MR. Prakash Chand Bethala, Bangalore V. The Deputy Commissioner of Income Tax, Circle - 7(1), Bangalore

ITA 999/BANG/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 6321 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-01-2021
• Assessment Year: 2007-2008
• Appeal Filed On: 09-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KANNAN NARAYANAN JT BENGALURU
• Assessee Lawyers: V SRINIVASAN
• Keywords: Reopening of assessment; Sale consideration of property below Jantri Value; Capital asset; Additional evidence; Cost of acquisition; Fair market value; Reason to believe; Capital Gains
• Section: 50C; 48; 13; 148; 54; 37; 12

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. 9 9 9/BANG/2019 ASSESSMENT YEAR: 2007 - 08 MR. PRAKASH CHAND BETHALA, 815, 80 FEET RING ROAD, 8 TH BLOCK, KORAMANGALA, BANGALORE 560 095. PAN: AABHK 7700G VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 7[1], BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN, ADVOCATE RESPONDENT BY : SHRI KANNAN NARAYANAN, JT.CIT(DR)(ITAT), BENGALURU. DATE OF HEARING : 11 .0 1 .202 1 DATE OF PRONOUNCEMENT : 28 .0 1 .202 1 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 29.03.2019 OF THE CIT(APPEALS), BANGALORE-9, BANGAL ORE IN RELATION TO ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL:- 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR A S THEY ARE AGAINST THE APPELLANT ARE OPPOSED TO LAW, EQUITY, W EIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE ORDER OF RE-ASSESSMENT IS BAD IN LAW AND VOI D-AB-INITIO FOR WANT OF REQUISITE JURISDICTION ESPECIALLY, THE MANDATORY REQUIREMENTS TO ASSUME JURISDICTION U/S 148 OF THE ACT DID NOT EXIST ITA NO.999/BANG/2019 PAGE 2 OF 21 AND HAVE NOT BEEN COMPLIED WITH AND CONSEQUENTLY, T HE ORDER OF RE-ASSESSMENT REQUIRES TO BE CANCELLED. 3. THE LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDING THE ASSESSMENT OF THE LONG TERM CAPITAL GAINS OF RS. 2, 68,25,802/- ON THE ALLEGED TRANSFER OF PROPERTY DURING THE YEAR IN VOKING THE PROVISIONS OF SEC. 50C OF THE ACT UNDER THE FACTS A ND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 3.1 THE LEARNED CIT[A] FAILED TO APPRECIATE THAT TH ERE WAS NO TRANSFER OF THE PROPERTY DURING THE YEAR UNDER APPE AL AND HENCE, THE COMPUTATION OF THE CAPITAL GAINS FOR THE YEAR UNDER APPEAL IS OPPOSED TO LAW AND FACTS OF THE APPELLANT'S CASE AN D THEREFORE, THE CAPITAL GAINS ASSESSED OUGHT TO HAVE B DELETED. 4. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WI TH THE HON'BLE CCIT/DG, THE APPELLANT DENIES ITSELF LIABLE TO BE CHARGED TO INTEREST U/S 234-A, 234-6 AND 234-C OF THE ACT, WHICH UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S C ASE DESERVES TO BE CANCELLED. 5. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBL Y PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLANT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO ORDER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE COSTS . 3. THE MAIN ISSUE RAISED IN THIS APPEAL IS WITH REG ARD TO TAXATION OF LONG TERM CAPITAL GAINS ARISING ON TRANSFER OF THE SITE NO. 868, 6TH BLOCK, KORAMANGALA. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN HUF. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED HIS RE TURN OF INCOME ON 31/03/2008 DECLARING TOTAL INCOME OF RS.2,06,130-/. THE ASSESSEE HAD PURCHASED THE ABOVE PROPERTY BY PARTICIPATING IN A BDA AUCTION. THE AUCTION SITE AGREEMENT BETWEEN THE BDA AND THE ASSESSEE TOO K PLACE ON 24.07.1984 AND FURTHER THE ASSESSEE WAS PUT IN POSS ESSION OF THE AFORESAID SITE BY THE BDA ON 29.08.1984. IN THE MONTH OF SEP TEMBER, 1989, THE ASSESSEE SOLD THE AFORESAID PROPERTY TO SHRI R.K. S IPANI THROUGH AN ORAL ITA NO.999/BANG/2019 PAGE 3 OF 21 AGREEMENT. THE ASSESSEE GAVE POSSESSION OF THE SITE TO SHRI R.K. SIPANI ON 24/10/1989 FOR A CONSIDERATION OF RS.9,80,500. THE ASSESSEE RECEIVED AMOUNT OF RS.9,79,455/- THROUGH VARIOUS CHEQUES AND BALANCE AMOUNT OF RS.1,005/- WAS TO BE PAID BY THE PURCHASER AT THE T IME OF EXECUTION OF SALE DEED. ON 08.03.1993, A SALE AGREEMENT (UNREGISTERE D DOCUMENT) FOR THE AFORESAID SITE WAS MADE BETWEEN THE ASSESSEE AND S HRI R.K. SIPANI TO BRING CLARITY ON THE NATURE OF THE TRANSACTION WITH RESPE CT TO ORAL AGREEMENT. THE ASSESSEE FURTHER EXECUTED A SALE DEED ON 09.03.2007 IN WHICH THE AFORESAID SITE WAS SOLD TO M/S. SURAJ PROPERTIES (A PROPRIETA RY CONCERN OF R.K. SIPANIS WIFE) FOR A CONSIDERATION OF RS.9,80,500/- TOWARDS SALE AND RS.23,27,305/- TOWARDS PURCHASE OF STAMP DUTY. 5. THE GUIDANCE VALUE OF THE ABOVE PROPERTY AS PER THE SALE DEED WAS RS.2,77,06,000/-. THE ASSESSING OFFICER NOTICED TH AT SALE CONSIDERATION WAS LESS THAN THE GUIDANCE VALUE. FOR THE PURPOSE OF C OMPUTATION OF CAPITAL GAINS, WHEN THE SALE VALUE IS LESS THAN THE GUIDANC E VALUE CALCULATED BY STAMP VALUATION AUTHORITY, PROVISIONS OF SECTION 50 C ARE ATTRACTED. AS PER SECTION 50C, IN SUCH A CASE , THE GUIDANCE VALUE SH ALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF SUCH TRANSFER. SECTION 50C OF THE INCOME TAX ACT READS AS FOLLOWS: 50C. (1) WHERE THE CONSIDERATION RECEIVED OR ACCR UING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE 'STAMP VALUATION AUTHORITY') FOR THE PURP OSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALU E SO ADOPTED OR ASSESSED SHALL, FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF SUCH TRANSFER. (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECT ION (1), WHERE (A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFIC ER THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AU THORITY ITA NO.999/BANG/2019 PAGE 4 OF 21 UNDER SUB-SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER; (B) THE VALUE SO ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUT ED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BE FORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF TH E CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS MADE, THE PROVISIONS OF SUB-SECTIONS (2), (3), (4), (5) AND ( 6) OF SECTION 16A, CLAUSE (I) OF SUB-SECTION (1) AND SUB-SECTIONS (6) AND (7) OF SECTION 23A, SUB-SECTION (5) OF SECTION 24, SECTION 34AA, S ECTION 35 AND SECTION 37 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957) , SHALL, WITH NECESSARY MODIFICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESS ING OFFICER UNDER SUB-SECTION (1) OF SECTION 16A OF THAT ACT. 6. BEFORE THE ASSESSING OFFICER, THE ASSESSEE ARGUE D THAT THE PROVISIONS OF SECTION 50C ARE APPLICABLE PROSPECTIVELY AND NOT RETROSPECTIVELY. THE ASSESSEE SUBMITTED THAT POSSESSION BY TRANSFER HAV ING BEEN COMPLETED IN 1989, THE PROVISIONS OF SECTION 50C WILL NOT BE APP LICABLE. ACCORDING TO THE ASSESSEE, THE PROVISIONS OF SECTION 50C OF THE ACT COMES WITH REFERENCE TO THE CAPITAL GAINS BY THE TRANSFEROR TO THE TRANSFER EE ON TRANSFER W.E.F. 01.04.2003. IT WAS SUBMITTED THAT THE PROVISIONS O F SECTION 50C CAME INTO STATUTE BOOK W.E.F. 04.04.2003 AND IT IS PROSPECTI VE IN NATURE AND NOT RETROSPECTIVE. THE ASSESSEE SUBMITTED THAT THE ASS ESSEE GAVE POSSESSION OF THE PROPERTY BEFORE ENACTMENT OF SECTION 50C OF THE ACT ITSELF AND THEREFORE, SECTION 50C HAS NO APPLICATION. IT WAS SUBMISSION OF THE ASSESSEE THAT ASSUMING SECTION 50C IS APPLICABLE, THE DOCUMENT EXECUTED IS WITH REFERENCE TO A CONTRACT OR TRANSFER WITHIN THE MEANING OF INCOME-TAX ACT PRIOR TO ENACTMENT OF SECTION 50C OF THE ACT. THEREFORE, IT WAS SUBMITTED THAT THE PROVISIONS OF SECTION 50C ARE NOT APPLICAB LE. HOWEVER, THE ASSESSING OFFICER STATED THAT PROVISIONS OF SECTION 50C ARE APPLICABLE AND HELD THAT TRANSACTION IS TAXABLE FOR THE YEAR 2007 -08. THE ASSESSING OFFICER ITA NO.999/BANG/2019 PAGE 5 OF 21 THUS TREATED RS.2,77,06,000/- AS THE SALE CONSIDERA TION RECEIVED BY THE ASSESSEE AND CALCULATED INCOME FROM CAPITAL GAINS A CCORDINGLY. 7. ON APPEAL, THE CIT(APPEALS) CONFIRMED THE ACTION OF THE AO IN REOPENING THE ASSESSMENT AND HELD THAT NOTICE U/S. 148 WAS VALIDLY ISSUED. ON MERITS, HE OBSERVED THAT THE EXACT DATE OF TRANS FER HAS TO BE ASCERTAINED. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT SINC E THE POSSESSION OF THE PROPERTY WAS GIVEN LONG BACK, SHRI R.K. SIPANI HAD CONSTRUCTED THE HOUSE FOR HIS OWN RESIDENTIAL PURPOSE, THEREFORE, NO TRAN SFER TOOK PLACE DURING FY 2006-07 AND THEREFORE, THE QUESTION OF OFFERING THE PROCEEDS OF TRANSFER FOR CAPITAL GAINS TAX DOES NOT ARISE IN THE A.Y. 2007-0 8. ACCORDING TO THE CIT(A), THE EXECUTION OF SALE DEED BY BDA IN FAVOUR OF THE ASSESSEE TOOK PLACE ONLY ON 11.10.1995. THEREFORE, BEFORE THE EXECUTION OF SALE DEED, THE ASSESSEE WAS ONLY AN ALLOTTEE (AGREEMENT HOLDER) OF THE AFOR ESAID SITE. THUS, IT WAS CLEAR THAT THE ASSESSEE HIMSELF WAS IN PART PERFORM ANCE OF THE CONTRACT U/S. 53A OF THE TRANSFER OF PROPERTY ACT. THEREFORE, IT WAS NOT CLEAR HOW HE TRANSFERRED THE SITE TO SHRI R.K. SIPANI IN 1993,WH EN HE HIMSELF GOT THE SALE DEED EXECUTED IN HIS FAVOUR IN 1995 BY THE BDA. F URTHER, ACCORDING TO THE CIT(A), THE OWNERSHIP OF PROPERTY WAS TRANSFERRED T O SHRI R.K. SIPANI IN 1993, THEN THE SALE DEED EXECUTED BY THE BDA IN 1995 SHOU LD HAVE BEEN MADE IN FAVOUR OF SHRI R.K. SIPANI AND NOT THE ASSESSEE. A CCORDING TO THE ASSESSING OFFICER, IF THE PROPERTY HAD BEEN TRANSFERRED TO SH RI R.K. SIPANI IN 1993 ITSELF, THEN THE ASSESSEE SHOULD NOT HAVE EXECUTED THE SALE DEED IN FAVOUR OF M/S. SURAJ PROPERTIES IN 2007 AS THE SAME WAS NOT REQUIR ED FROM HIS SIDE. AS PER THE AGREEMENT DATED 08.03.1993, THE AFORESAID S ITE WAS TRANSFERRED TO SHRI R.K. SIPANI BUT IN THE SALE DEED DATED 09.03.2 007, IT WAS TRANSFERRED TO M/S. SURAJ PROPERTIES. FURTHER, VIDE SALE DEED DAT ED 09.03.2007 TRANSFER OF SITE AS WELL AS BUILDING TOOK PLACE; BUT VIDE SALE AGREEMENT DATED 08.03.1993, ONLY THE SITE WAS TRANSFERRED. HENCE, T HE SALE AGREEMENT DATED 08.03.1993 AND THE SALE DEED DATED 09.03.2007 WERE NOT IN COHERENCE WITH ITA NO.999/BANG/2019 PAGE 6 OF 21 EACH OTHER AND THE TRANSFEREE IN BOTH THE CASES WER E LEGALLY DIFFERENT ENTITIES AND THEREFORE BOTH THE TRANSFERS WERE HELD TO BE DI FFERENT. FOR CONVENIENCE SAKE, RELEVANT PARAGRAPH OF SALE DEED DATED 09.03.2 007 EXTRACTED IN THE IMPUGNED ORDER OF THE CIT(A) IS REPRODUCED BELOW:- WHEREAS THE AFORESAID SITE ALONG WITH THE BUILDING CONSTRUCTED THEREON IS THE SUBJECT MATTER OF THIS SALE DEED AND THE SAME IS MOREFULLY DESCRIBED IN THE SCHEDULE HEREUNDER AND H EREIN REFERRED TO AS THE SCHEDULE PROPERTY. 