMISSED. IN THE RESULT, THE APPEAL IN ITA NO.439(ASR)/2013 IS DISMISSED. 138 25. ITA NO.440(ASR)/2013 BHAI HARNIRPAL SINGH THE ISSUE INVOLVED IN GROUNDS NO. 1 & 2 IS WITH REGARD TO REOPENING OF THE ASSESSMENT WAS RAISED BEFORE THE LD. CIT(A) , WHO HAS RIGHTLY DISMISSED THE GROUNDS OF THE ASSESSEE. ACCORDINGLY, WE DISMISS GROUNDS NO. 1 & 2 OF THE ASSESSEE. 25.1. AS REGARDS GROUNDS NO.3, THE FACTS IN THIS GR OUND ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHE RS (SUPRA), WHERE DETAILED ORDERS HAVE BEEN PASSED IN THE SAID CASES. SINCE THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA), THEREFORE, OUR ORDER IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA) IS IDENTICALLY AP PLICABLE TO THE FACTS OF THE PRESENT APPEAL, WHICH HAVE BEEN DISCUSSED IN DETAIL IN OUR ORDER IN THE CASE OF SH. SATNAM SINGH KAINTH VS ITO (SUPRA). THEREFOR E, IN THE FACTS AND CIRCUMSTANCES, GROUNDS 3 OF THE ASSESSEE IS DISM ISSED. IN THE RESULT, THE APPEAL IN ITA NO.440(ASR)/2013 IS DISMISSED. 26. ITA NO.447(ASR)/2013 - DR. RAM KUMAR GOYAL AS REGARDS GROUND NO.1, IT IS PERTINENT TO REPRODU CE THE GROUNDS RAISED BEFORE THE LD. CIT(A) IN HIS ORDER AT PAGE 1 TO 4 AS UNDER: 139 1. THAT THE ORDER PASSED BY THE LD. AO WARD 2(3) IS IL LEGAL, BAD IN LAW, AGAINST FACTS AND WITHOUT JURISDICTION. 2. THAT IN THE FACTS & CIRCUMSTANCES OF THE CASE, LD. AO ERRED IN REJECTING ARBITRARILY THE CLAIM OF THE STATUS OF A PPELLANT AS THAT OF HUF IN RESPECT OF ACQUISITION OF PLOT AND CONSEQUE NTIAL EFFECT THEREOF. 3. THAT IN THE FACTS & CIRCUMSTANCES OF THE CASE, LD. AO ERRED IN REJECTING THE CLAIM OF THE APPELLANT REGARDING ASS IGNMENT ON 21.02.2002 OF 500 SQ. HAD PLOT TO MANJU RINWA INSP ITE OF HAVING FURNISHED PHOTOSTAT COPIES OF RECEIPT DT. 21.02.20 02 AFFIDAVIT OF THE APPELLANT DT. 26.03.2002, LETTER ADDRESSED BY SMT. MANJU RINWA TO THE PRESIDENT OF THE SOCIETY AND SUM OF RS.3300000 (TH IRTY THREE LACS ONLY) VIDE ACCOUNT PAYEE CHEQUE AS PART PAYMENT ON ACCOUNT OF ADVANCE TOWARDS SURRENDER OF HER RIGHT IN PLOT OF 500 SQ.YD HELD IN THE SOCIETY HAVING BEEN RECEIVED BY MANJU RINWA IN FIN ANCIAL YEAR 2007- 08. 4. THAT IN THE FACTS & CIRCUMSTANCES OF THE CASE, LD. AO ERRED IN HOLDING THAT THE TRIPARTITE AGREEMENT DT. 25.02.20 07 IN RESPECT OF LAND CONSTITUTE A TRANSACTION OF TRANSFER ENVISAGED U/ S 2(47)(V) OF INCOME TAX ACT. 5. THAT IN THE FACTS & CIRCUMSTANCES OF THE CASE, LD. AO ERRED IN IGNORING THE FACT THAT PROPERTY IN QUESTION IS AGR ICULTURE LAND AND IS EXEMPT FROM CAPITAL GAIN TAX AS NOT BEING CAPITAL ASSET WITHIN THE MEANING OF SEC. 2(14)V) OF THE ACT. 6. THAT IN THE FACTS & CIRCUMSTANCES OF THE CASE, LD. AO ERRED IN COMPUTING THE CAPITAL GAIN AT RS.35750000/-. 7. THAT WITHOUT PREJUDICE TO GROUND NO.5, THE LD. AO ERRED IN NOT ALLOWING EXEMPTION OF RS.20250000/- U/S 54F OF THE ACT WITHOUT ASSIGNING ANY REASON. 