Armatic Engineering Pvt Lt d, Bangalore V. The Deputy Commissioner of Income Tax Circle-1(1)(1), Bangalore

ITA 916/BANG/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 1940 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-02-2021
• Assessment Year: 2012-2013
• Appeal Filed On: 24-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: H V GOWTHAMA
• Keywords: Sale consideration of property below Jantri Value; Capital asset; Fair market value; Capital Gains
• Section: 50C; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K., JUDICIAL MEMBER IT A NO. 916/BANG/2017 ASSESSMENT YEAR: 2012 - 13 ARMATIC ENGINEERING (P) LTD., NO.8, 27 TH CROSS, BSK 2 ND STAGE, BANGALORE 560 070. PAN: AABCA 2132P VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(1)(1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : S HRI H.V. GOWTHAMA, CA RESPONDENT BY : S HRI KANNAN NARAYANAN, JT.C IT(DR)(ITAT ), BENGALURU. DATE OF HEARING : 10 .0 2 .202 1 DATE OF PRONOUNCEMENT : 25 .0 2 .202 1 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF CIT(APPEALS)-1, BANGALORE 27.03.2017 FOR THE ASSESS MENT YEAR 2012-13 ON THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN CONFIRMING THE ORDER PASSED BY THE LEARNED ASSESSIN G OFFICER IN RESPECT OF CAPITAL GAINS ADOPTED ON THE BASIS OF GU IDELINE VALUE AS PER STAMP DUTY AUTHORITIES. 2. THE LEARNED ASSESSING OFFICER OUGHT TO HAVE UNDE RSTOOD THAT THE APPELLANT COMPANY HAS HANDED OVER THE OLD LAND & BUILDING TO THE DEVELOPER DURING FINANCIAL YEAR 200 7-08 RELEVANT TO ASST. YEAR 2008-09. SINCE THE LAND & BUILDING WA S HANDED OVER TO THE DEVELOPER WITH IRREVOCABLE POWER OF ATT ORNEY, AS PER ITA NO.916/BANG/2017 PAGE 2 OF 19 THE JURISDICTION HIGH COURT ORDER, IN THE CASE OF D R. DAYALU AND OTHERS, TRANSFER HAVING TAKEN PLACE AS PER PROVISIO NS OF SEC.2(47)(V), THE CAPITAL GAINS SHOULD HAVE BEEN BR OUGHT TO TAX DURING ASST. YEAR 2008-09 AND NOT DURING ASST.YEAR 2012-13. 3. THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN NOT CONSIDERING THE FACT THAT THE DEVELOPER FOR THE PUR POSE OF THEIR BANK REQUIREMENT, REGISTERED THE SAME LAND, WHICH W AS TAKEN UNDER JOINT DEVELOPMENT AGREEMENT, FOR WHICH THE ST AMP DUTY & REGISTRATION CHARGES WAS PAID BASED ON THE GUIDEL INE VALUE AS PER KARNATAKA STAMP ACT. THEREFORE, THERE CANNOT BE TAX PAYABLE TWICE ON THE SALE OF SAME LAND. 4. THE LEARNED COMMISSIONER OF INCOME TAX OUGHT TO HAVE NOTICED THAT THERE WAS NO CONSIDERATION PAID WHILE REGISTERING THE SALE DEED AND IN THE SALE DEED THERE HAS BEEN A REF ERENCE TO JOINT DEVELOPMENT AGREEMENT. HENCE ONCE THE CAPITAL GAIN TAX IS PAYABLE AT THE TIME OF JOINT DEVELOPMENT AGREEME NT, THERE CANNOT BE AGAIN CAPITAL GAIN TAX AT THE TIME OF EXE CUTING SALE DEED. 5. THE LEARNED COMMISSIONER OF INCOME TAX VAS WRONG IN CONFIRMING THAT THE CAPITAL GAIN ARISES DURING ASST . YEAR 2012-13 BASED ON THE FACT THAT THE SALE DEED WAS REGISTERED WITH THE SUB- REGISTRAR DURING THE YEAR UNDER CONSIDERATION. 6. THE LEARNED ASSESSING OFFICER SHOULD HAVE RE-OPE NED THE ASSESSMENT FOR ASST. YEAR 2008-09 BECAUSE AS PER TH E ORDER OF HON'BLE HIGH COURT OF KARNATAKA IN DR. DAYALU'S CAS E, SINCE IRREVOCABLE POWER OF ATTORNEY TOGETHER WITH THE POS SESSION WAS HANDED OVER TO THE DEVELOPER DURING ASST. YEAR 2008 -09 AND THE APPELLANT SHIFTED THEIR MANUFACTURING UNIT TO A RUR AL PLACE, WHICH IS NEAR HAROHALLI ON KANAKAPURA ROAD, BANGALORE, FO R WHICH THE APPELLANT WAS ELIGIBLE FOR REBATE UNDER SECTION 54G OF INCOME TAX ACT. 7. FOR THE ABOVE AND ANY OTHER GROUNDS THAT MAY BE ADVANCED AT THE TIME OF HEARING, THE APPELLANT PRAYS THAT, A PPEAL BE ALLOWED. 2. THE ASSESSEE IS A PRIVATE LIMITED COMPANY, ENGA GED IN MANUFACTURE OF ENGINEERING PRODUCTS. IT FILED RETUR N OF INCOME DECLARING NET ITA NO.916/BANG/2017 PAGE 3 OF 19 TAXABLE INCOME OF RS.(-)55,39,774 ON 30.09.2012. TH E ASSESSMENT ORDER WAS PASSED BY THE AO WITH A NET TAXABLE INCOME OF R S.3,34,65,142 , WHICH IS ENTIRELY DEEMED CAPITAL GAINS BROUGHT TO TAX BY THE LEARNED ASSESSING OFFICER. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IN ORDER TO EXPLORE THE POSSIBILITY OF COMMERCIAL CONVERSION OF THEIR F ACTORY BUILDING ENTERED INTO A DEVELOPMENT AGREEMENT DATED 24.10.2007 WITH A DEVELOPER BY NAME, PARK INC., FOR DEMOLISHING & CONSTRUCTING A C OMMERCIAL COMPLEX TO BE RENTED OUT JOINTLY BY THE DEVELOPER AS WELL AS T HE ASSESSEE COMPANY. THOUGH REGISTERED JDA WAS ENTERED WITH M/S. PARK IN C. ON 24.10.2007, THE SAID PARK INC. GOT THE PLAN APPROVED FOR DEMOLI SHING OF OLD BUILDING AND CONSTRUCTING COMMERCIAL COMPLEX ONLY DURING SEPT.20 08. THEREFORE, AS PER PROVISIONS OFSEC.2(47)(V), THE JDA HAS COME INT O EFFECT IN SEPT.2008. AS PER THE JURISDICTIONAL HIGH COURT ORDER OF DR. D AYALU THE CAPITAL GAINS IN RESPECT OF THE PROPERTY GIVEN UNDER JDA SHOULD HAVE BEEN CONSIDERED AS TAXABLE DURING ASST. YEAR 2009-10. 