Anant Shaligram Kalaskar, Pune V. Income Tax Officer, Aurangabad

ITA 737/PUN/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7736 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 30-03-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M K VERMA
• Assessee Lawyers: PRAMOD JADHAV
• Keywords: Capital asset; Additional evidence; Cost of acquisition; Corroborative evidences
• Section: 142(1); 133(6); 148; 6; 144; 10

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 737 /P U N/201 7 / ASSESSM ENT YEAR : 20 08 - 09 SHRI ANANT SHALIGRAM KALASKAR FLAT NO.N - 102, PARMAR PARK CO - OP SOCIETY, 26, NIGADI PRADHIKARAN, PUNE 411044 . / APPELLANT PAN: A BGPK0352G VS. THE INCOME TAX OFFICER , WARD 2 ( 3 ) , AURANGABAD . / RE SPONDENT / APPELLANT BY : SHRI PRAMOD JADHAV / RESPONDENT BY : S HRI M.K. VERMA / DATE OF HEARING : 16 . 0 1 .201 9 / DATE OF PRONOUNCEMENT: 17 . 0 1 .201 9 / ORDER PER SUS HMA CHOWLA, J M : TH E APPEAL FILED BY ASSESSEE IS AGAINST THE ORDER OF CIT (A) - 2 , AURANGABAD , DATED 02 . 0 1 .20 1 7 RELATING TO ASSESSMENT YEAR 20 08 - 09 AGAINST ORDER PASSED UNDER SECTION 144 R.W.S. 147 OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE ASS ESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ITA NO. 737 /P U N/20 1 7 ANANT S. KALASKAR 2 GROUND NO.1: THE LEARNED CIT(A) HAS FAILED TO APPRECIATING THAT THE IMPUGNED ASSESSMENT ORDER PASSED BY THE AO UNDER SECTION 144 R.W.S. 147 BY THE LEARNED AO IS BAD IN LAW. GROUND NO.2: WITHOUT PREJ UDICE TO THE ABOVE GROUND NO.1, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE LEARNED AO IN ASSESSING THE LONG - TERM CAPITAL GAIN IN THE HANDS OF THE APPELLANT WITHOUT APPRECIATING THE FACT THAT THERE IS NO TRANSFER OF THE PROPERTY IN THE SUB JECT ASSESSMENT YEAR. GROUND NO.3: WITHOUT PREJUDICE TO THE ABOVE GROUND NO 1 AND 2, ASSUMING BUT NOT ADMITTING THAT PROPERTY IS TRANSFERRED IN THE SUBJECT ASSESSMENT YEAR, THE LEARNED CIT(A) HAS ERRED IN TAXING SUCH CAPITAL GAIN IN THE SUBJECT ASSESSMEN T YEAR WITHOUT APPRECIATING THAT CAPITAL GAIN ON SUCH TRANSFER CANNOT BE ASSESSED TO TAX IN THE SUBJECT ASSESSMENT YEAR AS CONSIDERATION IS NOT RECEIVED IN THE SUBJECT ASSESSMENT YEAR. GROUND NO.4: WITHOUT PREJUDICE TO THE ABOVE GROUND NO 1 TO 3, THE LEA RNED CIT(A) HAS ERRED IN NOT ALLOWING ALL THE EXPENDITURES CLAIMED BY THE APPELLANT TOWARDS COST OF THE ACQUISITION. IN VIEW OF THE ABOVE GROUNDS AND IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE APPELLANT PRAYS YOUR HONOURS TO SET ASIDE THE RELEVANT ASSESSMENT ORDER PASSED BY THE AO WHICH HAS BEEN SUBSEQUENTLY CONFIRMED BY THE LEARNED CIT(A) AND PASS ANY OTHER ORDER WHICH YOUR HONOURS MAY DEEMED FIT IN THE INTEREST OF JUSTICE. 