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Income Tax Appellate Tribunal, INDORE BENCHE, INDORE
Before: SHRI KUL BHARAT & SHRI MANISH BORAD
आदेश / O R D E R
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
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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.2010-11 as against which Ld. Assessing Officer as well as Ld. Commissioner of Income Tax(Appeal) have assessed the capital gain in the Assessment Year 2011-12 which is against the legal position on the subject matter. Without prejudice to the above it is submitted that the Net Consideration of sale of Property amounts to Rs.29,00,000/-, out of which Rs.28,24,000/- have been invested in purchase of residential unit at 21/4, Ratlam Kothi, Indore. A copy of the Ledger Account of the new asset is submitted herewith for ready reference please.”
In addition to the above grounds of appeal the assessee has also raised following additional ground of appeal: “On the additional Ground: Facts and circumstances of the case, ld. AO as well as Ld. Commissioner of Income Tax (appeal) erred in assessing the capital gain without appreciating that, the net consideration has been invested in the asset specified in the section 54F. Therefore provision of section 50C does not apply.”
Briefly stated facts in present appeal are that the application of the assessee was took up for scrutiny assessment and the assessment u/s 143(3) of the Act 1961(hereinafter referred as ‘the Act’) was framed vide order dated 31.12.2013. The assessing officer while framing the assessment made addition of Rs.24,18,650/- on account of long term capital gain. Against this the assessee is in further appeal. 3. Apropos ground No.1 the Ld. Counsel for the assessee submitted that the authorities below failed to appreciate the facts that the transfer had taken place in earlier year. The assessee had duly
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offered gain arising out of that in the assessment year 2010-11. He submitted that the sale deed was presented for registration on 31st March, 2010. The entire payment of sale consideration was made on 31.03.2010 by way of cheque, the possession of the property in question was handed over on 31.03.2010, therefore, he submitted that in terms of section 2(47), the transfer took place during the financial year 2009-10 relevant to A.Y. 2010-11. Accordingly, the assessee had offered capital gain arising thereof in the A.Y. 2010-11 in support of this he drew our attention to paper book page number 3. 4. On the contrary Ld. DR opposed the submissions and submitted that the transactions would relate to the year when sale deed is actually registered by the stamp valuation authority. He contended that mere presentation of document for registration would not be sufficient. The stamp valuation Authority is required to assess the stamp duty. Section 50C of the Act would come into play when the stamp duty is assessed and document is released after payment of stamp duty. 5. We have heard rival submissions and perused relevant material available on record. The undisputed facts are that the assessee presented sale deed for registration on 31.03.2010 to the “Stamp Valuation Authority”. As per the sale deed the assessee had made payment of sale consideration byway of cheques drawn on Kenra Bank, M. G. Road, Indore, had amounting to Rs.15,00,000/- & Rs.14,00,000/- respectively. As per clause (3) of sale deed, the assessee has handed over possession to the purchaser. The
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contention of the assessee is that in terms of section 2(47), transfer took place in the F.Y. 2009-10, therefore, the authorities below have wrongly taxed the capital gain in the year under appeal. For the sake of clarity section 2(47) of the Act is reproduced as under: “transfer, in relation to a capital asset, includes- (i) the sale, exchange or relinquishment of the asset, or (ii) the extinguishment of any rights therein or (iii) the compulsory acquisition thereof under any law; or (iv) in a case where the asset is converted by the owner thereof into, or is treated by him as, stock-in-trade of a business carried on by him, such conversion or treatment or (iva) the maturity or redemption of a zero coupon bond, or (v) any transaction involving the allowing of the possession 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, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring or enabling the enjoyment of any immovable property. [Explanation 1]- for the purposes of sub-clauses (v) and (vi) “ immovable property” shall have the same meaning as in clause (d) of section 269UA.] Explanation 2- for the removal of doubts, it is hereby clarified that “transfer” included and shall be deem to have always included disposing of or parting with an asset or any interest therein or creating any interest in any asset in any manner whatsoever, directly or indirectly, absolutely or conditionally voluntarily or involuntarily, by way of an agreement or otherwise notwithstanding that such transfer of rights has been characterised as being effected or dependent upon or flowing from the transfer of a share or shares of a company registered or incorporated outside India;] 4
