Syed Sikandera Ali, Hyd, Hyderabad V. ITO, Ward-6(3), Hyd, Hyderabad

ITA 781/Hyd/2015

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7168 (ITAT-HYDERABAD)
• Duration Of Justice: 6 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 20-04-2021
• Assessment Year: 2010-2011
• Appeal Filed On: 05-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P DINAKAR
• Keywords: Capital asset; Period of limitation; Additional evidence; Question of law; Time period of passing order; TDS; Capital Gains
• Section: 2(14); 201; 73; 13; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. NO. 781/HYD/2015 ASSESSMENT YEAR: 2010-11 SYED SIKANDER ALI, HYDERABAD [PAN: ACVPA4441Q] VS INCOME TAX OFFICER, WARD-6(3), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI P.DINAKAR, AR FOR REVENUE : SHRI SUNIL KUMAR PANDEY, DR DATE OF HEARING : 20-04-2021 DATE OF PRONOUNCEMENT : 02-09-2021 O R D E R PER S.S.GODARA, J.M. : THIS ASSESSEES APPEAL FOR AY.2010-11 ARISES FROM TH E CIT(A)-4, HYDERABADS ORDER DATED 27-02-2015 PASSED IN CASE NO.0514 / 2014-15 / ITO,WD.6(3) / CIT(A)-4 / HYD / 2014-15, IN PROCEEDINGS U/S.143(3) R.W.S.147OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEES SOLE SUBSTANTIVE GRIEVANCE AS PER H IS NINE MAIN SUBSTANTIVE GROUNDS CHALLENGES CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION MAKING LONG TERM CAPITAL GAIN ADDITION OF RS.2,81,88,700/- IN THE COURSE OF ASSESS MENT ITA NO. 781/HYD/2015 :- 2 -: FRAMED ON 22-01-2014 AS UPHELD IN THE CIT(A)S LOWER APPELLATE ORDER READING AS FOLLOWS: 3. THE APPELLANT DURING THE COURSE OF APPELLATE PR OCEEDINGS VIDE ITS LETTER DATED 19/02/2015 HAD FILED THE FOLLOWING WRI TTEN SUBMISSIONS WHICH ARE REPRODUCED AS UNDER: MR. SIKANDER AH - ASSESSEE VENDOR - BADLY IN NEED O F MONEY/FUNDS. MR. SIKANDER ALI WAS IN DIRE NEED OF MONIES TO PAY OFF HIS DEBTS AND ALSO TO MARRY OFF HIS DAUGHTERS AND SO FOR THE PURP OSE AT ONE TIME HE WANTED TO DISPOSE OFF HIS HOUSE PROPERTY AT D.NO.8. 2-413/1/A, ROAD NO.4 BANJARA HILLS, HYDERABAD, AT SAME REASONABLE B ARGAIN. THE ASSESSEE VENDOR IN THE FIRST INSTANCE, ENTERED INTO A REGISTERED AGREEMENT SALE CUM GPA NO.3966/2007 DT 30.11.2007 W ITH K. VIJAYA BHASKARA REDDY TO SELL HIS PROPERTY BEARING D.NO.8-2- 413/1/A, SITUATED AT ROAD NO.4, BANJARA HILLS, HYDE RABAD FOR A CONSIDERATION OF RS.1,60,00,000/-. IN THIS CONNECTI ON, HE WAS IN RECEIPT OF RS.10,00,000/- IN CHEQUE FORM AND RS.40. 00 LAKHS IN CASH AS TOKEN ADVANCE PAID BY THE PROSPECTIVE VENDEE. AS HE COULD NOT PAY HE REST AMOUNT IN TIME AND FOR OTHER REASONS, T HE PROPOSED SALE TRANSACTION WITH MR. VIJAYA BHASKARA REDDY COULD NO T GET OFF AND SO WAS, TO BE CANCELLED, IT WAS CANCELLED BY DOC. NO.1 140/2009 ON 20.04.2009 BY ANOTHER REGISTERED CANCELLATION DEED. MR. SURESH BABU - PRO. UMA ENTERPRISES -A BROKER OR LOAN FACILITATION CAME INTO THE PICTURE. THE ASSESSEE VENDOR LATER CH ANGED HIS MIND OF SELLING HIS LONE INHERITED HOUSE PROPERTY FOR THE T IME BEING NOW AND INSTEAD TRY FOR OTHER WAYS TO 'ENCASH' ON THE SAME. HE WAS ALSO UNDER PRESSURE FROM VIJAYA BHASKER REDDY TO PAYOFF HIS MONIES AT THE EARLIEST WITHIN NO TIME. MR.SURESH BABU PROP.M/S.UMA ENTERPRISES WAS ENGAGED AS A LOAN FACILITATOR TO TRY FOR ANY POSSIBLE LOAN AGAINST TH E ASSESSEE VENDOR'S HOUSE PROPERTY. IN THE COURSE OF OBTENTION OF LOAN AGAINST THE SAID HOUSE PROPERTY, THE BROKER, AFTER MANY TRIALS INFOR MED THE ASSESSEE VENDOR THAT THE MAXIMUM LOAN THAT HE COULD GET BY ' MORTGAGE OF PROPERTY' WITH ANY BANK WOULD BE IN THE RANGE OF RS . 75.00 LAKHS TO 100.00 LAKHS. THE ASSESSEE'S LOAN REQUIREMENTS HOWEVER WERE OTHER WISE AND HE WANTED SOMETHING MORE THAN RS. 100.00 LAKHS AS HE W AS TO PAY RS. 90.00 LAKHS OR SO TO MR. VIJAYA BHASKARA REDDY ALON E, AMOUNT TAKEN AGAINST GPA FROM HIM ALONG WITH INTEREST THEREON. TAKING ADVANTAGE OF THE ASSESSEE'S DELICATE PREDICA MENT SITUATION, THE BROKER MR. SURESH BABU LEVERAGED FOR A CLEVERFU L BARGAIN WITH THE ASSESSEE SAYING THAT HE COULD GET MORE AMOUNT OF LO AN, PROVIDED HE WAS, IN EFFECT WILLING, AT LEAST ON PAPER, TO MAKE FOR A 'REAL REGISTERED ITA NO. 781/HYD/2015 :- 3 -: SALE DEED' OF HIS PROPERTY IN SOME NAME INSTEAD OF A 'PROPERTY MORTGAGE LOAN' BECAUSE A HOUSING LOAN FROM A BANK. AGAINST HOUSE PROPERTY COULD GET AT A LOWER INTEREST RATE AS AGAI NST THE (HIGH) INTEREST RATE ON MORTGAGE LOAN. IN THAT PROCESS HE, VIZ. THE BROKER TOO PITCHED HIM SELF IN THE DEAL AS ONE MORE PARTY ALONG WITH THE ASSESSEE AND THE PURC HASER OF PROPERTY TO SHARE IN THE AMOUNT OF LOAN; SO OBTAINE D AGAINST THE PLEDGE OF REGISTERED SALE DEED PROPERTY WITH ANY BA NK/FINANCE COMPANY IN THE NAME OF A I HOUSING LOAN. THE ASSESSEE VENDOR WAS THUS MADE' TO ENTER A MAKE BELIEVE 'SALE DEED' WITH ONE MRS. MANJU DEVI TAPARIA W/O. SHIV SH ANKAR TAPARIA WHICH WAS DULY REGISTERED ON 20.04.2009 IN THE USUA L MANNER AS PER LAWS OF LAND, WITH SRO, HYDERABAD(SOUTH).INCURRING RELEVANT EXPENDITURE OF STAMP DUTY IN THE PROCESS UNDER STAM P DUTY ACT. THE SALE CONSIDERATION THEREIN WAS QUOTED AT RS.3,00,67 ,000/- AS HAVING BEEN RECEIVED BY THE ASSESSEE VENDOR. DURING THE COURSE OF ASSESSMENT PROCEEDS, THE ASSES HAS EMPHATICALLY ASSERTED BEFORE THE LD. AO THAT HE HAS NOT HANDED OVER THE PHYSICAL POSSESSION OF HIS PROPERTY TO MRS. MAN JU DEVI AND THAT HE IS STILL IN VIRTUAL PHYSICAL OCCUPATION OF THE SAID PROPERTY EVEN TILL DATE OF THIS APPEAL BEFORE THE HON'BLE. IN SPITE OF ASSESSEE VENDOR'S STRONG ASSERTIONS THA T HE IS STILL IN PHYSICAL POSSESSION OF HIS PROPERTY THE LD AO TOOK A DIFFERENT STAND, TO SAY IN HI; OWN WORDS THAT THE 'LAW IS WELL SETTL ED THAT THE SUB REGISTRAR WILL REGISTER A SALE DEED, WHEN POSSESSIO N