8. THAT IN THE FACTS & CIRCUMSTANCES OF THE CASE, LD. AO ERRED IN CHARGING INTEREST U/S 234A & 234B. 9. THAT HUMBLE APPELLANT PRAYS FOR PERMISSION TO A DD OR AMEND ANY GROUND OF APPEAL BEFORE DISPOSAL OF THE APPEAL . 3. BRIEF FACTS ARE THAT THE APPELLANT IS A MEMBER OF A SOCIETY NAMED PUNJAB COOPERATIVE HOUSING SOCIETY, MOHALI AND ENT ERED INTO A TRIPARTITE AGREEMENT WITH ONE M/S. HASH BUILDERS A ND M/S. TATA HOUSING DEVELOPMENT CORPORATION ON 25.02.2007. THE FACTS ARE IDENTICAL IN EACH CASE OF AN MLA AND ALL THE ISSU E HAS BEEN DEALT IN DETAILS BY ME IN CASE OF SH. NIRMAL SINGH KAHLON I N APPEAL NO. 214- 140 IT/10-11 DATED 07.03.2013 I.E. THE EVEN DATE OF TH IS ORDER WHEREIN THE APPEAL OF ASSESSEE IS DISMISSED. 4. GROUNDS OF APPEAL RELATING TO THE CLAIM OF THE APPELLANT THAT HE IS OWNER OF 500 SQ. YD AND THE REMAINING 500 SQ. Y D WAS OWNED BY HIS WIFE SMT. MANJUT RINWA IS DECIDED AS UNDER: I) THE APPELLANT CLAIMED DURING THE COURSE OF ASS ESSMENT PROCEEDINGS THAT OUT OF THE PLOT OF 1000 SQ. YARD, HE HAD ALREADY SOLD 500 SQ. YARD TO SMT. MANJU RINWA AND HE HAD ALREA DY RECEIVED RS.600000/- AS SALE CONSIDERATION OF THE PLOT. THE EVIDENCE REGARDING THE NECESSARY DOCUMENTATION WITH PUNJABI COOPERATI VE BUILDING SOCIETY WAS FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. BUT THE AO DID NOT ACCEPT THE EXPLANATION OF THE APPELLANT AND ASSESSED THE CAPITAL GAIN ARISING FROM THE SURRENDER OF RIGHTS IN THE PLOT OF 1000 SQ. YDS IN THE HANDS OF THE APPELLANT. II) DURING THE COURSE OF APPELLATE PROCEEDINGS, T HE APPELLANT ONCE AGAIN REITERATED THE SUBMISSIONS ON THIS ISSUE MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND AL SO FILED A CERTIFICATE FROM THE DEVELOPERS REGARDING PAYMENT OF RS.33,00,000/- TO SMT. MANJU RINWA DURING F.Y. 2007-08. THE AO WA S ASKED TO FILE HIS COMMENTS ON THE EVIDENCE FILED BY THE A/R OF T HE APPELLANT DURING THE COURSE OF APPELLATE PROCEEDINGS BUT THE AO IN HIS REMAND REPORT HAS MADE NO COMMENT ON THIS DOCUMENTARY EVIDENCE. IN VIEW OF THE FACTS STATED ABOVE, I DIRECT THE A O TO ASSESS OF THE CAPITAL GAINS ARISING FROM THE ABOVE SAID PLOT WITH PUNABI CO- OPERATIVE BUILDING SOCIETY OWNED BY THE APPELLANT AND HIS WIFE IN EQUAL SHARES, IN THE HANDS OF THE APPELLANT. BUT T HE AO MAY TAKE ACTION IN ACCORDANCE WITH THE PROVISIONS OF INCOME TAX ACT, 1961 TO ASSESS THE CAPITAL GAINS ARISING FROM PLOT OF 500 SQ. YARDS IN THE HANDS OF MANJU RINWA. THE GROUND OF APPEAL IS TREATED AS ALLOWED. 