D.L. Khandge, Pune V. Income tax Officer, Pune

ITA 652/PUN/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0531 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-12-2020
• Assessment Year: 2007-2008
• Appeal Filed On: 20-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Retrospective amendment; Competent authority; CHAPTER IV
• Section: 50C; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE VIRTUAL COURT BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 653/PUN/2017 ASSESSMENT YEAR : 2007-08 VASANT LAXMAN KHANDGE, AT POST TALEGAON DABHADE, TALUKA MAVAL, PUNE 410 506 PAN : AAZPK8350N VS. ITO, WARD-9(5), PUNE APPELLANT RESPONDENT ITA NO. 652/PUN/2017 ASSESSMENT YEAR : 2007-08 SANTOSH D. KHANDGE LEGAL HEIR OF DATTATRAYA LAXMAN KHANDGE, DAMODAR MANGAL, KARYALAYA, 1155A, GURUWAR PETH, TALEGAON DABHADE, TALUKA MAVAL, PUNE 410506 PAN : AAZPK8354J VS. ITO, WARD-9(5), PUNE APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP: THESE TWO APPEALS BY DIFFERENT BUT CONNECTED ASSESSEES EMANATE FROM THE ORDERS PASSED BY THE LD. CIT(A) ON 30- 12-2016 AND 01-12-2016 RESPECTIVELY IN RELATION TO THE ASSESSMENT YE AR ASSESSEE BY SHRI N.W. KHARE REVENUE BY SHRI S.P. WALIMBE DATE OF HEARING 22-12-2020 DATE OF PRONOUNCEMENT 23-12-2020 ITA NOS.653 AND 652/PUN/2017 V.L. KHANDGE AND SANTOSH D. KHANDGE 2 2007-08. SINCE THERE IS A COMMON LIS AND SIMILAR GROUND IN BOTH THE APPEALS, WE ARE, ERGO, PROCEEDING TO DISPOSE THEM BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRSTLY, WE ESPOUSE THE APPEAL BY SH. VASANT LAXMAN KHANDGE (ITA NO.653/PUN/2017). THE FACTUAL MATRIX OF THE CASE IS THAT THE ASSESSEE FILED RETURN FOR THE ASSESSMENT YEAR 20 07-08 DECLARING TOTAL INCOME OF RS.1,16,567/-. THE ASSESSING OF FICER (AO) RECEIVED INFORMATION FROM DCIT, CIRCLE-8, PUNE THAT THE ASSESSEE AND HIS BROTHER, DATTATRAYA LAXMAN KHANDGE, THE OTHER ASSESSEE IN THE PRESENT BATCH OF APPEALS, ENTERED INTO A DEVELOPMENT AGREEMENT WITH M/S. V.S. KOLBHOR & ASSOCIATES FOR SALE OF LAND AT SURVEY NOS. 676/677/679 AT TALEGAON DABHADE FOR A CONSIDERATION OF RS.93,25,000/-. THE SALE DEED WAS REG ISTERED ON 03-08-3006, ON WHICH DATE THE STAMP VALUE WAS RS.2,43,28 ,953/-. CONSIDERING THE FACT THAT THE INCOME ESCAPED ASSESSMENT ON THIS SCORE, THE AO ISSUED NOTICE U/S.148 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED `THE ACT). AFTER ENTERTAINING AND DIS POSING OF THE ASSESSEES OBJECTIONS SEPARATELY AGAINST THE INITIATION OF REASSESSMENT, THE AO CAME TO HOLD IN THE ASSESSMENT ORDER THAT THE ACTUAL DATE OF TRANSFER OF THE PROPERTY WAS THE DATE AS PER REGISTERED SALE DEED, VIZ. 03-08-2006, WHICH FELL IN THE PREVIOUS YEA R RELEVANT ITA NOS.653 AND 652/PUN/2017 V.L. KHANDGE AND SANTOSH D. KHANDGE 3 TO THE ASSESSMENT YEAR