AND TITLE FULLY WITHOUT ANY ENCUMBRANCE ON THE PROPERTY WAS HANDED OVER, AND THE VENDOR AGREES THAT HE/SHE HAS RECEIVED SALE CONSIDE RATION FULLY'. HE FURTHER WENT TO SAY, THAT SUPREME COURT ILL THE CASE OF 'SURAJ LAMP INDS, VS STATE OF HARYALLA & ORS CLEARLY RULED THAT A REGISTERED SALE DEED IS ONLU THE VALID DOCUMENT IN TERMS OF. T RANSF.ER AND SUCH DEED IS LEGALLY, AND LAWFULLY VALID', NO POSSESSION GIVEN NO TRANSFER INVOLVED:- THE ASSESSEE VENDOR ARGUES THAT HE IS STILL IN VIRT UAL PHYSICAL POSSESSION OF HIS PROPERTY AS AGAINST WHAT IS SO ST ATED IN THE REGISTERED SALE DEED. THE VENDEE OF THE PROPERTY HO WEVER, HAS NOT COMPLAINED TILL DATE WITH ANY OF THE AUTHORITIES OR FOR THAT MATTER ISSUED ANY' LEGAL NOTICE' AGAINST HIM NOR PETITIONE D THE APPROPRIATE COURRT IN THE MATTER OF HIS CONTINUED ILLEGAL, PHY SICAL OCCUPATION OF THE SAID PROPERTY. SURPRISINGLY SHE, BY TAKING A C URIOUS TURN AROUND STAND WITH NO OTHER POSSIBLE ALTERNATIVES AVAILABLE UNDER THE LAW AND SO ONLY BEFORE THE LD AO, IN HER SWORN STATEMENT CA ME OUT OPENLY WITH AN ULTERIOR INTENT/MOTIVE TO PUT HIM IN A CORN ER/DISCREDIT HIS IMAGE IN THE SOCIETY. SHE KNOWS FULLY WELL THAT UND ER ANY CIVIL LAWS/CRIMINAL LAWS SHE COULD NOT SUCCEED AGAINST TH E ASSESSEE ITA NO. 781/HYD/2015 :- 4 -: VENDOR AS ANY SUCH HASTY/FAULTY STEP WOULD BOOMERAN G ON HER IN VIEW OF HER BEING PRIVY TO OTHER AGREEMENTS ENTERED WITH HIM. THE ASSESSEE VENDOR, ARGUES, THAT IN THE ABSENCE OF HIS CLEAR BONA FIDE INTENTIONS/ACTIONS EXPRESSLY MADE OTHERWISE WH ILE ENTERING SUCH SALE DEED CONTRACT ESPECIALLY VIZ. WHEN SUCH SALE D EED IS ACCOMPANIED. WITH (1) MOU DT 16.04.2009 AND (2) AGR EEMENT OF RECONVEYANCE _ DT. 18.05.2009. AND TO PROVE THAT, ' SALE DEED IS FALSE', HE HAS OPENLY ASSERTED 'BEFORE THE AO THAT HE IS STILL IN 'PHYSICAL OCCUPATION' OF THE SAID OF HIS OWN PROPER TY UNCHALLENGED AND UNASSAILED OF HIS RIGHTFUL 'TITLESHIP RIGHTS' - LAWFULLY BY THE VENDEE OF PROPERTY - MRS. MANJU DEVI TAPARIA. SUPRI SINGLY THE LDAO HAS FAILED TO TAKE COGNIZANCE OF THE SAME AND EVEN EVADED MENTION OF THE SAME VIZ., VENDEE'S 'PHYSICAL POSSESSION' OF THE SAID PROPERTY IN HIS ASSESSMENT ORDER. CASE LAWS CITED ON SALE DEED REGISTERED POSSESS ION NOT GIVEN: AS HELD IN THE CASE OF SMT. RAJ RANI DEVI RAMNA V C IT (1993) 201 ITR 1032 (PAT), THE SALE DEED OF THE PROPERTY WAS R EGISTERED BUT POSSESSION WAS NOT GIVEN NOR THE PAYMENT WAS RECEIV ED. IT WAS HELD BY THE PATNA HIGH COURT THAT THE TRANSACTION INVOLV ED 'NO TRANSFER. IN THE ABSENCE OF ANY PROVISION TO THE CONTRARY, TH E CONCEPT OF SALE OF AN IMMOVABLE PROPERTY WHICH IS INCLUDED IN THE TERM CAPITAL ASSET AS DEFINED U/S 2(14) HAS TO BE GATHERED FROM SECTION 5 4 OF TRANSFER OF PROPERTY ACT, 1882 (TP - ACT). IN THE PRESENT CASE, THE PARTIES VIZ. ASSESSEE VEND OR, AND MRS. MANJU DEVI HAD CLEARLY INTENDED THAT DESPITE THE EXECUTIO N AND REGISTRATION OF SALE DEED UNDER REGISTRATION ACT 1908, THE SAID DEED ACCOMPANIED WITH OTHER 'RIDERS' (CONDITIONALITIES) DULY WRITTEN AND SIGNED AS BETWEEN THEM IN' CLEAR TERMS IS NOTHING BUT A PIECE OF PAPER GIVEN REQUIRED LEGALITY FOR THE SOLE AIM OF OBTAINING LOA N FROM THE BANK. AND HENCE THERE IS NO 'TRANSFER OF PROPERTY' OR SALE' O F PROPERTY THAT TOOK PLACE WITH 'POSSESSION OF PROPERTY' NOT BEING TRANS FERRED FROM THE ASSESSEE VENDOR AND HENCE NO CAPITAL GAINS WOULD AR ISE IN THE ASSESSEE HANDS. CASE LAW CITED ON REGISTRATION OF DOCUMENT NECESSA RY BUT NOT CONCLUSIVE OF TRANSFER :- IN: HIRALAL RAMDAYAL V CIT (1980) 122 ITR 461 (PATT ) THE ASSESSEE HAD EXECUTED A SALE DEED IN RESPECT OF CERTAIN IMMO VABLE PROPERTY AND GOT IT REGISTERED AS WELL. BUT WHEN THE AO PROP OSED TO TAX THE CAPITAL GAINS ARISING THERE FROM, THE ASSESSEE CONT ENDED THE SALE DEED WAS A 'SHAM DOCUMENT' AND NO SALE HAD IN FACT TAKEN PLACE. THIS CONTENTION WAS REPEATED RIGHT UP TO THE TRIBUN AL. BUT, THE HIGH COURT OBSERVED THAT, NO DOUBT, EVIDENTIARY VALUE HA S TO BE ATTACHED TO A REGISTERED DOCUMENT, BUT THE DOCUMENT BY ITSEL F CANNOT BE FINAL WORD IN THE MATTER. IT HAS TO BE BORNE IN MIND THAT CAPITAL GAINS ITA NO. 781/HYD/2015 :- 5 -: ACCRUE ONLY IF THERE IS A SALE OR ANY OTHER TRANSFE R OF CAPITAL ASSET AND IF THE ASSESSEE IS ABLE TO PROVE THAT IN FACT N O SALE TOOK PLACE, IN THAT CASE, NO CAPITAL GAIN ACCRUED WHICH COULD BE A SSESSED TO INCOME - TAX. EVEN IN THE FACE OF REGISTERED SALE DEED, IF THE ASSESSEE IS ABLE TO PROVE BY 'COGENT EVIDENCE' AND SATISFY THE TRIBU NAL THAT NO SALE AS SUCH TOOK PLACE, THE CONCLUSION THAT THERE WAS NO C APITAL GAIN. 'WHEREAS THE VACANT POSSESSION WAS NOT HANDED OVER BY THE ASSESSEE TO PROSPECTING TRANSFEREE COMPANY, THE TRA NSACTION ENTERED WITH THAT COMPANY BY THE ASSESSEE FOR IMMOVEABLE PR OPERTY COULD NOT BE TERMED AS 'TRANSFER' WITHIN THE MEANING OF S ECTION 2(47)(V) R.W.SECTION 53A OF TP ACT B.K.JHALA & ASSOCIATES VS . ASST. CIT (2000) 14 DTC 201. (PUNE-TRIB.). TRANSFER WHERE 'POSSESSION' NOT TRANSFERRED TO THE TRANSFEREE. AO GIVEN AMPLE DOCUMENTARY EVIDENCES'. AS DISCUSSED IN PRECEDING PARAGRAPHS, THE AT) WAS G IVEN DURING THE COURSE OF PROCEEDINGS THE FOLLOWING DOCUMENTS. 