3. THE PRESENT APPEAL IS FILED AFTER DELAY OF 20 DAYS. THE ASSES SEE HAS FILED AN AFFIDAVIT EXPLAINING THE REASONS FOR DELAY AND IN VIEW OF THE SAME, I FIND MERIT IN THE PLEA OF ASSESSEE AND THE DELAY IN FILING THE APPEAL LATE BEFORE THE TRIBUNAL IS CONDONED. 4. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST ASSESSA BILITY OF CAPITAL GAINS IN THE HANDS OF ASSESSEE, WHEREIN THE CASE OF ASSESSEE IS THAT THERE IS NO TRANSFER OF PROPERTY IN THE SUBJECT ASSESSMENT YEAR, HENCE NO CAPITAL GAIN IS TO BE ASSESSED IN THE HANDS OF ASSESSEE. HOWEVER, CASE OF REVENUE ON THE OTHER HAND, IS THAT CAPITAL GAIN HAS ARISEN IN THE YEAR UNDER CONSIDERATION AND HENCE, THE ASSESSEE IS LIABLE TO PAY TAX ON THE INCOME FROM LONG TERM CAPITAL GAINS. ITA NO. 737 /P U N/20 1 7 ANANT S. KALASKAR 3 5. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS AN INDIVIDUAL. THE ASSESSING OFFICER NOT ED THAT THE ASSESSEE WAS INVOLVED IN FINANCIAL TRANSACTION OF SELLING OF IMMOVABLE PROPERTY OF 38 LAKHS DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE WAS ASKED TO EXPLAIN THE SAID TRANSACTION. HOWEVER, THERE WAS NO COMPLIANCE FROM THE ASSESSEE. HE NCE, THE ASSESSING OFFICER RECORDED REASONS FOR REOPENING THE ASSESSMENT UNDER SECTION 147 OF THE ACT AND ISSUED NOTICE UNDER SECTION 148 OF THE ACT. THE SAID NOTICE WAS RETURNED BACK BY THE POSTAL AUTHORITIES. THE ASSESSING OFFICER THUS, SERVED NOTICE B Y AFFIXTURE AND ALSO THEREAFTER, ISSUED NOTICE UNDER SECTION 142(1) OF THE ACT. HOWEVER, THE ASSESSEE DID NOT APPEAR NOR RESPONDED TO ANY OF THE NOTICES AND HENCE, THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE AS TO WHY ASSESSMENT SHOULD NOT BE COMPLETED UNDER SECTION 144 OF THE ACT. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HA D SOLD AN IMMOVABLE PROPERTY FOR CONSIDERATION OF 38 LAKHS AND HAD FAILED TO OFFER CAPITAL GAIN ON THE SALE OF SAID PROPERTY. THE ASSESSING OFFICER FURTHER NOTED THAT COST O F PROPERTY WAS NOT AVAILABLE ON RECORD, HENCE TOTAL CONSIDERATION OF 38 LAKHS WAS TREATED AS LONG TERM CAPITAL GAIN AND WAS ADDED IN THE HANDS OF ASSESSEE. 6. BEFORE THE CIT(A), FIRST OBJECTION RAISED BY ASSESSEE WAS AGAINST INITIATION OF PROCEEDINGS UN DER SECTION 147 OF THE ACT, WHEREIN THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER. THE SECOND OBJECTION WAS AGAINST EX - PARTE ASSESSMENT MADE UNDER SECTION 144 OF THE ACT, WHICH WAS ALSO UPHELD BY THE CIT(A). THE THIRD ISSUE WHICH WAS RAISED WAS AGAINS T COMPUTATION OF INCOME ARISING