UNDER CONSIDERATION. INVOKING THE PROVISIONS OF SECTION 50C OF THE ACT, THE AO ADDED A SUM OF RS.75,01,976/- IN THE TOTAL INCOME OF THE ASSESSEE, BEING O NE HALF SHARE OF ADDITIONAL CAPITAL GAIN. THE ASSESSEES CONTENTION TH AT THE TRANSFER TOOK PLACE WAY BACK ON 06-05-2000 ON ENTERING IN TO CONTRACT AND HANDING OVER THE POSSESSION OF THE PROPERTY TO M/S V.S. KOLBHOR & ASSOCIATES AFTER RECEIPT OF SUBSTANTIAL PART OF SALE CONSIDERATION, DID NOT FIND FAVOUR WITH THE AO. THE LD. CIT( A) ECHOED THE ASSESSMENT ORDER ON THIS ISSUE. AGGRIEVED THER EBY, THE ASSESSEE HAS COME UP IN APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS THROUGH VIRTUAL COURT AND SCANNED THE RELEVANT MATERIAL ON RECORD. THE FACTS AR E NOT IN DISPUTE. HOWEVER, A LITTLE ELABORATION OF THE PRIMARY AND ESS ENTIAL FACTS IS ESSENTIAL. THE ASSESSEE AND HIS BROTHER, DATTATRAY LAXMAN KHANDGE, THE OTHER ASSESSEE IN THE PRESENT BATCH OF APPEA LS, INHERITED LAND AT SURVEY NOS. 676/677/679 AFTER THE DEATH OF TH EIR FATHER SHRI LAXMAN TUKARAM KHANDGE. AN AGREEMENT WAS E NTERED INTO ON 03-12-1984 BY THEIR FATHER WITH ONE MR. KULDEEP SIN GH NANDA FOR TRANSFER OF THE SAID LAND. THE MATTER WENT INTO LITIGATION. MR. KULDEEP SINGH NANDA FILED A CIVIL SUIT, WHICH ENDED WITH A COMPROMISE DECREE ON 04-01-2000 WHEREBY MR. KULDEEP S INGH ITA NOS.653 AND 652/PUN/2017 V.L. KHANDGE AND SANTOSH D. KHANDGE 4 NANDA WAS TO BE PAID A SUM OF RS.62,75,000/-. AS SH. LAXMAN TUKARAM KHANDGE HAD DIED BY THAT TIME, THE ASSESSEE AND HIS BROTHER EXECUTED THE COMPROMISE DECREE. IN ORDER TO FINA NCE THE PAYMENT TO MR. KULDEEP SINGH NANDA, THE ASSESSEE ENTERED IN TO AN AGREEMENT FOR TRANSFER OF THE LAND WITH M/S. V.S. KOLBHOR & ASSOCIATES FOR A CONSIDERATION OF RS.93,25,000/-. FORM 37 -I, ACCOMPANIED BY THE AGREEMENT DATED 06.05.2000, WAS FILED ON 10- 05-2000 WITH THE COMPETENT AUTHORITY UNDER THE INCOME-TAX A CT SEEKING APPROVAL TO THE TRANSACTION. IT IS A MATTER OF RECORD THAT THE COMPETENT AUTHORITY ALSO ACCORDED ITS CLEARANCE VIDE CERTIFICATE U/S.269-UL(3). EVENTUALLY, A REGISTERED SALE DEED WAS EXEC UTED ON 03-08-2006. IN THE BACKDROP OF THE ABOVE FACTS, THE MO OT QUESTION WHICH ARISES IN THE INSTANT CASE IS TO FIND OUT THE DATE OF TRAN SFER TRIGGERING THE PROVISIONS OF CHAPTER IV-E OF THE ACT. THE AO HAS OPINED THAT TRANSFER TOOK PLACE ON EXECUTION OF THE SALE DEED ON 03- 08-2006 AND HENCE CAPITAL GAIN BECAME CHARGEABLE U/S.45 OF THE ACT IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 20 07-08 UNDER CONSIDERATION. AU CONTRAIRE , THE ASSESSEE HAS CANVASSED A VIEW THAT THE TRANSFER TOOK PLACE ON 06.05.2000 AND HENCE, THE CAPITAL GAIN COULD NOT BE CHARGED TO TAX IN THE YEAR UNDER CONSIDERATION. ITA NOS.653 AND 652/PUN/2017 V.L. KHANDGE AND SANTOSH D. KHANDGE 