1) COPIES OF MOU DT. 16.04.2009 (NOT REGISTERED) 2) AGREEMENT OF RECONVEYANCE DT. 18/05/2009 (NOT REGIS TERED) ENTERED INTO AS BETWEEN THE ASSESSEE VENDOR AND MRS . MANJU DEVI TAPARIA, THE ABOVE AGREEMENTS RELATE TO THE 'PROPERTY' THAT IS PURPORTED TO HAVE BEEN SO 'SOLD' TO MRS. MANJU DEVI. A) THE MOU AGREEMENT DT. 16.04.2009 INTER ALIA PROV IDES/SAYS THAT:- (EXTRACT OF RELEVANT CLAUSES) . . CLAUSE NO. (1) & (2) READS:- THE 01ST PARTY( THE ASSESSEE VENDOR) AND 02ND PARTY (MRS. MANJU DEVI TAPARIA) MUTUALLY AGREED AND ACCEPTED TO EXECU TE REGISTERED SALE DEED IN ASPECT OF SCHEDULED PROPERTY WITH ANY FINANCIAL INSTITUTION AND THE SAID SALE DEED IS EXECUTED WITH OUT ANY SALE CONSIDERATION PURELY FOR THE PURPOSE OF OBTAINING L OAN TO AN EXECUTE RS.2,81,50,260/-. THE 01 ST PARTY & 02 ND PARTY MUTUALLY AGREED AND ACCEPTED THAT THE 01 ST PARTY WILL SHARE LOAN AMOUNT. CLAUSE NO 5 READS:- THE 02 ND PARTY HEREBY ADMITS' AND DECLARES THAT SALE DEED W OULD BE EXECUTED ONLY A DOCUMENT FOR THE PURPOSE OF OBTAINI NG LOAN FROM ANY .FINANCIAL, AS THE 02ND PARTY HAS GOOD REPUTATION I N REPAYMENT OF LOANS AND SO THE 02ND PARTY (MRS. MANJU DEVI TAPARI A) IS NOT THE BONA FIDE PURCHASER IN RESPECT OF SCHEDULED PROPERT Y. CLAUSE NO.9 READS:- THE 02ND PARTY ADMITS AND DECLARE THAT SALE DEED WH ICH WOULD BE EXECUTED BY THE 01ST PARTY IN FAVOUR OF THE 02ND PA RTY THROUGH THE ITA NO. 781/HYD/2015 :- 6 -: SAID REGISTERED SALE DEED THE 02 ND PARTY WILL NOT HAVE ANY RIGHT, TITLE, INTEREST IN RESPECT OF SCHEDULED PROPERLY. CLAUSE NO.10 READS:- THAT THE 02ND PARTY HAS ADMITTED AND ACCEPTED TO EX ECUTE AGREEMENT OF RECONVEYANCE OR CANCELLATION OF REGIST ERED SALE DEED ON THE SAME DAY WHERE THE REGISTERED SALE DEED WILL BE DONE IN FAVOUR OF IT. CLAUSE NO. 11 READS:- THAT THE 02ND PARTY HEREBY UNDERTAKES 'AND DECLARE THAT BY USING THE REGISTERED SALE DEED WOULD BE EXECUTED IN FAVOR OF IT BY THE O1ST PARTY WILL NOT BE MISUSED AND THE 02ND PARTY UNDERT AKES THAT IT WILL NOT EXECUTE ANY DEED OF CONVEYANCE IN FAVOUR OF ANY THIRD PARTY. B) THE AGREEMENT OF RECONVEYANCE DT. 18.05.2009 INT ER ALIA BY CLAUSE NO (1) READS AS UNDER. THE 1ST PARTY - MRS. MANJU DEVI, AND THE 2ND PARTY MR. SIKANDER ALI - THE ASSESSEE VENDOR MUTUALLU AGREED AND ACCEPTED TH AT. TO EXECUTE: THE REGISTERED SALE DEED IN FAVOUR OF THE FIRST PAR TY WITH A CONDITION TO RECONVEY THE SCHEDULED PROPERTY ON PAYMENT OF SALE CONSIDERATION AS MUTUALLY AGREED IN MOU DT. 16.04.2009. CLAUSE NO (2) OF THE SAME AGREEMENT SAYS - THE 1ST PARTY MRS: MANJU DEVI HEREBY UNDERTAKES THAT NOT TO REGISTER SALE DE ED OR ANY DEEDS IN FAVOUR ANY .THIRD PARTY(IES) WITHIN A PERI OD OF 05 YEARS FROM THE DATE OF EXECUTION OF THIS AGREEMENT OF REC ONVEYANCE. MOU & AGREEMENT OF RECONVEYANCE - UNREGISTERED DOCU MENTS AS OBSERVED BY LD AO. THE LD. AO'S ARGUMENT THAT THE S AID 02 AGREEMENTS VIZ. MOU FOR THE LOAN OBTAINED .ON 'EXEC UTION OF SALE DEED' WITH MRS. MANJU DEVI AND ALSO AGREEMENT OF RE CONVEYANCE AS ENTERED INTO AS BETWEEN THEM BY THE PARTIES THERETO , HAVING A BEARING ON THE VERY SUBJECT. MATTER OF PROPERTY SOLD, SINCE THEY BEING UNREGISTERED, AND HENCE SHOULD NOT TO BE CONSIDERED , DOES NOT HAVE A FORCE IN IT AND SO SPEAKS OF HIS PERFUNCTORY MIND O N THE SUBJECT. AGREEMENTS - VALIDITY AND THEIR ENFORCEABILITY AGREEMENTS AS BETWEEN TWO/MORE INDIVIDUALS/PERSONS IF MADE AS PER LAW OF LAND VIZ. INDIAN CONTRACT ACT ARE VALID CONTRACTS ENFORCEABLE IN A COURT OF LAW. THE AO SHOULD HAVE REALIZED THAT ALL AGREEMENTS NEE D NOT BE REGISTERED SO AS TO BE ENFORCEABLE IN LAW. AS PER S EC 2(H) OF INDIAN CONTRACT 1872, ANY AGREEMENT ENFORCEABLE BY LAW IS A CONTRACT. III OTHER WORDS, ALL SUCH AGREEMENTS IF ENTERED ON VALID AND APPROPRIATE STAMP VALUE UNDER INDIAN STAMP ACT ARE VERY MUCH 'ENFORCEABLE IN A COURT OF LAW' PROVIDED' THEY ARE FULFILLING THE BASIC ITA NO. 781/HYD/2015 :- 7 -: REQUIREMENTS (1) AN OFFER, (2) AN ACCEPTANCE, (3) ' COMPETENCE OF THE PARTIES TO CONTRACT, (4) LAWFUL SUBJECT MATTERS, (5 ) MUTUALITY OF OBLIGATIONS & (6) CONSIDERATION. THUS THE ABOVE 02 AGREEMENTS, VIZ. MOU AND AGREEMEN T OF RECONVEYANCE, AS ENTERED INTO AS BETWEEN THE TWO PE RSONS ARE VERY MUCH 'ENFORCEABLE IN LAW'. UNFORTUNATELY HE HAS NOT SAID ANYTHING ABOUT THEIR 'ENFORCEABILITY IN LAW' IN HIS ASSESSME NT ORDER OTHER THAN MERELY SAYING THEY ARE NONREGISTERED AND HENCE HE H AS NOT CONSIDERED THEM. REGISTERABILITY OF AGREEMENT DOCUMENTS:- AS HAS BEEN SAID EARLIER ALL AGREEMENTS/CONTRACTS N EED NOT GET REGISTERED TENDER REGISTRATION ACT UNLESS THEY ARE SO PRESCRIBED SPECIFICALLY AS SUCH, SUFFICE IT, SHOULD THEY ARE P ROPERLY STAMPED OF APPROPRIATE VALUE UNDER INDIAN STAMP ACT, TO MAKE T HEM DULY ENFORCEABLE IN A COURT OF LAW, IN CASE OF ANY DISPU TE ARISING THERE, FROM BY EITHER OF PARTIES 'TO SUCH AGREEMENTS. AT T HE WORST, IN THE EVENTUALITY SHOULD SUCH, AGREEMENTS SUFFER ANY 'DEF ICIENCU' OF NON - REGISTRATION, DEPENDING ON THE NATURE, SIGNIFICANCE , INTENT OF PARTIES INVOLVED AND SPECIFIC LAW - WHETHER NATIONAL/INTERN ATIONAL UNDER WHICH THEY ARE SO ENTERED/MADE UNLESS THE CONTEXT S UBJECT MATTER IS INIMICAL TO ANY LAW OF LAND OR STATE/SOCIETY AT LAR GE, COURTS AT TIMES, IN GENERAL, GIVE A FAIR OPPORTUNITY FOR RECTIFICATI ON OF SUCH DEFICIENCY BY THE PARTIES TO MAKE THEM LEGALLY ENFORCEABLE FOR JUSTICE RENDERABILITY, THUS IN CASES OF ENFORCEABLE AGREEMENTS/CONTRACTS, COURTS ARE THE ULTIMATE JURISDICTION TO ROLE OVER SUCH MATTERS. MOU AGREEMENT & AGREEMENT OF RECONVEYANCE - WHY THE Y REMAINED UNREGISTERED. REGISTRATION OF ANY DOCUMENT UNDER REGISTRATION ACT 1908 HAS ITS OWN UNIQUE ADVANTAGE OF BEING IN 'PUBLIC DOMAIN' AN D PROTECTED FROM FRAUD END FORGERY OF DOCUMENTS OF TRANSFER. FURTHER REGISTRATION PROVIDES INFORMATION TO PEOPLE WHO MAY DEAL WITH A PROPERTY, AS TO THE NATURE AND EXTENT OF THE 'RIGHTS' WHICH PERSONS MAY HAVE, AFFECTING THE PROPERTY. IN OTHER WORDS, IT ENABLES PEOPLE TO FIND OUT WHETHER ANY PARTICULAR PROPERTY WITH WHICH THEY ARE CONCERNED, HAS BEEN SUBJECTED TO ANY LEGAL OBLIGATION OR LIABILITY AND WHO IS (ARE) THE PERSON(S) PRESENTLY HAVING RIGHT, TITLE, AND INTERE ST IN THAT PROPERTY. IT GIVES SOLEMNITY OF FORM AND PERPETUATE DOCUMENTS