4. HOWEVER, THE ASSESSEE COMPANY OFFERED THE CAPITA L GAINS DURING ASST. YEAR 2012-13 UNDER THE BONAFIDE UNDERSTANDING THAT DEVELOPED PROPERTY WAS PHYSICALLY HANDED OVER TO THE ASSESSEE DURING FINANCIAL YEAR 2011-12 ONLY. AS PER THE JURISDICTIONAL HIGH COURT ORDER, THE CAPITAL GAINS WAS REQUIRED TO BE TAXED DURING THE ASST. YEAR 2008 -09. 5. FURTHER, THE ASSESSEE SUBMITTED THAT AS APEX COU RT'S ORDER, SINCE WHILE COMPLETING ANY ASSESSMENT, THE BENEFICIAL ADV ANTAGE OF THE ASSESSEE SHOULD HAVE BEEN CONSIDERED ON PRIORITY. N OW, WHILE TAXING CAPITAL GAINS DURING ASST. YEAR 2012-13, IT IS QUIT E PREJUDICIAL TO THE INTEREST OF THE ASSESSEE BECAUSE GUIDELINE VALUE OF THE PROPERTY UNDER CONSIDERATION IS SUBSTANTIALLY MORE THAN DEEMED CON SIDERATION SAID TO HAVE BEEN PASSED ON TO THE ASSESSEE. THE DEVELOPER HAD A LREADY REGISTERED ITA NO.916/BANG/2017 PAGE 4 OF 19 JOINT DEVELOPMENT AGREEMENT (JDA) & SINCE THE INTEN TION OF THE ASSESSEE & DEVELOPER IS ONLY TO HOLD LAND & BUILDING AND SHA RE THE RENT RECEIVED EQUALLY, THERE WAS NO NEED TO REGISTER ANY SALE DEE D. BUT THE DEVELOPER IN ORDER TO GET HIS NAME RECORDED WITH THE SUB-REGISTR AR'S RECORD, REGISTERED THE SALE DEED ON 18.07.2011, WHEREIN THE VALUATION AS PER GUIDELINE ISSUED BY GOVERNMENT OF KARNATAKA IS RS.3,50,90,000 /- AND THE SAME HAS BEEN ADOPTED FOR THE PURPOSE OF CAPITAL GAIN. BY VI RTUE OF PROVISIONS OF SEC.2(47)(V) READ WITH TRANSFER OF PROPERTIES ACT 1 953, THE JOINT DEVELOPER HAS ALREADY BECOME PART OWNER ON THE DATE OF EXECUT ION OF JOINT DEVELOPMENT AGREEMENT. 6. THEREFORE, THE ASSESSEE SUBMITTED THAT THE CAPI TAL GAINS SHOULD HAVE BEEN TAXED IN THE YEAR OF COMMENCEMENT OF CONS TRUCTION AFTER REGISTERING THE JOINT DEVELOPMENT AGREEMENT. THE GU IDELINE VALUE PREVAILING AS ON THAT DATE IS MUCH LOWER THAN THE V ALUE ADOPTED BY THE ASSESSEE FOR DETERMINING THE CAPITAL GAIN. THE ASSE SSEE OBJECTED TO THE ASSESSING OFFICER'S ADOPTING THE HIGHER VALUE AS PE R GUIDELINES ASSESSED BY THE STAMP VALUATION OFFICER. THE ASSESSEE CONTEN DED THAT ON RECEIPT OF THE OBJECTION FROM THE ASSESSEE, THE AO SHOULD HAVE REFERRED THE MATTER TO THE VALUATION CELL TO DETERMINE FAIR MARKET VALUE O F THE PROPERTY AS ON DATE OF REGISTRATION OF SALE DEED. THIS IS WITHOUT PREJU DICE OF THE CONTENTION TO THE ASSESSEE THAT THAT THE CAPITAL GAINS SHOULD HAV E BEEN TAXED IN THE YEAR OF SANCTION OF PLAN UNDER JOINT DEVELOPMENT AG REEMENT. HOWEVER, THE AO DID NOT REFER THE MATTER TO THE VALUATION OF FICER. 7. FURTHER, THE ASSESSEE SUBMITTED THAT IT WAS ENTI TLED FOR DEDUCTION U/S.54G OF THE ACT, IN RESPECT OF THE REINVESTMENT IN THE FACTORY LAND & BUILDING NEAR HAROHALLY, WHICH THE ASSESSEE IS RIGH TLY ENTITLED TO, WHICH WAS NOT ALLOWED BY THE AO. ITA NO.916/BANG/2017 PAGE 5 OF 19 8. AS PER PROVISIONS OF SEC.71(2) OF THE ACT, THE LOSS OFFERED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION I.E. A Y 2012-13 OF RS.55,27,132/- WHICH HAS BEEN DETERMINED BY THE AO WITH MINOR VARIATION, SHOULD HAVE BEEN REDUCED FROM CAPITAL GAINS AND ONL Y NET CAPITAL GAINS SHOULD HAVE BEEN BROUGHT TO TAX. IT WAS CONTENDED T HAT THE AO HAS NOT CONSIDERED THE AMOUNT OF LOSS TO BE REDUCED FROM TH E CAPITAL GAINS AMOUNT. AGGRIEVED BY THE ABOVE VARIATION, THE ASSE SSEE WENT IN APPEAL BEFORE CIT(APPEALS). 9. THE CIT(APPEALS) OBSERVED THAT THE ASSESSEE HAS GOT REGISTERED THE SALE DEED ON 18.7.2011 RELEVANT TO FY 2011-12 (AY 2 012-13), AS SUCH CAPITAL GAIN HAS TO BE BROUGHT TO TAX IN THE YEAR O F REGISTRATION OF SALE DEED. 10. FURTHER, REGARDING THE AOS FAILURE TO REFER VA LUATION OF CAPITAL ASSET TO THE VALUATION OFFICER, IT WAS OBSERVED BY THE CI T(A) THAT THE AO IS CORRECT IN FOLLOWING THE MARKET VALUE AS DETERMINED BY STAMP VALUATION AUTHORITY U/S. 50C OF THE ACT. REGARDING THE DENI AL OF CLAIM U/S. 54G, THE CIT(A) OBSERVED THAT INVESTMENT IS REQUIRED TO BE D ONE WITHIN 3 YEARS FROM THE DATE OF DEEMED SALE OF FACTORY AND SHIFTING OF FACTORY AND IN THIS CASE, THE CAPITAL GAIN HAS ARISEN DUE TO REGISTRATION OF SALE DEED ON 18.7.2011, AS SUCH THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U /S. 54G. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 11. BEFORE US, THE CONTENTION OF THE LD. AR IS THAT THE ASSESSEE HAD A LAND & FACTORY BUILDING AT BSK II STAGE, BANGALORE. IT ENTERED INTO A JOINT DEVELOPMENT AGREEMENT ON 24.10.2007 IN RESPECT OF T HE LAND & FACTORY BUILDING WITH ONE, M/S. PARK INC. FOR DEMOLISHING T HE LAND & BUILDING AND CONSTRUCTING THE COMMERCIAL COMPLEX ON A JOINT DEVE LOPMENT BASIS. AS PER JOINT DEVELOPMENT AGREEMENT, THE DEVELOPER IS ALLOW ED TO HAVE 50% OF THE LAND AND ON THE BALANCE 50% OF THE LAND A COMME RCIAL COMPLEX IS ITA NO.916/BANG/2017 PAGE 6 OF 19 CONSTRUCTED TO BE HANDED OVER TO THE ASSE COMPANY A ND AS PER THE FURTHER UNDERSTANDING, BOTH DEVELOPER AND APPELLANT WILL RE NT OUT THE CONSTRUCTED PROPERTY ON RENTAL BASIS. DUE TO VARIOUS CONSTRAINT S, THE DEVELOPER COULD ONLY GET THE PLAN APPROVED FOR DEMOLISHING THE OLD BUILDING AND CONSTRUCTING THE COMMERCIAL COMPLEX DURING SEPTEMBE R 2008. THEREFORE, AS PER PROVISIONS OF SEC.2(47)(V), THE JOINT DEVELO PMENT AGREEMENT HAS COME INTO EFFECT IN SEPTEMBER 2008. IF AT ALL ANY C APITAL GAINS IS REQUIRED TO BE TAXED, AS PER THE JURISDICTION HIGH COURT ORDER IN THE CASE OF CIT V. DR. DR. T.K. DAYALU, (2011) 202 TAXMAN 531 (KAR) , THE CAPITAL GAINS WOULD ARISE ONLY DURING ASST. YEAR 2009-10. THE PROPERTY, AFTER DEVELOPMENT, WAS HANDED OVER TO THE ASSESSEE COMPANY DURING FINANCIA L YEAR 2011-12. THE ASSESSEE WHILE SUBMITTING THE RETURN OF INCOME, HAD INCLUDED 50% OF THE COST OF CONSTRUCTION OF THE ASSESSEES PORTION AS S ALE CONSIDERATION, BASED ON THAT FACT, DEVELOPED PROPERTY WAS HANDED OVER TO THE ASSESSEE DURING THE FINANCIAL YEAR UNDER CONSIDERATION. HOWEVER, TH E LEGAL POSITION OF TAXING THE CAPITAL GAINS AS PER PROVISIONS OF SECTION 2(47 )(V) AND THE JURISDICTION HIGH COURT ORDER, THE CAPITAL GAINS SHOULD HAVE BEE N BROUGHT TO TAX DURING ASST. YEAR 2009-10, BASED ON THE GUIDELINE VALUE PR EVAILING AT THAT POINT OF TIME AND NOT AT THE TIME OF TAKING POSSESSION OF TH E PROPERTY. 12. THE LD. AR RELIED ON THE FOLLOWING JUDGMENTS:- (1) ITO V. SHAFIQ MOHAMMED SHAH, 82 TAXMANN.COM 6 (CHENNAI TRIB.) (2) PR. CIT V. DR. AMRIK SINGH BASRA, 82 TAXMANN.COM 18 6 (P&H) (3) PR. CIT V. DR. CHARANJIT SINGH, 85 TAXMANN.COM 144 (P&H) (4) HUSSAN LAL PURI V. ITO, 38 TAXMANN.COM 7 (CHANDIGAR H TRIB) ITA NO.916/BANG/2017 PAGE 7 OF 19 (5) CIT V. BHARAT GENERAL REINSURANCE CO. LTD., 81 ITR 303 (DEL) 13. THE LD. DR SUBMITTED THAT THOUGH JDA WAS ENTERE D INTO BY THE ASSESSEE ON 24.10.2007, THE CONDITION LAID DOWN IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT WAS NOT SATISFIED IN THE A Y 2008-09 AND WILLINGNESS TO POSTPONE THE CONTRACT HAS NOT BEEN M ADE BY THE DEVELOPER AND ONLY ON FULFILMENT OF THE CONDITION LAID DOWN I N SECTION 53A OF THE TRANSFER OF PROPERTY ACT, THE CAPITAL GAIN HAS TO B E CHARGED. HE SUBMITTED THAT IN THIS CASE THE CONDITION LAID DOWN IN SECTIO N 53A OF THE TRANSFER OF PROPERTY ACT WAS COMPLIED ONLY IN AY 2012-13, AS S UCH CAPITAL GAIN WAS RIGHTLY BROUGHT TO TAX IN THIS ASSESSMENT YEAR ONLY . 14. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE, JDA WAS ENTERED INTO BY THE ASSESSEE WITH THE DEVELOPER, M/S. PARC INC. ON 24.10.2007. AT THE SAME TIME, TH E ASSESSEE HAS GIVEN A GENERAL POWER OF ATTORNEY (GPA) TO THE BUILDER/DEVE LOPER. NOW THE QUESTION BEFORE US IS WHETHER THE CAPITAL GAIN IS T O BE CHARGED IN AY 2008- 09 ON ENTERING INTO JDA/GPA OR IN AY 2012-13 WHEN T HE ASSESSEE GOT HIS SHARE OF CONSTRUCTED AREA. FOR THIS PURPOSE, WE HA VE TO GO THROUGH THE CONTENTS OF THE JDA. AS PER JDA, THE ASSESSEE PERM ITTED THE DEVELOPER TO ENTER THE SCHEDULE PROPERTY AND TO COMMENCE AND COM PLETE DEVELOPMENT OF SCHEDULE PROPERTY BY CONSTRUCTING COMMERCIAL BUI LDING AS PER SANCTIONED PLAN. AS PER CLAUSE 2.2 OF JDA, THIS PERMISSION CA NNOT BE CONSTRUED AS DELIVERY OF POSSESSION U/S. 53A OF THE TRANSFER OF PROPERTY ACT R.W.S. 2(47)(V) OF THE I.T. ACT. AS PER CLAUSE 7.1.1, THE ASSESSEE IS ENTITLED FOR A SUM OF RS.75 LAKHS INTEREST FREE REFUNDABLE DEPOSIT WHICH HAS BEEN PAID BY THE DEVELOPER TO THE ASSESSEE AS FOLLOWS:- RS.40,00,000 BY CHEQUE BEARING NO.354583 DATED 27.8 .2007 RS.35,00,000 BY CHEQUE BEARING NO.561730 DATED 12.7 .2007 BOTH CHEQUES ON HDFC BANK. ITA NO.916/BANG/2017 PAGE 8 OF 19 15. AS PER CLAUSE 8.1, COMMENCEMENT OF CONSTRUCTION SHOULD START NOT LATER THAN 60 DAYS FROM THE DATE OF EXECUTION OF AL LOCATION AGREEMENT. AS PER CLAUSE 8.2, THE CONSTRUCTION SHOULD BE COMPLETE D WITHIN 24 MONTHS FROM THE DATE OF ISSUE OF COMMENCEMENT CERTIFICATE BY BBMP. HOWEVER, AS PER CLAUSE 8.4, THE GRACE PERIOD TO START CONSTR UCTION HAS BEEN GIVEN AS 3 MONTHS. 