5 4. WITHOUT PREJUDICE TO THE CORE ARGUMENT THAT THE TRANSFE R TOOK PLACE IN THE ASSESSMENT YEAR 2001-2002, THE LD. AR ALSO TO OK AN ALTERNATE ARGUMENT THAT THE CASE WAS COVERED BY THE FIRST PR OVISO TO SECTION 50C OF THE ACT AND HENCE, THE STAMP VALUE, IF AT ALL, SHOULD BE CONSIDERED WITH REFERENCE TO THE DATE OF AGREEMENT ENTER ED INTO ON 06.05.2000 AND NOT ON THE DATE OF REGISTRATION ON 03-08 -2006. THIS WAS COUNTERED BY THE LD. DR BY ARGUING THAT THE FIRST PR OVISO TO SECTION 50C WAS INSERTED BY THE FINANCE ACT, 2006 W.E.F. 01-04- 2017 AND HENCE, THE SAME CANNOT APPLY TO THE ASSESSMENT Y EAR 2007-08 UNDER CONSIDERATION. 5. WE FIRST TAKE UP THE ALTERNATE ARGUMENT RAISED BY THE LD. AR FOR CONSIDERATION. BEFORE EMBARKING UPON THIS ISSUE, IT WOULD BE APT TO TAKE NOTE OF THE MANDATE OF FIRST PROVISO TO SECTION 50C (1) OF THE ACT, WHICH STATES THAT: `WHERE THE DATE OF THE AGREEMENT FIXING THE AMOUNT OF CONSIDERATION AND THE DATE OF REGISTRATION FOR TH E TRANSFER OF THE CAPITAL ASSET ARE NOT THE SAME, THE VALUE AD OPTED BY THE STAMP VALUATION AUTHORITY ON THE DATE OF AGREEMENT MAY BE TAKEN FOR THE PURPOSES OF COMPUTING FULL VALUE OF CONSIDER ATION FOR SUCH TRANSFER. THIS PROVISO UNEQUIVOCALLY STATES THAT IF THE DATE OF AGREEMENT FIXING THE AMOUNT OF CONSIDERATION IS DIFFERENT FR OM THE DATE OF REGISTRATION FOR THE TRANSFER OF THE CAPITAL ASSET TA KING PLACE ITA NOS.653 AND 652/PUN/2017 V.L. KHANDGE AND SANTOSH D. KHANDGE 6 LATER ON, THE STAMP VALUE SHOULD BE CONSIDERED WITH REFERENC E TO THE DATE OF AGREEMENT AND NOT THE DATE OF REGISTRATION. THE SE COND PROVISO TO SECTION 50C(1) CONCOMITANTLY STATES THAT: `THE FIRST PROVISO SHALL APPLY ONLY IN A CASE WHERE THE AMOUNT OF CONSIDERATION, OR A PART THEREOF, HAS BEEN RECEIVED BY WA Y OF AN ACCOUNT PAYEE CHEQUE OR ON OR BEFORE THE DATE OF THE AGREEMENT FOR TRANSFER. ON GOING THROUGH THE PRESCRIPTION OF THE TW O PROVISOS WHICH HAVE BEEN INSERTED BY THE FINANCE ACT, 2016 W.E.F. 01-04-2017, IT IS OVERT THAT THE ADOPTION OF THE STAMP VALUE WITH REFERENCE TO THE DATE OF AGREEMENT AS DISCUSSED IN THE F IRST PROVISO WILL BE VALID ONLY IF THE FULL OR PART CONSIDERATION HAS BEEN REC EIVED THROUGH BANKING CHANNEL ON OR BEFORE THE DATE OF AGREEM ENT OF TRANSFER. TO PUT IT SIMPLY, STAMP VALUE ON THE DATE OF AGR EEMENT, IN CONTRAST TO THE DATE OF REGISTRATION, CAN BE CONSIDERED AS FULL VALUE OF CONSIDERATION IN TERMS OF SECTION 50C OF THE ACT ONLY WHE N THE DATE OF AGREEMENT IS DIFFERENT FROM THE DATE OF REGISTRATION AND THE TRANSFEROR RECEIVES WHOLE OR PART OF THE CONSIDERATION BEFO RE THE DATE OF AGREEMENT FOR TRANSFER. 