WHICH ARE OF LEGAL IMPORTANCE OR RELEVANCE BY RECORDING THEM, WH ERE PEOPLE MAY SEE THE RECORD AND ENQUIRE UNIQUE AND ASCERTAIN WHA T THE PARTICULARS ARE 'AND AS FAR AS LAND/IMMOVEABLE PROPERTY IS CONC ERNED WHAT OBLIGATION EXIST WITH REGARD TO THEM. ITA NO. 781/HYD/2015 :- 8 -: THUS, AS AFORESAID, THE ABOVE 02 AGREEMENT DOCUMENT S VIZ. MOU & AGREEMENT OF RECONVEYANCE, IF THEY TOO HAD BEEN REG ISTERED IN ADDITION TO 'SALE DEED' DOCUMENT REGISTRATION THE A SSESSEE VENDOR AND VENDEE (PARTIES TO THE DOCUMENTS) WOULD 'DISENT ITLE' THEMSELVES FROM GETTING ANY 'POSSIBLE LOAN' AGAINST THE SAID P ROPERTY FROM ANY BANK/FINANCIAL INSTITUTIONS OR EVEN FROM A PRIVATE FINANCER AS LENDERS SUSPECT THAT NO CLEAR VALID SALE/TITLE OF P ROPERTY AS PER LAW OF LAND HAS TAKEN PLACE/EXISTS OR THAT THE SALE OF PROPERTY IN QUESTION WOULD BE SUBJECT TO LEGAL WRANGLING/LITIGA TIONS FOR YEARS TOGETHER WITH NO CLARITY POSITION. IN THE PRESENT CASE THE AO, HAS NEITHER SHOWN HIS M ODICUM OF PATIENCE/WILLINGNESS TO UNDERSTAND THE ENTIRE ISSUE IN ITS-WHOLE GAMUT NOR HAS HE SOUGHT REQUISITE EXPERT LEGAL ADVI CE ON THE SAME BEFORE HE CAME TO HIS PREJUDICED CONCLUSION OF SAYI NG THAT SUCH AGREEMENTS ARE NOT FIT FOR CONSIDERATION. AT ALL TO THE PRESENT CONTEXT.. THE AO THUS, SHOULD HAVE REALIZED THAT THE 'INTENT OF PARTIES' IS THE FULCRUM, ON WHICH, THE OTHER ASPECTS COME TO STAND ONE OVER THE OTHER. FIRST LET US TAKE 'SALE DEED' WHICH IS EXECU TED AND REGISTERED UNDER THE INDIAN REGISTRATION ACT 1908. IF IT IS RE AD ON STAND ALONE BASIS ANYONE WOULD, NATURALLY, COME TO A FIRM CONCL USION THAT THE 'SALE OF PROPERTY' HAS IN EFFECT TAKEN PLACE IN ALL RESPECTS AND ASPECTS AND SO THE VENDOR OF THE PROPERTY IS FIT AND ELIGIB LE FOR LEVY OF CAPITAL GAIN TAX UNDER THE INCOME TAX ACT. THUS THERE IS NO ROOM FOR ANY DOUBT ON THE MATTER AND POINT OF TAXATION WHICH IS STRAIGHT FORWARD FOR EASY CONSUMPTION. ANYONE WOULD THEN SAY THAT THE SALE OF PROPERTY EFF ECTED IS 'A COMPLETE SALE' WITH ALL INGREDIENTS OF SALE CONTRAC T CHARACTERISTICS HAVING BEEN FULFILLED AS PER LAWS OF LAND VIZ. TRAN SFER OF PROPERTY ACT, SALE OF GOODS ACT, INDIAN CONTRACTS ACT AND LA STLY INDIAN INCOME TAX ACT TO BE ELIGIBLE FOR LEVY OF CHARGE OF CAPITA L GAINS TAX. IN OTHER WORDS, THE SELLER/VENDOR AND PURCHASER OF PROPERTY, ONE WOULD ASSUME THAT THEY ARE WITH 'CLEAR INTENTIONS O F THEIR MIND AND ACTIONS: WITH NO AMBIGUITIES ATTACHED THERE TO IN P ERFORMANCE OF CONTRACT OF SALE. IT IS ONLY WHEN THE VENDOR ATTEMPTS TO PRODUCE SOME MORE AGREEMENTS/CONTRACTS COPIES/DOCUMENTS RELEVANT TO ' SUCH COMPLETED SALE' OF PROPERTY, WHICH MAKE THE THINGS A BIT ENTW INED/COMPLICATED VITIATING THE TOPIC OF 'COMPLETED SALE OF PROPERTY' . IN OTHER WORDS, THE LATERAL AGREEMENTS/CONTRACTS VI Z. MOU AGREEMENT SAYING IN THE INSTANT CASE THE 'SALE OF PROPERTY' I S SUBJECT TO AVAILING OF 'LOAN' REQUIREMENTS BY THE ASSESSEE VENDOR AND P URCHASER OF PROPERTY AGREEING TO 'CERTAIN CONDITIONALITIES'. AGREEMENT OF RECONVEYANCE - SAYS THAT 'SOLD PROPERT Y' SHOULD GET RECONVEYED TO THE ASSESSEE VENDOR WITH PROVISION OF CERTAIN TIME ITA NO. 781/HYD/2015 :- 9 -: PERIOD LIMITS - AS ARE ENTERED INTO BY THE SAME PAR TIES IN FULL KNOWLEDGE OF THEIR LEGAL CONSEQUENCES. THUS PURCHASER OF PROPERTY IS FULLY MADE AWARE OF H ER 'LIMITS' WHICH PUT A BAR ON HER RIGHTFUL ENJOYMENT OF PROPERTY AS OTHERWISE THAT WOULD HAVE BEEN AVAILABLE TO HER HAD IT NOT BEEN A 'CONDITIONAL SALE'. MORE OVER THE PURCHASER IS FULLY AWARE THAT, TILL D ATE SHE-IS NOR-GIVEN 'VACANT POSSESSION OF THE PROPERTY' BY THE ASSESSEE VENDOR TO HER THOUGH THE 'EXECUTED SALE DEED' SO SAID WHICH BUT R EMAINED ONLY ON PAPER'. THIS IS BECAUSE THAT SHE, IN FULL KNOWLEDG E AND TO HER OWN CONSCIENCE EXECUTED 02 MORE SEPARATE AGREEMENTS IN ADDITION TO USUAL SALE DEED OF PROPERTY - VIZ. MOU & AGREEMENT OF RECONVEYANCE 'WITH THE ASSESSEE VENDOR, WHICH 'HANDCUFFED UP HER HANDS' TO INITIATE ANY 'LEGAL STEPS' WORTH THE NAME UNDER THE LAW OF LAND AGAINST HIM. IN OTHER WORDS SHE IS SPECIFICALLY EST OPPED FROM PROCEEDING SO UNDER THE LAW BY AN EXPRESS AGREEMENT WITH THE ASSESSEE VENDOR IN CONNECTION WITH SAID PROPERTY. THUS BOTH THE ASSESSEE VENDOR AND PURCHASER OF PROP ERTY, DID NOT HAVE 'CLEAR SET OF MINDS' ON THE ALLEGED SALE DEED OF PROPERTY 'FROM THE VERY BEGINNING'. IN OTHER WORDS IT IS NOTHING B UT A 'CONDITIONAL SALE OF PROPERTY' AS BETWEEN THE PARTIES WITH OTHER OBJECTIVE/PURPOSE IN THEIR MINDS AND HENCE THE ALLEGED SALE TRANSACTI ON OF PROPERTY DOES NOT QUALIFY ITSELF TO BE CALLED 'AS TRANSFER/S ALE OF PROPERTY' IN VIEW OF POSSESSION OF PROPERTY HAS NOT PASSED ON TO 'PURCHASER' IN REALISTIC TERMS BUT REMAINING ON PAPER UNDER THE TRANSFER OF PROPERTY ACT AND ALSO 'SALE OF GOODS ACT'. CONDITIONAL SALE NOT A COMPLETE SALE OF PROPERTY SALE AS DEFINED UNDER SUB CLAUSE (I) OF CLAUSE (4 7) OF SEC.2 OF INCOME TAX ACT, 1961. SECTION OF 54 OF TRANSFER OF PROPERTIES ACT 1882, D EFINES SALE AS UNDER:- A TRANSFER OF OWNERSHIP IN EXCHANGE FOR A PRICE PA ID OR PROMISED OR PART PAID OR PART PROMISED. SEC 4(3) OF THE SALE OF GOODS ACT 1930, THE DEFINIT ION OF SALE IS AS UNDER 'WHERE UNDER A CONTRACT OF SALE OF THE PROPERTY IN THE GOODS IS TRANSFERRED, THE CONTRACT IS CALLED A 'SALE'. THUS THE INCOME TAX ACT, TAKES THE DEFINITION OF TE RM, 'SALE' AS DEFINED UNDER RELEVANT PROVISIONS OF TRANSFER OF PR OPERTIES ACT AND THE SALE OF GOODS OF ACT. THE TERM 'SALE' AS USED IN THOSE RELEVANT PROVISION S OF THE SAID TWO ACTS CONNOTE THE MEANING OF A 'COMPLETED SALE' AND NOT A 'CONDITIONAL SALE' VIZ. A 'TYPE OF SALE' WHERE CERTAIN 'CONDITIO NS' ARE ATTACHED BY ITA NO. 781/HYD/2015 :- 10 -: THE