FROM LONG TERM CAPITAL GAIN S . THE PLEA OF ASSESSEE WAS THAT THERE WAS NO TRANSFER OF PROPERTY AS HE HAD ONLY EXECUTED THE DEED OF ASSIGNMENT IN FAVOUR OF ONE M/S. JOSHABA SELF EMPLOYMENT TRAINING & SERVICES CO - OP LTD. (IN S HORT JOSHABA) , NASHIK FOR THE TRANSFER OF PLOT NO.72, ITA NO. 737 /P U N/20 1 7 ANANT S. KALASKAR 4 TOWN CENTRE, SECTOR C - 3, CIDCO, AURANGABAD ON 11.12.2007. THE SALE CONSIDERATION WAS FIXED FOR 38 LAKHS. HOWEVER, BUYER PAID SUM OF 1 LAKH AT THE TIME OF EXECUTION OF DEED OF ASSIGNMENT AND HAD GIVEN POST - DATED CHEQUE OF 37 LAKHS TO THE ASSESSEE BUT THE BUYER COULD NOT HONOUR THE CHEQUE OF 37 LAKHS ; THE ASSESSEE PLEADED THAT IT HAD ALLEGEDLY NOT TRANSFERRED THE PLOT TO BUYER AND TRANSACTION OF SALE AND TRANSFER WAS NOT COMPLETED. THE ASSESS EE, AS AN EVIDENCE OF THIS AVERMENT, PROVIDED COPY OF LETTER DATED 05.06.2014 ISSUED BY JOSHABA, WHEREIN IT WAS MENTIONED THAT SINCE THE BUYER COULD NOT PAY BALANCE CONSIDERATION OF 37 LAKHS TO THE ASSESSEE, SALE DEED WAS CANCELLED. THE ASSESSEE ALSO PR OVIDED COPY OF AFFIDAVIT MADE BY JOSHABA DATED 06.06.2014, WHEREIN IT WAS AFFIRMED THAT SINCE THE AMOUNT WAS NOT PAID WITHIN SCHEDULED TIME, THE TRANSACTION FOR PURCHASE OF PROPERTY WAS CANCELLED. THE ASSESSEE FURTHER SUBMITTED COPY OF SALE DEED DATED 01. 02.2013 ON A BOND PAPER OF 100/ - , WHEREIN THE ASSESSEE WAS M ENTIONED AS A PURCHASER AND JOSHABA WAS MENTIONED AS SELLER. IN THE UNREGISTERED SALE DEED, JOSHABA HAD MENTIONED THAT IF DESIRED, THEY WERE READY TO REGISTER THE PROPERTY BACK IN THE NAME OF A SSESSEE FOR WHICH THE Y WOULD NOT DEMAND ANY CONSIDERATION OR MONEY. IN THE SAID DOCUMENT, IT WAS NARRATED THAT THE POSSESSION OF PROPERTY WOULD BE HANDED OVER TO JOSHABA ONLY WHEN THE ENTIRE MONEY WAS PAID TO THE ASSESSEE. THIS IMPLIES THAT POSSESSION OF PROPERTY WAS NOT HANDED OVER TO JOSHABA. THIS DOCUMENT WAS CLAIMED TO BE A CANCELLATION OF ORIGINAL DEED OF ASSIGNMENT DATED 11.12.2007. THE ASSESSEE ALSO SUBMITTED A LETTER WRITTEN BY JOSHABA TO THE ADMINISTRATOR, CIDCO DATED 05.06.2014 , WHICH WAS RECE IVED BY THE CONCER NED OFFICE. IN THE SAID LETTER, JOSHABA HAD MENTIONED THAT SINCE THEY WERE UNABLE TO PAY THE AMOUNT OF 37 LAKHS TO THE ASSESSEE, THE DEED OF ASSIGNMENT WAS CANCELLED AND THE CANCELLATION WAS MENTIONED IN A NOTARIZED BOND WHICH WAS ALSO SUBMITTED BEFORE THE AUTHORITIES. IN THE SAID BOND, IT WAS ITA NO. 737 /P U N/20 1 7 ANANT S. KALASKAR 5 SPECIFICALLY MENTIONED THAT THE PROPERTY BELONGS TO THE ASSESSEE AND THEY DO NOT HAVE ANY OBJECTION TO THE PROPERTY BEING IN THE NAME OF ASSESSEE. THE ASSESSEE ALSO FURNISHED COPY OF PROPERTY TA X BILL RAISED BY AURANGABAD MUNICIPAL CORPORATION IN THE NAME OF ASSESSEE. ALL THESE EVIDENCES WERE FILED BEFORE THE CIT(A) AND REQUEST WAS MADE TO ADMIT THE SAME UNDER RULE 46A OF INCOME TAX RULES, 1962 (IN SHORT THE RULES). 