8. THUS, THE CIT(A) WAS OF THE VIEW THAT THE TRANS ACTIONS CARRIED OUT BY THE ASSESSEE WERE NOT CLEAR AND TRANSPARENT IN NATU RE. HE ALSO NOTICED THAT THE ASSESSEE HAD NOT PAID THE TAXES DURING THE RESP ECTIVE YEAR WHEN THE PROPERTY WAS CLAIMED TO BE TRANSFERRED BY HIM AND A FTER THE EXECUTION OF SALE DEED WHEN THE PROPERTY WAS LEGALLY TRANSFERRED. THU S HE OBSERVED THAT THE ASSESSEE WAS TRYING TO BYPASS THE LAWS WITH THE HEL P OF VARIOUS AGREEMENTS WHICH IS CLEARLY AN INSTANCE OF TAX AVOIDANCE. HE REFERRED TO SECTION 54 OF THE TRANSFER OF PROPERTY ACT WHICH, ACCORDING TO HI M, CLEARLY STATES THAT TRANSFER IN CASE OF AN IMMOVABLE PROPERTY OF VALUE MORE THAN RS.100 CAN ONLY BE MADE THROUGH A REGISTERED DOCUMENT. SECTIO N 54 OF THE TRANSFER OF PROPERTY ACT STATES AS FOLLOWS:- SALE DEFINED, - SALE IS A TRANSFER OF OWNERSHIP IN EXCHANGE FOR A PRICE PAID OR PROMISED OR PART PAID AND PART PROM ISE. SALE HOW MADE SUCH TRANSFER, IN THE CASE OF TANGIBLE IMMOV EABLE PROPERTY OF THE VALUE OF ONE HUNDRED RUPEES AND UPWARDS, OR IN THE CASE OF A REVERSION OR OTHER INTANGIBLE THING, CAN BE MADE ONLY BY A REGISTERED INSTRUMENT. IN THE CASE OF TANGIBLE IMMO VEABLE PROPERTY OF A VALUE LESS THAN ONE HUNDRED RUPEES, SUCH TRANS FER MAY BE MADE EITHER BY A REGISTERED INSTRUMENT OR BY DELIVERY OF THE PROPERTY. DELIVERY OF TANGIBLE IMMOVEABLE PROPERTY TAKES PLAC E WHEN THE SELLER PLACES THE BUYER, OR SUCH, PERSON AS HE DIRE CTS, IN POSSESSION OF THE PROPERTY. ITA NO.999/BANG/2019 PAGE 7 OF 21 CONTRACT FOR SALE, -A CONTRACT FOR THE SALE OF IMMO VEABLE PROPERTY IS A CONTRACT THAT A SALE OF SUCH PROPERTY SHALL TA KE PLACE ON TERMS SETTLED BETWEEN THE PARTIES. IT DOES NOT, OF ITSEL F, CREATE ANY INTEREST IN OR CHARGE ON SUCH PROPERTY. 9. THE CIT(A) WITH REFERENCE TO SECTIONS 53A AND 54 OF THE TRANSFER OF PROPERTY ACT, RELIED ON THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF NARANDAS KARSONDAS VS. SA KAMTAM AND RAMBHAU NAMDEO GAJRE VS. NARAYAN BAPUJI DHOTRA WHEREIN IT WAS OBSERVED THAT A TRANSFER OF IMMOVA BLE PROPERTY BY WAY OF SALE CAN BE EFFECTED ONLY BY A D EED OF CONVEYANCE. IN THE ABSENCE OF A DEED OF CONVEYANCE (WHICH MUST BE DULY STAMPED AND REGISTERED AS REQUIRED BY LAW), NO RIGHT, TITLE OR INTEREST IN AN IMMOVABLE PROPERTY CAN BE TRANSFERRED. RELIANCE WAS ALSO PLAC ED ON THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF CIT VS. BALBIR SINGH MAINI (2017) 86 TAXMANN.COM 94 (SC) WHEREIN IT WAS HELD THAT NO RIGHTS ARE TRANSFERRED IN RESPECT OF AN IMMOVABLE PROPERTY, IF THE DOCUMENT P URPORTEDLY CONVEYING SUCH A TRANSFER IS NOT REGISTERED. 10. THE RELEVANT SECTIONS THAT ARE NECESSARY FOR US TO DECIDE THE PRESENT MATTER ARE AS UNDER:- 53A. PART PERFORMANCE . WHERE ANY PERSON CONTRACTS TO TRANSFER FOR CONSIDERATION ANY IMMOVEABLE PROPERTY BY WRITING SIGNED BY HIM OR ON HIS BEHALF FROM WHICH THE TERMS NECESSARY TO CONSTITUTE THE TRANSFER CAN BE ASCERTAINED WITH REA SONABLE CERTAINTY, AND THE TRANSFEREE HAS, IN PART PERFORMANCE OF THE CONTRACT, TAKEN POSSESSION OF THE PROPERTY OR ANY PART THEREOF, OR THE TRANSFEREE, BEING ALREADY IN POSSESSION, CONTINUES IN POSSESSIO N IN PART PERFORMANCE OF THE CONTRACT AND HAS DONE SOME ACT I N FURTHERANCE OF THE CONTRACT, AND THE TRANSFEREE HAS PERFORMED O R IS WILLING TO PERFORM HIS PART OF THE CONTRACT, THEN, NOTWITHSTAN DING THAT WHERE THERE IS AN INSTRUMENT OF TRANSFER, THAT THE TRANSF ER HAS NOT BEEN COMPLETED IN THE MANNER PRESCRIBED THEREFORE BY THE LAW FOR THE TIME BEING IN FORCE, THE TRANSFEROR OR ANY PERSON C LAIMING UNDER HIM SHALL BE DEBARRED FROM ENFORCING AGAINST THE TR ANSFEREE AND PERSONS CLAIMING UNDER HIM ANY RIGHT IN RESPECT OF THE PROPERTY OF WHICH THE TRANSFEREE HAS TAKEN OR CONTINUED IN POSS ESSION, OTHER ITA NO.999/BANG/2019 PAGE 8 OF 21 THAN A RIGHT EXPRESSLY PROVIDED BY THE TERMS OF THE CONTRACT: PROVIDED THAT NOTHING IN THIS SECTION SHALL AFFECT THE RIGHTS OF A TRANSFEREE FOR CONSIDERATION WHO HAS NO NOTICE OF T HE CONTRACT OR OF THE PART PERFORMANCE THEREOF.] INCOME TAX ACT SECTION 2 DEFINITIONS IN THIS ACT, UNLESS THE CON TEXT OTHERWISE REQUIRES, (47) TRANSFER, IN RELATION TO A CAPITAL ASSET, INCLUD ES, (I) TO (IV) XXX XXX (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE P OSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882) ; OR (VI) ANY TRANSACTION (WHETHER BY WAY OF BECOMING A MEMBER OF, OR ACQUIRING SHARES IN, A CO-OPERATIVE SOCIETY, COMPAN Y OR OTHER ASSOCIATION OF PERSONS OR BY WAY OF ANY AGREEMENT O R ANY ARRANGEMENT OR IN ANY OTHER MANNER WHATSOEVER) WHIC H HAS THE EFFECT OF TRANSFERRING, OR ENABLING THE ENJOYMENT O F, ANY IMMOVABLE PROPERTY. 45. CAPITAL GAINS (1) ANY PROFITS OR GAINS ARISING FROM THE TRANSFER OF A CAPITAL ASSET EFFECTED IN THE PREVIOUS YEAR SHALL, SAVE AS OTHERW ISE PROVIDED IN SECTIONS 54, 54B, 54D, 54E, 54EA, 54EB, 54F, 54G AN D 54H, BE CHARGEABLE TO INCOME-TAX UNDER THE HEAD CAPITAL GA INS, AND SHALL BE DEEMED TO BE THE INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE. 48. MODE OF COMPUTATION THE INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAINS SHALL BE COMPUTED, BY DEDUCTIN G FROM THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF THE CAPITAL ASSET THE FOLLOWING AMOUNTS , NAMELY: (I) EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH SUCH TRANSFER; ITA NO.999/BANG/2019 PAGE 9 OF 21 (II) THE COST OF ACQUISITION OF THE ASSET AND THE C OST OF ANY IMPROVEMENT THERETO: 11. SECTION 53A, AS IS WELL KNOWN, WAS INSERTED BY THE TRANSFER OF PROPERTY AMENDMENT ACT, 1929 TO IMPORT INTO INDIA T HE EQUITABLE DOCTRINE OF PART PERFORMANCE. THIS COURT HAS IN SHRIMANT SHAMRAO SURYAVANSHI & ANR. V. PRALHAD BHAIROBA SURYAVANSHI (D) BY LRS. & ORS., (2002) 3 SCC 676 AT 682 STATED AS FOLLOWS:- 16. BUT THERE ARE CERTAIN CONDITIONS WHICH ARE REQ UIRED TO BE FULFILLED IF A TRANSFEREE WANTS TO DEFEND OR PROTEC T HIS POSSESSION UNDER SECTION 53- A OF THE ACT. THE NECESSARY CONDI TIONS ARE: (1) THERE MUST BE A CONTRACT TO TRANSFER FOR CONSIDERATION OF ANY IMMOVABLE PROPERTY; (2) THE CONTRACT MUST BE IN WRITING, SIGNED BY THE TRANSFEROR, OR BY SOMEONE ON HIS BEHALF; (3) THE WRITING MUST BE IN SUCH WORDS FROM WHICH THE TERMS NECESSARY TO CONSTRUE THE TRANSFER CAN BE ASCERTAINED; (4) THE TRANSFEREE MUST IN PART-PERFORMANCE OF THE CONTRACT TAKE POSSESSION OF THE PROPERTY, OR OF ANY PART THEREOF; (5) THE TRANSFEREE MUST HAVE DONE SOME ACT IN FURTHERANCE OF THE CONTRACT; AND (6) THE TRANSFEREE MUST HAVE PERFORMED OR BE WILLI NG TO PERFORM HIS PART OF THE CONTRACT. 12. IT IS ALSO WELL-SETTLED BY THIS COURT THAT THE PROTECTION PROVIDED UNDER SECTION 53A IS ONLY A SHIELD, AND CAN ONLY BE RESOR TED TO AS A RIGHT OF DEFENCE. RAMBHAU NAMDEO GAJRE V. NARAYAN BAPUJI DHOTRA (2004 ) 8 SCC 614 AT 619, PARA 10. AN AGREEMENT OF SALE WHICH FULFILLED THE INGREDIEN TS OF SECTION 53A WAS NOT REQUIRED TO BE EXECUTED THROUGH A REGIS TERED INSTRUMENT. THIS POSITION WAS CHANGED BY THE REGISTRATION AND OTHER RELATED LAWS (AMENDMENT) ACT, 2001. AMENDMENTS WERE MADE SIMULTA NEOUSLY IN SECTION ITA NO.999/BANG/2019 PAGE 10 OF 21 53A OF THE TRANSFER OF PROPERTY ACT AND SECTIONS 17 AND 49 OF THE INDIAN REGISTRATION ACT. BY THE AFORESAID AMENDMENT, THE W ORDS THE CONTRACT, THOUGH REQUIRED TO BE REGISTERED, HAS NOT BEEN REGI STERED, OR IN SECTION 53A OF THE 1882 ACT HAVE BEEN OMITTED. SIMULTANEOUSLY, SECTIONS 17 AND 49 OF THE 1908 ACT HAVE BEEN AMENDED, CLARIFYING THAT UNL ESS THE DOCUMENT CONTAINING THE CONTRACT TO TRANSFER FOR CONSIDERATI ON ANY IMMOVABLE PROPERTY (FOR THE PURPOSE OF SECTION 53A OF 1882 ACT) IS REG ISTERED, IT SHALL NOT HAVE ANY EFFECT IN LAW, OTHER THAN BEING RECEIVED AS EVI DENCE OF A CONTRACT IN A SUIT FOR SPECIFIC PERFORMANCE OR AS EVIDENCE OF ANY COLLATERAL TRANSACTION NOT REQUIRED TO BE EFFECTED BY A REGISTERED INSTRUMENT. SECTION 17(1A) AND SECTION 49 OF THE REGISTRATION ACT, 1908 ACT, AS AM ENDED, READ THUS: 17(1A). THE DOCUMENTS CONTAINING CONTRACTS TO TRAN SFER FOR CONSIDERATION, ANY IMMOVABLE PROPERTY FOR THE PURPO SE OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 ( 4 OF 1882) SHALL BE REGISTERED IF THEY HAVE BEEN EXECUTE D ON OR AFTER THE COMMENCEMENT OF THE REGISTRATION AND OTHE R RELATED LAWS (AMENDMENT) ACT, 2001 AND IF SUCH DOCUMENTS ARE NOT REGISTERED ON OR AFTER SUCH COMMENCEMENT, THEN THEY SHALL HAVE NO EFFECT FOR TH E PURPOSES OF THE SAID SECTION 53A. 49. EFFECT OF NON-REGISTRATION OF DOCUMENTS REQUIRED TO BE REGISTERED . NO DOCUMENT REQUIRED BY SECTION 17 OR BY ANY PROVISION OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882), TO BE REGISTERED SHALL- (A) AFFECT ANY IMMOVABLE PROPERTY COMPRISED THEREIN, OR (B) CONFER ANY POWER TO ADOPT, OR (C) B E RECEIVED AS EVIDENCE OF ANY TRANSACTION AFFECTING SUCH PROPERTY OR CONFERRING SUCH POWER, UNLESS IT HAS BEEN REGISTERED: PROVIDED THAT AN UNREGISTERED DOCUMENT AFFECTING IMMOVABLE PROPERTY AND REQUIRED BY THIS ACT OR THE TRANSFER O F PROPERTY ACT, 1882 (4 OF 1882), TO BE REGISTERED MAY BE RECEIVED AS EVIDENCE OF A CONTRACT IN A SUIT FOR SPECIFIC PERFORMANCE UNDER CHAPTER II OF THE SPECIFIC RELIEF ACT, 1887 (1 OF 1877) OR AS EVIDENC E OF ANY COLLATERAL TRANSACTION NOT REQUIRED TO BE EFFECTED BY REGISTERED INSTRUMENT. ITA NO.999/BANG/2019 PAGE 11 OF 21 20 . THE EFFECT OF THE AFORESAID AMENDMENT IS THAT, O N AND AFTER THE COMMENCEMENT OF THE AMENDMENT ACT OF 2001, IF A N AGREEMENT, LIKE THE JDA IN THE PRESENT CASE, IS NOT REGISTERED, THEN IT SHALL HAVE NO EFFECT IN LAW FOR THE PURPOSES OF SECTION 53A. IN SHORT, THERE IS NO AGREEMENT IN THE EYES OF LAW WHI CH CAN BE ENFORCED UNDER SECTION 53A OF THE TRANSFER OF PROPE RTY ACT. THIS BEING THE CASE, WE ARE OF THE VIEW THAT THE HIGH CO URT WAS RIGHT IN STATING THAT IN ORDER TO QUALIFY AS A TRANSFER OF A CAPITAL ASSET UNDER SECTION 