BIKRAMJIT SINGH GILL vs. COMMISSIONER OF INCOME TAX BATHINDA

ITA/161/2014HC Punjab & HaryanaPHHC01109288201431 July 2015Author: MR. JUSTICE A.B. CHAUDHARI,MR. JUSTICE M.M. AGGARWAL7 pages
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What were the facts?

The assessee, Bikramjit Singh Gill, is an individual and a member of M/s Defence Services Cooperative House Building Society Limited. The society owned 27.3 acres of land, and members were allotted plots. The appellant had a 500 sq. yard plot. A Joint Development Agreement (JDA) was entered into on April 27, 2007, between the society, M/s Tata Housing Development Company Limited (THDC), and HASH Builders (P) Limited (HASH). The developers were to pay monetary consideration and a built-up flat to members with 500 sq. yard plots. The assessee received part of the consideration. The Assessing Officer (AO) assessed the income for AY 2008-09 at ₹1,78,09,240/-, taxing the entire consideration receivable under the JDA as capital gains. The CIT(A) and the Tribunal upheld the AO's order. The assessee appealed to the High Court.

What did the High Court hold?

The High Court, in this case, relied on its prior judgment in Charanjit Singh Atwal vs. ITO. The court held that no possession of the entire land was given by the transferor to the transferee in part performance of the JDA to fall within Section 53A of the Transfer of Property Act, 1882. Any possession delivered was as a licensee for development, not as a transferee. Furthermore, Section 53A of the 1882 Act, incorporated into Section 2(47)(v) of the Act, required fulfillment of all its ingredients. Since the JDA was not registered and was executed after September 24, 2001, Section 53A of the 1882 Act did not apply, and consequently, Section 2(47)(v) of the Act was not applicable. The court noted the assessee's submission that capital gains tax had been paid on amounts received and that sale deeds were executed. In light of the cancellation of the JDA and the inability to perform due to court orders, the Tribunal and lower authorities were incorrect in holding the assessee liable for capital gains tax on the remaining land for which no consideration was received. The appeals were allowed.

What were the issues?

1. Whether, in the facts and circumstances, any taxable capital gains arises from the transaction entered by the assessee under Section 2(47)(ii), (v), and (vi) of the Income Tax Act, 1961, read with Section 53A of the Transfer of Property Act, 1882? Assessee's Contentions: - Capital gains tax has already been paid on amounts received from the developer. - Sale deeds have been executed for land transferred. - Due to the cancellation of the JDA and subsequent court orders staying construction, no further amounts have been received, and no action has been taken. - Capital gains tax will be discharged as and when any further amount is received. Revenue's Contentions: - The revenue's contentions are not explicitly recorded in the judgment, but their stance was to tax the entire consideration receivable under the JDA as capital gains, which was upheld by the lower authorities.

Which sections of the Income-tax Act were involved?

Section 2(47)(ii),Section 2(47)(v),Section 2(47)(vi),Section 53A,Section 54F,Section 143(1),Section 143(3),Section 148,Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.161 of 2014 (O&M) Date of decision: July 31, 2015 Bikramjit Singh Gill ……Appellant Vs. Commissioner of Income Tax, Bathinda …..Respondent CORAM: HON’BLE MR. JUSTICE AJAY KUMAR MITTAL HON’BLE MR. JUSTICE FATEH DEEP SINGH Present: Mr. Divya Suri, Advocate and Mr. Madhur Sharma, Advocate for the appellant. Mr. G.S.Hooda, Advocate and Ms. Urvashi Dhugga, Advocate for the revenue.

Ajay Kumar Mittal,J.

1.

This order shall dispose of ITA Nos.161 and 322 of 2014 as the issue involved in both the appeals is common. However, the facts are being extracted from ITA No.161 of 2014. 2. ITA No.161 of 2014 has been filed by the assessee-appellant under Section 260A of the Income Tax Act, 1961 (in short, “the Act”) against the order dated 11.9.2013, Annexure A.3 passed by the Income Tax Appellate Tribunal, Amritsar Bench Amritsar (in short, “the Tribunal) in ITA No.406(ASR)/2013 for the assessment year 2008-09. GURBAX SINGH 2015.08.18 16:48 I attest to the accuracy and integrity of this document High Court Chandigarh

3.

Briefly, the facts as narrated in ITA No.161 of 2

The order continues below.

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