6. WE NOW ADVERT TO THE FACTS OF THE INSTANT CASE. THE DATE OF AGREEMENT IS 06.05.2000 AND THE DATE OF REGISTRATION IS 03- 08-2006. IT IS FOUND FROM THE BANK STATEMENT OF M/S. V.S. KOLBHOR & ITA NOS.653 AND 652/PUN/2017 V.L. KHANDGE AND SANTOSH D. KHANDGE 7 ASSOCIATES, COPY GIVEN AT PAGE 36 OF THE PAPER BOOK, THAT THE ASSESSEE RECEIVED SUBSTANTIAL AMOUNT OF SALE CONSIDERATION THR OUGH BANKING CHANNEL BEFORE THE DATE OF THE AGREEMENT IN THE Y EAR 2000. SINCE THE PRESCRIPTION OF BOTH THE PROVISOS TO SECTION 50C(1) IS SATISFIED, EX CONSEQUENTI, IT IS ONLY THE STAMP VALUE ON THE DATE OF AGREEMENT WHICH, IF WARRANTED, NEEDS TO BE CONSIDERED A S FULL VALUE OF CONSIDERATION U/S.50C FOR THE PURPOSE OF CALCULATION OF CAPITAL GAIN U/S.45 OF THE ACT. 7. THE DEBATABLE POINT INVOLVED HEREIN IS TO ASCERTAIN TH E DATE OF APPLICABILITY OF THE BENEFICIAL PROVISO TO SECTION 50C(1) WHICH GIVES A BREATHING SPACE TO ALL SUCH ASSESSEES WHO ENTER INTO AGREEMENT FOR TRANSFER OF PROPERTY ON A DATE ANTERIOR TO TH E DATE OF ACTUAL REGISTRATION AND ALSO RECEIVE FULL OR PART OF THE CONSIDE RATION FOR SUCH TRANSFER. ADMITTEDLY, THE PROVISO WAS INSERTED BY THE FINANCE ACT, 2016 W.E.F. 1.4.2017 AND THE ASSESSMENT Y EAR UNDER CONSIDERATION IS 2007-08. IT IS PERTINENT TO NOTE THAT BUT FOR THE PROVISO, MANDATE OF SUB-SECTION (1) OF SECTION 50C APPLIES, BY WHICH THE STAMP VALUE ON DATE OF REGISTRATION WHICH IS USUALLY HIGHER BECAUSE OF THE SAME FALLING LATER IN THE POINT OF TIME F ROM THE DATE OF AGREEMENT - IS REQUIRED TO BE TAKEN AS A FULL VA LUE OF CONSIDERATION NOTWITHSTANDING THE FACT THAT THE DEAL GOT FINALIZED IN ITA NOS.653 AND 652/PUN/2017 V.L. KHANDGE AND SANTOSH D. KHANDGE 8 THE PAST ON RECEIVING FULL OR PART OF THE CONSIDERATION, THER EBY EXPOSING THE ASSESSEE TO HIGHER TAX BILL. 8. THE HONBLE SUPREME COURT IN A CONSTITUTION BENCH DEC ISION IN CIT VS. VATIKA TOWNSHIP PVT. LTD. (2014) 367 ITR 446 (SC) HAS EXTENSIVELY DEALT WITH THE PROSPECTIVE OR RETROSPECTIVE APPLICATION OF THE PROVISIONS BY HOLDING THAT A LEGISLATION IS ORDINARILY PRESUMED TO BE PROSPECTIVE UNLESS CONTRARY INTENTION APPEARS . IT FURTHER WENT ON TO HOLD THAT: `WHERE A BENEFIT IS CONFERRE D BY LEGISLATION, THE RULE AGAINST A RETROSPECTIVE CONSTRUCTION IS DIFFE RENT. IF LEGISLATION CONFERS A BENEFIT ON SOME PERSONS BUT WITHOUT INFLICTING A CORRESPONDING DETRIMENT ON SOME OTHER PERSON OR ON THE PUBLIC GENERALLY AND WHERE TO CONFER SUCH BENEFIT APPE ARS TO HAVE BEEN THE LEGISLATORS OBJECT, THEN THE PRESUMPTION WOULD BE THAT SUCH LEGISLATION, GIVING IT A PURPOSIVE CONSTRUCTION, WOULD WARRANT IT TO BE GIVEN A RETROSPECTIVE EFFECT. THIS EXACTLY IS TH E JUSTIFICATION TO TREAT PROCEDURAL PROVISIONS AS RETROSPECTIVE. WHEN WE EXAMINE THE CONTENT OF THE TWO PROVISOS TO SECTION 50C(1) IN JUXTAPOSITION TO THE LANGUAGE OF SUB-SECTION (1), IT GETS GRAPHICALLY CLEAR THAT THE BENEFICIAL PROVISO HAS BEEN INSERTED IN