2(47)(V) OF THE ACT, THERE MUST BE A CONTRACT WHICH CAN BE ENFORCED IN LAW UNDER SECTION 53A OF THE TRA NSFER OF PROPERTY ACT. A READING OF SECTION 17(1A) AND SECTI ON 49 OF THE REGISTRATION ACT SHOWS THAT IN THE EYES OF LAW, THE RE IS NO CONTRACT WHICH CAN BE TAKEN COGNIZANCE OF, FOR THE PURPOSE S PECIFIED IN SECTION 53A. THE ITAT WAS NOT CORRECT IN REFERRING TO THE EXPRESSION OF THE NATURE REFERRED TO IN SECTION 53A IN SECTION 2(47)(V) IN ORDER TO ARRIVE AT THE OPPOSITE CONCLUS ION. THIS EXPRESSION WAS USED BY THE LEGISLATURE EVER SINCE S UB-SECTION (V) WAS INSERTED BY THE FINANCE ACT OF 1987 W.E.F. 01.0 4.1988. ALL THAT IS MEANT BY THIS EXPRESSION IS TO REFER TO THE INGR EDIENTS OF APPLICABILITY OF SECTION 53A TO THE CONTRACTS MENTI ONED THEREIN. IT IS ONLY WHERE THE CONTRACT CONTAINS ALL THE SIX FEA TURES MENTIONED IN SHRIMANT SHAMRAO SURYAVANSHI (SUPRA) , THAT THE SECTION APPLIES, AND THIS IS WHAT IS MEANT BY THE EXPRESSIO N OF THE NATURE REFERRED TO IN SECTION 53A . THIS EXPRESSION CANNOT BE STRETCHED TO REFER TO AN AMENDMENT THAT WAS MADE YEARS LATER IN 2001, SO AS TO THEN SAY THAT THOUGH REGISTRATION OF A CONTRACT IS REQUIRED BY THE AMENDMENT ACT OF 2001, YET THE AFORESAID EXPRESSION OF THE NATURE REFERRED TO IN SECTION 53A WOULD SOMEHOW REFER ONLY TO THE NATURE OF CONTRACT MENTIONED IN SECTION 53A, WH ICH WOULD THEN IN TURN NOT REQUIRE REGISTRATION. AS HAS BEEN STATE D ABOVE, THERE IS NO CONTRACT IN THE EYE OF LAW IN FORCE UNDER SECTIO N 53A AFTER 2001 UNLESS THE SAID CONTRACT IS REGISTERED. THIS BEING THE CASE, AND IT BEING CLEAR THAT THE SAID JDA WAS NEVER REGISTERED, SINCE THE JDA HAS NO EFFICACY IN THE EYE OF LAW, OBVIOUSLY NO TR ANSFER CAN BE SAID TO HAVE TAKEN PLACE UNDER THE AFORESAID DOCUME NT. SINCE WE ARE DECIDING THIS CASE ON THIS LEGAL GROUND, IT IS UNNECESSARY FOR US TO GO INTO THE OTHER QUESTIONS DECIDED BY THE HIGH COURT, NAMELY, WHETHER UNDER THE JDA POSSESSION WAS OR WAS NOT TAK EN; WHETHER ONLY A LICENCE WAS GRANTED TO DEVELOP THE PROPERTY; AND WHETHER THE DEVELOPERS WERE OR WERE NOT READY AND WILLING T O CARRY OUT THEIR PART OF THE BARGAIN. SINCE WE ARE OF THE VIEW THAT SUB-CLAUSE (V) OF ITA NO.999/BANG/2019 PAGE 12 OF 21 SECTION 2(47) OF THE ACT IS NOT ATTRACTED ON THE FA CTS OF THIS CASE, WE NEED NOT GO INTO ANY OTHER FACTUAL QUESTION. 13. THE CIT(A) CONCLUDED THAT THE SALE AGREEMENT DATED 08.03.1993 IS AN UNREGISTERED DOCUMENT AND NO LEGAL TRANSFER HAS HAPPENED THROUGH THAT. THE CIT(A) OBSERVED THAT THE TRANSFER CAN ONLY BE E FFECTED BY THE EXECUTION OF A SALE DEED WHICH HAPPENED ONLY ON 09.03.2007. ALL OTHER EVIDENCES/DOCUMENTS WHETHER IT IS IN THE NATURE OF SHARES OF THE COMPANY AFTER FORMATION OF THE COMPANY, POSSESSION OF THE P ROPERTY ETC. ARE NOT RELEVANT OR NOT VALID FOR TRANSFER OF IMMOVABLE PRO PERTY AFTER AMENDMENT IN 2001. THEREFORE, THE CIT(A) HELD THAT THE SALE AGR EEMENT DOES NOT CREATE ANY TITLE IN FAVOUR OF THE ASSESSEE AND THE SALE AG REEMENT WAS NOT A VALID DOCUMENT FOR TRANSFER OF PROPERTY. CONSIDERING THA T THE TRANSFER HAD TAKEN PLACE ON 09.03.2007, THE CIT(A) HELD THAT PROVISION S OF SECTION 50C OF THE ACT ARE APPLICABLE IN THE PRESENT CASE, THE TRANSFE R AGREEMENT DATED 09.03.2007 WAS THROUGH A REGISTERED DOCUMENT AND TH E GUIDANCE VALUE OF THE PROPERTY AS ON THAT DATE HAS TO BE CONSIDERED AS THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE AND TAXED ACCORDINGLY. THU S, THE CIT(A) UPHELD THE ORDER OF AO. 14. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 15. WITH REGARD TO THE REOPENING OF THE ASSESSMENT, THE LD. COUNSEL FOR THE ASSESSEE FIRSTLY SUBMITTED THAT THE REASONS REC ORDED FURNISHED BY THE AO IN THE LETTER DATED 30/11/2011 CONTAINS ONLY THE PU RPORTED EXTRACT OF THE REASONS RECORDED. HOWEVER, IT IS SUBMITTED THAT THE REASONS TO BE RECORDED U/S. 148[2] OF THE ACT ARE REQUIRED TO BE DONE IN T HE ORDER SHEET OF THE ASSESSEES FILE WITH THE DATE OF RECORDING THE REAS ONS AND THE SIGNATURE OF THE AO RECORDING THE REASONS. IT IS SUBMITTED THAT THE AO HAS NOT FURNISHED THE COPY OF THE ORDER SHEET NOTINGS CONTAINING THE REASONS RECORDED AND IN THE CIRCUMSTANCES, THE ASSESSEE IS UNABLE TO STATE IF THE MANDATORY REQUIREMENTS FOR INITIATING THE PROCEEDINGS HAVE BE EN PROPERLY COMPLIED WITH ITA NO.999/BANG/2019 PAGE 13 OF 21 INASMUCH AS THE DATE OF RECORDING THE REASONS IS NO T KNOWN TO THE ASSESSEE. FURTHER, THE NAME AND SIGNATURE OF THE OFFICER RECO RDING THE REASONS ETC., IS ALSO UNAVAILABLE AND THEREFORE, ON THIS COUNT ALSO, THE ASSESSEE IS UNABLE TO STATE IF THE MANDATORY REQUIREMENTS OF RECORDING TH E REASONS HAVE BEEN COMPLIED WITH. HENCE, IT IS PRAYED THAT THE AO MAY KINDLY BE DIRECTED TO FURNISH THE SAME FOR EFFECTIVE REPRESENTATION OF TH E CASE AND UPON THE RECEIPT OF THE SAME, PERMIT THE ASSESSEE TO MAKE SUBMISSION S ON THIS ASPECT OF THE MATTER. 16. SECONDLY, IT WAS SUBMITTED THAT IN THE EXTRACT OF THE REASONS AS FURNISHED BY THE LEARNED A.O., THERE IS A REFERENCE MADE TO A SURVEY WAS CONDUCTED BY THE DEPARTMENT IN THE CASE OF M/S. SUR AJ PROPERTIES, PROPRIETRIX, SMT. SURAJ SIPANI ON 23/08/2011. IT IS STATED THAT IN COURSE OF THE AFORESAID SURVEY PROCEEDINGS, CERTAIN DOCUMENTS VIZ ., SALE DEEDS/AGREEMENTS TO SELL WERE FOUND AND IMPOUNDED. PERUSAL OF THESE DOCUMENTS REVEALED THAT THE ASSESSEE HAD SOLD THE L AND ACQUIRED FROM BDA TO M/S. SURAJ PROPERTIES UNDER THE SALE DEED DATED 09.03.2007 REGISTERED AS DOCUMENT NO. BHM 04162-2009-2010 IN BOOK I, STORED IN CD NO., BMHD 385 IN THE OFFICE OF SUB-REGISTRAR, BOMMANAHALLI, B ANGALORE FOR A CONSIDERATION OF RS. 9,80,500/- TOWARDS SALE AND RS . 23,27,305/- TOWARDS PURCHASE OF STAMP DUTY. THE GUIDANCE VALUE OF THE P ROPERTY AS SEEN FROM THE SALE DEED IS RS. 2.7 CRORES. AS THE SALE CONSID ERATION IS MUCH LESS THAN THE GUIDANCE VALUE, THE PROVISIONS OF SEC. 50C OF T HE ACT IS ATTRACTED IN THE HANDS OF M/S. PRAKASH CHAND BETHALA AND SONS [HUF]. THUS, THE ASSESSEE IS LIABLE TO PAY CAPITAL GAINS TAX. ON THE ABOVE BA SIS, THE AO WAS OF THE VIEW AFTER VERIFICATION OF THE SEIZED MATERIALS THAT IT WAS FOUND THAT THE ASSESSEE HAS EVADED THE CAPITAL GAINS TAX ON THE ABOVE SALE OF PROPERTY FOR THE AFORESAID ASSESSMENT YEAR 20078-08. HENCE, THE LEAR NED A.O. HAS DERIVED A REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSM ENT. ITA NO.999/BANG/2019 PAGE 14 OF 21 17. AS MENTIONED EARLIER, THE ASSESSEE DID NOT FILE ANY FORMAL OBJECTIONS. HOWEVER, IT HAS STATED THAT THERE WAS NO ESCAPEMENT OF CAPITAL GAINS TAX AS THE POSSESSION OF THE PROPERTY SOLD UNDER THE SALE DEED DATED 09.03.2007 WAS GIVEN LONG BACK. IT WAS SUBMITTED THAT IN FACT , THIS ASPECT OF THE MATTER IS CLEAR FROM THE MATERIALS FOUND IN COURSE OF SURV EY ITSELF AND HENCE, ACCORDING TO THE ASSESSEE, THERE COULD NOT BE A BON AFIDE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT FOR THE YEAR UNDER APPEAL. T HE REOPENING OF THE ASSESSMENT HAS TO BE BONAFIDE. IT CANNOT BE A MERE PRETENSE AND WHEN FACTS THAT ARE RELEVANT FOR ARRIVING AT A PROPER CONCLUSI ON ARE IGNORED AND NOT CONSIDERED THE REOPENING OF THE ASSESSMENT IS NOT B ONAFIDE. HENCE, IT IS SUBMITTED THAT THE REOPENING OF THE ASSESSMENT IS U NJUSTIFIED AND THE CONSEQUENT ASSESSMENT ORDER PASSED REQUIRES TO BE C ANCELLED. 18. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT TI ME FOR COMPLETION OF THE SALE DEED IS ONLY 1 YEAR 6 MONTHS FROM THE DATE OF 08.03.1993 AND ABSOLUTE SALE DEED WAS NOT EXECUTED WITHIN THAT PER IOD, THEREFORE AGREEMENT TO SELL IS NOT VALID. HE FURTHER SUBMITT ED THAT EVEN CAPITAL GAIN WAS NOT OFFERED TO TAX CONSEQUENT TO THIS SALE AGRE EMENT ALSO IN THE AY 1993-94. ACCORDINGLY HE SUBMITTED THAT REOPENING O F ASSESSMENT IS TO BE HELD AS VALID. 19. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. AS SEEN FROM THE FACTS OF THE CASE, DURING THE COUR SE OF SURVEY IN THE CASE OF M/S. SURAJ PROPERTIES ON 23.8.2011 CERTAIN DOCUM ENTS WERE FOUND AND IMPOUNDED, WHICH SHOWED THERE WAS A SALE DEED DATED 9.3.2007 WHEREIN THE PRESENT ASSESSEE, PCBS(HUF) HAS SOLD THE PROPER TY TO SMT. SURAJ SIPANI FOR A CONSIDERATION OF RS.9,80,500 AND STAMP DUTY WAS PAID AT RS.23,77,305. THE GUIDANCE VALUE OF THE SAID PROPE RTY WAS RS.2.7 CRORES AS PER THE PROVISIONS OF SECTION 50C OF THE ACT. WE ARE OF THE OPINION THAT THE ASSESSEE HAS TO DECLARE CAPITAL GAIN FOR THE AY 2007-08 TO THE TUNE OF RS.2.77 CRORES WHICH IS SAID TO HAVE ESCAPED ASSESS MENT FOR THE AY 2007- ITA NO.999/BANG/2019 PAGE 15 OF 21 08. ACCORDINGLY THE AO ISSUED NOTICE U/S. 148 TO T HE ASSESSEE ON 15.10.2012 AFTER PRIOR APPROVAL OF THE ADDL. CIT, R ANGE 7, BANGALORE. 20. THE ASSESSEE IS A HUF, WHO FILED RETURN OF INCO ME ON 31.3.2008 DECLARING A TOTAL INCOME OF RS. 2,06,130. THERE WER E NO FURTHER PROCEEDINGS TAKEN IN THIS CASE AO FOR THE YEAR UNDER APPEAL. A NOTICE U/S. 148 OF THE INCOME-TAX ACT, 1961 [THE ACT] WAS ISSUED TO THE AS SESSEE ON 15/12/2012 CALLING UPON TO FILE HIS RETURN OF INCOME. IN RESPO NSE TO THE NOTICE, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED ON 22/01/2013 RE QUESTING THAT THE RETURN OF INCOME FILED ORIGINALLY ON 31/03/2008 BE TREATED AS RETURN FILED IN RESPONSE TO THE NOTICE ISSUED U/S 148 OF THE ACT. IN THE SAI D REPLY, THE REASONS RECORDED FOR ISSUING THE NOTICE U/S. 148 OF THE ACT WAS ALSO SOUGHT. 