5. GROUND OF APPEAL RELATING TO THE CLAIM OF THE A PPELLANT THAT THE PLOT OF 500 SQ. YARDS WITH PUNJABI COOPERATIVE BUI LDING SOCIETY WAS OWNED BY HIM IN THE STATUS OF HUF IS DECIDED AS U NDER: I) THE A/R OF THE APPELLANT HAS ARGUED THAT THE I NVESTMENT IN THE PLOT WAS MADE FORM THE FUNDS OF HUF AS THE APPELLANT OWNS 141 AGRICULTURE LAND FROM WHICH AGRICULTURE INCOME DER IVED BY HIM AND THE INVESTMENT IN THE PLOT WAS MADE OUT OF THE AGR ICULTURE INCOME. BUT THE AO REJECTED THE CLAIM OF THE APPELLANT AND ASS ESSED THE CAPITAL GAIN IN THE HANDS OF INDIVIDUAL. II) DURING THE COURSE OF APPELLATE PROCEEDINGS, T HE A/R OF THE APPELLANT HAS AGAIN RELIED ON THE SUBMISSIONS MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. I HAVE GONE THROUGH THE WRITTEN SUBMISSIONS AND D OCUMENTS FILED DURING THE COURSE OF ASSESSMENT AS WELL AS A PPELLATE PROCEEDINGS AND I FIND THAT THE RECEIPT OF RS.6,00,000/- BY T HE APPELLANT FROM SMT. MANJU RINWA, HAS BEEN SIGNED BY HIM AS RAM KUMAR GOYAL MLA PUNJAB VIDHAN SABHA ABOHAR CONSTITUENCY ABOHAR DIS TT. FEROZEPUR. THIS VITAL DOCUMENT SIGNED AND PREPARE D BY THE APPELLANT HIMSELF SHOWS THAT THE APPELLANT WAS OWN ER OF THE ABOVE SAID PLOT IN INDIVIDUAL CAPACITY BECAUSE IF THE HU F FUNDS WERE INVESTED THEN THE RECEIPT OF PAYMENT SHOULD HAVE ALSO BEEN SIGNED IN THE CAPACITY OF KARTA OF HUF. THUS, THE APPELLANT WAS OWNER OF THIS PLOT IN INDIVIDUAL CAPACITY AND THE CAPITAL GAIN H AS BEEN RIGHTLY ASSESSED IN THE HANDS OF INDIVIDUAL. IN VIEW OF THE ABOVE SAID EVIDENCE, THE GROUND OF APPEAL IS DISMISSED. 26.1. THE LD. COUNSEL FOR THE ASSESSEE MR. P.N.AROR A ARGUED THAT THE FUNDS HAVE BEEN INVESTED OUT OF HUF AND NONE OF THE AUTHO RITIES BELOW HAVE APPRECIATED THESE FACTS AND THE CASE OF THE ASSESS EE IS VOID AB INITIO. 26.2. THE LD. DR RELIED UPON THE ORDER OF THE LD. C IT(A). 26.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE FACTS OF THE CASE. WE CONCUR WITH THE VIEWS OF THE LD. CIT(A) THAT THE RECEIPT OF RS.6 LACS BY THE ASSESSEE FROM HIS WIFE MRS. MANJU RINWA HAS BE EN SIGNED BY HIM IN THE INDIVIDUAL CAPACITY WHICH SHOWS THAT THE ASSESSEE W AS THE OWNER OF THE PLOT 142 IN THE INDIVIDUAL CAPACITY AND NOT IN THE HANDS OF HUF. IN THE FACTS AND CIRCUMSTANCES GROUND NO.1 OF THE ASSESSEE IS DISMIS SED. 26.4. AS REGARDS GROUNDS NO. 2 TO 11, THE FACTS IN THESE GROUNDS ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAIN TH VS. ITO AND OTHERS (SUPRA), WHERE DETAILED ORDERS HAVE BEEN PASSED IN THE SAID CASES. SINCE THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACT S IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE C ASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA), THEREFORE OUR OR DER IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA) IS IDENTICA LLY APPLICABLE TO THE FACTS OF THE PRESENT APPEAL, WHICH HAVE BEEN DISCUSSED IN DETAIL IN OUR ORDER IN THE CASE OF SH. SATNAM SINGH KAINTH VS ITO (SUPRA). THE REFORE, IN THE FACTS AND CIRCUMSTANCES, GROUNDS 2 TO 11 OF THE ASSESSEE AR E DISMISSED. IN THE RESULT, THE APPEAL IN ITA NO.447(ASR)/2013 IS DISMISSED. 