16. THERE IS A GPA DATED 24.10.2007 IN FAVOUR OF TH E DEVELOPER WHEREIN AS PER CLAUSE 8 THE ASSESSEE HAS GIVEN THE AUTHORIT Y TO APPEAR BEFORE VARIOUS AUTHORITIES SO AS TO GET THE REQUIRED PERMI SSION FOR CONSTRUCTION. BY CLAUSE 9 OF GPA, ASSESSEE HAS GIVEN RIGHT TO THE DE VELOPER TO SELL OR DISPOSE BY WAY OF SALE, LEASE, MORTGAGE, EXCHANGE O R OTHERWISE 50% UNDIVIDED SHARE, RIGHT, TITLE, INTEREST AND OWNERSH IP IN THE LAND IN THE SCHEDULE PROPERTY OR SUCH PROPORTIONAL UNDIVIDED SH ARE PROPORTIONATE TO THE SUPER BUILT UP AREA THAT WILL BE ALLOTTED TO THE SH ARE OF THE AFORESAID DEVELOPERS IN ACCORDANCE WITH AGREEMENT DATED 24.10 .2007. THE OTHER CLAUSES OF THE GPA AUTHORIZES THE DEVELOPER TO DO T HE FOLLOWING:- 10. TO RECEIVED ADVANCES AND BALANCE OF SALE PRIC E FROM ANY PURCHASER/S AND ISSUE PROPER AND VALID RECEIPTS AND DISCHARGES THEREFOR IN RESPECT OF UNDIVIDED SHARE IN THE SCHED ULE PROPERTY. 13. TO DELIVER POSSESSION OF THE PORTION/S OF THE S CHEDULE PROPERTY; WITH OR WITHOUT BUILDING TO THE NOMINEE/S AND ASSIG NEE/S O THE DEVELOPER AND/OR PURCHASERS OF LAND SHARE AND/OR BU ILT-UP AREAS TO THE EXTENT REFERRED TO IN CLAUSE 9. 14. TO SIGN AND EXECUTE NECESSARY DOCUMENTS, DECLA RATIONS, AFFIDAVITS, UNDERTAKINGS AND OTHER DOCUMENTS REQUIR ED FOR COMPLETION OF SALE AND/OR TRANSFER AND/OR ALIENATIO N OF SCHEDULE PROPERTY TO THE EXTENT REFERRED TO IN CLAUSE 9 OR I N RESPECT OF ANY MATTER RELATING TO SCHEDULE PROPERTY AND TO DO ALL OTHER ITA NO.916/BANG/2017 PAGE 9 OF 19 ACTS, DEEDS AND THINGS THAT MAY BE NECESSARY FOR AC HIEVING THE PURPOSES MENTIONED THEREIN. 16. TO SIGN AND EXECUTE NECESSARY DOCUMENTS, FORM S, AFFIDAVITS AND DECLARATIONS THAT MAY BE REQUIRED FOR TRANSFER OF KHATAS AND MUTATION IN THE NAMES OF THE BUYERS OF THE LAND SHA RE AND/OR BUILT UP AREAS IN THE SCHEDULE PROPERTY AND TAKE SU CH STEPS AS ARE REQUIRED FOR SUCH TRANSFER OR MUTATION IN THE N AME/S OF THE TRANSFEREE/S IN RESPECT OF THE AREAS REFERRED TO IN CLAUSE 9 17. TO NEGOTIATE ON TERMS FOR AND GRANT LEASE, SUB- LEASE OR UNDER LEASE OR PART WITH POSSESSION OF UNDIVIDED SHARE RI GHT, TITLE AND INTEREST IN THE PROPERTY DESCRIBED IN THE SCHEDULE TO THE EXTENT REFERRED TO IN CLAUSE 9 WITH OR WITHOUT BUILT-UP AR EAS IN WHO OR IN PORTIONS OR IN ANY OTHER MANNER ON SUCH TERMS AN D CONDITIONS AS DEVELOPER DEEMS FIT IN FAVOUR OF ANY TRANSFEREE/S OR IN FAVOUR OF ITS NOMINEE/S OR ASSIGNEE/S. 18. TO RECEIVE RENTS, PREMIUMS, ADVANCES, EARNEST MONIES, DEPOSITS AND OTHER SUMS FROM THE TRANSFEREE/S AND EXECUTE AG REEMENT/S TO LEASE AND OR LEASE DEED/S AND OTHER CONVEYANCES IN FAVOUR OF SUCH PERSONS AND ISSUE PROPER AND VALID RECEIPTS AN D DISCHARGES THEREFOR IN RESPECT OF SCHEDULE PROPERTY TO THE EXTENT REFERRED TO IN CLAUSE 9. 20. TO PRESENT ANY AGREEMENT/S, LEASE DEEDS OR OTH ER CONVEYANCES IN RESPECT OF THE SCHEDULE PROPERTY OR PORTIONS THEREOF FOR REGISTRATION TO THE EXTENT REFERRED TO IN CLAUSE 9, ADMIT EXECUTION AND RECEIPT OF CONSIDERATION BEFORE THE SUB- REGISTRAR HAVING AUTHORITY FOR AND TO GET THE SAME REGISTERED IN THE MANNER REQUIRED UNDER LAW AND TO DO ALL ACTS, D EEDS AND THINGS WHICH OUR SAID ATTORNEY SHALL CONSIDER NECES SARY BY WAY OF LEASE OR OTHERWISE TO THE SAID TRANSFEREE/S OR I N ANY OTHER MANNER AS OUR ATTORNEYS MAY DEEM IT FIT AS FULLY AN D EFFECTUALLY IN ALL RESPECTS AS WE COULD DO THE SAME OURSELVES. 21. TO REALISE RENTS, ISSUES AND OTHER PROFITS AND ACCEPT SURRENDER OF LEASES AND TENANCIES AND TO EVICT ALL TRESPASSER S AND UNAUTHORISED OCCUPANTS AND TENANTS OF THE AFORESAID SHARE REFERRED TO IN CLAUSE 9 IN RESPECT OF THE SCHEDULE PROPERTY. ITA NO.916/BANG/2017 PAGE 10 OF 19 22. TO SIGN AND GIVE NOTICE/S TO TENANTS/ LESSEE/S AND OTHER OCCUPANTS OF THE SCHEDULE PROPERTY IN THE AFORESAID PART OF THE SCHEDULE PROPERTY REFERRED TO IN PARA-9 WITH OR WIT HOUT BUILDING THEREOF ENFORCING THE RIGHTS UNDER LEASE D EEDS IF ANY AND/OR ENFORCE RIGHTS OF A LESSOR UNDER TRANSFER OF PROPERTY ACT OR UNDER ANY OTHER RENT CONTROL AND OTHER ENACT MENTS INCLUDING FOR HIS EVICTION AND TO REPAIR OR ABATE A NY NUISANCE AND ENFORCE ALL REMEDIES OPEN IN RESPECT THERETO. 