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While dictating the order it came to our notice that similar issue came up before the coordinate bench of this Tribunal, Kolkata Bench in the case of DCIT, Circle-9 Kolkata vs. M/s. Bagrees Investments Pvt. Ltd. in ITA No.1335/Kol/2011 wherein the Tribunal observed as under: “7. We have heard the rival contentions of both the parties and perused the material available on record. At the outset, we find that the Apex Court has stayed the order of Bagri Impex (P) Ltd. (supra) vide its order dated 10.05.2013 which reads as under:- “Issue notice returnable in the last week of August, 2012. In the meantime, there shall be stay of implementation of the order dated 16.1.2013 passed by the High Court t Calcutta in ITA No.277 of 2012.” As the matter is pending in the court of law therefore we are inclined to restore the issue to the file of AO for fresh adjudication with the direction to pass fresh order in the light of the directions to be issue in the aforesaid judgment by Hon'ble Supreme Court. Hence the appeal of the Revenue is allowed for statistical purposes. 8. In the result the appeal of the revenue is allowed for statistical purposes. ITANo.1667/Kol/2011(M/s. Bagri Synthetics Pvt. Ltd.)”
Accordingly, this appeal was fixed for hearing for clarification on 09.01.2018. The Ld. Representative of the parties were heard at length. Ld. counsel for the assessee submitted that the ratio of the judgment of Hon'ble Calcutta, High Court in the case of Bagri Impex (P) Ltd. vs. ACIT 259 CTR (Cal) 553. The Ld. counsel for the assessee submitted that the ratio of the Hon'ble Calcutta High Court would not be applicable on the facts of the present case.
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Per contra Ld. DR has relied upon the judgment of Hon'ble Supreme Court rendered in Civil Appeal No.15619 of 2017 in the case of CIT vs. Balbir singh Maini. We have heard the rival contentions. The Hon'ble Supreme Court in the case of CIT vs. Balbir Singh Maini(supra) has held as under: “The object of Section 2(47)(vi) appears to be to bring within the tax net a de factor transfer of any immovable property. The expression “ enabling the enjoyment of’ takes color from the earlier expression “transferring”, so that it is clear that any transaction which enables the enjoyment of immovable property must be enjoyment as a purported owner thereof. The idea is to bring within the tax net, transactions, where, through title may not be transferred in law, there is, in substance, a transfer of title of fact.”
We find that the facts in the case relied by the Revenue are little different from the facts of the present case. Since the issue in the present case is what would be the consequence where the entire sale consideration is paid and possession is handed over in a particular financial year coupled with the fact that agreement is presented for registering before the registration authority for registering the same, however, the registration authority did not release the document on account of valuation of stamp duty. In the case of Bagri Impex (P) Ltd. vs. ACIT(supra), the issue was what should be the year of transfer when the assessee has received entire sale consideration and handed over the possession, in pursuance to an agreement for sale or in the year when the conveyance deed was executed. The Hon'ble High Court of Calcutta in the case of Bagri Impex(P) Ltd. has ruled that the year when sale deed is registered
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should be considered as year of transfer in terms of section 2(47) of the Act. However, this operation of this decision has been stayed by the Hon'ble Supreme Court. Under these facts we deem it proper to set aside the assessment order on this issue and restore the same to the file of the AO who would decide the same after outcome of the case of Bagri Impex (P) Ltd. vs. ACIT (supra) pending before the Hon'ble Supreme Court. 9. In the result, the appeal of the Assessee is allowed for statistical purposes.
Order was pronounced in the open court on 19 .01.2018.
Sd/- Sd/- (MANISH BORAD) (KUL BHARAT) CCOUNTANT MEMBER JUDICIALMEMBER Indore; �दनांक Dated : 19 / 01/2018 ctàxÄ? P.S/.�न.स.
Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file. By order Private Secretary/DDO, Indore