27. ITA NO.453(ASR)/2013 SURJIT KUMAR JAYANI THE FACTS RELATING TO ALL THE GROUNDS RAISED IN THI S APPEAL ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHE RS (SUPRA), WHERE DETAILED ORDERS HAVE BEEN PASSED IN THE SAID CASES. SINCE THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH 143 ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA), THEREFORE, OUR ORDER IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA) IS IDENTICALLY AP PLICABLE TO THE FACTS OF THE PRESENT APPEAL, WHICH HAVE BEEN DISCUSSED IN DETAIL IN OUR ORDER IN THE CASE OF SH. SATNAM SINGH KAINTH VS ITO (SUPRA). THEREFOR E, IN THE FACTS AND CIRCUMSTANCES, ALL THE GROUNDS OF THE ASSESSEE I N ITA NO.453(ASR)/2013 ARE DISMISSED. 28. ITA NO.454(ASR)/2013 SH. NIRMAL SINGH KAHLON THE FACTS RELATING TO ALL THE GROUNDS RAISED IN THI S APPEAL ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHE RS (SUPRA), WHERE DETAILED ORDERS HAVE BEEN PASSED IN THE SAID CASES. SINCE THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA), THEREFORE, OUR ORDER IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA) IS IDENTICALLY AP PLICABLE TO THE FACTS OF THE PRESENT APPEAL, WHICH HAVE BEEN DISCUSSED IN DETAIL IN OUR ORDER IN THE CASE OF SH. SATNAM SINGH KAINTH VS ITO (SUPRA). THEREFOR E, IN THE FACTS AND 144 CIRCUMSTANCES, ALL THE GROUNDS OF THE ASSESSEE I N ITA NO.454(ASR)/2013 ARE DISMISSED. 29. ITA NO.460(ASR)/2013 SMT. GURMAIL KAUR AS REGARDS GROUND NO.6, BEING THE LEGAL ISSUE UNDE R SECTION 148 WHICH HAS BEEN RAISED BEFORE THE LD. CIT(A), WE HAV E PERUSED THE RECORDS AND THE ARGUMENTS MADE BY THE ASSESSEE AND WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A). THUS, GROUND NO.6 IS DISMI SSED. 29.1. AS REGARDS GROUND NO.7, THE SAME GENERAL IN N ATURE AND DOES NOT REQUIRE ANY ADJUDICATION. 29.2. AS REGARDS GROUNDS NO.1 TO 5, THE FACTS IN T HESE GROUNDS ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAIN TH VS. ITO AND OTHERS (SUPRA), WHERE DETAILED ORDERS HAVE BEEN PASSED IN THE SAID CASES. SINCE THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AN D IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA), THE REFORE, OUR ORDER IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA) IS IDENTICALLY APPLICABLE TO THE FACTS OF THE PRESENT APPEAL, WHI CH HAVE BEEN DISCUSSED IN DETAIL IN OUR ORDER IN THE CASE OF SH. SATNAM SI NGH KAINTH VS ITO (SUPRA). THEREFORE, IN THE FACTS AND CIRCUMSTANCES, THE GROUNDS NO. 1 TO 5 145 OF THE ASSESSEE ARE DISMISSED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.460(ASR)/2013 IS DISMISSED. 