23. TO RAISE, BORROW FUNDS FROM BANKS, BANKERS, FIN ANCIAL INSTITUTIONS AND OTHER PUBLIC BY CREATING EQUITABLE OR OTHER MORTGAGES ON SECURITY OF THE SAID 50% UNDIVIDED SHA RE IN THE SCHEDULE PROPERTY REFERRED TO IN PARA-9 ABOVE WITH OR WITHOUT BUILT AREAS THEREIN AND DEVELOPMENT RIGHTS IN THE A GREEMENT DATED 24/10/2007, SIGN AND EXECUTE REQUISITE MORTGA GE DEEDS AND OTHER CONVEYANCES REQUIRED THEREFOR ON SUCH TER MS AND CONDITIONS AS OUR ATTORNEY DEEMS IT FIT AND GET THE SAME REGISTERED BEFORE THE JURISDICTIONAL SUB-REGISTRAR IN THE MANNER PRESCRIBED UNDER LAW, AND FOR THE SAID PURPOSES SIG N AND EXECUTE NECESSARY FORMS, DECLARATIONS AND AFFIDAVIT S ETC., BUT WITHOUT INVOLVING US OR OUR SUCCESSORS OR BALANCE S HARE IN THE LAND AND BUILDING IN THE SCHEDULE PROPERTY IN ANY L IABILITY IN RESPECT OF THE SAID BORROWING, MORTGAGES OR OTHER COMMITMENTS. 24. TO SIGN AND EXECUTE ANY RECTIFICATION DEEDS, MO DIFICATION DEEDS AND CONFIRMATION DEEDS AND OTHER DOCUMENTS IN RELATION TO THE DOCUMENTS EXECUTED BY OUR DEVELOPER S IN FAVOUR OF THE TRANSFEREES OF THE DEVELOPERS' CONSTRUCTED AREA AND GET THE SAME REGISTERED IN THE MANNER REQUIRED UNDER LAW. 25. TO DELIVER POSSESSION OF DEVELOPERS' CONSTRUCTE D AREA ALONG WITH PROPORTIONATE SHARE IN THE LAND IN SCHEDULE PROPERTY IN WHOLE OR IN PORTIONS OR IN THE FORM OF UNDIVIDED SHARES IN FAVOUR OF THE PURCHASERS/ TRANSFEREES/ LE SSEES THERETO. 26. TO SIGN AND EXECUTE ANY DEEDS OF CANCELLATION OF AGREEMENTS AND OTHER DOCUMENTS EXECUTED BY THE DEVELOPERS IN R ESPECT OF HIS SHARE OF DEVELOPERS' CONSTRUCTED AREA AND HIS ITA NO.916/BANG/2017 PAGE 11 OF 19 SHARE OF LAND IN SCHEDULE PROPERTY AND GET THE SAME REGISTERED IN THE MANNER REQUIRED UNDER LAW. 17. THUS, WHEN WE READ JDA ALONG WITH GPA, IT SHOW S THAT ASSESSEE HAD CLEARLY PARTED WITH THE OWNERSHIP OF DEVELOPER S SHARE OF PROPERTY IN FAVOUR OF DEVELOPER, M/S. PARK INC. VIDE THESE CONV EYANCE. A COMBINED READING SUGGESTS THAT ASSESSEE DELIVERED NOT ONLY T HE LEGAL POSSESSION OF THE PROPERTY, BUT ALSO THE TOTAL CONTROL AND POSSES SION OF THE PROPERTY IN FAVOUR OF DEVELOPER. GPA HAS GRANTED THE DEVELOPER POSSESSIVE RIGHT BY THE ASSESSEE. FROM THE ACT OF GIVING CONTROL AND M ANAGEMENT OF THE PROPERTY IN FAVOUR OF THE DEVELOPER WHICH IS CLEARL Y MENTIONED IN THE ABOVE CLAUSES OF GPA, IT IS QUITE CLEAR THAT THE GPA IS N OT A MERE LICENCE TO ENTER THE LAND FOR DOING SOME PRELIMINARY ACT IN RELATION TO THE DEVELOPMENT WORK, BUT THE POWER OF CONTROL OF THE LAND WHICH IS AN IN CIDENCE OF POSSESSION HAS BEEN CONVEYED TO THE DEVELOPER UNDER THE GPA. THE DEVELOPER HAVING DULY REGISTERED GPA CANNOT BE REGARDED AS MERELY A LICENSEE OR AN AGENT SUBJECT TO THE CONTROL OF THE OWNER. HIS POSSESSIO N CANNOT BE CHARACTERIZED AS PRECARIOUS OR TENTATIVE IN NATURE. THE FACT THAT THE GPA AND JDA BEING REGISTERED IS AN EXPRESS DECLARATION TO THE EFFECT FOUND IN THE GPA ITSELF IS NOT WITHOUT SIGNIFICANCE. THE DE VELOPERS RIGHTS UNDER GPA SHOWS THAT THE DEVELOPER HAS BETTER CONTROL AND POSSESSION IN THE SAID PROPERTY WHICH ON A HIGHER PEDESTAL THAN A MER E DEVELOPER WHO APPORTIONS BUILT-UP AREA WITH THE LAND OWNER. THE DEVELOPER HAS BETTER RIGHT TO ENTER THE LAND AND CONTROL THE SAME WHICH HE DERIVED FROM THE GPA. THE LAND OWNER MAY HAVE A RIGHT TO INSPECT TH E LAND TO OVERSEE THE CONSTRUCTION WHICH IS ONLY TO THE LIMITED EXTENT, C OMPARED TO THE DEVELOPERS RIGHTS. EXCLUSIVE POSSESSION IS NOT NE CESSARY FOR THE PURPOSE OF SATISFYING THE CONDITION LAID DOWN IN SECTION 2( 47)(V) OF THE ACT. IN OUR OPINION, THE REGISTERED GPA EXECUTED BY THE ASSESSE E ALONG WITH JDA IN FAVOUR OF THE DEVELOPER MUST BE REGARDED AS A TRANS ACTION IN THE EYE OF LAW, WHICH ALLOWS NOT ONLY POSSESSION OF THE PROPER TY, BUT ALSO VARIOUS ITA NO.916/BANG/2017 PAGE 12 OF 19 RIGHTS AS MENTIONED ABOVE AND IT COULD BE RIGHTLY C ONSIDERED AS PART PERFORMANCE OF THE CONTRACT AS PER SECTION 53A UNDE R THE TRANSFER OF PROPERTY ACT. IN OTHER WORDS, JDA ALONG WITH GPA W HICH GRANTS TO THE DEVELOPER OVERALL CONTROL OF THE PROPERTY IN HIS HA NDS, EVEN IF THAT MEANS NO EXCLUSIVE POSSESSION BY THE DEVELOPER, STILL IT COULD BE CONSTRUED AS POSSESSION IN TERMS OF CLAUSE (V) OF SECTION 2(47 ) OF THE I.T. ACT. 18. IN THE INSTANT CASE, HAVING REGARD TO THE TERMS OF THE JDA AND GPA EXECUTED ON 24.10.2007, IT COULD BE REGARDED AS TR ANSACTION INVOLVING THE ALLOWING OF THE POSSESSION OF LAND TO BE TAKEN IN PART PERFORMANCE OF THE CONTRACT AND THEREFORE, THE TRANSFER WITHIN THE M EANING OF SECTION 2(47)(V) OF THE ACT MUST BE DEEMED TO HAVE TAKEN PLACE ON TH E DATE OF EXECUTION OF JDA ALONG WITH GPA ON 24.10.2007. SINCE THE JDA A LONG WITH GPA WAS EXECUTED ON 24.10.2007 RELEVANT TO FY 2007-08, CAPI TAL GAIN MUST HAVE ARISEN IN THE RELEVANT AY 2008-09, AND NOT IN THE A Y 2012-13. 