21. IN OUR OPINION, AT THE TIME OF ISSUE OF NOTICE U/S. 148 OF THE ACT, THE AO SHOULD HAVE REASON TO BELIEVE THAT INCOME HAS ES CAPED ASSESSMENT AND IT IS NOT IMPERATIVE THAT THE AO SHOULD ACTUALLY DI SCLOSE THE ESCAPEMENT OF PARTICULAR ITEM OF INCOME. IN OTHER WORDS, AT THE TIME OF ISSUE OF NOTICE U/S. 148, THERE NEED NOT BE CONCLUSIVE PROOF THAT THERE WAS ESCAPEMENT OF INCOME. THE AO SHALL PRIMA FACIE CERTIFY THAT THERE IS ESCAPEMENT OF INCOME. IN THE PRESENT CASE, AT THE TIME OF ISSUE OF NOTICE U/S.148, THERE IS A REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT IN TH E AY 2007-08. EVEN FURTHER DISCOVERY OF THE FACT CANNOT INVALIDATE THE NOTICE U/S. 148 OF THE ACT, WHICH WHEN ISSUED, WAS A VALID NOTICE. ACCORDINGLY , WE UPHOLD THE REOPENING OF ASSESSMENT IN THIS CASE. 22. COMING TO THE MERITS, THE LD. AR SUBMITTED THAT THE ASSESSEE HAD ORIGINALLY PARTICIPATED IN A BDA AUCTION FOR PURCHA SE OF PROPERTY. THE ASSESSEE WAS IN POSSESSION OF THE SITE ON 29/08/19 84 PURSUANT TO THE AUCTION SITE AGREEMENT DATED 24/07/1984 ENTERED IN TO BETWEEN THE ASSESSEE AND THE BDA. IT WAS SUBMITTED THAT SHRI R. K. SIPANI PURCHASED THE AFORESAID SITE TO CONSTRUCT HIS RESIDENTIAL HOUSE T HROUGH M/S. K. PRAKASHCHAND BETHALA PROPERTIES PVT. LTD (M/S. KPCB PPL FOR SHORT) FLOATED ITA NO.999/BANG/2019 PAGE 16 OF 21 EARLIER BY HIM ALONG WITH THE ASSESSEE. AFTER THE INCORPORATION OF M/S. KPCBPPL, THE ASSESSEE AND SHRI R.K. SIPANI ENTERED INTO AN ORAL AGREEMENT IN THE MONTH OF SEPTEMBER, 1989 WHEREBY T HE ASSESSEE SOLD THE AFORESAID SITE TO SHRI R.K. SIPANI FOR A CONSIDERAT ION OF RS.9,80,500/- AND A SUM OF RS.9,79,455/- WAS RECEIVED BY THE ASSESSEE B Y WAY OF VARIOUS CHEQUES. IT WAS SUBMITTED THAT THE ASSESSEE GAVE P OSSESSION TO SHRI R.K. SIPANI OF THE AFORESAID SITE ON 24/10/1989 ITSELF. THEREAFTER, THE ASSESSEE ENTERED INTO AN UNREGISTERED AGREEMENT DATED 08/03/ 1993 TO SELL THE AFORESAID SITE. 23. AS ALREADY SUBMITTED BY LD. AR, SHRI R.K. SIPAN I PURCHASED THE AFORESAID SITE TO CONSTRUCT HIS RESIDENTIAL HOUSE T HROUGH M/S. KPCBPPL. THUS, IT WAS SUBMITTED THAT THE LAND CAME TO BE OWN ED BY SHRI R.K. SIPANI AND THE SUPER STRUCTURE PUT UP ON THE AFORESAID SIT E CAME TO BE OWNED BY M/S. KPCBPPL, SINCE IT HAD PUT UP THE STRUCTURE OUT OF ITS FUNDS. IT WAS FURTHER SUBMITTED THAT THE KHATA OF THE AFORESAID P ROPERTY STOOD IN THE NAME OF M/S. KPCBPPL AND ALSO THAT THE PROPERTY TAXES WE RE PAID BY THE SAID COMPANY FROM TIME TO TIME. THE LD. AR DREW OUR AT TENTION TO THE COPY OF THE KHATHA CERTIFICATE AND TAX PAID RECEIPT WHICH W AS ALREADY MADE AVAILABLE BEFORE THE CIT(APPEALS) AS ADDITIONAL EVIDENCE (PLA CED ON RECORD AT PB PAGES 70 TO 71). FURTHER, THE LD. AR SUBMITTED THA T AS FAR AS ASSESSEE WAS CONCERNED, THE TRANSACTION WAS VIRTUALLY COMPLETED IN THE YEAR 1989 AND THEREAFTER THE ASSESSEE TOTALLY FORGOT ABOUT THE TR ANSACTION. IN THE YEAR 1995 OR THEREABOUT, SHRI R.K. SIPANI REALIZED THAT HE DI D NOT HAVE THE TITLE AS HE HAD NOT YET OBTAINED THE AUCTION SALE DEED FROM THE BDA. SUBSEQUENTLY, SHRI R.K. SIPANI GOT THE SALE DEED DATED 11.10.1995 EXECUTED BY THE BDA IN FAVOUR OF ASSESSEE AND THE COPY OF SALE DEED WAS PLACED ON RECORD ITA NO.999/BANG/2019 PAGE 17 OF 21 WHICH WAS NOT CONSIDERED BY THE ASSESSING OFFICER. THE LD. AR SUBMITTED THAT ON 09/03/2007, SHRI R.K. SIPANI GOT THE ASSESS EE TO EXECUTE A SALE DEED IN RESPECT OF THE AFORESAID SITE IN FAVOUR OF HIS N OMINEE VIZ., M/S. SURAJ PROPERTIES, WHICH IS A PROPRIETARY CONCERN OF SHRI R.K. SIPANIS WIFE. THUS, IT WAS SUBMITTED THAT THE TITLE OF THE PROPERTY STO OD IN FAVOUR OF ASSESSEE IN THE RECORDS OF SUB-REGISTRAR SINCE NO REGISTERED SA LE AGREEMENT/DOCUMENT WAS EXECUTED BETWEEN THE PARTIES. THEREFORE, SHRI R.K. SIPANI REQUESTED THE ASSESSEE TO EXECUTE THE SALE DEED AS VENDOR WHI CH WAS READILY ACCEPTED BY THE ASSESSEE SINCE HE HAD RECEIVED THE ENTIRE SA LE CONSIDERATION OF RS.9,80,500/- AND M/S. KPCBPPL WAS MADE A CONFIRMIN G PARTY AS THE SUPER STRUCTURE BELONGED TO IT. 24. THE LD. AR SUBMITTED THAT THE DIFFERENCE BETWEE N THE GUIDELINE VALUE OF THE SALE DEED BEING 09/03/2007 AND THE ACTUAL CO NSIDERATION AGREED BETWEEN THE TWO PARTIES BECAME THE SUBJECT MATTER O F AND THE AO CONCLUDED THE ASSESSMENT PROCEEDINGS, DETERMINING THE TOTAL I NCOME OF THE ASSESSEE AT RS.2,70,31,932/- BY MAKING A SOLITARY ADDITION OF RS.2,68,25,802/- ON THE TRANSFER OF PROPERTY BY INVOKING THE PROVISIONS OF SEC. 50C OF THE ACT WHICH WAS CONFIRMED BY THE CIT(A). 25. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT TH E SALE AGREEMENT DATED 8.3.1993 IS AN UNREGISTERED DOCUMENT AND IT C ANNOT BE CONSIDERED AS A VALID CONVEYANCE DEED SO AS TO TRANSFER THE IMPUG NED PROPERTY AND THE ACTUAL SALE TOOK PLACE VIDE SALE DEED DATED 9.3.200 7. ACCORDING TO THE LD. DR, THE SALE TOOK PLACE ONLY ON 9.3.2007, AS SUCH T HE PROVISIONS OF SECTION 50C OF THE ACT AS IT STOOD ON THAT DATE SHOULD BE A PPLIED. HE SUPPORTED THE ORDER OF THE LOWER AUTHORITIES. 26. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. SECT ION 48 OF THE ACT PROVIDES THE MODE OF COMPUTATION OF CAPITAL GAIN. IT CONTEMPLATES THE INCOME ARISING UNDER THE HEAD CAPITAL GAIN SO AS TO COMPUTE BY DEDUCTING ITA NO.999/BANG/2019 PAGE 18 OF 21 FROM THE FULL VALUE OF CONSIDERATION RECEIVED OR AC CRUING AS A RESULT OF TRANSFER OF CAPITAL ASSET THE FOLLOWING AMOUNTS VIZ., (A) EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH SUCH TRANSFER; (B) COST OF ACQUISITION OF ASSET AND COST OF ANY IM PROVEMENT MADE THERETO. 27. SECTION 50C PROVIDES THAT WHERE THE CONSIDERATI ON RECEIVED OR ACCRUING AS A RESULT OF TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET BEING RENT OR BUILDING OR BOTH IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED SHALL, F OR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERA TION. IN OTHER WORDS, THE FULL VALUE OF CONSIDERATION MENTIONED IN SECTION 48 IS TO BE REPLACED BY THE CONSIDERATION ON WHICH THE VALUE OF THE PROPERTY WA S ADOPTED FOR THE PURPOSE OF PAYMENT OF STAMP DUTY. 28. IN THE PRESENT CASE, THE AO APPLIED THE PROVIS IONS OF SECTION 50C OF THE ACT ON THE BASIS OF SALE DEED EXECUTED BY THE A SSESSEE ON 9.3.2007. AT THIS STAGE, IT IS APPROPRIATE TO OBSERVE THAT TH ERE WAS AN AGREEMENT OF SALE EXECUTED BY ASSESSEE ON 8.3.1993 AND TOTAL PAY MENT OF RS.9,79,455 WAS MADE TO THE VENDOR BY THE PURCHASER OUT OF TOTA L CONSIDERATION OF RS.9,80,500 AND PENDING BALANCE WAS ONLY RS.1,005 A ND THE ENTIRE PAYMENT WAS MADE BY CHEQUE AND THE SAME WAS MENTIONED IN TH E SALE DEED DATED 9.3.2007. FURTHER, THE POSSESSION OF PROPERTY WAS A LSO HANDED OVER TO THE PURCHASER MENTIONING SALE AGREEMENT AS ON 8.3.1993. IT IS ALSO BROUGHT ON RECORD THAT THIS PROPERTY HAS BEEN MENTIONED AS ADDRESS OF R.K. SIPANI AS EVIDENT FROM FORM 32 FILED BY SIPANI AUTOMOBILES LTD. BEFORE ROC ON 17.12.1996. FURTHER KATHA OF SAID PROPERTY HAS BEE N TRANSFERRED ON 9.2.2000 IN THE NAME OF M/S. KPCBPPL. THUS, THE M AJOR PAYMENT OF RS.9,79,455 WAS RECEIVED BY THE ASSESSEE VIDE SALE AGREEMENT DATED ITA NO.999/BANG/2019 PAGE 19 OF 21 8.3.1993 WHICH WAS MUCH BEFORE THE SALE DEED EXECUT ED ON 9.3.2007. AS OBSERVED EARLIER, SECTION 50C PROVIDES THAT WHERE T HE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IF LESS THAN VALUE ADOPTE D OR ASSED BY ANY AUTHORITY FOR THE PURPOSE OF STAMP DUTY IN RESPECT OF SUCH TR ANSFER, THE VALUE ADOPTED OR ASSESSED SHALL FOR THE PURPOSE OF SECTION 48 BE DEEMED TO BE THE FULL VALUE OF CONSIDERATION. THE QUESTION BEFORE US IS, WHAT COULD BE THE FULL VALUE OF SUCH CONSIDERATION I.E., WHETHER VALUE ON WHICH STAMP DUTY WAS PAID AT THE TIME OF SALE DEED OR THE VALUE DECLARED IN T HE SALE AGREEMENT? 29. IN THE PRESENT CASE, THE ASSESSEE HAS ENTERED I NTO SALE AGREEMENT ON 8.3.1993 AND MAJOR PORTION OF THE CONSIDERATION HAS BEEN RECEIVED BY THE ASSESSEE MENTIONED IN THE SALE AGREEMENT THROUGH AC COUNT PAYEE CHEQUE AND POSSESSION OF PROPERTY WAS ALSO HANDED OVER TO SRI R.K. SIPANI ON 24.10.1989, WHICH WAS MENTIONED IN CLAUSE 5 OF SALE AGREEMENT. THERE IS NO DISPUTE REGARDING THESE FACTS. THE PURCHASER HA S NOT PAID ANYTHING MORE THAN THE VALUE MENTIONED IN THE SALE AGREEMENT. FU RTHER BY WAY OF AGREEMENT DATED 8.3.1993 RIGHT OVER THE PROPERTY HA S BEEN TRANSFERRED FROM THE VENDOR TO PURCHASER. THE ONLY PENDING WAS ACTU AL REGISTRATION OF THE SALE DEED. IN OTHER WORDS, AT TIME OF AGREEMENT OF SALE IN RESPECT OF THIS IMMOVABLE PROPERTY ON 8.3.1993, A RIGHT IN PERSONA IS CREATED IN FAVOUR OF THE PURCHASER. WHEN SUCH A RIGHT IS CREATED IN FAV OUR OF THE PURCHASER AND THE VENDOR IS RESTRAINED FROM SELLING SUCH PROPERTY TO SOMEONE ELSE BECAUSE THE PURCHASER, IN WHOSE FAVOUR RIGHT IN PERSONA IS CREATED, HAS LEGITIMATE RIGHT TO ENFORCE SUCH SPECIFIC PERFORMANCE OF THE A GREEMENT IF THE VENDOR FOR SOME REASON OR OTHER HAS NOT EXECUTED THE SALE DEED . THUS BY VIRTUE OF AGREEMENT OF SALE, SOME RIGHT IS GIVEN TO THE VENDE E BY THE VENDOR. IT IS ENCUMBRANCE ON THE PROPERTY. AT THIS STAGE, IT IS APPROPRIATE TO MENTION THAT THE PROVISIONS OF SECTION 50C(1) OF THE ACT, ACCORD ING TO WHICH, IF THERE IS A GAP BETWEEN THE DATE OF EXECUTION OF SALE AGREEMENT AND THE SALE DEED ITA NO.999/BANG/2019 PAGE 20 OF 21 AND IF THE GUIDANCE VALUE CHANGES, THE GUIDANCE VAL UE AS ON THE DATE OF AGREEMENT HAS TO BE CONSIDERED AS THE FULL CONSIDER ATION OF THE CAPITAL ASSET. IN THE PRESENT CASE, THE ENFORCEABLE AGREEMENT WAS ENTERED INTO ON 8.3.1993 BY PAYMENT OF MAJOR PORTION OF THE SALE CO NSIDERATION AND ONLY FORMAL SALE DEED WAS EXECUTED ON 9.3.2007. THE ASS ESSEE HAS PRODUCED ALL THE RELEVANT DOCUMENTS FOR DEMONSTRATING THE AU THENTICITY OF THE SALE AGREEMENT WITH CORROBORATIVE EVIDENCE IN THE FORM O F KATHA CERTIFICATE IN THE NAME OF M/S. KPCBPPL DATED 1.7.1997, THE ADDRESS OF R.K. SIPANI, SIPANI AUTOMOBILES LTD. IN FORM 32 BEFORE THE REGISTRAR OF COMPANIES ON 17.12.1996 AND THE PAYMENT DETAILS THROUGH CHEQUES. THE PAYMENT MENTIONED IN THE SALE DEED TOWARDS SALE CONSIDERATI ON CLEARLY DEMONSTRATED THAT THESE PAYMENTS HAVE BEEN PASSED BETWEEN THE PA RTIES VIDE SALE AGREEMENT DATED 8.3.1993 AND POSSESSION OF PROPERTY HAS ALREADY BEEN HANDED OVER ON 24.10.1989. THEREFORE, TRANSFER HAS TAKEN PLACE VIDE SALE AGREEMENT DATED 8.3.1993 AND FULL VALUE OF CONSIDER ATION FOR THE PURPOSE OF COMPUTING LONG TERM CAPITAL GAIN IN THE HANDS OF TH E ASSESSEE HAS TO BE ADOPTED ON THE BASIS OF GUIDANCE VALUE OF THIS PROP ERTY AS ON THE DATE OF SALE AGREEMENT ONLY, NOT ON THE DATE OF SALE DEED D ATED 9.3.2007. ACCORDINGLY WE ALLOW THE GROUNDS TAKEN BY THE ASSES SEE AS THERE WAS NO APPLICABILITY OF SECTION 50C IN THE YEAR 2007-08. 30. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF JANUARY, 2021. SD/- SD/- ( GEORGE GEO RGE K. ) ( CHANDRA POOJARI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 28 TH JANUARY, 2021. / DESAI S MURTHY / ITA NO.999/BANG/2019 PAGE 21 OF 21 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE. 