30. ITA NO.461(ASR)/2013 S. JORA SINGH MANN THE FACTS RELATING TO ALL THE GROUNDS RAISED IN THI S APPEAL ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHE RS (SUPRA), WHERE DETAILED ORDERS HAVE BEEN PASSED IN THE SAID CASES. SINCE THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA), THEREFORE, OUR ORDER IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA) IS IDENTICALLY AP PLICABLE TO THE FACTS OF THE PRESENT APPEAL, WHICH HAVE BEEN DISCUSSED IN DETAIL IN OUR ORDER IN THE CASE OF SH. SATNAM SINGH KAINTH VS ITO (SUPRA). THEREFOR E, IN THE FACTS AND CIRCUMSTANCES, ALL THE GROUNDS OF THE ASSESSEE I N ITA NO.4461(ASR)/2013 ARE DISMISSED. 31. ITA NO.462(ASR)/2013 SH.SHER SINGH THE FACTS RELATING TO ALL THE GROUNDS RAISED IN THI S APPEAL ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND 146 IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHE RS (SUPRA), WHERE DETAILED ORDERS HAVE BEEN PASSED IN THE SAID CASES. SINCE THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA), THEREFORE, OUR ORDER IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA) IS IDENTICALLY AP PLICABLE TO THE FACTS OF THE PRESENT APPEAL, WHICH HAVE BEEN DISCUSSED IN DETAIL IN OUR ORDER IN THE CASE OF SH. SATNAM SINGH KAINTH VS ITO (SUPRA). THEREFOR E, IN THE FACTS AND CIRCUMSTANCES, ALL THE GROUNDS OF THE ASSESSEE I N ITA NO.462(ASR)/2013 ARE DISMISSED. 32. ITA NO. 463(ASR)/2013 SH.INDERJIT SINGH AS REGARDS GROUNDS NO.6, 7 & 8 WITH REGARD TO ISSU ANCE OF NOTICE U/S 148 OF THE ACT, THE SAME HAS BEEN DEALT BY THE LD. CIT(A) AND WHO HAS RIGHTLY DISMISSED THE SAME BY PASSING A WELL REASON ED ORDER IN PARA 4 (PAGE 3 & 4). WE FIND NO INFIRMITY IN THE ORDER OF THE LD . CIT(A) AND ACCORDINGLY GROUNDS NO. 6, 7 & 8 ARE DISMISSED. 32.1 AS REGARDS GROUNDS NO. 1 TO 5, THE SAME ARE GE NERAL IN NATURE AND THEREFORE, DO NOT REQUIRE ANY ADJUDICATION. 147 32.2. AS REGARDS GROUNDS NO. 9 TO 12, THE FACTS IN THESE GROUNDS ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAIN TH VS. ITO AND OTHERS (SUPRA), WHERE DETAILED ORDERS HAVE BEEN PASSED IN THE SAID CASES. SINCE THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACT S IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE C ASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA), THEREFORE, OUR O RDER IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA) IS IDENTICA LLY APPLICABLE TO THE FACTS OF THE PRESENT APPEAL, WHICH HAVE BEEN DISCUSSED IN DETAIL IN OUR ORDER IN THE CASE OF SH. SATNAM SINGH KAINTH VS ITO (SUPRA). THE REFORE, IN THE FACTS AND CIRCUMSTANCES, GROUNDS NO. 9 TO 12 OF THE ASSES SEE ARE DISMISSED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.463(AS R)/2013 IS DISMISSED. 33. ITA NO.402(ASR)/2013 AY 2008-09 SH.CHARANJIT SIN GH SANDHU AS REGARDS GROUNDS NO. 1 TO 3 WITH REGARD TO PROVI SIONS OF SECTION 147/148, THE LD. CIT(A) HAS PASSED A WELL REASONED ORDER AND HAS DISMISSED THE GROUNDS OF THE ASSESSEE AND WE FIND NO INFIRMIT Y IN HIS ORDER. THUS, GROUNDS NO. 1 TO 3 OF THE ASSESSEE ARE DISMISSED. 