PARTIES INVOLVED IN THE TRANSACTION. THE CONDIT IONALITY ATTACHED/ROOTED TO A 'SALE TRANSACTION' MAY BE OF D IFFERENT KINDS VARYING TO SITUATIONAL CIRCUMSTANCES THE SAID PART IES HAVE COME TOGETHER FOR A COMMON CAUSE/OBJECTIVE' EXCLUSIVE TO THEM. PARTIES ALWAYS INTENDED TO OBTAIN LOAN FROM A BANK - THEIR SOLE OBJECTIVE & AIM. IN THE PRESENT CASE, THE PARTIES TO 'ALLEGED SALE T RANSACTION OF PROPERTY' HAVE ROUNDLY INTENDED TO OBTAIN LOAN FROM A BANK AGAINST THE 'SECURITY OF PROPERTY' IN THE NAME OF PURCHASER OF PROPERTY VIZ. MRS. MANJU DEVI, WHICH AMOUNT WOULD BE SHARED AS PE R SOME AGREED ARRANGEMENT. FOR THE PURPOSE, AS PER BROKER'S (MR. CH. SURESH BABU), FACILITATION AND HIS ADVICE ON THE MATTER, THE ASSE SSEE VENDOR HAS AGREED TO 'MAKE SALE OF HIS PROPERTY' IN THE NAME O F MRS. MANJU DEVI, THROUGH A MAKE-BELIEVE DEED ONLY FOR THE SALE AIM O F OBTAINING A LOAN AGAINST SECURITY OF THE SAID HOUSE PROPERTY. TO THAT END, THE ASSESSEE VENDOR AND MRS. MANJU DEV I, PURCHASER OF PROPERTY HAVE ENTERED INTO 02 MORE WRITTEN AGREEMEN TS VIZ. (1) MOU (2) AND AN AGREEMENT OF RECONVEYANCE WHICH INTEND T O SPECIFICALLY PUT IMPOSE RESTRICTIONS ON THE RIGHTS/CLAIMS ACCR UING FROM THE EXECUTION AND REGISTRATION OF SALE DEED OF PROPERTY FOR A CERTAIN PERIOD OF TIME 05 YEARS FROM THE DATE OF 'SALE DEED ' - UNTIL WHICH TIME, THE PURCHASER OF PROPERTY' AS PER 'SALE DEED' SHALL NOT VENTURE TO SELL OR DEAL WITH THE 'PURCHASED PROPERTY' OR EN FORCE HER 'LAWFUL RIGHTS' AS THE 'LAWFUL PROPERTY OWNER OF THE SAID P ROPERTY. TO THAT END, THE ASSESSEE VENDOR HAS 'INTENTIONALLY' NOT HA NDED OVER POSSESSION OF THE PROPERTY BOTH AS PER LEGAL ADVICE AND IN 'TACIT CONCURRENCE 'WITH PURCHASER OF PROPERTY MRS. MANJU DEVI TAPARIA. THE ASSESSEE VENDOR, THUS IN THE SWORN STATEMENT BE FORE THE ID AO, TO QUESTION NO 8, HAS STRONGLY STATED THAT - 'HE HA S NOT HANDED OVER OR TRANSFERRED HIS PROPERTY POSSESSION TO MRS. MANJ U DEVI'. THIS IS BECAUSE, ARMED WITH THE 02 SAID AGREEMENTS - MOU AG REEMENT AND AGREEMENT OF RECONVEYANCE I\POSSESSION OF PROPERTY' NOT VET PARTED WITH, BY HIM, HE COULD STOP HER OF ANY POSSIBLE ENFORCEMENT/ENCROACHMENT OF ANY LEGAL CLAIM/RIGHT B Y THE PURCHASER OF PROPERTY IN A COURT OF LAW, AND THEREFORE, NEITH ER IN TERMS OF SEC 2(47) (V) OF INCOME TAX ACT, NOR IN TERMS OF SEC 53 A OF TP ACT THE IMPUGNED 'SALE DEED' TRANSACTION COULD BE CLASSIFIE D AS 'TRANSFER: OF CAPITAL ASSET OR COULD BE SO CONSIDERED AS A 'COMPL ETED SALE' TRANSACTION IN VIEW OF IT BEING A CONDITIONAL SALE' . ASSESSEE VENDOR IN SUBMISSION OF RELEVANT DOCUMENTS TO THE LD AO:- THE ASSESSEE VENDOR IN THE PRESENT CASE, AS STATED EARLIER IS WELL, IN SUBMISSION OF ALL RELEVANT EVIDENCES OF DOCUMENTS O F AGREEMENTS VIZ. MOU AND AGREEMENT OF RECONVEYANCE IN HIS SWORN STAT EMENT BEFORE THE LD AO IN SUPPORT OF HIS CONTENTION THAT THE SAL E DEED OF HIS ITA NO. 781/HYD/2015 :- 11 -: PROPERTY WITH MRS. MANJU DEVI MAKES IT A 'CONDITION AL SALE' NOT A COMPLETED SALE' AND HENCE DO NOT COME UNDER THE DEF INITION OF 'TRANSFER' U/S 2(47) OF INCOME TAX ACT. IT IS UNFOR TUNATE THAT THE LD AO, IT APPEARED WANTONLY DISREGARDED THE ABOVE 02 A GREEMENTS DOCUMENTS BY CITING A FLIMSY EXCUSE THAT THEY ARE ' NOT REGISTERED' IN LAW FOR CONSIDERATION. CASE LAW QUOTES - AS COME TO BE MENTIONED IN THE OR DER OF ASSESSMENT BY LDAO. SURAJ LAMP INDUSTRIES (P) LTD, VS STATE OF HARYANA & ANR 13917 OF 2009 DT. 01.10.2011. HON'BLE SUPREME COURT RULING ON OTHER MODES OF TRAN SFER OF PROPERTIES OTHER THAN BY REGISTRATION. AT FIRST, THE ABOVE CASE, LAW, AS COME TO BE QUOTED BY THE AO IS NOT A CASE LAW PERTAINING TO THE INCOME TAX MATTER. IT IS A CASE LAW DELIVERED BY HON'BLE SUPREME COURT IN A MATTER PERT AINING TO IMMOVEABLE PROPERTIES TRANSFERRED/CONVEYED BY OTHER MODES OF TRANSFER NOT GETTING REGISTERED UNDER THE INDIAN RE GISTRATION ACT - LIKE, SALE AGREEMENTS/AGREEMENT TO SELL/GENERAL POWER OF ATTORNEY/WILL WHICH ARE KNOWN AS INDIRECT SALES. IT HAS COME TO THE NOTICE OF HON'BLE APEX COURT, TH AT THERE IS GROWING A PARALLEL ECONOMY RUNNING IN TO HUNDREDS OF CRORES O F RUPEES WITHIN THE COUNTRY'S ECONOMY THROUGH LAND/REAL ESTATE BUSI NESS MAFIA OPENLY BY PASSING/VIOLATING ESTABLISHED RELEVANT LA WS OF LAND AND SO INDULGING IN GENERATION OF 'BLACK MONEY' WITH DEVIO US METHODS OF SO CALLED 'INDIRECT SALES OF IMMOVABLE PROPERTY' GETTI NG OFFICIALLY REGISTERED UNDER THE INDIAN REGISTRATION ACT. THUS THE HON'BLE COURT HAS OBSERVED THAT HIGH RATES OF STAMP DUTIES IN RESPECT OF DEALINGS OF PURCHASE/ SALE OF IMMOVAB LE PROPERTIES, EXISTING IN CERTAIN STATES ARE ONE OF THE PRIME CAU SES/FACTORS ENCOURAGING SUCH INDIRECT SALES CAUSING MUCH REVENU E LOSS TO THE COUNTRY'S EXCHEQUER IN THE FORM OF STAMP DUTY, INCO ME TAX & WEALTH TAX EVASION. THIS IS BECAUSE A MAJORITY OF DEALINGS PERTAINING TO IMMOVABLE PROPERTIES~ ARE BEING MADE THROUGH GENERA L POWER ATTORNEY, AGREEMENTS TO SELL AND WILL WHI.CH NEED N OT BE 'REGISTERED' AS SUCH UNDER THE INDIAN REGISTRATION ACT. ONLY CON FIRMED DEALINGS OR DIRECT SALES IN IMMOVABLE PROPERTIES ARE GETTING RE GISTERED UNDER THE- INDIAN REGISTRATION ACT AND THE REST, AS DETAILED A BOVE ARE NOT SO GETTING REGISTERED ON ACCOUNT OF GAPING HOLE PREVAI LING IN THE PRESENT LAW. AND HENCE, TO CURB SUCH RAMPANT MISUSE OF REGISTRAT ION ACT, THE APEX COURT DIRECTED THE SATES OF DELHI, HARYANA, PUNJAB & UTTAR PRADESH, TO MAKE SUITABLE CHANGES IN REGISTRATION ACT OF RES PECTIVE STATES, MAKING COMPULSORY REGISTRATION OF DOCUMENTS CONTAIN ING CONTRACT TO TRANSFER FOR CONSIDERATION LIKE AGREEMENT TO SELL E TC. ITA NO. 781/HYD/2015 :- 12 -: VAGUE/UNFOUNDED CHARGES/COMMENTS MADE AGAINST THE A SSESSEE:- THE