7. THE CIT(A) FORWARDED THE SAID DOCUMENTS TO THE ASSESSING OFFICER, WHO IN TURN, FURNISHED REMAND REPORT AND THE ASSESSEE FILED REJOINDER TO THE REMAND REPORT, BEFORE THE CIT(A). THE ASSESSEE PLEADED IN THE REMAND PROCEEDINGS THAT SINCE THE PLOT WAS IN THE POSSESSION OF ASSESSE E , HENCE NO TRANSFER HAD TAKEN PLACE AND THUS IT COULD NOT BE STATED THAT PROPERTY WAS EVER TRANSFERRED IN THE NAME OF JOSHABA. IT WAS ALSO EXPLAINED THAT THE SAID PLOT WAS PURCHASED IN THE YEAR 2002 FOR CONSIDERATION OF 19,22,660/ - . THE ASSESSING OFFICER IN REMAND PROCEEDINGS ISSUED NOTICE UNDER SECTION 133(6) OF THE ACT TO CIDCO AND ASKED FOR DETAILS OF ASSIGNMENT / OWNERSHIP OF THE SAID PROPERTY. IN REPLY, CIDCO STATED THAT THE PROPERTY WAS ASSIGNED TO JOSHABA ON 11 .12.2007 AND IT HAS BEEN AGAIN SOLD BY JOSHABA TO SMT. SONIYA MAKRAND KHADKE AND SHRI MAKRAND KHADKE ON 12.03.2015. HENCE, THE CLAIM OF ASSESSEE THAT THE TRANSACTION W AS CANCELLED BY BOTH THE PARTIES WAS INCORRECT. THE ASSESSING OFFICER THUS, IN THE REMA ND REPORT STATED THAT THE ADDITIONAL EVIDENCE MAY NOT BE ACCEPTED REGARDING CANCELLATION OF DEED OF ASSIGNMENT. FURTHER, THE ASSESSEE HAD SUBMITTED ADDITIONAL EVIDENCE IN SUPPORT OF COST OF CONSTRUCTION AND COST OF ACQUISITION & IMPROVEMENT AT 19,22,660/ - AND THE ASSESSING OFFICER PROPOSED THAT ONLY SUM OF 17,74,640/ - MAY BE ACCEPTED AS COST OF ACQUISITION AND IMPROVEMENT AS THE BALANCE SUPPORTING EVIDENCE WAS NOT FILED. WITH REGARD TO BALANCE EXPENDITURE ON ACCOUNT OF STAMP DUTY, ETC., THE ITA NO. 737 /P U N/20 1 7 ANANT S. KALASKAR 6 ASSESSING OFFICER NOTED THAT AS PER THE DEED OF ASSIGNMENT, THE SAID EXPENDITURE HAD TO BE PAID BY PURCHASER, HENCE THE SAME COULD NOT BE ALLOWED IN THE HANDS OF ASSESSEE, WHO WAS A SELLER. THE CLAIM OF REPAYMENT OF HOUSING LOAN AND INTEREST THEREON WERE NOT EXPENSES FOR SALE OF PLOT AND HENCE, WERE NOT TO BE ALLOWED. HE ALSO POINTED OUT THAT THE ASSESSEE HAS FAILED TO FILE ANY EVIDENCE IN SUPPORT OF COMMISSION PAID OF 80,000/ - AND HENCE THE SAME HAS ALSO NOT TO BE ALLOWED. THE ASSESSEE IN REJOINDER POINTED OUT THAT POSSESSION OF PROPERTY WAS ESSENTIAL FOR TREATING THE TRANSACTION OF TRANSFER AS COMPLETE AND SINCE THE BUYER HAD EXPLICITLY ADMITTED THAT POSSESSION OF P ROPERTY WAS STILL WITH THE SELLER, TRANSFER WAS NOT COMPLETE AND HENCE, IT WAS NOT A SALE. 8. THE CIT(A) HOWEVER, NOTED THAT DEED OF ASSIGNMENT CLEARLY MENTIONED THAT CERTAIN CHARGES OF REGISTRATION WOULD BE PAID BY JOSHABA AND IT WAS ALSO MENTIONED IN THE DEED OF ASSIGNMENT THAT ASSIGNOR HAD PUT THE ASSIGNEE INTO THE POSSESSION OF SAID PLOT. THE CIT(A) ALSO REFERRED TO THE LETTER OF CIDCO, WHICH STATED THAT THE SAID PLOT WAS TRANSFERRED BY JASHOBA TO TWO DIFFERENT PARTIES FOR CONSIDERATION OF 1 CRORE ON 18.02.2015. IN SUCH CIRCUMSTANCES, THE CIT(A) HELD THAT IT WAS A CASE WHERE TRANSFER OF IMMOVABLE PROPERTY WAS COMPLETED WHEN THE CONVEYANCE WAS EXECUTED. HE FURTHER REFERRED TO THE PROVISIONS OF SECTION 2(47)(I) OF THE ACT AND HELD THAT IN THE INSTANT CASE, ALL THE INGREDIENTS OF VALID SALE WERE COMPLETED WHEN THE ASSESSEE ENTERED INTO THE SALE OF PROPERTY VIDE DEED OF ASSIGNMENT DATED 11.12.2007 , WHICH WAS ALSO REGISTERED FOR THE REGISTRATION FEES OF 1,90,000/ - . THE CIT(A) NOTED THAT THE PROPERTY WAS SOLD BY DEED OF ASSIGNMENT DATED 11.12.2007 AND NEITHR TRANSFEROR NOR THE TRANSFEREE COMMUNICATE EACH OTHER ON THE ISSUE OF TRANSFER OF PROPERTY FOR PERIOD OF ALMOST FIVE YEARS. HE FURTHER NOTED THAT IT WAS ONLY IN FEBRUARY, 2013 THAT JOSHABA ENTERED INTO AN ALLEGED CANCELLATION OF THE SALE ITA NO. 737 /P U N/20 1 7 ANANT S. KALASKAR 7 AND FILED THE LETTER BEFORE CIDCO ON 05.06.201 4 STATING THAT THEY HAD CANCELLED SALE DEED DATED 11.12.2007. 9. WITH REGARD TO POSSESSION OF PROPERTY, THE CIT(A) OBSERVED THAT POSSESSION OF PROPERTY UNDER SECTION 53A OF THE TRANSFER OF PROPERTY ACT, MERELY DISENTITLES THE TRANSFEROR FROM DISTURBING THE POSSESSION OF TRANSFEREE WHO WAS PUT IN POSSESSION OF A PA RTICULAR IMMOVABLE PROPERTY SUBSEQUENT TO ANY AGREEMENT AS THE SAME HAS NOTHING TO DO WITH THE OWNERSHIP OF PROPERTY. HE THUS, HELD THAT WHERE THE PROPERTY LEGALLY CONVEYED BY WAY OF EXECUTION OF A REGISTERED SALE DEED I.E. ASSIGNMENT DEED, THEN THE FACT THAT THE POSSESSION OF PROPERTY REMAINED WITH THE TRANSFEROR DOES NOT DISENTITLE THE TRANSFEREE FROM ITS RIGHTS OF OWNERSHIP IN THE SAID PROPERTY. HE WAS OF THE VIEW THAT TRANSFER BY POSSESSION WAS ONE OF THE METHODS OF TRANSFER OF PROPERTY AND UNILATERAL AVERMENTS MADE BY JOSHABA THAT THE POSSESSION OF PROPERTY REMAINED WITH THE ASSESSEE COULD NOT AFFECT THE TRANSFER MADE ON 11.12.2007, WHEN JOSHABA BECAME THE LEGAL OWNER OF PROPERTY. THE CIT(A) THUS, HELD THAT TRANSFER BY SALE WAS EFFECTED WITHIN THE ME ANING OF SECTION 2(47) OF THE ACT MAKING THE ASSESSEE ELIGIBLE FOR PAYMENT OF CAPITAL GAIN S TAX ARISING OUT OF SAID TRANSACTION. 10. SHRI PRAMOD JADHAV, THE LEARNED AUTHORIZED REPRESENTATIVE APPEARED ON BEHALF OF ASSESSEE AND SHRI M.K. VERMA, THE LEARNE D DEPARTMENTAL REPRESENTATIVE APPEARED ON BEHALF OF REVENUE AND PUT FORWARD THEIR CONTENTIONS. 11. ON PERUSAL OF RECORD AND AFTER HEARING BOTH THE LEARNED AUTHORIZED REPRESENTATIVES, THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS AGAINST ITA NO. 737 /P U N/20 1 7 ANANT S. KALASKAR 8 ASSESSABILITY OF LONG TERM CAPITAL GAINS TAX IN THE HANDS OF ASSESSEE IN THE CAPTIONED ASSESSMENT YEAR. THE TRANSACTION INVOLVES TRANSFER OF PLOT NO.72, TOWN CENTRE, SECTOR C - 3, CIDCO, AURANGABAD. THE ASSESSEE ENTERED INTO DEED OF ASSIGNMENT IN FAVOUR OF JOSHABA ON 11.1 2.2007, WHEREIN THE AGREED SALE CONSIDERATION FOR THE SAID PLOT WAS FIXED AT 38 LAKHS. AT THE TIME OF EXECUTION OF DEED OF ASSIGNMENT, SUM OF 1 LAKH WAS PAID TO THE ASSESSEE BY THE BUYER AND POSTDATED CHEQUE OF 37 LAKHS WAS GIVEN TO THE ASSESSEE. I T IS AN ADMITTED FACT THAT THE SAID POSTDATED CHEQUE OF 37 LAKHS WAS NOT ENCASHED BY THE BUYER. 12. THE QUESTION WHICH ARISES IS THAT WHERE THE BUYER COULD NOT PAY BALANCE CONSIDERATION OF 37 LAKHS TO THE ASSESSEE AND ALSO WHERE NO POSSESSION OF PRO PERTY WAS GIVEN BUT THE DEED OF ASSIGNMENT SO EXECUTED WAS USED BY JOSHABA TO ENTER INTO A TRANSACTION WITH OTHER PARTIES AND THEN ALSO TO CANCEL THE ORIGINAL DEED OF ASSIGNMENT AND ALSO TO REVERT BACK ANY RIGHTS IN THE SAID PROPERTY TO THE ASSESSEE WOULD JUSTIFY THE STAND OF REVENUE AUTHORITIES THAT THE TRANSFER OF PROPERTY TOOK PLACE ON 11.12.2007 I.E. THE DAY ON THE DEED OF ASSIGNMENT WAS EXECUTED IN FAVOUR OF JOSHABA. IT MAY BE REITERATED THAT ON EXECUTION OF DEED OF ASSIGNMENT, ONLY SUM OF 1 LAKH WA S PAID TO THE ASSESSEE AND BALANCE SUM OF 37 LAKHS THOUGH PAID BY WAY OF POSTDATED CHEQUE, BUT THE SAME WAS NOT ENCASHED. ANOTHER FACT WHICH NEEDS TO BE KEPT IN MIND IS THAT THE POSSESSION OF PROPERTY REMAINED WITH THE ASSESSEE AND THE SAID FACT IS EVEN ACCEPTED BY JOSHABA. THE CIT(A) HAS ALSO NOTED THE SAID FACT OF NO POSSESSION BEING HANDED OVER OF THE AFORESAID PROPERTY BY THE ASSESSEE TO JOSHABA. BOTH THE AUTHORITIES BELOW HAVE EXTENSIVELY REFERRED TO VARIOUS COMMUNICATIONS WITH CIDCO AUTHORITIES A ND HAVE NOTED THAT THE SAID PLOT WAS TRANSFERRED BY JOSHABA TO SMT. SONIYA MAKRAND KHADKE AND SHRI MAKRAND ITA NO. 737 /P U N/20 1 7 ANANT S. KALASKAR 9 KHADKE FOR CONSIDERATION OF 1 CRORE ON 18.02.2015 AND ALSO THE CANCELLATION OF THAT AGREEMENT BY THEM AND WILLINGNESS OF JOSHABA TO HANDOVER THE PR OPERTY BACK TO THE ASSESSEE. 