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. 9 9 9/BANG/2019 ASSESSMENT YEAR: 2007 - 08 MR. PRAKASH CHAND BETHALA, 815, 80 FEET RING ROAD, 8 TH BLOCK, KORAMANGALA, BANGALORE 560 095. PAN: AABHK 7700G VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 7[1], BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN, ADVOCATE RESPONDENT BY : SHRI KANNAN NARAYANAN, JT.CIT(DR)(ITAT), BENGALURU. DATE OF HEARING : 11 .0 1 .202 1 DATE OF PRONOUNCEMENT : 28 .0 1 .202 1 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 29.03.2019 OF THE CIT(APPEALS), BANGALORE-9, BANGAL ORE IN RELATION TO ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL:- 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR A S THEY ARE AGAINST THE APPELLANT ARE OPPOSED TO LAW, EQUITY, W EIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE ORDER OF RE-ASSESSMENT IS BAD IN LAW AND VOI D-AB-INITIO FOR WANT OF REQUISITE JURISDICTION ESPECIALLY, THE MANDATORY REQUIREMENTS TO ASSUME JURISDICTION U/S 148 OF THE ACT DID NOT EXIST ITA NO.999/BANG/2019 PAGE 2 OF 21 AND HAVE NOT BEEN COMPLIED WITH AND CONSEQUENTLY, T HE ORDER OF RE-ASSESSMENT REQUIRES TO BE CANCELLED. 3. THE LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDING THE ASSESSMENT OF THE LONG TERM CAPITAL GAINS OF RS. 2, 68,25,802/- ON THE ALLEGED TRANSFER OF PROPERTY DURING THE YEAR IN VOKING THE PROVISIONS OF SEC. 50C OF THE ACT UNDER THE FACTS A ND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE. 3.1 THE LEARNED CIT[A] FAILED TO APPRECIATE THAT TH ERE WAS NO TRANSFER OF THE PROPERTY DURING THE YEAR UNDER APPE AL AND HENCE, THE COMPUTATION OF THE CAPITAL GAINS FOR THE YEAR UNDER APPEAL IS OPPOSED TO LAW AND FACTS OF THE APPELLANT'S CASE AN D THEREFORE, THE CAPITAL GAINS ASSESSED OUGHT TO HAVE B DELETED. 4. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WI TH THE HON'BLE CCIT/DG, THE APPELLANT DENIES ITSELF LIABLE TO BE CHARGED TO INTEREST U/S 234-A, 234-6 AND 234-C OF THE ACT, WHICH UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S C ASE DESERVES TO BE CANCELLED. 5. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBL Y PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLANT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO ORDER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE COSTS . 3. THE MAIN ISSUE RAISED IN THIS APPEAL IS WITH REG ARD TO TAXATION OF LONG TERM CAPITAL GAINS ARISING ON TRANSFER OF THE SITE NO. 868, 6TH BLOCK, KORAMANGALA. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN HUF. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED HIS RE TURN OF INCOME ON 31/03/2008 DECLARING TOTAL INCOME OF RS.2,06,130-/. THE ASSESSEE HAD PURCHASED THE ABOVE PROPERTY BY PARTICIPATING IN A BDA AUCTION. THE AUCTION SITE AGREEMENT BETWEEN THE BDA AND THE ASSESSEE TOO K PLACE ON 24.07.1984 AND FURTHER THE ASSESSEE WAS PUT IN POSS ESSION OF THE AFORESAID SITE BY THE BDA ON 29.08.1984. IN THE MONTH OF SEP TEMBER, 1989, THE ASSESSEE SOLD THE AFORESAID PROPERTY TO SHRI R.K. S IPANI THROUGH AN ORAL ITA NO.999/BANG/2019 PAGE 3 OF 21 AGREEMENT. THE ASSESSEE GAVE POSSESSION OF THE SITE TO SHRI R.K. SIPANI ON 24/10/1989 FOR A CONSIDERATION OF RS.9,80,500. THE ASSESSEE RECEIVED AMOUNT OF RS.9,79,455/- THROUGH VARIOUS CHEQUES AND BALANCE AMOUNT OF RS.1,005/- WAS TO BE PAID BY THE PURCHASER AT THE T IME OF EXECUTION OF SALE DEED. ON 08.03.1993, A SALE AGREEMENT (UNREGISTERE D DOCUMENT) FOR THE AFORESAID SITE WAS MADE BETWEEN THE ASSESSEE AND S HRI R.K. SIPANI TO BRING CLARITY ON THE NATURE OF THE TRANSACTION WITH RESPE CT TO ORAL AGREEMENT. THE ASSESSEE FURTHER EXECUTED A SALE DEED ON 09.03.2007 IN WHICH THE AFORESAID SITE WAS SOLD TO M/S. SURAJ PROPERTIES (A PROPRIETA RY CONCERN OF R.K. SIPANIS WIFE) FOR A CONSIDERATION OF RS.9,80,500/- TOWARDS SALE AND RS.23,27,305/- TOWARDS PURCHASE OF STAMP DUTY. 5. THE GUIDANCE VALUE OF THE ABOVE PROPERTY AS PER THE SALE DEED WAS RS.2,77,06,000/-. THE ASSESSING OFFICER NOTICED TH AT SALE CONSIDERATION WAS LESS THAN THE GUIDANCE VALUE. FOR THE PURPOSE OF C OMPUTATION OF CAPITAL GAINS, WHEN THE SALE VALUE IS LESS THAN THE GUIDANC E VALUE CALCULATED BY STAMP VALUATION AUTHORITY, PROVISIONS OF SECTION 50 C ARE ATTRACTED. AS PER SECTION 50C, IN SUCH A CASE , THE GUIDANCE VALUE SH ALL BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF SUCH TRANSFER. SECTION 50C OF THE INCOME TAX ACT READS AS FOLLOWS: 50C. (1) WHERE THE CONSIDERATION RECEIVED OR ACCR UING AS A RESULT OF THE TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY OF A STATE GOVERNMENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE 'STAMP VALUATION AUTHORITY') FOR THE PURP OSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALU E SO ADOPTED OR ASSESSED SHALL, FOR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUIN G AS A RESULT OF SUCH TRANSFER. (2) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SECT ION (1), WHERE (A) THE ASSESSEE CLAIMS BEFORE ANY ASSESSING OFFIC ER THAT THE VALUE ADOPTED OR ASSESSED BY THE STAMP VALUATION AU THORITY ITA NO.999/BANG/2019 PAGE 4 OF 21 UNDER SUB-SECTION (1) EXCEEDS THE FAIR MARKET VALUE OF THE PROPERTY AS ON THE DATE OF TRANSFER; (B) THE VALUE SO ADOPTED OR ASSESSED BY THE STAMP VALUATION AUTHORITY UNDER SUB-SECTION (1) HAS NOT BEEN DISPUT ED IN ANY APPEAL OR REVISION OR NO REFERENCE HAS BEEN MADE BE FORE ANY OTHER AUTHORITY, COURT OR THE HIGH COURT, THE ASSESSING OFFICER MAY REFER THE VALUATION OF TH E CAPITAL ASSET TO A VALUATION OFFICER AND WHERE ANY SUCH REFERENCE IS MADE, THE PROVISIONS OF SUB-SECTIONS (2), (3), (4), (5) AND ( 6) OF SECTION 16A, CLAUSE (I) OF SUB-SECTION (1) AND SUB-SECTIONS (6) AND (7) OF SECTION 23A, SUB-SECTION (5) OF SECTION 24, SECTION 34AA, S ECTION 35 AND SECTION 37 OF THE WEALTH-TAX ACT, 1957 (27 OF 1957) , SHALL, WITH NECESSARY MODIFICATIONS, APPLY IN RELATION TO SUCH REFERENCE AS THEY APPLY IN RELATION TO A REFERENCE MADE BY THE ASSESS ING OFFICER UNDER SUB-SECTION (1) OF SECTION 16A OF THAT ACT. 6. BEFORE THE ASSESSING OFFICER, THE ASSESSEE ARGUE D THAT THE PROVISIONS OF SECTION 50C ARE APPLICABLE PROSPECTIVELY AND NOT RETROSPECTIVELY. THE ASSESSEE SUBMITTED THAT POSSESSION BY TRANSFER HAV ING BEEN COMPLETED IN 1989, THE PROVISIONS OF SECTION 50C WILL NOT BE APP LICABLE. ACCORDING TO THE ASSESSEE, THE PROVISIONS OF SECTION 50C OF THE ACT COMES WITH REFERENCE TO THE CAPITAL GAINS BY THE TRANSFEROR TO THE TRANSFER EE ON TRANSFER W.E.F. 01.04.2003. IT WAS SUBMITTED THAT THE PROVISIONS O F SECTION 50C CAME INTO STATUTE BOOK W.E.F. 04.04.2003 AND IT IS PROSPECTI VE IN NATURE AND NOT RETROSPECTIVE. THE ASSESSEE SUBMITTED THAT THE ASS ESSEE GAVE POSSESSION OF THE PROPERTY BEFORE ENACTMENT OF SECTION 50C OF THE ACT ITSELF AND THEREFORE, SECTION 50C HAS NO APPLICATION. IT WAS SUBMISSION OF THE ASSESSEE THAT ASSUMING SECTION 50C IS APPLICABLE, THE DOCUMENT EXECUTED IS WITH REFERENCE TO A CONTRACT OR TRANSFER WITHIN THE MEANING OF INCOME-TAX ACT PRIOR TO ENACTMENT OF SECTION 50C OF THE ACT. THEREFORE, IT WAS SUBMITTED THAT THE PROVISIONS OF SECTION 50C ARE NOT APPLICAB LE. HOWEVER, THE ASSESSING OFFICER STATED THAT PROVISIONS OF SECTION 50C ARE APPLICABLE AND HELD THAT TRANSACTION IS TAXABLE FOR THE YEAR 2007 -08. THE ASSESSING OFFICER ITA NO.999/BANG/2019 PAGE 5 OF 21 THUS TREATED RS.2,77,06,000/- AS THE SALE CONSIDERA TION RECEIVED BY THE ASSESSEE AND CALCULATED INCOME FROM CAPITAL GAINS A CCORDINGLY. 7. ON APPEAL, THE CIT(APPEALS) CONFIRMED THE ACTION OF THE AO IN REOPENING THE ASSESSMENT AND HELD THAT NOTICE U/S. 148 WAS VALIDLY ISSUED. ON MERITS, HE OBSERVED THAT THE EXACT DATE OF TRANS FER HAS TO BE ASCERTAINED. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT SINC E THE POSSESSION OF THE PROPERTY WAS GIVEN LONG BACK, SHRI R.K. SIPANI HAD CONSTRUCTED THE HOUSE FOR HIS OWN RESIDENTIAL PURPOSE, THEREFORE, NO TRAN SFER TOOK PLACE DURING FY 2006-07 AND THEREFORE, THE QUESTION OF OFFERING THE PROCEEDS OF TRANSFER FOR CAPITAL GAINS TAX DOES NOT ARISE IN THE A.Y. 2007-0 8. ACCORDING TO THE CIT(A), THE EXECUTION OF SALE DEED BY BDA IN FAVOUR OF THE ASSESSEE TOOK PLACE ONLY ON 11.10.1995. THEREFORE, BEFORE THE EXECUTION OF SALE DEED, THE ASSESSEE WAS ONLY AN ALLOTTEE (AGREEMENT HOLDER) OF THE AFOR ESAID SITE. THUS, IT WAS CLEAR THAT THE ASSESSEE HIMSELF WAS IN PART PERFORM ANCE OF THE CONTRACT U/S. 53A OF THE TRANSFER OF PROPERTY ACT. THEREFORE, IT WAS NOT CLEAR HOW HE TRANSFERRED THE SITE TO SHRI R.K. SIPANI IN 1993,WH EN HE HIMSELF GOT THE SALE DEED EXECUTED IN HIS FAVOUR IN 1995 BY THE BDA. F URTHER, ACCORDING TO THE CIT(A), THE OWNERSHIP OF PROPERTY WAS TRANSFERRED T O SHRI R.K. SIPANI IN 1993, THEN THE SALE DEED EXECUTED BY THE BDA IN 1995 SHOU LD HAVE BEEN MADE IN FAVOUR OF SHRI R.K. SIPANI AND NOT THE ASSESSEE. A CCORDING TO THE ASSESSING OFFICER, IF THE PROPERTY HAD BEEN TRANSFERRED TO SH RI R.K. SIPANI IN 1993 ITSELF, THEN THE ASSESSEE SHOULD NOT HAVE EXECUTED THE SALE DEED IN FAVOUR OF M/S. SURAJ PROPERTIES IN 2007 AS THE SAME WAS NOT REQUIR ED FROM HIS SIDE. AS PER THE AGREEMENT DATED 08.03.1993, THE AFORESAID S ITE WAS TRANSFERRED TO SHRI R.K. SIPANI BUT IN THE SALE DEED DATED 09.03.2 007, IT WAS TRANSFERRED TO M/S. SURAJ PROPERTIES. FURTHER, VIDE SALE DEED DAT ED 09.03.2007 TRANSFER OF SITE AS WELL AS BUILDING TOOK PLACE; BUT VIDE SALE AGREEMENT DATED 08.03.1993, ONLY THE SITE WAS TRANSFERRED. HENCE, T HE SALE AGREEMENT DATED 08.03.1993 AND THE SALE DEED DATED 09.03.2007 WERE NOT IN COHERENCE WITH ITA NO.999/BANG/2019 PAGE 6 OF 21 EACH OTHER AND THE TRANSFEREE IN BOTH THE CASES WER E LEGALLY DIFFERENT ENTITIES AND THEREFORE BOTH THE TRANSFERS WERE HELD TO BE DI FFERENT. FOR CONVENIENCE SAKE, RELEVANT PARAGRAPH OF SALE DEED DATED 09.03.2 007 EXTRACTED IN THE IMPUGNED ORDER OF THE CIT(A) IS REPRODUCED BELOW:- WHEREAS THE AFORESAID SITE ALONG WITH THE BUILDING CONSTRUCTED THEREON IS THE SUBJECT MATTER OF THIS SALE DEED AND THE SAME IS MOREFULLY DESCRIBED IN THE SCHEDULE HEREUNDER AND H EREIN REFERRED TO AS THE SCHEDULE PROPERTY. 