19. THUS, IN OUR OPINION, THE ASSESSEE BEING THE OW NER OF THE PROPERTY ENTERED INTO JDA ALONG WITH GPA WITH THE DEVELOPER IN TERMS OF WHICH THE DEVELOPER WAS GIVEN THE POSSESSION OF THE PROPERTY ALONG WITH BUNDLE OF RIGHTS AND ASSESSEE IS ENTITLED TO RECEIVE 50% AREA OF SUPER BUILT-UP AREA IN THE BUILDING; 50% OF THE CAR PARKING AREAS IN BASEM ENT FLOOR AND GROUND FLOOR AND OTHER LEVELS WHEREVER THEY ARE PROVIDED I N SCHEDULE PROPERTY; 50% OF THE TERRACE RIGHTS; AND 50% OF ALL THE BENEF ITS ARISING OUT OF THE DEVELOPMENT AND BUILT AS PER THE SPECIFICATIONS DET AILED IN THE ANNEXURE ATTACHED THERETO. THE ASSESSEE WAS LIABLE TO PAY CAPITAL GAINS TAX IN THE YEAR IN WHICH THE SAID JDA ALONG WITH GPA WAS SIGNE D AND NOT AFTERWARDS. THIS VIEW OF OURS IS FORTIFIED BY THE ORDER OF TRIB UNAL IN HUSSAN LAL PURI V. ITO, 38 TAXMANN.COM 7 (CHANDIGARH TRIB.). 20. FURTHER IN THE CASE OF CIT V. DR. T.K. DAYALU, 202 TAXMAN 531 (KARN), THE HONBLE HIGH COURT OF KARNATAKA BASED ON THE JU DGMENT OF THE ITA NO.916/BANG/2017 PAGE 13 OF 19 HONBLE BOMBAY HIGH COURT IN THE CASE OF CHATURBHUJ DWARKADAS KAPADIA V. CIT (2003) 260 ITR 491 (BOM) HELD AS FOLLOWS:- HAVING REGARD TO THE FINDING OF FACT THAT POSSESSI ON OF THE PROPERTY HAS BEEN HANDED OVER ON 30 TH MAY, 1996, AND CASH PART OF THE AGREEMENT ALSO RECEIVED ON THAT DATE, APPROP RIATE ASSESSMENT YEAR IN WHICH THE CAPITAL GAIN IS TO BE TAXED IS 1997- 98 AND NOT IN THE YEAR WHEN THE ENTIRE PROJECT WAS COMPLETED IN 2003-04. 21. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CA SE OF DR. T.K. DAYALU (SUPRA) FURTHER HELD AS FOLLOWS:- THE HON'BLE SUPREME COURT (SIC) HAS REFERRED TO TH E CONTENTION OF THE ASSESSEE AND THE EARLIER JUDGMENTS OF THE SU PREME COURT CITED BY HIM AND HELD THAT THOSE JUDGMENTS WERE PRI OR TO INTRODUCTION OF THE CONCEPT OF DEEMED TRANSFER UNDE R SECTION 2(47)(V) OF THE ACT AND IF THE CONTRACT, READ AS A WHOLE, INDICATES PASSING OF OR TRANSFERRING OF COMPLETE CONTROL OVER THE PROPERTY IN FAVOUR OF THE DEVELOPER, THEN THE DATE OF THE CONTR ACT WOULD BE RELEVANT TO DECIDE THE YEAR OF CHARGEABILITY. THERE FORE, IN THESE APPEALS, WE HOLD THAT CAPITAL GAIN IS TO BE TAXED I N THE YEAR 1997- 98 AND NOT IN THE YEAR 2003-04 AS CONTENDED BY THE ASSESSEE. ACCORDINGLY, WE ANSWER THE SUBSTANTIAL QUESTIONS OF LAW FRAMED IN ITA NO.3209/2005 IN FAVOUR OF THE REVENUE AND SU BSTANTIAL QUESTIONS OF LAW FRAMED IN ITA NO.3105/2005 AGAINST THE ASSESSEE 22. THE HON'BLE BOMBAY HIGH COURT IN CHATURBHUJ DWARKADAS KAPADIA V. CIT [2003] 260 ITR 491/ 129 TAXMAN 497 HELD THAT THE DA TE RELEVANT FOR ATTRACTING CAPITAL GAIN HAVING REGARD TO THE DEFINITION UNDER SECTION 2(47) OF THE ACT IS THE DATE ON WHICH POSSE SSION IS HANDED OVER BY THE DEVELOPER AND HAS OBSERVED AS FOLLOWS:- UNDER SECTION 2(47)(V), ANY TRANSACTION INVOLVING ALLOWING OF POSSESSION TO BE TAKEN OVER OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT WOULD C OME WITHIN THE AMBIT OF SECTION 2(47)(V). THAT, IN ORDE R TO ITA NO.916/BANG/2017 PAGE 14 OF 19 ATTRACT SECTION 53A, THE FOLLOWING CONDITIONS NEED TO BE FULFILLED. THERE SHOULD BE A CONTRACT FOR CONSIDERA TION; IT SHOULD BE IN WRITING; IT SHOULD BE SIGNED BY THE TR ANSFEROR; IT SHOULD PERTAIN TO TRANSFER OF IMMOVABLE PROPERTY ; THE TRANSFEREE SHOULD HAVE TAKEN POSSESSION OF THE PROP ERTY; LASTLY, THE TRANSFEREE SHOULD BE READY AND WILLING TO PERFORM HIS PART OF THE CONTRACT. THAT EVEN ARRANGE MENTS 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 WAS ARGUED ON BEHALF OF THE ASSESSEE THAT NO TRANSFER TOOK PLACE TILL EXECUTION OF THE CONVEYANCE. CONSEQUENTLY, THE ASSE SSEES USED TO ENTER INTO AGREEMENTS FOR DEVELOPING PROPER TIES WITH THE BUILDERS AND UNDER THE AGREEMENT WITH THE BUILDERS, THEY USED TO CONFER PRIVILEGES OF OWNERSH IP WITHOUT EXECUTING CONVEYANCE AND TO PLUG THAT LOOPH OLE, SECTION 2(47)(V) CAME TO BE INTRODUCED IN THE ACT.' 23. FURTHER, THE ARGUMENT OF THE LD. DR IS THAT THE ASS ESSEE ITSELF INCLUDED CAPITAL GAIN FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, AS SUCH ASSESSEE CANNOT CHALLENGE THE SAME. IN OUR OPINION , THOUGH THE ASSESSEE HAS OFFERED CAPITAL GAIN IN THE AY 2012-13, BUT