ORDER T O BENEFIT SOME ASSESSES WHO ENTER INTO AGREEMENT PRIOR TO THE DATE OF REGISTRATION AND ALSO SIMULTANEOUSLY RECEIVE FULL OR A PART O F ITA NOS.653 AND 652/PUN/2017 V.L. KHANDGE AND SANTOSH D. KHANDGE 9 CONSIDERATION. SUCH BENEFICIAL PROVISION DOES NOT INFLICT A CORRESPONDING DETRIMENT TO OTHER ASSESSEES OR THE PUBLIC GE NERALLY. SINCE OBJECT OF THE FIRST PROVISO TO SECTION 50C(1) IS TO CONFE R A BENEFIT TO CERTAIN CLASS OF ASSESSES IN THE GIVEN SITUATION, GOIN G BY THE RATIO LAID DOWN IN VATIKA TOWNSHIP (SUPRA) , THIS PROVISO WILL HAVE TO BE HELD AS RETROSPECTIVE APPLICABLE FROM THE DATE OF INSERTION OF SECTION 50C W.E.F. 01-04-2003. OUR VIEW IS F ORTIFIED BY A RECENT JUDGMENT RENDERED BY THE HONBLE MADRAS HIGH COURT IN CIT VS. VUMMIDI AMARENDRA (2020) 429 ITR 99 (MADRAS) . IT IS, THEREFORE, HELD THAT THE ALTERNATE PLEA RAISED BY THE LD. AR FO R ADOPTING STAMP VALUE ON THE DATE OF AGREEMENT IN THE YEAR 20 00 INSTEAD OF THE DATE OF REGISTRATION IN 2006 IS HEREBY COUNTENA NCED, IN PRINCIPLE. 9. NOW WE PROCEED TO THE PRIMARY ARGUMENT OF THE LD. AR THAT THE TRANSFER TOOK PLACE ON 06.05.2000, BEING THE DATE OF AGREEMENT, WHICH HAS BEEN CONTRADICTED BY THE REVENUE BY MAKING OUT A CASE THAT THE DATE OF REGISTRATION, BEING, 03-08-2006 IS THE REAL DA TE OF TRANSFER ATTRACTING SECTION 45 OF THE ACT. IF WE CONCUR WITH THE VIEW POINT OF THE REVENUE, THEN CAPITAL GAIN WILL BE CHARGEABLE TO TAX IN THE A.Y. 2007-08 SUBJECT TO THE ADOPTION OF STAMP VA LUE OF THE PROPERTY AS PREVALENT ON 06.05.2000, BEING THE DATE OF ITA NOS.653 AND 652/PUN/2017 V.L. KHANDGE AND SANTOSH D. KHANDGE 10 AGREEMENT, ON THE STRENGTH OF THE FIRST PROVISO TO SECTION 5 0C(1) AS DISCUSSED ABOVE. IF, ON THE OTHER HAND, WE AGREE WITH TH E VIEW POINT OF THE ASSESSEE, THEN CAPITAL GAIN ON THE TRANSFER OF THE CAPITAL ASSET WILL BE SUBJECTED TO TAXATION IN THE A.Y. 2001-02 SUBJECT TO ITS COMPUTATION IN ACCORDANCE WITH THE RELEVANT PROVISIONS BUT WITHOUT ANY APPLICATION OF SECTION 50C AS THIS SECTION ITSELF CAME TO BE INSERTED BY THE FINANCE ACT, 2002 W.E.F. 01-04-200 3. 10. SECTION 2(47) OF THE ACT DEFINES THE TERM TRANSFER . SUB- SECTION (47) HAS SIX CLAUSES. IT IS SEEN FROM THE ORDERS O F THE AUTHORITIES BELOW THAT THEY HAVE NOT REFERRED TO ANY SPECIFIC CLAUSE FROM THE DEFINITION OF `TRANSFER FOR MAGNETIZING SECTION 45 O F THE ACT. THE LD. DR VEHEMENTLY ARGUED THAT THE CASE IS DIRECTLY COVERED BY CLAUSE (V) OF SECTION 2(47) OF THE ACT. HE DI D NOT INVITE OUR ATTENTION TOWARDS ANY OTHER CLAUSE OF SECTION 2(47) GETTIN G TRIGGERED. AS SUCH, WE WILL FOCUS ONLY ON CLAUSE (V), WHIC H STATES THAT 'TRANSFER', IN RELATION TO A CAPITAL ASSET, INCLUDES:`(V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORM ANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TR ANSFER OF PROPERTY ACT, 1882 (4 OF 1882). AS CLAUSE (V) IS DIRECTLY REFERRING TO SECTION 53A OF THE TRANSFER OF PROPERTY ACT ( TPA), ITA NOS.653 AND 652/PUN/2017 V.L. KHANDGE AND SANTOSH D. KHANDGE 11 THE DOCTRINE OF INCORPORATION WILL GET ATTRACTED AND HAVE THE E FFECT OF BODILY LIFTING AND READING SUCH LATER PROVISION IN SECTION 2(47)(V) OF THE ACT. SECTION 53A OF THE TPA, AS APPLICABLE ON THE DATE OF AGREEMENT, NAMELY, 06-05-2000, READ AS UNDER: `53A. PART PERFORMANCE.WHERE ANY PERSON CONTRACTS TO TRANSFER FOR CONSIDERATION ANY IMMOVEABLE PROPERTY BY WRITING SIGNED BY HIM OR ON HIS BEHALF FROM WHICH THE TERMS NECESSARY TO CONSTITUTE THE TRANSFER CAN BE ASCERTAINED WITH REASONABLE CERTAINTY, AND THE 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 CONTRACT THOUGH REQUIRED TO BE REGISTERED, HAS NOT BEEN REGISTERED, OR, WHERE THERE IS AN INSTRUMENT OF TRANSFER, THAT THE TRANSFER HAS NOT B EEN COMPLETED IN THE MANNER PRESCRIBED THERE FOR BY THE LAW FOR THE TIME BEING IN FORCE, THE TRANSFEROR OR ANY PERSON CLAIMING UND ER HIM SHALL BE DEBARRED FROM ENFORCING AGAINST THE TRANSFEREE A ND PERSONS CLAIMING UNDER HIM ANY RIGHT IN RESPECT OF THE PROP ERTY OF WHICH THE TRANSFEREE HAS TAKEN OR CONTINUED IN POSSESSION , OTHER THAN A RIGHT EXPRESSLY PROVIDED BY THE TERMS OF THE CONTRA CT: PROVIDED THAT NOTHING IN THIS SECTION SHALL AFFECT THE RIGHTS OF A TRANSFEREE FOR CONSIDERATION WHO HAS NO NOTICE OF T HE CONTRACT OR OF THE PART PERFORMANCE THEREOF. (EMPHASIS SUPPLIED BY ITALICIZING) 11. THUS ON READING SECTION 2(47)(V) OF THE ACT IN A HOLISTIC MANNER AS ALSO HAVING THE MANDATE OF SECTION 53A OF TRANS FER OF PROPERTY ACT INCORPORATED INTO IT, ONE CAN EASILY DEDUCE THAT W HERE ANY PERSON CONTRACTS TO TRANSFER ANY IMMOVABLE PROPERTY FOR ITA NOS.653 AND 652/PUN/2017 V.L. KHANDGE AND SANTOSH D. KHANDGE 12 CONSIDERATION BY WRITING WHICH DEPICTS THE TERMS NECESSARY TO CONSTITUTE TRANSFER AND THE TRANSFEREE IN PART PERFORMANCE OF THE CONTRACT TAKES POSSESSION OF THE PROPERTY OR A PART THEREO F AND FURTHER HAS PERFORMED OR IS WILLING TO PERFORM HIS PART OF TH E CONTRACT, THEN NOTWITHSTANDING THAT THE CONTRACT THOUGH REQUIRE D TO BE REGISTERED HAS NOT BEEN REGISTERED, SHALL BE CONSTRUED A S CONSTITUTING `TRANSFER FOR THE PURPOSE OF SECTION 45 OF THE ACT. REVERTING THE FACTUAL SCENARIO PREVAILING IN THE INSTANT CASE, IT IS SEEN THAT THE ASSESSEE AGREED TO TRANSFER THE IMMOVABLE PR OPERTY TO M/S. V.S. KOLBHOR & ASSOCIATES BY A WRITTEN AGREEMENT ON 06.05.2000 FOR A CONSIDERATION OF RS.93,25,000/-. M/S. V.S. KOLBHOR & ASSOCIATES TOOK POSSESSION OF THE PROPERTY IN TH E YEAR 2000 ITSELF AND PERFORMED THEIR PART OF THE CONTRACT BY PAYIN G A SUM OF RS.62.75 LAKH THERE AND THEN. IN SUCH CIRCUMSTA