8. THUS, THE CIT(A) WAS OF THE VIEW THAT THE TRANS ACTIONS CARRIED OUT BY THE ASSESSEE WERE NOT CLEAR AND TRANSPARENT IN NATU RE. HE ALSO NOTICED THAT THE ASSESSEE HAD NOT PAID THE TAXES DURING THE RESP ECTIVE YEAR WHEN THE PROPERTY WAS CLAIMED TO BE TRANSFERRED BY HIM AND A FTER THE EXECUTION OF SALE DEED WHEN THE PROPERTY WAS LEGALLY TRANSFERRED. THU S HE OBSERVED THAT THE ASSESSEE WAS TRYING TO BYPASS THE LAWS WITH THE HEL P OF VARIOUS AGREEMENTS WHICH IS CLEARLY AN INSTANCE OF TAX AVOIDANCE. HE REFERRED TO SECTION 54 OF THE TRANSFER OF PROPERTY ACT WHICH, ACCORDING TO HI M, CLEARLY STATES THAT TRANSFER IN CASE OF AN IMMOVABLE PROPERTY OF VALUE MORE THAN RS.100 CAN ONLY BE MADE THROUGH A REGISTERED DOCUMENT. SECTIO N 54 OF THE TRANSFER OF PROPERTY ACT STATES AS FOLLOWS:- SALE DEFINED, - SALE IS A TRANSFER OF OWNERSHIP IN EXCHANGE FOR A PRICE PAID OR PROMISED OR PART PAID AND PART PROM ISE. SALE HOW MADE SUCH TRANSFER, IN THE CASE OF TANGIBLE IMMOV EABLE PROPERTY OF THE VALUE OF ONE HUNDRED RUPEES AND UPWARDS, OR IN THE CASE OF A REVERSION OR OTHER INTANGIBLE THING, CAN BE MADE ONLY BY A REGISTERED INSTRUMENT. IN THE CASE OF TANGIBLE IMMO VEABLE PROPERTY OF A VALUE LESS THAN ONE HUNDRED RUPEES, SUCH TRANS FER MAY BE MADE EITHER BY A REGISTERED INSTRUMENT OR BY DELIVERY OF THE PROPERTY. DELIVERY OF TANGIBLE IMMOVEABLE PROPERTY TAKES PLAC E WHEN THE SELLER PLACES THE BUYER, OR SUCH, PERSON AS HE DIRE CTS, IN POSSESSION OF THE PROPERTY. ITA NO.999/BANG/2019 PAGE 7 OF 21 CONTRACT FOR SALE, -A CONTRACT FOR THE SALE OF IMMO VEABLE PROPERTY IS A CONTRACT THAT A SALE OF SUCH PROPERTY SHALL TA KE PLACE ON TERMS SETTLED BETWEEN THE PARTIES. IT DOES NOT, OF ITSEL F, CREATE ANY INTEREST IN OR CHARGE ON SUCH PROPERTY. 9. THE CIT(A) WITH REFERENCE TO SECTIONS 53A AND 54 OF THE TRANSFER OF PROPERTY ACT, RELIED ON THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF NARANDAS KARSONDAS VS. SA KAMTAM AND RAMBHAU NAMDEO GAJRE VS. NARAYAN BAPUJI DHOTRA WHEREIN IT WAS OBSERVED THAT A TRANSFER OF IMMOVA BLE PROPERTY BY WAY OF SALE CAN BE EFFECTED ONLY BY A D EED OF CONVEYANCE. IN THE ABSENCE OF A DEED OF CONVEYANCE (WHICH MUST BE DULY STAMPED AND REGISTERED AS REQUIRED BY LAW), NO RIGHT, TITLE OR INTEREST IN AN IMMOVABLE PROPERTY CAN BE TRANSFERRED. RELIANCE WAS ALSO PLAC ED ON THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF CIT VS. BALBIR SINGH MAINI (2017) 86 TAXMANN.COM 94 (SC) WHEREIN IT WAS HELD THAT NO RIGHTS ARE TRANSFERRED IN RESPECT OF AN IMMOVABLE PROPERTY, IF THE DOCUMENT P URPORTEDLY CONVEYING SUCH A TRANSFER IS NOT REGISTERED. 10. THE RELEVANT SECTIONS THAT ARE NECESSARY FOR US TO DECIDE THE PRESENT MATTER ARE AS UNDER:- 53A. PART PERFORMANCE . WHERE ANY PERSON CONTRACTS TO TRANSFER FOR CONSIDERATION ANY IMMOVEABLE PROPERTY BY WRITING SIGNED BY HIM OR ON HIS BEHALF FROM WHICH THE TERMS NECESSARY TO CONSTITUTE THE TRANSFER CAN BE ASCERTAINED WITH REA SONABLE CERTAINTY, AND THE TRANSFEREE HAS, IN PART PERFORMANCE OF THE CONTRACT, TAKEN POSSESSION OF THE PROPERTY OR ANY PART THEREOF, OR THE TRANSFEREE, BEING ALREADY IN POSSESSION, CONTINUES IN POSSESSIO N IN PART PERFORMANCE OF THE CONTRACT AND HAS DONE SOME ACT I N FURTHERANCE OF THE CONTRACT, AND THE TRANSFEREE HAS PERFORMED O R IS WILLING TO PERFORM HIS PART OF THE CONTRACT, THEN, NOTWITHSTAN DING THAT WHERE THERE IS AN INSTRUMENT OF TRANSFER, THAT THE TRANSF ER HAS NOT BEEN COMPLETED IN THE MANNER PRESCRIBED THEREFORE BY THE LAW FOR THE TIME BEING IN FORCE, THE TRANSFEROR OR ANY PERSON C LAIMING UNDER HIM SHALL BE DEBARRED FROM ENFORCING AGAINST THE TR ANSFEREE AND PERSONS CLAIMING UNDER HIM ANY RIGHT IN RESPECT OF THE PROPERTY OF WHICH THE TRANSFEREE HAS TAKEN OR CONTINUED IN POSS ESSION, OTHER ITA NO.999/BANG/2019 PAGE 8 OF 21 THAN A RIGHT EXPRESSLY PROVIDED BY THE TERMS OF THE CONTRACT: PROVIDED THAT NOTHING IN THIS SECTION SHALL AFFECT THE RIGHTS OF A TRANSFEREE FOR CONSIDERATION WHO HAS NO NOTICE OF T HE CONTRACT OR OF THE PART PERFORMANCE THEREOF.] INCOME TAX ACT SECTION 2 DEFINITIONS IN THIS ACT, UNLESS THE CON TEXT OTHERWISE REQUIRES, (47) TRANSFER, IN RELATION TO A CAPITAL ASSET, INCLUD ES, (I) TO (IV) XXX XXX (V) ANY TRANSACTION INVOLVING THE ALLOWING OF THE P OSSESSION OF ANY IMMOVABLE PROPERTY TO BE TAKEN OR RETAINED IN PART PERFORMANCE OF A CONTRACT OF THE NATURE REFERRED TO IN SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882) ; OR (VI) ANY TRANSACTION (WHETHER BY WAY OF BECOMING A MEMBER OF, OR ACQUIRING SHARES IN, A CO-OPERATIVE SOCIETY, COMPAN Y OR OTHER ASSOCIATION OF PERSONS OR BY WAY OF ANY AGREEMENT O R ANY ARRANGEMENT OR IN ANY OTHER MANNER WHATSOEVER) WHIC H HAS THE EFFECT OF TRANSFERRING, OR ENABLING THE ENJOYMENT O F, ANY IMMOVABLE PROPERTY. 45. CAPITAL GAINS (1) ANY PROFITS OR GAINS ARISING FROM THE TRANSFER OF A CAPITAL ASSET EFFECTED IN THE PREVIOUS YEAR SHALL, SAVE AS OTHERW ISE PROVIDED IN SECTIONS 54, 54B, 54D, 54E, 54EA, 54EB, 54F, 54G AN D 54H, BE CHARGEABLE TO INCOME-TAX UNDER THE HEAD CAPITAL GA INS, AND SHALL BE DEEMED TO BE THE INCOME OF THE PREVIOUS YEAR IN WHICH THE TRANSFER TOOK PLACE. 48. MODE OF COMPUTATION THE INCOME CHARGEABLE UNDER THE HEAD CAPITAL GAINS SHALL BE COMPUTED, BY DEDUCTIN G FROM THE FULL VALUE OF THE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF THE TRANSFER OF THE CAPITAL ASSET THE FOLLOWING AMOUNTS , NAMELY: (I) EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH SUCH TRANSFER; ITA NO.999/BANG/2019 PAGE 9 OF 21 (II) THE COST OF ACQUISITION OF THE ASSET AND THE C OST OF ANY IMPROVEMENT THERETO: 11. SECTION 53A, AS IS WELL KNOWN, WAS INSERTED BY THE TRANSFER OF PROPERTY AMENDMENT ACT, 1929 TO IMPORT INTO INDIA T HE EQUITABLE DOCTRINE OF PART PERFORMANCE. THIS COURT HAS IN SHRIMANT SHAMRAO SURYAVANSHI & ANR. V. PRALHAD BHAIROBA SURYAVANSHI (D) BY LRS. & ORS., (2002) 3 SCC 676 AT 682 STATED AS FOLLOWS:- 16. BUT THERE ARE CERTAIN CONDITIONS WHICH ARE REQ UIRED TO BE FULFILLED IF A TRANSFEREE WANTS TO DEFEND OR PROTEC T HIS POSSESSION UNDER SECTION 53- A OF THE ACT. THE NECESSARY CONDI TIONS ARE: (1) THERE MUST BE A CONTRACT TO TRANSFER FOR CONSIDERATION OF ANY IMMOVABLE PROPERTY; (2) THE CONTRACT MUST BE IN WRITING, SIGNED BY THE TRANSFEROR, OR BY SOMEONE ON HIS BEHALF; (3) THE WRITING MUST BE IN SUCH WORDS FROM WHICH THE TERMS NECESSARY TO CONSTRUE THE TRANSFER CAN BE ASCERTAINED; (4) THE TRANSFEREE MUST IN PART-PERFORMANCE OF THE CONTRACT TAKE POSSESSION OF THE PROPERTY, OR OF ANY PART THEREOF; (5) THE TRANSFEREE MUST HAVE DONE SOME ACT IN FURTHERANCE OF THE CONTRACT; AND (6) THE TRANSFEREE MUST HAVE PERFORMED OR BE WILLI NG TO PERFORM HIS PART OF THE CONTRACT. 12. IT IS ALSO WELL-SETTLED BY THIS COURT THAT THE PROTECTION PROVIDED UNDER SECTION 53A IS ONLY A SHIELD, AND CAN ONLY BE RESOR TED TO AS A RIGHT OF DEFENCE. RAMBHAU NAMDEO GAJRE V. NARAYAN BAPUJI DHOTRA (2004 ) 8 SCC 614 AT 619, PARA 10. AN AGREEMENT OF SALE WHICH FULFILLED THE INGREDIEN TS OF SECTION 53A WAS NOT REQUIRED TO BE EXECUTED THROUGH A REGIS TERED INSTRUMENT. THIS POSITION WAS CHANGED BY THE REGISTRATION AND OTHER RELATED LAWS (AMENDMENT) ACT, 2001. AMENDMENTS WERE MADE SIMULTA NEOUSLY IN SECTION ITA NO.999/BANG/2019 PAGE 10 OF 21 53A OF THE TRANSFER OF PROPERTY ACT AND SECTIONS 17 AND 49 OF THE INDIAN REGISTRATION ACT. BY THE AFORESAID AMENDMENT, THE W ORDS THE CONTRACT, THOUGH REQUIRED TO BE REGISTERED, HAS NOT BEEN REGI STERED, OR IN SECTION 53A OF THE 1882 ACT HAVE BEEN OMITTED. SIMULTANEOUSLY, SECTIONS 17 AND 49 OF THE 1908 ACT HAVE BEEN AMENDED, CLARIFYING THAT UNL ESS THE DOCUMENT CONTAINING THE CONTRACT TO TRANSFER FOR CONSIDERATI ON ANY IMMOVABLE PROPERTY (FOR THE PURPOSE OF SECTION 53A OF 1882 ACT) IS REG ISTERED, IT SHALL NOT HAVE ANY EFFECT IN LAW, OTHER THAN BEING RECEIVED AS EVI DENCE OF A CONTRACT IN A SUIT FOR SPECIFIC PERFORMANCE OR AS EVIDENCE OF ANY COLLATERAL TRANSACTION NOT REQUIRED TO BE EFFECTED BY A REGISTERED INSTRUMENT. SECTION 17(1A) AND SECTION 49 OF THE REGISTRATION ACT, 1908 ACT, AS AM ENDED, READ THUS: 17(1A). THE DOCUMENTS CONTAINING CONTRACTS TO TRAN SFER FOR CONSIDERATION, ANY IMMOVABLE PROPERTY FOR THE PURPO SE OF SECTION 53A OF THE TRANSFER OF PROPERTY ACT, 1882 ( 4 OF 1882) SHALL BE REGISTERED IF THEY HAVE BEEN EXECUTE D ON OR AFTER THE COMMENCEMENT OF THE REGISTRATION AND OTHE R RELATED LAWS (AMENDMENT) ACT, 2001 AND IF SUCH DOCUMENTS ARE NOT REGISTERED ON OR AFTER SUCH COMMENCEMENT, THEN THEY SHALL HAVE NO EFFECT FOR TH E PURPOSES OF THE SAID SECTION 53A. 49. EFFECT OF NON-REGISTRATION OF DOCUMENTS REQUIRED TO BE REGISTERED . NO DOCUMENT REQUIRED BY SECTION 17 OR BY ANY PROVISION OF THE TRANSFER OF PROPERTY ACT, 1882 (4 OF 1882), TO BE REGISTERED SHALL- (A) AFFECT ANY IMMOVABLE PROPERTY COMPRISED THEREIN, OR (B) CONFER ANY POWER TO ADOPT, OR (C) B E RECEIVED AS EVIDENCE OF ANY TRANSACTION AFFECTING SUCH PROPERTY OR CONFERRING SUCH POWER, UNLESS IT HAS BEEN REGISTERED: PROVIDED THAT AN UNREGISTERED DOCUMENT AFFECTING IMMOVABLE PROPERTY AND REQUIRED BY THIS ACT OR THE TRANSFER O F PROPERTY ACT, 1882 (4 OF 1882), TO BE REGISTERED MAY BE RECEIVED AS EVIDENCE OF A CONTRACT IN A SUIT FOR SPECIFIC PERFORMANCE UNDER CHAPTER II OF THE SPECIFIC RELIEF ACT, 1887 (1 OF 1877) OR AS EVIDENC E OF ANY COLLATERAL TRANSACTION NOT REQUIRED TO BE EFFECTED BY REGISTERED INSTRUMENT. ITA NO.999/BANG/2019 PAGE 11 OF 21 20 . THE EFFECT OF THE AFORESAID AMENDMENT IS THAT, O N AND AFTER THE COMMENCEMENT OF THE AMENDMENT ACT OF 2001, IF A N AGREEMENT, LIKE THE JDA IN THE PRESENT CASE, IS NOT REGISTERED, THEN IT SHALL HAVE NO EFFECT IN LAW FOR THE PURPOSES OF SECTION 53A. IN SHORT, THERE IS NO AGREEMENT IN THE EYES OF LAW WHI CH CAN BE ENFORCED UNDER SECTION 53A OF THE TRANSFER OF PROPE RTY ACT. THIS BEING THE CASE, WE ARE OF THE VIEW THAT THE HIGH CO URT WAS RIGHT IN STATING THAT IN ORDER TO QUALIFY AS A TRANSFER OF A CAPITAL ASSET UNDER SECTION 2(47)(V) OF THE ACT, THERE MUST BE A CONTRACT WHICH CAN BE ENFORCED IN LAW UNDER SECTION 53A OF THE TRA NSFER OF PROPERTY ACT. A READING OF SECTION 17(1A) AND SECTI ON 49 OF THE REGISTRATION ACT SHOWS THAT IN THE EYES OF