PR.COMMISSIONER OF INCOME -TAX -1 CHD vs. SMT MUKHTIAR KAUR M,L,A FLAT NO 1 OPPST PUNJAB BHAWAN SEC 22 C CHD

ITA/352/2017HC Punjab & HaryanaPHHC01117561201714 November 2017Author: MR. JUSTICE SURINDER GUPTA,MR. JUSTICE ARUN MONGA10 pages
AI SummaryDismissed

What were the facts?

The appeal by the revenue challenges an order of the Income Tax Appellate Tribunal (ITAT) for Assessment Year 2007-08. The assessee, Smt. Mukhtiar Kaur, entered into a Joint Development Agreement (JDA) with developers for her land. The Assessing Officer (AO) computed capital gains based on the total consideration (cash and flat value), making a significant addition. The Commissioner of Income Tax (Appeals) deleted this addition, a decision upheld by the ITAT. The AO's addition was based on the premise that the JDA constituted a 'transfer' under Section 2(47)(v) of the Income Tax Act, 1961, read with Section 53A of the Transfer of Property Act, 1882. The assessee had disclosed capital gains only on the amount received. The revenue's appeal to the High Court hinges on whether a 'transfer' had indeed occurred for tax purposes.

What did the High Court hold?

The High Court held that the matter was no longer res integra, as it had been decided by this Court in C.S. Atwal's case (ITA No. 200 of 2013) and subsequently, the civil appeal filed by the revenue against that judgment was dismissed by the Apex Court in Commissioner of Income Tax Vs. Balbir Singh Maini and Others. The High Court noted that the substantial questions of law raised in the present appeal were identical to those decided in C.S. Atwal's case. In C.S. Atwal's case, the Court had concluded that parties had agreed for pro-rata transfer of land, no possession was given in part performance of the JDA to fall under Section 53A of the Transfer of Property Act, possession delivered was as a licensee, and since the JDA was not registered (executed after 24.09.2001), Section 53A and consequently Section 2(47)(v) did not apply. The assessee in that case had paid capital gains tax on amounts received, and the JDA was cancelled for the remaining land. The High Court found that the revenue's counsel could not controvert the applicability of these decisions. Therefore, the substantial questions of law were answered accordingly, and the appeal was dismissed.

What were the issues?

The High Court had to decide several substantial questions of law, primarily revolving around the interpretation of 'transfer' under the Income Tax Act and the applicability of Section 53A of the Transfer of Property Act. The key questions were: 1. Whether the ITAT was right in holding that parties agreed for pro-rata transfer of land, and if a 'transfer' under Section 2(47)(v) read with other sub-sections and Section 269UA had taken place. 2. Whether the ITAT erred in holding that possession was not given in part performance of the JDA to fall under Section 53A of the Transfer of Property Act, despite a registered irrevocable power of attorney. 3. Whether the ITAT was correct in holding that the essential ingredients of Section 53A were not fulfilled due to the JDA not being registered, and if this requirement could be read into Section 2(47)(v). 4. Whether the ITAT was right in not considering the registered irrevocable Special Power of Attorney and other contemporaneous documents. 5. Whether the ITAT was right in bifurcating the agreement and allowing capital gains tax only upon receipt of money, contrary to Section 45. The revenue argued that the JDA, possession letter, and irrevocable power of attorney constituted a 'transfer' under Section 2(47)(v) and other related provisions. The assessee contended that capital gains tax was paid on amounts received, and the JDA was cancelled for a portion of the land. The revenue relied on Supreme Court judgments in Suraj Lamps and Sanjeev Lal cases. The ITAT had followed a previous High Court judgment in C.S. Atwal's case.

Which sections of the Income-tax Act were involved?

Section 2(47),Section 2(47)(ii),Section 2(47)(v),Section 2(47)(vi),Section 269UA,Section 53A,Section 45,Section 54F,Section 148,Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision: 14.11.2017

Pr. Commissioner of Income Tax-I, Chandigarh

.…Appellant

Vs. Smt. Mukhtiar Kaur, M.L.A. Flat No.1, Opposite Punjab Bhawan, Sector-3, Chandigarh.

…..Respondent CORAM: HON’BLE MR. JUSTICE AJAY KUMAR MITTAL

HON’BLE MR. JUSTICE AMIT RAWAL Present: Mr. Urvashi Dhugga, Senior Standing Counsel for the appellant.

Ajay Kumar Mittal,J.

1.

This appeal has been preferred by the appellant-revenue under Section 260A of the Income Tax Act, 1961 (in short, “the Act”) against the order dated 12.01.2017, Annexure A.3, passed by the Income Tax Appellate Tribunal, Division Bench, Chandigarh (in short, “the Tribunal”) in ITA No. 682/CHD/2016, for the assessment year 2007-08, claiming following substantial questions of law:- (i) “Whether on the facts and circumstances of the case and in law, the Hon’ble ITAT is right in holding that the parties had agreed for pro-rata transfer o

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 2(47)

All 831 judgments and leading authorities on Section 2(47) →

Recent GST High Court judgments

Search GST case law →