NCES, THE CASE GETS COVERED U/S. 2(47)(V) OF THE ACT READ WITH SECTIO N 53A OF THE TRANSFER OF PROPERTY ACT HAVING THE EFFECT OF CONSTITUTIN G `TRANSFER ON 06.05.2000 NOTWITHSTANDING THE FACT THAT THE CO NTRACT THOUGH REQUIRED TO BE REGISTERED WAS NOT REGISTERED AT THAT TIM E. IT IS VITAL TO NOTE THAT SECTION 53A OF THE TPA UNDERWENT A CHANGE W.E.F. 24-09-2001 OMITTING THE WORDS THE CONTRACT THOUGH REQUIRED TO BE REGISTERED, HAS NOT BEEN REGISTERED, OR . ITA NOS.653 AND 652/PUN/2017 V.L. KHANDGE AND SANTOSH D. KHANDGE 13 SIMULTANEOUS WITH THIS AMENDMENT, AN ALTERATION WAS ALSO CARRIE D OUT TO THE REGISTRATION OF PROPERTY ACT, 1908 BY INSERTING SUB- SECTION (1A) TO SECTION 17 DEALING WITH DOCUMENTS OF WHICH REGISTRATION IS COMPULSORY BY PROVIDING THAT: `THE DOCUMENTS CONTAINING CONTRACTS TO TRANSFER FOR CONSIDERATION, ANY IMMOVA BLE PROPERTY FOR THE PURPOSE OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882) SHALL BE REGISTERED IF THEY HAVE BEE N EXECUTED ON OR AFTER THE COMMENCEMENT OF THE REGISTRATION AN D OTHER RELATED LAWS (AMENDMENT) ACT, 2001 (48 OF 2001) AND IF SUCH DOCUMENTS ARE NOT REGISTERED ON OR AFTER SUCH COMME NCEMENT, THEN, THEY SHALL HAVE NO EFFECT FOR THE PURPOSES OF THE SA ID SECTION 53A.. THE AMENDMENTS CARRIED OUT TO SECTION 53A OF THE TPA AND SECTION 14 OF THE REGISTRATION ACT, 1908, BOTH WITH EFFECT FROM 24- 09-2001, NECESSITATE REGISTRATION OF THE CONTRACT AS SINE QUA NON FOR CONSTITUTING TRANSFER U/S.2(47) OF THE ACT. THUS, IN THE PE RIOD POSTERIOR TO THE AMENDMENT TO SECTION 53A OF THE TRANSFER O F PROPERTY ACT AND SECTION 14 OF THE REGISTRATION ACT W.E.F. 24- 09- 2001, REGISTRATION OF CONTRACT HAS NOW BECOME MANDATORY TO CONSTITUTE TRANSFER. THE HONBLE APEX COURT IN CIT VS. BALBIR SINGH MAINI (2017) 398 ITR 531 (SC) HAS HELD THAT: `AFTER THE COMMENCEMENT OF THE AMENDMENT ACT OF 2001, IF AN AGREEME NT, ITA NOS.653 AND 652/PUN/2017 V.L. KHANDGE AND SANTOSH D. KHANDGE 14 LIKE THE JDA IN THE PRESENT CASE, IS NOT REGISTERED, THEN IT SH ALL HAVE NO EFFECT IN LAW FOR THE PURPOSES OF SECTION 53A. AS A LOG ICAL COROLLARY, THE POSITION IS OTHERWISE IN THE PERIOD ANTERIOR TO THE SAID AMENDMENTS. AS PRE-AMENDED SECTION 53A OF THE TPA DID NOT REQUIRE REGISTRATION OF A CONTRACT AS A NECESSARY CONDITION, A FORTIORI IS THAT SECTION 2(47)(V) ALSO COULD NOT REQUIRE SUCH CONDITION, WITH SEQUITUR THAT THE TRANSACTION OF GIVING POSSESSION OF THE PROPE RTY BY TRANSFEROR TO THE TRANSFEREE PURSUANT TO SOME CONTRACT COU PLED WITH THE TRANSFEREE PERFORMING HIS PART OF CONTRACT BY PAYING FULL OR PART CONSIDERATION, WOULD COMPLETE `TRANSFER AT THAT STAGE THERE BY ATTRACTING CAPITAL GAIN DE HORS THE ACTUAL REGISTRATION. 