LAW, THE RE IS NO CONTRACT WHICH CAN BE TAKEN COGNIZANCE OF, FOR THE PURPOSE S PECIFIED IN SECTION 53A. THE ITAT WAS NOT CORRECT IN REFERRING TO THE EXPRESSION OF THE NATURE REFERRED TO IN SECTION 53A IN SECTION 2(47)(V) IN ORDER TO ARRIVE AT THE OPPOSITE CONCLUS ION. THIS EXPRESSION WAS USED BY THE LEGISLATURE EVER SINCE S UB-SECTION (V) WAS INSERTED BY THE FINANCE ACT OF 1987 W.E.F. 01.0 4.1988. ALL THAT IS MEANT BY THIS EXPRESSION IS TO REFER TO THE INGR EDIENTS OF APPLICABILITY OF SECTION 53A TO THE CONTRACTS MENTI ONED THEREIN. IT IS ONLY WHERE THE CONTRACT CONTAINS ALL THE SIX FEA TURES MENTIONED IN SHRIMANT SHAMRAO SURYAVANSHI (SUPRA) , THAT THE SECTION APPLIES, AND THIS IS WHAT IS MEANT BY THE EXPRESSIO N OF THE NATURE REFERRED TO IN SECTION 53A . THIS EXPRESSION CANNOT BE STRETCHED TO REFER TO AN AMENDMENT THAT WAS MADE YEARS LATER IN 2001, SO AS TO THEN SAY THAT THOUGH REGISTRATION OF A CONTRACT IS REQUIRED BY THE AMENDMENT ACT OF 2001, YET THE AFORESAID EXPRESSION OF THE NATURE REFERRED TO IN SECTION 53A WOULD SOMEHOW REFER ONLY TO THE NATURE OF CONTRACT MENTIONED IN SECTION 53A, WH ICH WOULD THEN IN TURN NOT REQUIRE REGISTRATION. AS HAS BEEN STATE D ABOVE, THERE IS NO CONTRACT IN THE EYE OF LAW IN FORCE UNDER SECTIO N 53A AFTER 2001 UNLESS THE SAID CONTRACT IS REGISTERED. THIS BEING THE CASE, AND IT BEING CLEAR THAT THE SAID JDA WAS NEVER REGISTERED, SINCE THE JDA HAS NO EFFICACY IN THE EYE OF LAW, OBVIOUSLY NO TR ANSFER CAN BE SAID TO HAVE TAKEN PLACE UNDER THE AFORESAID DOCUME NT. SINCE WE ARE DECIDING THIS CASE ON THIS LEGAL GROUND, IT IS UNNECESSARY FOR US TO GO INTO THE OTHER QUESTIONS DECIDED BY THE HIGH COURT, NAMELY, WHETHER UNDER THE JDA POSSESSION WAS OR WAS NOT TAK EN; WHETHER ONLY A LICENCE WAS GRANTED TO DEVELOP THE PROPERTY; AND WHETHER THE DEVELOPERS WERE OR WERE NOT READY AND WILLING T O CARRY OUT THEIR PART OF THE BARGAIN. SINCE WE ARE OF THE VIEW THAT SUB-CLAUSE (V) OF ITA NO.999/BANG/2019 PAGE 12 OF 21 SECTION 2(47) OF THE ACT IS NOT ATTRACTED ON THE FA CTS OF THIS CASE, WE NEED NOT GO INTO ANY OTHER FACTUAL QUESTION. 13. THE CIT(A) CONCLUDED THAT THE SALE AGREEMENT DATED 08.03.1993 IS AN UNREGISTERED DOCUMENT AND NO LEGAL TRANSFER HAS HAPPENED THROUGH THAT. THE CIT(A) OBSERVED THAT THE TRANSFER CAN ONLY BE E FFECTED BY THE EXECUTION OF A SALE DEED WHICH HAPPENED ONLY ON 09.03.2007. ALL OTHER EVIDENCES/DOCUMENTS WHETHER IT IS IN THE NATURE OF SHARES OF THE COMPANY AFTER FORMATION OF THE COMPANY, POSSESSION OF THE P ROPERTY ETC. ARE NOT RELEVANT OR NOT VALID FOR TRANSFER OF IMMOVABLE PRO PERTY AFTER AMENDMENT IN 2001. THEREFORE, THE CIT(A) HELD THAT THE SALE AGR EEMENT DOES NOT CREATE ANY TITLE IN FAVOUR OF THE ASSESSEE AND THE SALE AG REEMENT WAS NOT A VALID DOCUMENT FOR TRANSFER OF PROPERTY. CONSIDERING THA T THE TRANSFER HAD TAKEN PLACE ON 09.03.2007, THE CIT(A) HELD THAT PROVISION S OF SECTION 50C OF THE ACT ARE APPLICABLE IN THE PRESENT CASE, THE TRANSFE R AGREEMENT DATED 09.03.2007 WAS THROUGH A REGISTERED DOCUMENT AND TH E GUIDANCE VALUE OF THE PROPERTY AS ON THAT DATE HAS TO BE CONSIDERED AS THE SALE CONSIDERATION RECEIVED BY THE ASSESSEE AND TAXED ACCORDINGLY. THU S, THE CIT(A) UPHELD THE ORDER OF AO. 14. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 15. WITH REGARD TO THE REOPENING OF THE ASSESSMENT, THE LD. COUNSEL FOR THE ASSESSEE FIRSTLY SUBMITTED THAT THE REASONS REC ORDED FURNISHED BY THE AO IN THE LETTER DATED 30/11/2011 CONTAINS ONLY THE PU RPORTED EXTRACT OF THE REASONS RECORDED. HOWEVER, IT IS SUBMITTED THAT THE REASONS TO BE RECORDED U/S. 148[2] OF THE ACT ARE REQUIRED TO BE DONE IN T HE ORDER SHEET OF THE ASSESSEES FILE WITH THE DATE OF RECORDING THE REAS ONS AND THE SIGNATURE OF THE AO RECORDING THE REASONS. IT IS SUBMITTED THAT THE AO HAS NOT FURNISHED THE COPY OF THE ORDER SHEET NOTINGS CONTAINING THE REASONS RECORDED AND IN THE CIRCUMSTANCES, THE ASSESSEE IS UNABLE TO STATE IF THE MANDATORY REQUIREMENTS FOR INITIATING THE PROCEEDINGS HAVE BE EN PROPERLY COMPLIED WITH ITA NO.999/BANG/2019 PAGE 13 OF 21 INASMUCH AS THE DATE OF RECORDING THE REASONS IS NO T KNOWN TO THE ASSESSEE. FURTHER, THE NAME AND SIGNATURE OF THE OFFICER RECO RDING THE REASONS ETC., IS ALSO UNAVAILABLE AND THEREFORE, ON THIS COUNT ALSO, THE ASSESSEE IS UNABLE TO STATE IF THE MANDATORY REQUIREMENTS OF RECORDING TH E REASONS HAVE BEEN COMPLIED WITH. HENCE, IT IS PRAYED THAT THE AO MAY KINDLY BE DIRECTED TO FURNISH THE SAME FOR EFFECTIVE REPRESENTATION OF TH E CASE AND UPON THE RECEIPT OF THE SAME, PERMIT THE ASSESSEE TO MAKE SUBMISSION S ON THIS ASPECT OF THE MATTER. 16. SECONDLY, IT WAS SUBMITTED THAT IN THE EXTRACT OF THE REASONS AS FURNISHED BY THE LEARNED A.O., THERE IS A REFERENCE MADE TO A SURVEY WAS CONDUCTED BY THE DEPARTMENT IN THE CASE OF M/S. SUR AJ PROPERTIES, PROPRIETRIX, SMT. SURAJ SIPANI ON 23/08/2011. IT IS STATED THAT IN COURSE OF THE AFORESAID SURVEY PROCEEDINGS, CERTAIN DOCUMENTS VIZ ., SALE DEEDS/AGREEMENTS TO SELL WERE FOUND AND IMPOUNDED. PERUSAL OF THESE DOCUMENTS REVEALED THAT THE ASSESSEE HAD SOLD THE L AND ACQUIRED FROM BDA TO M/S. SURAJ PROPERTIES UNDER THE SALE DEED DATED 09.03.2007 REGISTERED AS DOCUMENT NO. BHM 04162-2009-2010 IN BOOK I, STORED IN CD NO., BMHD 385 IN THE OFFICE OF SUB-REGISTRAR, BOMMANAHALLI, B ANGALORE FOR A CONSIDERATION OF RS. 9,80,500/- TOWARDS SALE AND RS . 23,27,305/- TOWARDS PURCHASE OF STAMP DUTY. THE GUIDANCE VALUE OF THE P ROPERTY AS SEEN FROM THE SALE DEED IS RS. 2.7 CRORES. AS THE SALE CONSID ERATION IS MUCH LESS THAN THE GUIDANCE VALUE, THE PROVISIONS OF SEC. 50C OF T HE ACT IS ATTRACTED IN THE HANDS OF M/S. PRAKASH CHAND BETHALA AND SONS [HUF]. THUS, THE ASSESSEE IS LIABLE TO PAY CAPITAL GAINS TAX. ON THE ABOVE BA SIS, THE AO WAS OF THE VIEW AFTER VERIFICATION OF THE SEIZED MATERIALS THAT IT WAS FOUND THAT THE ASSESSEE HAS EVADED THE CAPITAL GAINS TAX ON THE ABOVE SALE OF PROPERTY FOR THE AFORESAID ASSESSMENT YEAR 20078-08. HENCE, THE LEAR NED A.O. HAS DERIVED A REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSM ENT. ITA NO.999/BANG/2019 PAGE 14 OF 21 17. AS MENTIONED EARLIER, THE ASSESSEE DID NOT FILE ANY FORMAL OBJECTIONS. HOWEVER, IT HAS STATED THAT THERE WAS NO ESCAPEMENT OF CAPITAL GAINS TAX AS THE POSSESSION OF THE PROPERTY SOLD UNDER THE SALE DEED DATED 09.03.2007 WAS GIVEN LONG BACK. IT WAS SUBMITTED THAT IN FACT , THIS ASPECT OF THE MATTER IS CLEAR FROM THE MATERIALS FOUND IN COURSE OF SURV EY ITSELF AND HENCE, ACCORDING TO THE ASSESSEE, THERE COULD NOT BE A BON AFIDE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT FOR THE YEAR UNDER APPEAL. T HE REOPENING OF THE ASSESSMENT HAS TO BE BONAFIDE. IT CANNOT BE A MERE PRETENSE AND WHEN FACTS THAT ARE RELEVANT FOR ARRIVING AT A PROPER CONCLUSI ON ARE IGNORED AND NOT CONSIDERED THE REOPENING OF THE ASSESSMENT IS NOT B ONAFIDE. HENCE, IT IS SUBMITTED THAT THE REOPENING OF THE ASSESSMENT IS U NJUSTIFIED AND THE CONSEQUENT ASSESSMENT ORDER PASSED REQUIRES TO BE C ANCELLED. 18. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT TI ME FOR COMPLETION OF THE SALE DEED IS ONLY 1 YEAR 6 MONTHS FROM THE DATE OF 08.03.1993 AND ABSOLUTE SALE DEED WAS NOT EXECUTED WITHIN THAT PER IOD, THEREFORE AGREEMENT TO SELL IS NOT VALID. HE FURTHER SUBMITT ED THAT EVEN CAPITAL GAIN WAS NOT OFFERED TO TAX CONSEQUENT TO THIS SALE AGRE EMENT ALSO IN THE AY 1993-94. ACCORDINGLY HE SUBMITTED THAT REOPENING O F ASSESSMENT IS TO BE HELD AS VALID. 19. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. AS SEEN FROM THE FACTS OF THE CASE, DURING THE COUR SE OF SURVEY IN THE CASE OF M/S. SURAJ PROPERTIES ON 23.8.2011 CERTAIN DOCUM ENTS WERE FOUND AND IMPOUNDED, WHICH SHOWED THERE WAS A SALE DEED DATED 9.3.2007 WHEREIN THE PRESENT ASSESSEE, PCBS(HUF) HAS SOLD THE PROPER TY TO SMT. SURAJ SIPANI FOR A CONSIDERATION OF RS.9,80,500 AND STAMP DUTY WAS PAID AT RS.23,77,305. THE GUIDANCE VALUE OF THE SAID PROPE RTY WAS RS.2.7 CRORES AS PER THE PROVISIONS OF SECTION 50C OF THE ACT. WE ARE OF THE OPINION THAT THE ASSESSEE HAS TO DECLARE CAPITAL GAIN FOR THE AY 2007-08 TO THE TUNE OF RS.2.77 CRORES WHICH IS SAID TO HAVE ESCAPED ASSESS MENT FOR THE AY 2007- ITA NO.999/BANG/2019 PAGE 15 OF 21 08. ACCORDINGLY THE AO ISSUED NOTICE U/S. 148 TO T HE ASSESSEE ON 15.10.2012 AFTER PRIOR APPROVAL OF THE ADDL. CIT, R ANGE 7, BANGALORE. 20. THE ASSESSEE IS A HUF, WHO FILED RETURN OF INCO ME ON 31.3.2008 DECLARING A TOTAL INCOME OF RS. 2,06,130. THERE WER E NO FURTHER PROCEEDINGS TAKEN IN THIS CASE AO FOR THE YEAR UNDER APPEAL. A NOTICE U/S. 148 OF THE INCOME-TAX ACT, 1961 [THE ACT] WAS ISSUED TO THE AS SESSEE ON 15/12/2012 CALLING UPON TO FILE HIS RETURN OF INCOME. IN RESPO NSE TO THE NOTICE, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED ON 22/01/2013 RE QUESTING THAT THE RETURN OF INCOME FILED ORIGINALLY ON 31/03/2008 BE TREATED AS RETURN FILED IN RESPONSE TO THE NOTICE ISSUED U/S 148 OF THE ACT. IN THE SAI D REPLY, THE REASONS RECORDED FOR ISSUING THE NOTICE U/S. 148 OF THE ACT WAS ALSO SOUGHT. 