AO HAS REMARKED, IN PARA 34 OF HIS. ORDER THAT' BY ENTERING INTO UNREGISTERED MOU JUST BEFORE SALE DEED REGISTRATION BEFORE THE SUB REGISTRAR AND ENTERING INTO AN UNREGISTERED AGREEME NT OF RECONVEYANCE IS NOTHING BUT PUTTING A COLOURABLE DE VICE TO AVOID CAPITAL GAIN TAX BUT NOTHING ELSE'. THE AO ALSO SAID IN PARA 31 OF THE ORDER QUOTE 'ENT ERING INTO AN MOU AND GIVING A STATEMENT THAT THE REGISTERED SALE DEE D HAS NO LEGAL SANCTION, BUT A MERELY A COLOURABLE DEVICE OR AVOID ANCE A TAX AS HELD IN MC DOWELL & CO. LTD. VS TO (1985) 154 ITR 148(SC ). THAT THE LD.AO BY ATTEMPTING TO APPLY CASE LAWS, AS ABOVE ST ATED, SURAJ LAMP INDS. & (P) LTD. VS STATE OF HARYANA AND MC DO WELL & CO. LTD. - TO THE PRESENT CASE OF THE ASSESSEE- JUST BECAUSE OF (1) SALE DEED CAME TO BE EXECUTED AND REGISTERED AND (2) MOU & AG REEMENT. OF RECONVEYANCE RELATING TO THE SAID PROPERTY NOT SO R EGISTERED AND SO IMPUTING THE 'SAID AGREEMENTS' AS NOTHING BUT A COL OURABLE DEVICES ONLY TO EVADE CAPITAL GAINS TAX BY HIM IS A SERIOUS BASELESS INSINUATION AND UNFOUNDED CHARGE ON AN HONEST CITIZ EN OF TAX PAYER WITHOUT ANY BASIS OF CORROBORATIVE MATERIAL /CONCRE TE PROOF ON RECORD FROM HIS END BROUGHT AGAINST HIM. SIMILAR CASE RAW CITED - MAHARANA BHAGWAT SINGH JI VS CIT (RAJ) A SIMILAR CASE TO THE PRESENT ONE COULD BE WORTH CI TING HERE: MOHARANA BHAGTOAT SINGHJI (DEED) VS. CIT (10.05.200 2)' EQUAL CITATIONS: (2003) 183 CTR RAJ 137,2003,259 ITR 381 RAJ. IN THE ABOVE CITED CASE, THE ASSESSEE HAD SOLD CERT AIN IMMOVABLE PROPERTIES DURING THE P.Y.1972 - 73 (A.Y.1973 - 74) BUT HE DECLARED NO CAPITAL GAIN ON THE SALE OF THE PROPERTIES. IT WAS MENTIONED IN THE SALE DEED THAT THE TOTAL CO NSIDERATION HAD ALREADY BEEN RECEIVED BY THE TRANSFEROR AND THE PRO CESSION OF TRANSFEREE LAKE PALACE HOTELS & MOTELS (P) LTD. IT WAS SUBMITTED ON BEHALF OF THE ASSESSEE HUF THAT BY A SUBSEQUENT MOU DT. 12.01.1973, THE PARTIES AGREED AND ACCEPTED THAT ONLY LOWER PORTION OF SHIVA NIVAS PLACE WAS TRANSFERRED TO THE TRANSFEREE. IT WAS ALSO SUBMITTED THAT A CANCELLATION DEED DT. 09.10.8 4 WAS ALSO EXECUTED BETWEEN THE PARTIES. THE AO, HOWEVER, REJE CTED ALL THE CONTENTIONS AND ASSESSED THE VALUE OF THE PROPERTY AT RS. 2,00,000/-. THE ASSESSEE, AGGRIEVED BY THE. ORDER, PREFERRED AN APPEAL WHICH WAS REJECTED BY CIT (APPEALS). THE ASSESSEE WENT ON IN FURTHER APPEAL BEFORE THE ITAT REITERATING THE CONTENTION R AISED BEFORE THE AO. THE TRIBUNAL, TOO, REJECTED HIS APPEAL! CITING MOU DT.12.01.1973 THE LEASE DEED DT. 14.12.1978, THE CANCELLATION DEED DT .09.10.1984 AND THE CERTIFICATE DT.15.03.1989 COULD NOT CHANGE THE LEGAL POSITION THAT ITA NO. 781/HYD/2015 :- 13 -: THE PROPERTY IN QUESTION HAD STOOD TRANSFERRED TO L AKE PALACE HOTELS & MOTELS (P) LTD. FURTHER, IN THE OPINION OF THE TR IBUNAL, THE DOCUMENTS REFERRED TO ARE SELF SERVING DOCUMENTS AN D AS SUCH THEY CANNOT BE ACTED UPON BEING IN VIOLATION OF THE PROV ISIONS OF THE TRANSFER OF PROPERTY ACT, INDIAN REGISTRATION ACT A ND THE STAMP DUTY ACT. ACCORDINGLY, THE TRIBUNAL REJECTED THE APPEAL. SUBSEQUENTLY, THE ASSESSEE HUF, FILED AN APPLICATIO N U/S 256(1) OF I- TAX ACT SEEKING CERTAIN QUESTIONS TO BE REFERRED TO RAJASTHAN HIGH COURT FOR OPINION. THE HON'BLE RAJASTHAN HIGH COURT RULED THAT THE TRI BUNAL COMMITTED AN ERROR IN REFUSING TO REFER THE 'QUESTION OF LAW' AS FORMULATED BY THE ASSESSEE HUF IN HIS APPLICATION FOR 'OPINION OF THI S COURT' ALLOWING THE REFERENCE APPLICATION FILED BY THE ASSESSEE. MR. SURESH BABU - A BROKER IN THE LOAN FACILITATION DEAL _ HIS ROLE CONSPICUOUSLY IGNORED:- IT IS ALSO SURPRISING THAT LD AO HAS CONVENIENTLY I GNORED TO INTERROGATE/PROBE MR.SURESH BABU PROP. M/S. UMA ENT ERPRISES A BROKER IN LOAN FACILITATION IN THE ENTIRE DEAL, ARR ANGED BY HIM/USING HIS GOOD OFFICES TO ARRANGE LOAN SUM FOR THE 02 PAR TIES VIZ. THE ASSESSEE VENDOR AND MR.MANJU DEVI TAPA RIA. FURTHER , THIS GENTLEMEN ALSO SIGNED ON SOME AGREEMENTS VIZ. MOU, ON BEHALF OF MR. MANJU DEVI TAPARIA AS HER REPRESENTATIVE. THE ASSESSEE VENDOR IN HIS SWORN STATEMENT BEFORE T HE AO IN Q.NO.6 OF THE ASSESSMENT ORDER HAS UNMISTAKABLY HIGHLIGHTE D THE SAID BROKER'S VITAL ROLE, WHICH CAME TO BE PLAYED BY HIM . AT HIS INSISTENCE, HE HAD GIVEN RS.2,00,000/- BY CHEQUE 166198/- AND R S. 81,00,000/- BY ANOTHER CHEQUE NO.166197 WHICH GOT T RANSFERRED TO M/S. 'UMA ENTERPRISES' BY THE BROKER CH.SURESH BABU . WHY THE AO HAS DELIBERATELY FAILED TO FURTHER INVES TIGATE/PROBE INTO THE AFFAIRS IS A MOOT POINT IN THIS ENTIRE EPISODE INSPITE OF THE SAID BROKER'S ROLE BEING BROUGHT TO HIS NOTICE. TENANCY AGREEMENT BY THE ASSESSEE/VENDOR WITH MR. A BDUL HALEEM BAIG MQ. DIRECTOR M/S.DREAM INDIA BUILDERS - A PROO F THAT HE IS STILL IN PHYSICAL OCCUPATION OF HIS 'SO CALLED SOLD PROPERTY '. THE ASSESSEE VENDOR HAS ENTERED INTO A TENANCY AGRE EMENT WITH MR. ABDUL HALEEM BAIG MG. DIRECTOR M/S. DREAM- INDIA BU ILDERS ON 30.04.2012 FOR LETTING OUT GROUND FLOOR AND THE 1 S F FLOOR PORTION TO HIM/COMPANY ON A MONTHLY RENT OF RS. 40,000/- AT HI S PREMISES H. NO. 8-2-413/1 A, SITUATED AT BANJARA HILLS, HYDERAB AD. IT MAY BE WORTH MENTIONING HERE THAT DREAM INDIA BU ILDERS HAS ALSO A SISTER CONCERN BY NAME PRIDE INDIA, MANSIONS (P) LTD. WHICH IS ALSO OWNED BY THE SAME INDIVIDUAL MR. ABDHUL HALEEM BAIG . ITA NO. 781/HYD/2015 :- 14 -: THE OWNER MR.SYED SIKANDER ALI, ASSESSEE/VENDOR, WH O IS IN PHYSICAL OCCUPATION OF 'ALLEGED SOLD PROPERTY' TILL DATE, HAS BEEN RECEIVING MONTHLY RENTAL AMOUNTS FROM THE SAID TENA NT DEPOSITED IN HIS OWN/PERSONAL BANK ACCOUNT. IN OTHER WORDS, THIS IS ONE OF THE PROOFS OVER AND ABOVE HIS STATED ASSERTIONS, THAT HE IS STILL IN 'PHYSICAL