12. REVERTING TO THE FACTUAL PANORAMA, IT IS SEEN THAT THE A SSESSEE HANDED OVER POSSESSION OF THE PROPERTY TO M/S. V.S. KOLBHO R & ASSOCIATES IN THE YEAR 2000 ON RECEIVING SUBSTANTIAL PART OF CONSIDERATION. THIS, IN OUR OPINION, CONSTITUTED TRANSFER U/S. 2(47)(V) OF THE ACT READ WITH SECTION 53A OF THE TPA ATTRACTIN G TAXABILITY OF CAPITAL GAIN IN THE A.Y. 2001-02. AS THE `TRANSFER TOOK PLACE IN THE SAID EARLIER YEAR, IT CANNOT ONCE AGAIN TAKE PLACE IN THE ASSESSMENT YEAR 2007-08 ATTRACTING TAXATION. SETTING ASID E THE IMPUGNED ORDER, WE HOLD THAT THE TRANSFER TOOK PLACE IN THE A.Y. 2001-2002 AND NOT 2007-08, LEADING TO TAXATION OF CA PITAL ITA NOS.653 AND 652/PUN/2017 V.L. KHANDGE AND SANTOSH D. KHANDGE 15 GAIN ONLY IN THE EARLIER YEAR AND NOT THE LATTER. AS THE LD. C IT(A) HAS UPHELD TAXABILITY OF THE CAPITAL GAIN IN THE A.Y. 2007-08, WE HEREBY OVERTURN THE SAME. THE REVENUE IS AT LIBERTY TO EXAM INE THE TAXABILITY OF THE CAPITAL GAIN, IF ANY, ARISING FROM THE TRANSACTION IN THE EARLIER YEAR, SUBJECT TO THE RELEVANT PROVISIONS. IN VIEW O F OUR FAVORABLE DECISION ON THE MAIN ARGUMENT OF THE LD. AR, THE ALTERNATE CLAIM OF THE ASSESSEE AND THE DISCUSSION MADE (SUPRA) HAS BEEN RENDERED ACADEMIC INSOFAR AS THE INSTANT APPEAL IS C ONCERNED. WE, THEREFORE, ORDER TO DELETE THE ADDITION OF RS.75,01,926 /- MADE IN THE HANDS OF THE ASSESSEE. SANTOSH D. KHANDGE L/H OF SH. DATTATRAYA LAXMAN KHANDGE - ITA NO.652/PUN/2017 : 13. THIS ASSESSEE WAS A CO-OWNER OF THE PROPERTY TRA NSFERRED ALONG WITH SH. V.L. KHANDGE, WHOSE APPEAL HAS BEEN DISPOS ED OFF HEREINABOVE. BOTH THE SIDES ARE CONSENSUS AD IDEM THAT THE FACTS AND CIRCUMSTANCES OF THIS ASSESSEE ARE MUTATIS MUTANDIS SIMILAR TO THOSE OF MR. VASANT LAXMAN KHANDGE. THE AO MADE SIMILA R ADDITION OF EQUAL AMOUNT OF RS.75,01,976/- IN THE HANDS OF THIS ASSESSEE AS WELL, WHICH GOT AFFIRMED BY THE LD. FIRST APPELLATE AUTHORITY. IN VIEW OF THE IDENTICAL FACTS, WE ADOPT THE SAME RAISON DETRE AS GIVEN SUPRA AND ORDER TO DELETE THE ADDITION FROM THE ITA NOS.653 AND 652/PUN/2017 V.L. KHANDGE AND SANTOSH D. KHANDGE 16 INCOME OF THE ASSESSEE FOR THE A.Y. 2007-08. HERE AGA IN, THE REVENUE IS AT LIBERTY TO PROCEED AGAINST THE ASSESSEE FOR THE A.Y. 2001-02 AS PER LAW. 14. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD DECEMBER, 2020. SD/- SD/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VIC E PRESIDENT PUNE; DATED : 23 RD DECEMBER, 2020 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A)-13, PUNE 4. 5. THE PR. CIT-5, PUNE , , / DR A, ITAT, PUNE 6. / GUARD FILE / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE ITA NOS.653 AND 652/PUN/2017 V.L. KHANDGE AND SANTOSH D. KHANDGE 17 DATE 1. DRAFT DICTATED ON 22-12-2020 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 23-12-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *