MR. MUKESH BIRLA,INDORE vs. THE ACIT RANGE 3, INDORE

ITA 7/IND/2015Status: DisposedITAT Indore19 January 2018AY 2011-127 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the issue revolves around when a transfer of immovable property is considered to have taken place for tax purposes, particularly when the sale deed is presented for registration, full consideration is paid, and possession is handed over, but the registration process is delayed due to stamp duty valuation. The Tribunal referred to the decision in DCIT, Circle-9 Kolkata vs. M/s. Bagrees Investments Pvt. Ltd. (ITA No.1335/Kol/2011), where a similar issue led to the restoration of the matter to the AO pending a Supreme Court decision. The Tribunal also considered the Supreme Court's observation in CIT vs. Balbir Singh Maini regarding 'de facto' transfer. However, distinguishing the facts from the Balbir Singh Maini case, the Tribunal found that the specific scenario of delayed registration due to stamp duty valuation, despite payment and possession, was critical. Citing the Calcutta High Court's decision in Bagri Impex (P) Ltd. vs. ACIT, which was stayed by the Supreme Court, the Tribunal decided to set aside the assessment order and restore the issue to the AO for fresh adjudication after the outcome of the Bagri Impex case pending before the Supreme Court.

What were the facts?

The assessee, Mr. Mukesh Birla, is in appeal against the order of the CIT(A) for Assessment Year 2011-12. The Assessing Officer (AO) made an addition of Rs. 24,18,650/- on account of long-term capital gain. The assessee's contention is that the property sale occurred in the financial year 2009-10 (relevant to AY 2010-11) because the sale deed was presented for registration on March 31, 2010, the entire sale consideration was paid on that date, and possession was handed over. However, the registration was not completed by March 31, 2010. The revenue argued that the transfer is effective only upon registration by the stamp valuation authority.

What were the issues?

1. Whether the transfer of property, for the purpose of capital gains, took place in Assessment Year 2010-11 or Assessment Year 2011-12, considering the sale deed was presented for registration on March 31, 2010, full consideration paid, and possession handed over, but registration was delayed, turning on Section 2(47) of the Income Tax Act, 1961. Assessee's Contention: The transfer occurred in AY 2010-11 as per Section 2(47), as sale deed was presented for registration, full payment was made, and possession was handed over on March 31, 2010. They relied on the facts of their case and the principle that transfer can occur even before formal registration. Revenue's Contention: The transfer is effective only when the sale deed is registered by the stamp valuation authority. Mere presentation of the document is insufficient. Section 50C becomes applicable upon assessment of stamp duty and release of the document.

Which sections of the Income-tax Act were involved?

Section 2(47),Section 50C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCHE, INDORE

Before: SHRI KUL BHARAT & SHRI MANISH BORAD

For Appellant: Shri C. P. Rawka, CA
For Respondent: Shri Rajiv Jain, Sr. DR
Hearing: 03.01.2018

PER KUL BHARAT, J.M:

This appeal by the Assessee is directed against the order of Ld. Commissioner of Income Tax(Appeals)-I, Indore, (in short ‘CIT(A)’), dated 30.09.2014 pertaining to A.Y. 2011-12. The assessee has raised following original grounds of appeal:

“It is submitted that assessee has sold the property during the period relevant to A.Y. 2010-11. The deduction was executed and presented to sub Registrar of the property well before the 31.03.2010. However, due to some reasons the registration

Mukesh Birla

could not be completed before the above date. Therefore, the assessee’s case is that the transfer had took place during the period relevant A.Y.2010-

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 851 judgments and leading authorities on Section 2(47) →

Recent GST High Court judgments

Search GST case law →