OCCUPATIO N' OF THE ALLEGED SOLD PROPERTY TO MR. MANJU DEVI TAPARIA. RECEIPT OF NOTICES FROM GHMC - MUNICIPAL CORPORATIO N:- THE 'ASSESSEE VENDOR ALSO STATES THAT HE IS IN RECE IPT OF MUNICIPAL / PROPERTY TAX NOTICES IN HIS NAME AS 'OWNER' OF THE SAID PROPERTY THE LATEST OF SUCH NOTICES - DT. 17.12.2014 & 09.01.201 5 WHICH GO TO PROVE HIS BASE OF ARGUMENT THAT HE IS IN PHYSICAL O CCUPATION OF THE PROPERTY IN THE RECORDS OF GHMS AUTHORITY. RECEIPT OF RENTAL INCOME DULY SHOWN IN THE 1- TAX R ETURNS THAT COME TO BE FILED BY HIM. RECEIPT AND ACCOUNTING OF RENTAL INCOMES RECEIVED F ROM DREAM INDIA BUILDERS / PRIDE INDIA MANSION (P) LTD. ARE UNFAILI NGLY SHOWN IN THE INCOME TAX RETURNS FILED BY THE ASSESSEE VENDOR FOR AY. 2013-14 & 2014-15. THUS HE HAS SHOWN RS.4,62,500/- FOR THE AY .2013-14 AND RS.7,20,500/- FOR THE AY.2014-15. SUCH RENTAL INCOME RECEIPT DECLARATION, AS PER INCO ME TAX ACT PROVISIONS WOULD COME TO BE SHOWN ONLY BY THE VERIT ABLE 'OWNERS' OF IMMOVABLE PROPERTY A 'TERM' SPECIFICALLY 'DEFINED' UNDER SAID ACT. FURTHER THE TDS FORM 26 AS STATEMENT DOWNLOADED FRO M TRACES SITE AGAINST HIS PAN - ACVPA 4441Q SHOWS RECEIPT OF RENT AL INCOMES FROM PRIDE INDIA MANSIONS (P). LTD. FOR THE AY 201-15. ALL THE ABOVE DOCUMENTS / INFORMATION GO TO PROVE T HAT HE IS DE-FACTO 'OWNER' OF HIS PROPERTY WHO IS STILL IN 'PHYSICAL O CCUPATION' OF THE SAID PROPERTY BEYOND DOUBT. IN THE LIGHT OF ABOVE FOREGOING, SUBMISSIONS / EXPL ANATIONS, BEFORE THE HON'BLE, IT IS EARNESTLY PRAYED BY THE ASSESSEE VEN DOR, IN EQUITY AND FAIR JUSTICE OF LAW, TO KINDLY CONSIDER CANCELLING THE ASSESSMENT ORDER AS BAD AND VOID IN LAW. 4. THOUGH THE ASSESSEE HAS TAKEN 21 GROUNDS IN APPE AL THEY ALL RELATE 'TO ONE ISSUE I.E. ASSESSMENT OF CAPITAL GAI NS ON ACCOUNT OF TRANSFER OF PROPERTY SITUATED AT ROAD NO.4, BANJARA HILLS, HYDERABAD VIDE DOCUMENT DATED 29/04/2009. THE BASIC CONTENTIO N OF THE ASSESSEE IS THAT THE REGISTRATION DOCUMENT CANNOT B E TAKEN AS CONCLUSIVE PROOF TO HOLD THAT THERE IS A TRANSFER R ESULTING IN CAPITAL GAINS. THE CONTENTION OF THE' ASSESSEE IS THAT THE PRECEDING AND SUBSEQUENT EVENTS ALSO SHOULD BE TAKEN INTO ACCOUNT TO ARRIVE AT THE TRUE CHARACTER OF THE TRANSACTION. WITH THE HELP. O F CERTAIN DOCUMENTS ITA NO. 781/HYD/2015 :- 15 -: THE ASSESSEE 'CONTENDED THAT THE TRANSACTION IN QUE STION IS ONLY A DOCUMENT TO ACCOMMODATE TAKING LOAN MORTGAGING THE PROPERTY. FOR THIS PURPOSE THE ASSESSEE IS RELYING ON THE FOLLOWI NG: I. THERE WAS AN. EARLIER TRANSACTION IN THE FORM OF AGREEMENT OF 'SALE CUM GPA WITH MR. VIJAYA BHASKARA REDDY ON 30/11/200 7, AGAINST WHICH THE ASSESSEE HAS RECEIVED SUBSTANTIATIVE AMOU NTS. AS THE ABOVE DEAL GET CANCELLED, THE ASSESSEE HAS TO REPAY THE AMOUNT ALONG WITH INTEREST. THE ASSESSEE CLAIMS THAT THE T RANSACTION 'IN QUESTION WAS ENTERED INTO PARTICULARLY TO REPAY THE AMOUNT TO MR. K. VIJAYA BHASKAR REDDY. II. THE ASSESSEE APPROACHED SOME BROKERS FOR ARRANG ING LOAN AGAINST MORTGAGE OF PROPERTY TO REPAY. THE AMOUNT TO MR. K. VIJAYA BHASKAR REDDY, DURING THE NEGOTIATIONS, THE BROKER SUGGESTE D THAT THE LOAN COULD BE ARRANGED IF A 'REGISTRATION SALE DEED' IS EXECUTED. III. TO SAFE GUARD THE INTEREST OF THE REVENUE AN M OU DATED 16/04/2009 WAS ENTERED INTO SHOWING THE REAL INTENT ION. AFTER THE SALE DEED ALSO AN AGREEMENT OF RECONVEYANCE DATED 1 8/05/2009 WAS ALSO EXECUTED BETWEEN THE SAME PARTIES AS PER M OU. IV. THE ASSESSEE CLAIMS THAT HE IS IN A POSSESSION OF PROPERTY AND RECEIVING THE RENT FROM THE TENANT. THE RENT RECEIV ED IS SHOWN AS HIS INCOME IN HIS, INDIVIDUAL CAPACITY AS INCOME FROM H OUSE PROPERTY WHICH IS BEING ACCEPTED BY THE DEPARTMENT. THE ASSE SSEE FILED COPIES OF THE RETURNS AND A COMPUTATION OF INCOME FOR THE AYS 2013-14 & 2014-15 FOR THIS PURPOSE. 5. 'THE ASSESSMENT ORDER, THE SUBMISSIONS OF THE AS SESSEE DURING THE ASSESSMENT PROCEEDINGS AND THE APPELLATE PROCEEDING S AND THE DOCUMENTS PLACED ON RECORD ARE CONSIDERED. IT IS SE EN THAT THERE IS NO AMBIGUITY AS TO WHETHER THERE IS TRANSFER WITHIN TH E MEANING TO SECTION 2(47) ON ACCOUNT OF EXECUTION OF THE DOCUME NT DATED 29/04/2009. THE DOCUMENT CLEARLY RECORDS THAT THE C ONSIDERATION HAS BEEN RECEIVED AND THE POSSESSION HAS BEEN HANDE D OVER TO THE PURCHASER. THE ASSESSE'S RELIANCE ON EARLIER TRANSA CTION AND APPLICATION OF PART OF CONSIDERATION FOR REPAYMENT OF MONEY TO SRI K VIJAYA BHASKAR REDDY WITH WHOM AN EARLIER AGREEMENT OF SALE / GPA WAS ENTERED INTO IS OF NO .RELEVANCE TO DECIDE THE NATURE OF THE TRANSACTION. THE DISTRIBUTION OF MONEY BETWEEN THE BROKER, ASSESSEE AND THE PURCHASER OF THE PROPERTY FROM THE LOAN RAI SED AGAINST THE PROPERTY IS A SUBSEQUENT ACT WL1LKH WOULD NOT CHANG E CHARACTER OF THE TRANSACTION ALREADY ENTERED INTO BY THE ASSESSE E WITH LITE PURCHASER OF THE PROPERTY. THE FACT THAT ULTIMATE P URCHASER SMT MANJU DEVI TEPARIA HAS ADMITTED ON OATH THAT THE CO NSIDERATION AS RECORDED IN THE DOCUMENT WAS PASSED ON AND THE TRAN SACTION DULY RECORDED IN HER ACCOUNTS AND SHOWN IN THE RETURN OF INCOME FILED BY HER FOR THE AY 2010-11. THE ABOVE DOCUMENTATION DUL Y CONFIRMED BY ITA NO. 781/HYD/2015 :- 16 -: THE ULTIMATE PURCHASER IS OF UTMOST IMPORTANCE TO A RRIVE AT THE TRUE NATURE OF THE TRANSACTION. AS REGARDS OF THE MOU DA TED 29/04/2009, IT IS SEEN THAT THERE IS NO REFERENCE OF ANY SUCH A GREEMENT IN THE REGISTRATION DEED ENTRY INTO ON 29/04/2009. SIMILAR LY THE AGREEMENT OF FREE CONVEYANCE ALLEGEDLY ENTERED INTO ON 18TH M AY, 2009, IS UN- REGISTERED AND CANNOT COMPLETELY RELIED UPON. FURTH ER, THE POSSESSION OF THE PROPERTY AND RECEIVING THE RENT FROM THE TEN ANT WOULD DEPEND ON LATER UNDERSTANDING THIS CANNOT BE A CONSIDERATI ON TO DECIDE WHETHER THE ASSESSEE PROPERTY WAS PASSED ON THROUGH A REGAL DOCUMENT CONFERRING ENFORCEABLE RIGHTS TO THE PURCH ASER. IN VIEW OF THE DISCUSSION AS ABOVE, I HOLD THAT THERE WAS A 'T RANSFER' WITHIN THE MEANING OF SECTION 2(47) OF THE INCOME TAX ACT, 196 1 GIVING RISE TO CAPITAL GAINS AS EVIDENCED BY THE DOCUMENT DATED 29 /04/2009 BETWEEN THE ASSESSEE AND SMT. K. MANJU DEVI TAPARIA . ACCORDINGLY, THE ACTION OF AO IN ASSESSING THE CAPITAL GAINS IS CONFIRMED AND THE ASSESSEE'S APPEAL ON THIS GROUND IS DISMISSED. 3. THIS ASSESSEE HAS PREFERRED HIS TWIN PETITIONS DT. 30-05- 2018 AND 05-03-2019 ALONG WITH THE CORRESPONDING AD DITIONAL EVIDENCE AS WELL. ALL THE SAID PLEADINGS AND ADDITION AL EVIDENCE FURTHER SEEK TO SUBSTANTIATE HIS CASE THAT THE TRANSFER OF THE RELEVANT CAPITAL ASSET BY WAY OF SALE DEED DT.20-04-200 9 IN ISSUE WAS INDEED A SHAM ONE IN LIGHT OF THE ALLEGED MEMORANDUM OF UNDERSTANDING (MOU) DT.20-04-2009 AND R E- CONVEYANCE DEED DT.18-05-2009; RESPECTIVELY. LEARNED COUNSEL INVITED OUR ATTENTION TO ASSESSEES PAPER BOOK(S) FURTHER CONTAINING THE RENTAL AGREEMENT BETWEEN THE ASSESSEE AN D ONE SHRI ABDUL HALEEM BAIG DT.30-04-2012, ICICI BANK STATE MENT, CONFIRMATION COMING FROM M/S.PRIDE INDIA (M) PVT. LTD. ETC REGARDING PAYING OF RENT TO HIM FOR THE PERIOD FROM AP RIL, 2014 TO MARCH, 2015 AFTER DEDUCTING TDS, WRITTEN SUBMISSION S AND INITIATION OF CIVIL/CRIMINAL PROCEEDINGS BEFORE THE L EARNED CHIEF METROPOLITAN MAGISTRATE, NAMPALLY CRIMINAL COURTS AT HYDERABAD BY HIS SON SHRI SYED MD.MUSTAFA ALI VS. RB L BANK AND OTHERS AS WELL AS A CIVIL SUIT IN THE LEARNED CIVI L COURT AT ITA NO. 781/HYD/2015 :- 17 -: HYDERABAD QUA THE VERY ASSET ETC. LEARNED COUNSEL THEREFORE PLEADS IN TUNE WITH THE ASSESSEES STAND THROUGH OUT AS WELL AS IN LIGHT OF THESE LEGAL INTERVENING DEVELOPMENT ASSE SSING OFFICER AS WELL AS THE CIT(A) HAVE ERRED IN LAW AND ON FACTS IN TREATING THE SALE DEED HEREIN DT.20-04-2009 AS A VALID TRANSFER U/S.2(47)(V) OF THE ACT GIVING RISE TO THE IMPUGNED LON G TERM CAPITAL GAIN ADDITION. WE LEGALLY MADE A VERY STRONG ENDEAVOUR TO GET THE IMPUGNED ISSUE REMANDED BACK TO THE ASSESSING OFFICER TO EXAMINE AFRESH IN LIGHT OF THE FINDINGS BY THE FOREGOING JUDICIAL FORUMS (SUPRA). 4. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL PLEADINGS AGAINST AND IN SUPPORT OF THE IMPUGNED ADDIT ION WE FIND NO REASON TO EXPRESS OUR CONCURRENCE WITH THIS TA XPAYERS STAND. THIS IS FOR THE REASON THAT HE HAS ALREADY EXEC UTED THE IMPUGNED REGISTERED SALE DEED; TREATED AS A VALID TRANS FER U/S.2(47)(V) OF THE ACT WHICH IS DEEMED TO HAVE SUPERS EDED ALL THE ORAL AS WELL AS UN-REGISTERED DOCUMENTS BETWEEN THE VENDOR AND THE VENDEE; AS THE CASE MAY BE. AND ALSO THAT WHATEVER ARE THE DOCUMENTS SOUGHT TO BE FILED BY WAY OF ADDITIONAL EVIDENCE, THE SAME ONLY CONTAIN PLEADINGS B EFORE THE RESPECTIVE CIVIL AND CRIMINAL COURTS (SUPRA) WHIC H ARE YET TO ATTAIN FINALITY. WE ARE UNABLE TO TREAT THE ASSESSEE OR H IS FAMILY MEMBERS PLEADINGS OR EVIDENCE THEREIN AS FOR MING THE SOLE BASIS SO AFAR AS ASSESSMENT OF HIS IMPUGNED CAP ITAL GAINS IS CONCERNED. WE WISH TO REFER TO HON'BLE APEX COURTS DECISION IN CIT VS. BALBIR SINGH MAINI (2017) [86 TAXMANN.COM 94](SC) REJECTING THE DEPARTMENTS PELA SEEKING TO INVOKE A TRA NSFER IN ABSENCE OF REGISTERED DOCUMENT, THEREBY SQUARELY COVER ING THE ITA NO. 781/HYD/2015 :- 18 -: ISSUE SO FAR AS THE FACTS HEREIN ARE INVOLVED AS THIS ASSESSEE HAD NOT ONLY APPEARED BEFORE THE REGISTRATION AUTHORITY CLAIMING THEREIN THAT HE HAD INDEED TRANSFERRED PEACE FUL AND VACANT POSSESSION OF THE RELEVANT CAPITAL ASSET BUT ALSO RECEIVED THE ENTIRE CORRESPONDING SALE CONSIDERATION . ANY PRIOR OR SUBSEQUENT DOCUMENT THEREIN TO, ORAL AS WELL AS AN UNREGISTERED ONE OUGHT TO BE TAKEN AS SUPERSEDED BY THE FOREGOING REGISTERED TRANSFER DOCUMENT IN ISSUE. WE THEREFORE QUOTE HON'BLE APEX COURTS YET ANOTHER DECISION CIT VS. K.Y.PILLIAH (1967) [63 ITR 411] (SC) TO EXPRESS OUR CONCURRENCE WITH THE CIT(A)S DETAILED DISCUSSION UNDER CHALLENGE . THE ASSESSEES STRONG ENDEAVOUR TO RELY ON THE FOREGOING L ITIGATION (SUPRA) AS WELL AS EVIDENCE DESERVES TO BE DECLINED IN LIGHT OF HIS REGISTERED SALE DEED DT.20-04-2009. WE ACCORDING LY UPHOLD THE IMPUGNED LONG TERM CAPITAL GAIN ADDITION IN ASSESS EES HANDS. ALL THE ASSESSEES APPLICATIONS/PETITIONS SEEK ING TO ADMIT ADDITIONAL GROUNDS AND EVIDENCE SHALL BE DEEMED TO HAVE BEEN DISPOSED-OF IN LIGHT OF OUR FOREGOING DETAI LED DISCUSSION. 5. WE LASTLY ACKNOWLEDGE THAT ALTHOUGH THE INSTANT LIS IS BEING DECIDED AFTER A PERIOD OF 90 DAYS FROM THE DATE OF HEARING AS PER RULE 34(5) OF THE IT(AT) RULES 1963, THE SAME HOWEVER, DOES NOT APPLY IN THE COVID LOCKDOWN SITUATI ON AS PER HON'BLE APEX COURTS RECENT DIRECTIONS DATED 27-04-2021 IN M.A.NO.665/2021 IN SM(W)C NO.3/2020 IN RE COGNIZANCE FOR EXTENSION OF LIMITATION MAKING IT CLEAR THAT IN SUCH CASES WHERE THE LIMITATION PERIOD (INCLUDING THAT PRESCRIBED FOR INS TITUTION ITA NO. 781/HYD/2015 :- 19 -: AS WELL AS TERMINATION) SHALL STAND EXCLUDED FROM 14 TH OF MARCH, 2021 TILL FURTHER ORDERS IN ABOVE TERMS. 6. THIS ASSESSEES APPEAL IS DISMISSED IN ABOVE TERM S. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND SEPTEMBER, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 02-09-2021 TNMM ITA NO. 781/HYD/2015 :- 20 -: COPY TO : 1.SYED SIKANDER ALI, C/O. SRI S.RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYAS ELEGANCE, 3-6-643, STREET NO.9, HI MAYAT NAGAR, HYDERABAD. 2. INCOME TAX OFFICER, WARD-6(3), HYDERABAD. 3.CIT(APPEALS)-4, HYDERABAD. 4.CIT,HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.