THE RE IS NO ESTOPPEL UNDER THE INCOME-TAX ACT. THE ASSESSEE HAVING ITSELF CHAL LENGED THE VALIDITY OF TAXING THE CAPITAL GAIN DURING THE AY 2012-13 AND T HE CIT(APPEALS) HAVING REJECTED THE SAME WITHOUT GIVING A CATEGORICAL FIN DING, IN OUR OPINION, THE ASSESSEE HAD OBJECTED THE TAXING OF CAPITAL GAIN IN AY 2012-13, WHICH WAS MAINLY OFFERED WHILE FILING RETURN OF INCOME. FURT HER, IT IS INCUMBENT UPON THE REVENUE AUTHORITIES TO FIND OUT WHETHER PARTICU LAR INCOME WAS ASSESSABLE IN A PARTICULAR YEAR OR NOT. MERELY BEC AUSE THE ASSESSEE WRONGLY INCLUDED THE INCOME IN ITS RETURN OF INCOME FOR A PARTICULAR YEAR, IT COULD NOT CONFER JURISDICTION TO THE DEPARTMENT TO TAX THAT INCOME IN THAT ASSESSMENT YEAR, EVEN THOUGH LEGALLY SUCH INCOME DI D NOT PERTAIN TO THAT YEAR. 24. IT IS PERTINENT TO MENTION T HE CBDT CIRCULAR NO. 14(XL-35) OF 1955, DATED 11.4.1955 AS PER WHICH THE LOWER AUTHORITIES SHOULD HAVE GUI DED THE ITA NO.916/BANG/2017 PAGE 15 OF 19 ASSESSEE AS TO THE CORRECT PROPOSITION OF THE LAW R EGARDING TAXABILITY OF CAPITAL GAIN. FOR CLARITY, WE REPRODUCE THE CONTEN TS OF THE SAID CIRCULAR:- ' OFFICERS OF THE DEPARTMENT MUST NOT TAKE ADVANTAG E OF IGNORANCE OF AN ASSESSEE AS TO HIS RIGHTS. IT IS ON E OF THEIR DUTIES TO ASSIST A TAX PAYER IN EVERY REASONABLE WAY, PARTICU LARLY IN THE MATTER OF CLAIMING AND SECURING RELIEFS AND IN THIS REGARD THE OFFICERS SHOULD TAKE THE INITIATIVE IN GUIDING A TA X PAYER WHERE PROCEEDINGS OR OTHER PARTICULARS BEFORE THEM INDICA TE THAT SOME REFUND OR RELIEF IS DUE TO HIM. THIS ATTITUDE WOULD , IN THE LONG RUN, BENEFIT THE DEPARTMENT, FOR IT WOULD INSPIRE CONFID ENCE IN HIM THAT HE MAY BE SURE OF GETTING A SQUARE DEAL FROM THE DE PARTMENT. ALTHOUGH, THEREFORE, THE RESPONSIBILITY FOR CLAIMIN G REFUNDS AND RELIEFS RESTS WITH THE ASSESSES ON WHOM IT IS IMPOS ED BY LAW, OFFICERS SHOULD (A) DRAW THEIR ATTENTION TO ANY REFUNDS OR RELIEFS TO W HICH THEY APPEAR TO BE CLEARLY ENTITLED BUT WHICH THEY HAVE O MITTED TO CLAIM FOR SOME REASON OR OTHER; (B) FREELY ADVISE THEM WHEN APPROACHED BY THEM AS TO TH EIR RIGHTS AND LIABILITIES AND AS TO THE PROCEDURE TO B E ADOPTED FOR CLAIMING REFUNDS AND RELIEFS'. 25. FURTHER, THE HONBLE DELHI HIGH COURT IN THE CASE O F CIT V. BHARAT GENERAL REINSURANCE CO. LTD., 83 ITR 303 (DEL) HELD AS FOLLOWS:- IT WAS TRUE THAT THE ASSESSEE ITSELF HAD INCLUDED THAT DIVIDEND INCOME IN ITS RETURN FOR THE YEAR IN QUESTION, BUT THERE WAS NO ESTOPPEL IN THE INCOME-TAX ACT AND THE ASSESSEE HAV ING ITSELF CHALLENGED THE VALIDITY OF TAXING THE DIVIDEND DURI NG THE YEAR OF ASSESSMENT IN QUESTION, IT MUST BE TAKEN THAT IT HA D RESILED FROM THE POSITION WHICH IT HAD WRONGLY TAKEN WHILE FILIN G THE RETURN. QUIT APART FROM IT, IT WAS INCUMBENT ON THE INCOME- TAX DEPARTMENT TO FIND OUT WHETHER A PARTICULAR INCOME WAS ASSESSABLE IN THE PARTICULAR YEAR OR NOT. MERELY BE CAUSE THE ASSESSEE WRONGLY INCLUDED THE INCOME IN ITS RETURN FOR A PARTICULAR YEAR, IT COULD NOT CONFER JURISDICTION ON THE DEPAR TMENT TO TAX THAT INCOME IN THAT YEAR EVEN THOUGH LEGALLY SUCH INCOME DID NOT PERTAIN TO THAT YEAR. THEREFORE THE INCOME FROM DIV IDEND WAS NOT ITA NO.916/BANG/2017 PAGE 16 OF 19 ASSESSABLE DURING THE ASSESSMENT YEAR 1958-59, BUT IT WAS ASSESSABLE IN THE ASSESSMENT YEAR 1953-54. IT COULD NOT, THEREFORE, BE TAXED IN THE ASSESSMENT YEAR 1958-59. 26. FURTHER, THE HONBLE BOMBAY HIGH COURT IN THE C ASE OF NIRMALA L. MEHTA VS. A. BALASUBRAMANIAM, C.I.T. (2004) 269 ITR 1 (BOM) HELD THAT THERE CANNOT BE ANY ESTOPPEL AGAINST THE STATUTE. A RTICLE 265 OF THE CONSTITUTION OF INDIA IN UNMISTAKABLE TERMS PROVIDE S THAT NO TAX SHALL BE LEVIED OR COLLECTED EXCEPT BY AUTHORITY OF LAW. ACQ UIESCENCE CANNOT TAKE AWAY FROM A PARTY THE RELIEF THAT HE IS ENTITLED TO WHERE THE TAX IS LEVIED OR COLLECTED WITHOUT AUTHORITY OF LAW. 27. THE HONBLE SUPREME COURT IN THE CASE OF CIT, MADRAS VS V. MR. P. FIRM, MUAR REPORTED IN 56 ITR 67(SC) HELD AS UNDER:- 'IF A PARTICULAR INCOME IS NOT TAXABLE UNDER THE IN COME-TAX ACT, IT CANNOT BE TAXED ON THE BASIS OF ESTOPPEL OR ANY OTH ER EQUITABLE DOCTRINE. EQUITY IS OUT OF PLACE IN TAX LAW; A PART ICULAR INCOME IS EITHER EXIGIBLE TO TAX UNDER THE TAXING STATUTE OR IT IS NOT. IF IT IS NOT, THE INCOME-TAX OFFICER HAS NO POWER TO IMPOSE TAX ON THE SAID INCOME.' 