33.1 AS REGARD GROUNDS NO. 4 TO 13, THE FACTS IN TH ESE GROUNDS ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATW AL VS. ITO AND OTHERS 148 (SUPRA) AND IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA), WHERE DETAILED ORDERS HAVE BEEN PASSED IN THE SAID CASES. SINCE THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA), THEREFORE, OUR ORDER IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA) IS IDENTICALLY AP PLICABLE TO THE FACTS OF THE PRESENT APPEAL, WHICH HAVE BEEN DISCUSSED IN DETAIL IN OUR ORDER IN THE CASE OF SH. SATNAM SINGH KAINTH VS ITO (SUPRA). THEREFOR E, IN THE FACTS AND CIRCUMSTANCES, GROUNDS NO. 4 TO 13 OF THE ASSESSE E ARE DISMISSED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.402(AS R)/2013 IS DISMISSED. 34. ITA NO.334(ASR)/2013 SH.SHINGARA RAM SANGHURA AS REGARDS GROUNDS NO. 2, 3 & 4, THE SAME WERE DEA LT BY THE LD. CIT(A), WHO HAS PASSED A WELL REASONED ORDER AND HA S DISMISSED THE SAME. ACCORDINGLY, WE FIND NO INFIRMITY IN THE ORDER OF T HE LD. CIT(A) AND GROUNDS NO. 2, 3 & 4 OF THE ASSESSEE ARE DISMISSED. 34.1 AS REGARDS GROUNDS NO. 1, 5 TO 10, THE FACTS I N THESE GROUNDS ARE IDENTICAL TO THE FACTS IN THE CASE OF SH. CHARANJIT SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE CASE OF SATNAM SINGH KAIN TH VS. ITO AND OTHERS (SUPRA), WHERE DETAILED ORDERS HAVE BEEN PASSED IN THE SAID CASES. SINCE THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACT S IN THE CASE OF SH. CHARANJIT 149 SINGH ATWAL VS. ITO AND OTHERS (SUPRA) AND IN THE C ASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA), THEREFORE, OUR O RDER IN THE CASE OF SATNAM SINGH KAINTH VS. ITO AND OTHERS (SUPRA) IS IDENTICA LLY APPLICABLE TO THE FACTS OF THE PRESENT APPEAL, WHICH HAVE BEEN DISCUSSED IN DETAIL IN OUR ORDER IN THE CASE OF SH. SATNAM SINGH KAINTH VS ITO (SUPRA). THE REFORE, IN THE FACTS AND CIRCUMSTANCES, GROUNDS 1, 5 TO 10 OF THE ASSESSEE ARE DISMISSED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.334(AS R)/2013 IS DISMISSED. 35. IN THE RESULT ITA NO. APPEAL BY RESULT 188(ASR)/2013 ASSESSEE DISMISSED 225(ASR)/2013 ASSESSEE DISMISSED 301(ASR)/2013 ASSESSEE DISMISSED 384(ASR)/2013 ASSESSEE DISMISSED 439(ASR)/2013 ASSESSEE DISMISSED 440(ASR)/2013 ASSESSEE DISMISSED 447(ASR)/2013 ASSESSEE DISMISSED 453(ASR)/2013 ASSESSEE DISMISSED 454(ASR)/2013 ASSESSEE DISMISSED 460(ASR)/2013 ASSESSEE DISMISSED 150 461(ASR)/2013 ASSESSEE DISMISSED 462(ASR)/2013 ASSESSEE DISMISSED 463(ASR)/2013 ASSESSEE DISMISSED 402(ASR)/2013 ASSESSEE DISMISSED 334(ASR)/2013 ASSESSEE DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 28TH AUGUST, 2013. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 28TH AUGUST, 2013 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEES: 2. THE 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.