21. IN OUR OPINION, AT THE TIME OF ISSUE OF NOTICE U/S. 148 OF THE ACT, THE AO SHOULD HAVE REASON TO BELIEVE THAT INCOME HAS ES CAPED ASSESSMENT AND IT IS NOT IMPERATIVE THAT THE AO SHOULD ACTUALLY DI SCLOSE THE ESCAPEMENT OF PARTICULAR ITEM OF INCOME. IN OTHER WORDS, AT THE TIME OF ISSUE OF NOTICE U/S. 148, THERE NEED NOT BE CONCLUSIVE PROOF THAT THERE WAS ESCAPEMENT OF INCOME. THE AO SHALL PRIMA FACIE CERTIFY THAT THERE IS ESCAPEMENT OF INCOME. IN THE PRESENT CASE, AT THE TIME OF ISSUE OF NOTICE U/S.148, THERE IS A REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT IN TH E AY 2007-08. EVEN FURTHER DISCOVERY OF THE FACT CANNOT INVALIDATE THE NOTICE U/S. 148 OF THE ACT, WHICH WHEN ISSUED, WAS A VALID NOTICE. ACCORDINGLY , WE UPHOLD THE REOPENING OF ASSESSMENT IN THIS CASE. 22. COMING TO THE MERITS, THE LD. AR SUBMITTED THAT THE ASSESSEE HAD ORIGINALLY PARTICIPATED IN A BDA AUCTION FOR PURCHA SE OF PROPERTY. THE ASSESSEE WAS IN POSSESSION OF THE SITE ON 29/08/19 84 PURSUANT TO THE AUCTION SITE AGREEMENT DATED 24/07/1984 ENTERED IN TO BETWEEN THE ASSESSEE AND THE BDA. IT WAS SUBMITTED THAT SHRI R. K. SIPANI PURCHASED THE AFORESAID SITE TO CONSTRUCT HIS RESIDENTIAL HOUSE T HROUGH M/S. K. PRAKASHCHAND BETHALA PROPERTIES PVT. LTD (M/S. KPCB PPL FOR SHORT) FLOATED ITA NO.999/BANG/2019 PAGE 16 OF 21 EARLIER BY HIM ALONG WITH THE ASSESSEE. AFTER THE INCORPORATION OF M/S. KPCBPPL, THE ASSESSEE AND SHRI R.K. SIPANI ENTERED INTO AN ORAL AGREEMENT IN THE MONTH OF SEPTEMBER, 1989 WHEREBY T HE ASSESSEE SOLD THE AFORESAID SITE TO SHRI R.K. SIPANI FOR A CONSIDERAT ION OF RS.9,80,500/- AND A SUM OF RS.9,79,455/- WAS RECEIVED BY THE ASSESSEE B Y WAY OF VARIOUS CHEQUES. IT WAS SUBMITTED THAT THE ASSESSEE GAVE P OSSESSION TO SHRI R.K. SIPANI OF THE AFORESAID SITE ON 24/10/1989 ITSELF. THEREAFTER, THE ASSESSEE ENTERED INTO AN UNREGISTERED AGREEMENT DATED 08/03/ 1993 TO SELL THE AFORESAID SITE. 23. AS ALREADY SUBMITTED BY LD. AR, SHRI R.K. SIPAN I PURCHASED THE AFORESAID SITE TO CONSTRUCT HIS RESIDENTIAL HOUSE T HROUGH M/S. KPCBPPL. THUS, IT WAS SUBMITTED THAT THE LAND CAME TO BE OWN ED BY SHRI R.K. SIPANI AND THE SUPER STRUCTURE PUT UP ON THE AFORESAID SIT E CAME TO BE OWNED BY M/S. KPCBPPL, SINCE IT HAD PUT UP THE STRUCTURE OUT OF ITS FUNDS. IT WAS FURTHER SUBMITTED THAT THE KHATA OF THE AFORESAID P ROPERTY STOOD IN THE NAME OF M/S. KPCBPPL AND ALSO THAT THE PROPERTY TAXES WE RE PAID BY THE SAID COMPANY FROM TIME TO TIME. THE LD. AR DREW OUR AT TENTION TO THE COPY OF THE KHATHA CERTIFICATE AND TAX PAID RECEIPT WHICH W AS ALREADY MADE AVAILABLE BEFORE THE CIT(APPEALS) AS ADDITIONAL EVIDENCE (PLA CED ON RECORD AT PB PAGES 70 TO 71). FURTHER, THE LD. AR SUBMITTED THA T AS FAR AS ASSESSEE WAS CONCERNED, THE TRANSACTION WAS VIRTUALLY COMPLETED IN THE YEAR 1989 AND THEREAFTER THE ASSESSEE TOTALLY FORGOT ABOUT THE TR ANSACTION. IN THE YEAR 1995 OR THEREABOUT, SHRI R.K. SIPANI REALIZED THAT HE DI D NOT HAVE THE TITLE AS HE HAD NOT YET OBTAINED THE AUCTION SALE DEED FROM THE BDA. SUBSEQUENTLY, SHRI R.K. SIPANI GOT THE SALE DEED DATED 11.10.1995 EXECUTED BY THE BDA IN FAVOUR OF ASSESSEE AND THE COPY OF SALE DEED WAS PLACED ON RECORD ITA NO.999/BANG/2019 PAGE 17 OF 21 WHICH WAS NOT CONSIDERED BY THE ASSESSING OFFICER. THE LD. AR SUBMITTED THAT ON 09/03/2007, SHRI R.K. SIPANI GOT THE ASSESS EE TO EXECUTE A SALE DEED IN RESPECT OF THE AFORESAID SITE IN FAVOUR OF HIS N OMINEE VIZ., M/S. SURAJ PROPERTIES, WHICH IS A PROPRIETARY CONCERN OF SHRI R.K. SIPANIS WIFE. THUS, IT WAS SUBMITTED THAT THE TITLE OF THE PROPERTY STO OD IN FAVOUR OF ASSESSEE IN THE RECORDS OF SUB-REGISTRAR SINCE NO REGISTERED SA LE AGREEMENT/DOCUMENT WAS EXECUTED BETWEEN THE PARTIES. THEREFORE, SHRI R.K. SIPANI REQUESTED THE ASSESSEE TO EXECUTE THE SALE DEED AS VENDOR WHI CH WAS READILY ACCEPTED BY THE ASSESSEE SINCE HE HAD RECEIVED THE ENTIRE SA LE CONSIDERATION OF RS.9,80,500/- AND M/S. KPCBPPL WAS MADE A CONFIRMIN G PARTY AS THE SUPER STRUCTURE BELONGED TO IT. 24. THE LD. AR SUBMITTED THAT THE DIFFERENCE BETWEE N THE GUIDELINE VALUE OF THE SALE DEED BEING 09/03/2007 AND THE ACTUAL CO NSIDERATION AGREED BETWEEN THE TWO PARTIES BECAME THE SUBJECT MATTER O F AND THE AO CONCLUDED THE ASSESSMENT PROCEEDINGS, DETERMINING THE TOTAL I NCOME OF THE ASSESSEE AT RS.2,70,31,932/- BY MAKING A SOLITARY ADDITION OF RS.2,68,25,802/- ON THE TRANSFER OF PROPERTY BY INVOKING THE PROVISIONS OF SEC. 50C OF THE ACT WHICH WAS CONFIRMED BY THE CIT(A). 25. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT TH E SALE AGREEMENT DATED 8.3.1993 IS AN UNREGISTERED DOCUMENT AND IT C ANNOT BE CONSIDERED AS A VALID CONVEYANCE DEED SO AS TO TRANSFER THE IMPUG NED PROPERTY AND THE ACTUAL SALE TOOK PLACE VIDE SALE DEED DATED 9.3.200 7. ACCORDING TO THE LD. DR, THE SALE TOOK PLACE ONLY ON 9.3.2007, AS SUCH T HE PROVISIONS OF SECTION 50C OF THE ACT AS IT STOOD ON THAT DATE SHOULD BE A PPLIED. HE SUPPORTED THE ORDER OF THE LOWER AUTHORITIES. 26. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. SECT ION 48 OF THE ACT PROVIDES THE MODE OF COMPUTATION OF CAPITAL GAIN. IT CONTEMPLATES THE INCOME ARISING UNDER THE HEAD CAPITAL GAIN SO AS TO COMPUTE BY DEDUCTING ITA NO.999/BANG/2019 PAGE 18 OF 21 FROM THE FULL VALUE OF CONSIDERATION RECEIVED OR AC CRUING AS A RESULT OF TRANSFER OF CAPITAL ASSET THE FOLLOWING AMOUNTS VIZ., (A) EXPENDITURE INCURRED WHOLLY AND EXCLUSIVELY IN CONNECTION WITH SUCH TRANSFER; (B) COST OF ACQUISITION OF ASSET AND COST OF ANY IM PROVEMENT MADE THERETO. 27. SECTION 50C PROVIDES THAT WHERE THE CONSIDERATI ON RECEIVED OR ACCRUING AS A RESULT OF TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET BEING RENT OR BUILDING OR BOTH IS LESS THAN THE VALUE ADOPTED OR ASSESSED BY ANY AUTHORITY FOR THE PURPOSE OF PAYMENT OF STAMP DUTY IN RESPECT OF SUCH TRANSFER, THE VALUE SO ADOPTED OR ASSESSED SHALL, F OR THE PURPOSES OF SECTION 48, BE DEEMED TO BE THE FULL VALUE OF THE CONSIDERA TION. IN OTHER WORDS, THE FULL VALUE OF CONSIDERATION MENTIONED IN SECTION 48 IS TO BE REPLACED BY THE CONSIDERATION ON WHICH THE VALUE OF THE PROPERTY WA S ADOPTED FOR THE PURPOSE OF PAYMENT OF STAMP DUTY. 28. IN THE PRESENT CASE, THE AO APPLIED THE PROVIS IONS OF SECTION 50C OF THE ACT ON THE BASIS OF SALE DEED EXECUTED BY THE A SSESSEE ON 9.3.2007. AT THIS STAGE, IT IS APPROPRIATE TO OBSERVE THAT TH ERE WAS AN AGREEMENT OF SALE EXECUTED BY ASSESSEE ON 8.3.1993 AND TOTAL PAY MENT OF RS.9,79,455 WAS MADE TO THE VENDOR BY THE PURCHASER OUT OF TOTA L CONSIDERATION OF RS.9,80,500 AND PENDING BALANCE WAS ONLY RS.1,005 A ND THE ENTIRE PAYMENT WAS MADE BY CHEQUE AND THE SAME WAS MENTIONED IN TH E SALE DEED DATED 9.3.2007. FURTHER, THE POSSESSION OF PROPERTY WAS A LSO HANDED OVER TO THE PURCHASER MENTIONING SALE AGREEMENT AS ON 8.3.1993. IT IS ALSO BROUGHT ON RECORD THAT THIS PROPERTY HAS BEEN MENTIONED AS ADDRESS OF R.K. SIPANI AS EVIDENT FROM FORM 32 FILED BY SIPANI AUTOMOBILES LTD. BEFORE ROC ON 17.12.1996. FURTHER KATHA OF SAID PROPERTY HAS BEE N TRANSFERRED ON 9.2.2000 IN THE NAME OF M/S. KPCBPPL. THUS, THE M AJOR PAYMENT OF RS.9,79,455 WAS RECEIVED BY THE ASSESSEE VIDE SALE AGREEMENT DATED ITA NO.999/BANG/2019 PAGE 19 OF 21 8.3.1993 WHICH WAS MUCH BEFORE THE SALE DEED EXECUT ED ON 9.3.2007. AS OBSERVED EARLIER, SECTION 50C PROVIDES THAT WHERE T HE CONSIDERATION RECEIVED OR ACCRUING AS A RESULT OF TRANSFER BY AN ASSESSEE OF A CAPITAL ASSET, BEING LAND OR BUILDING OR BOTH, IF LESS THAN VALUE ADOPTE D OR ASSED BY ANY AUTHORITY FOR THE PURPOSE OF STAMP DUTY IN RESPECT OF SUCH TR ANSFER, THE VALUE ADOPTED OR ASSESSED SHALL FOR THE PURPOSE OF SECTION 48 BE DEEMED TO BE THE FULL VALUE OF CONSIDERATION. THE QUESTION BEFORE US IS, WHAT COULD BE THE FULL VALUE OF SUCH CONSIDERATION I.E., WHETHER VALUE ON WHICH STAMP DUTY WAS PAID AT THE TIME OF SALE DEED OR THE VALUE DECLARED IN T HE SALE AGREEMENT? 29. IN THE PRESENT CASE, THE ASSESSEE HAS ENTERED I NTO SALE AGREEMENT ON 8.3.1993 AND MAJOR PORTION OF THE CONSIDERATION HAS BEEN RECEIVED BY THE ASSESSEE MENTIONED IN THE SALE AGREEMENT THROUGH AC COUNT PAYEE CHEQUE AND POSSESSION OF PROPERTY WAS ALSO HANDED OVER TO SRI R.K. SIPANI ON 24.10.1989, WHICH WAS MENTIONED IN CLAUSE 5 OF SALE AGREEMENT. THERE IS NO DISPUTE REGARDING THESE FACTS. THE PURCHASER HA S NOT PAID ANYTHING MORE THAN THE VALUE MENTIONED IN THE SALE AGREEMENT. FU RTHER BY WAY OF AGREEMENT DATED 8.3.1993 RIGHT OVER THE PROPERTY HA S BEEN TRANSFERRED FROM THE VENDOR TO PURCHASER. THE ONLY PENDING WAS ACTU AL REGISTRATION OF THE SALE DEED. IN OTHER WORDS, AT TIME OF AGREEMENT OF SALE IN RESPECT OF THIS IMMOVABLE PROPERTY ON 8.3.1993, A RIGHT IN PERSONA IS CREATED IN FAVOUR OF THE PURCHASER. WHEN SUCH A RIGHT IS CREATED IN FAV OUR OF THE PURCHASER AND THE VENDOR IS RESTRAINED FROM SELLING SUCH PROPERTY TO SOMEONE ELSE BECAUSE THE PURCHASER, IN WHOSE FAVOUR RIGHT IN PERSONA IS CREATED, HAS LEGITIMATE RIGHT TO ENFORCE SUCH SPECIFIC PERFORMANCE OF THE A GREEMENT IF THE VENDOR FOR SOME REASON OR OTHER HAS NOT EXECUTED THE SALE DEED . THUS BY VIRTUE OF AGREEMENT OF SALE, SOME RIGHT IS GIVEN TO THE VENDE E BY THE VENDOR. IT IS ENCUMBRANCE ON THE PROPERTY. AT THIS STAGE, IT IS APPROPRIATE TO MENTION THAT THE PROVISIONS OF SECTION 50C(1) OF THE ACT, ACCORD ING TO WHICH, IF THERE IS A GAP BETWEEN THE DATE OF EXECUTION OF SALE AGREEMENT AND THE SALE DEED ITA NO.999/BANG/2019 PAGE 20 OF 21 AND IF THE GUIDANCE VALUE CHANGES, THE GUIDANCE VAL UE AS ON THE DATE OF AGREEMENT HAS TO BE CONSIDERED AS THE FULL CONSIDER ATION OF THE CAPITAL ASSET. IN THE PRESENT CASE, THE ENFORCEABLE AGREEMENT WAS ENTERED INTO ON 8.3.1993 BY PAYMENT OF MAJOR PORTION OF THE SALE CO NSIDERATION AND ONLY FORMAL SALE DEED WAS EXECUTED ON 9.3.2007. THE ASS ESSEE HAS PRODUCED ALL THE RELEVANT DOCUMENTS FOR DEMONSTRATING THE AU THENTICITY OF THE SALE AGREEMENT WITH CORROBORATIVE EVIDENCE IN THE FORM O F KATHA CERTIFICATE IN THE NAME OF M/S. KPCBPPL DATED 1.7.1997, THE ADDRESS OF R.K. SIPANI, SIPANI AUTOMOBILES LTD. IN FORM 32 BEFORE THE REGISTRAR OF COMPANIES ON 17.12.1996 AND THE PAYMENT DETAILS THROUGH CHEQUES. THE PAYMENT MENTIONED IN THE SALE DEED TOWARDS SALE CONSIDERATI ON CLEARLY DEMONSTRATED THAT THESE PAYMENTS HAVE BEEN PASSED BETWEEN THE PA RTIES VIDE SALE AGREEMENT DATED 8.3.1993 AND POSSESSION OF PROPERTY HAS ALREADY BEEN HANDED OVER ON 24.10.1989. THEREFORE, TRANSFER HAS TAKEN PLACE VIDE SALE AGREEMENT DATED 8.3.1993 AND FULL VALUE OF CONSIDER ATION FOR THE PURPOSE OF COMPUTING LONG TERM CAPITAL GAIN IN THE HANDS OF TH E ASSESSEE HAS TO BE ADOPTED ON THE BASIS OF GUIDANCE VALUE OF THIS PROP ERTY AS ON THE DATE OF SALE AGREEMENT ONLY, NOT ON THE DATE OF SALE DEED D ATED 9.3.2007. ACCORDINGLY WE ALLOW THE GROUNDS TAKEN BY THE ASSES SEE AS THERE WAS NO APPLICABILITY OF SECTION 50C IN THE YEAR 2007-08. 30. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF JANUARY, 2021. SD/- SD/- ( GEORGE GEO RGE K. ) ( CHANDRA POOJARI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 28 TH JANUARY, 2021. / DESAI S MURTHY / ITA NO.999/BANG/2019 PAGE 21 OF 21 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.