28. FURTHER, IN THE PRESENT CASE, ONLY FOR THE PURP OSE OF LOAN REQUIRED FROM THE BANK, THE DEVELOPER REGISTERED A SALE DEED ON 18.07.2011, WHEREIN IT IS ALSO CLEARLY MENTIONED THAT THE PROPE RTY IS ALREADY IN DEVELOPER'S POSSESSION AS PER THE REGISTERED DEVELO PMENT AGREEMENT DATED 24.10.2007 AND THE PRESENT SALE DEED MADE WAS ONLY FOR CONFIRMING THE RIGHT ALREADY HELD BY THE JOINT DEVELOPER BY EX ECUTING THE SALE DEED. THE SUB-REGISTRAR WHILE REGISTERING THE SALE DEED A DOPTED THE GUIDELINE VALUE TO DETERMINE STAMP DUTY AND REGISTRATION CHAR GES. HOWEVER, SINCE TAX ON CAPITAL GAIN ON THE SAME PROPERTY TRANSACTIO N WOULD BE FOR ASSESSMENT YEAR 2008-09 AS PER PROVISIONS OF INCOME TAX ACT, NO CAPITAL GAIN ARISES OUT OF THE IMPUGNED JDA/GPA DURING ASST . YEAR 2012-13. ITA NO.916/BANG/2017 PAGE 17 OF 19 29. IN VIEW OF THE ABOVE, THIS GROUND OF THE ASSESSEE I S ALLOWED. 30. THE NEXT GROUND IS WITH REGARD TO GRANT OF DEDU CTION 54G OF THE ACT. THE FACTS ARE THAT THE ASSESSEE COMPANY IN ORDER TO SHIFT THE FACTORY FROM THE PRESENT PLACE, WHICH IS ALMOST IN THE HEART OF THE CITY, ENTERED INTO DEVELOPMENT AGREEMENT FOR CONSTRUCTING COMMERCIAL C OMPLEX. BUT TO CONTINUE MANUFACTURING ACTIVITY, THE ASSESSEE PURCH ASED AN INDUSTRIAL LAND NEAR HAROHALLI VILLAGE ON KANAKAPURA ROAD AND INVES TED SUBSTANTIAL AMOUNT IN CONSTRUCTING THE FACTORY AND SHIFTED THEI R MANUFACTURING UNIT INTO THE RURAL AREA, WHICH IS ELIGIBLE FOR DEDUCTION U/S .54G OF INCOME TAX ACT. THE INVESTMENT MADE IN THE NEW FACTORY PREMISES IS AS UNDER: PURCHASE OF LAND DURING FY 2007-08 RS. 62,40,74 0 INVESTMENT MADE TO BUILDING DURING FY 2007-08 RS. 25,86,571 FURTHER ADDITIONS DURING FY 2008-09 RS.1,02,09,52 3 INVESTMENT MADE DURING FY 2009-10 RS. 15,93,44 9 INVESTMENT MADE DURING FY 2010-11 RS. 2,08,0 42 ------------------- TOTAL COST OF CONSTRUCTION: RS.2,08,38,325 ------------------- 31. THE AO IN THE ASST. ORDER FOR AY 2012-13 REJECT ED ENTIRE CLAIM OF SEC.54G STATING THAT SINCE THE INVESTMENT IS REQUIR ED TO BE DONE WITHIN 3 YEARS FROM THE DATE OF DEEMED SALE OF FACTORY AND S HIFTING THE FACTORY AND SINCE AS PER THE AO, THE CAPITAL GAINS HAS ARISEN D UE TO REGISTRATION OF SALE DEED ON 18.07.2011 I.E. FY 2011-12, AND HENCE, ACCO RDING TO THE AO, THE ASSESSEE IS NOT ELIGIBLE FOR ANY DEDUCTION U/S.54G OF INCOME TAX ACT. 32. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THIS GROUND IS ONLY ACADEMIC IN VIEW OF OUR FINDING S WITH REGARD TO NON- TAXABILITY OF CAPITAL GAIN IN THIS ASSESSMENT YEAR I.E. AY 2012-13, HOWEVER, FOR THE PURPOSE OF COMPLETENESS, WE MAKE IT CLEAR T HAT ASSESSEE COULD CLAIM DEDUCTION U/S. 54G IN THE APPROPRIATE ASSESSM ENT YEAR WHEN THE CAPITAL GAIN IS SUBJECT TO TAX. IT IS ORDERED ACCOR DINGLY. ITA NO.916/BANG/2017 PAGE 18 OF 19 33. REGARDING THE ISSUE OF APPLICABILITY OF SECTION 50C OF THE ACT, THE ASSESSEE OBJECTED FOR ADOPTING VALUE OF 50C AS PER GUIDANCE VALUE, AT THE TIME OF ASSESSMENT, A LETTER REQUESTING FOR REFEREN CE TO THE VALUATION ITSELF WAS ALSO MADE BY LETTER DATED 19.03.2015 ADDRESSED TO THE DCIT. THIS IS AS PER PROVISIONS OF SUB-SECTION 2 OF SEC.50C, WHER E IT IS STATED THAT IF THE ASSESSEE CLAIMS BEFORE THE ASSESSING OFFICER THAT I F THE VALUE ADOPTED ASSESSED/ASSESSABLE BY THE STAMP VALUATION AUTHORIT Y UNDER SUB-SECTION- 1 EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER, THE ASSESSING OFFICER MAY REFER THE VALUATION OF CA PITAL ASSET TO A VALUATION OFFICER. THE AO, HOWEVER, DID NOT REFER THE ISSUE O F VALUATION TO THE VALUATION OFFICER. 34. SINCE WHILE ADJUDICATING GROUND NO.1, WE HAVE A LREADY HELD THAT CAPITAL GAIN IS TO BE TAXED NOT IN THIS ASSESSMENT YEAR 2012-13, BEING SO, THERE IS NO QUESTION OF APPLICATION OF SECTION 50C OF THE ACT AND THE REGISTRATION OF SALE DEED WAS ONLY FOR THE LIMITED PURPOSE OF FORMALIZING THE BANK REQUEST, WHO FINANCED THE ASSESSEE AS DISCUSSE D IN PARA 28 OF THIS ORDER. IN OUR OPINION, THERE IS NO APPLICABILITY O F SECTION 50C OF THE ACT IN THE ASSESSMENT YEAR 2012-13 SINCE TRANSFER TOOK PLA CE NOT IN THIS ASSESSMENT YEAR. THUS, THIS ISSUE IS ONLY ACADEMIC AS THERE WAS NO INCIDENCE AND CHARGEABILITY OF CAPITAL GAIN IN AY 2 012-13. THEREFORE, THIS GROUND BY THE ASSESSEE IS ALLOWED. 35. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS AL LOWED. PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF FEBRUARY, 2021. SD/- SD/- ( GEORGE GEORGE K. ) ( CHANDRA POOJARI ) JUDICIAL MEMB ER ACCOUNTANT MEMB ER BANGALORE, DATED, THE 25 TH FEBRUARY, 2021. / DESAI S MURTHY / ITA NO.916/BANG/2017 PAGE 19 OF 19 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.