13. WITHOUT GOING INTO ALL THOSE TRANSACTIONS, I LIMIT MYSELF TO THE POSITION AS IN FINANCIAL YEAR 2007 - 08 I.E. THE DATE ON WHICH THE DEED OF ASSIGNMENT WAS ENTERED INTO BETWEEN ASSESSEE AND JOSHABA. IN THIS REGARD, WHEN TH ERE IS TRANSFER OF RIGHTS IN PROPERTY FOR A PRICE AND THE CONVEYANCE HAS BEEN EXECUTED, THEN THE PROVISIONS OF SECTION 2(47)(V) OF THE ACT BECOMES MATERIAL, WHICH PROVIDES TRANSFER IN RELATION TO CAPITAL ASSET INCLUDES, (V) ANY TRANSACTION INVOLVING THE AL LOWING OF POSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882. SO, THE REQUIREMENT IS THAT THE TRANSFER IN RELATION TO CAPITAL ASSET WH ICH TAKES COGNIZANCE OF SALE, EXCHANGE OR RELINQUISHMENT O F ANY ASSET OR EXTINGUISHMENT OF ANY RIGHT, ALSO RECOGNIZES ANY TRANSACTION, UNDER WHICH POSSESSION OF ANY IMMOVABLE PROPERTY IS GIVEN OR RETAINED BY THE BUYER. IN THE PRESENT CASE, ON RECEIPT OF 1 LAKH AND POSTDATED CHEQUES OF 37 LAKHS, WHICH WERE NEVER ENCASHED, THE POSSESSION OF PROPERTY REMAINED WITH THE ASSESSEE ; THE BUYER JOSHABA CLEARLY ADMITS THAT IT NEVER RECEIVED POSSESSION . IN SUCH CIRCUMSTANCES, WHERE THE POSSESSION OF PROPERTY HAS NOT BEEN HANDED OVER AND EVEN THE COMPLETE CONSIDERATION FOR THE PROPERTY HAS NOT BEEN RECEIVED BY THE ASSESSEE EXCEPT FOR ADVANCE OF 1 LAKH , THEN THE REVENUE AUTHORITIES HAVE ERRED IN HOLDING THAT TRANSFER HAD TAKEN PLACE IN FINANCIAL YEAR 2007 - 08 ON TH E DATE OF SIGNING OF DEED OF ASSIGNMENT. THERE MAY BE A DOCUMENT BY WHICH CERTAIN RIGHTS WERE TRANSFERRED BUT ONCE THE POSSESSION OF PROPERTY HAS NOT BEEN HANDED OVER, THE ASSESSEE DOES NOT BECOME LIABLE TO PAY CAPITAL GAINS TAX ON SUCH TRANSACTION AS THE CONDITIONS LAID ITA NO. 737 /P U N/20 1 7 ANANT S. KALASKAR 10 DOWN IN SECTION 2(47)(V) OF THE ACT HAVE NOT BEEN FULFILLED. ACCORDINGLY, ORDER OF CIT(A) IS REVERSED IN THIS REGARD AND I HOLD THAT NO INCOME FROM LONG TERM CAPITAL GAINS IS TO BE ASSESSED IN THE HANDS OF ASSESSEE. THE OTHER GROUNDS OF APPEAL NO.3 AND 4 RAISED BY ASSESSEE ON WITHOUT PREJUDICE BASIS, BECOME ACADEMIC, IN VIEW OF ALLOWING GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE. AS FAR AS GROUND OF APPEAL NO.1 RAISED BY ASSESSEE IS CONCERNED, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE DID NOT RAISE ANY OBJECTIONS TO THE ORDER OF CIT(A), HENCE THE SAID GROUND OF APPEAL IS DISMISSED. 1 4 . IN THE RESULT, APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 17 TH DAY OF JANUARY , 201 9 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 17 TH JANUARY , 201 9 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 2 , AURANGABAD ; 4. THE PR. CIT - 2 , AURANGABAD ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE