ITO, PATIALA vs. SH.RAVINDER SINGH BHATTI, PATIALA

आदेश/ORDER

PER DIVA SINGH The present appeal has been filed by the Revenue assailing the correctness of the order dated 30.11.2016 of CIT (A) Patiala pertaining to the assessment year 2008-09 on the following grounds : (i) In the facts and circumstances of the case, whether the Ld. CIT(A) has erred both on facts and in law in not considering that contemporaneous documents pertaining to a transaction which have to be read as one, they are "MOU'/"Joint Development Agreement", "Possession letter" and "Irrevocable Power of Attorney" and "Resolution by the members allowing the society to enter into a contract with the developers", (ii) In the facts and circumstances of the case, whether the Ld. CIT(A) has erred both on facts and in law in not considering that contemporaneous documents pertaining to a transaction are read as one then "Registration"/"Execution" of Irrevocable Power of Attorney which incorporated that "Terms and conditions" of an agreement satisfied the conditions of amendment of Section 53A of Transfer of Property Act, 1882 and read with Section 2(47)(v) of the Income Tax Act. (iii) In the facts and circumstances of the case, whether the Ld. CIT(A) has erred both on facts and in law in not considering that "Registration" is not sine qua non for "Transfer" to be legal under Section 2(47)(v) read with 2(47)(ii) of the Income Tax Act as section 2(47) in an inclusive definition. (iv) In the facts and circumstances of the case, whether the Ld. CIT(A) has erred both on facts and in law in not considering the "Inclusive" Definition of Transfer u/s 2(47) (ii) and (vi) of Income Tax Act in which an "Agreement to sell" is enough to hold that u/s 2(47) (ii) there is an extinguishment of a right.

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(v) In the facts and circumstances of the case, whether the Ld.CIT(A) has erred both on facts and in law in not considering the "Inclusive" definition of 2(47) and definition of "Agreement to Transfer" u/s 269 UA as per Income Tax Act and relied upon different Acts i.e. Transfer of Property Act, 1882 and Registration Act, 1908 to decide the Proposition of law that transfer mandatory requires Registration and perpetuated the "mischief sought to be remedied by the incorporation of 2(47)(v) & (vi) against the Heydon Rule. (vi) In the facts and circumstances of the case, whether the Ld.CIT(A) has erred both on facts and in law in coming to a dichotomous finding on facts by holding that the assessee to be a licencee as against the findings of fact that the power of attorney created 3rd party right under section 202 of Contract Act. The two being diametrically opposite preposition of law as licencee creates "no interest" and section 202 of Contract Act creates interest in a property. (vii) In the facts and circumstances of the case, whether the Ld.CIT(A) has erred both on facts and in law in holding that possession had not been delivered by the assessee in respect of the entire land without appreciation that the agreement that the assessee entered with M/s Billus Enterprises clearly provided for vacant physical possession to be handed over and that such vacant physical possession was also handed over by assessee. (viii) In the facts and circumstances of the case, whether the Ld.CIT(A) has erred both on facts and in law in holding that possession was not given by the assessee and if given, was in the nature of a licencee ignoring the clear and detailed provisions in the agreement that assessee entered into the with M/s Billus Enterprises, whose provisions and available evidence does not indicate that the transaction was in nature of a licencee." (ix) In the facts and circumstances of the case, whether the Ld.CIT(A) has erred both on facts and in law by failing to appreciate that the assessee had paid/undertook to pay tax on capital gains accruing to her thus admitting that the transaction was of a nature where capital gain was exigible," (x) In the facts and circumstances of the case, whether the Ld.CIT(A) has erred both on facts and in law in holding that unless right to receive has been accrued, income is not taxable even under the head "Capital Gains" ignoring the provisions of section 45 read with section 48 of Income Tax Act, 1961." 2. At the time of hearing, it was a common stand of the parties before the Bench the arguments advanced in ITA 25/CHD/2017 & ITA 27/CHD/2017 would address the issues herein also. It was submitted that the facts are identical to what has been argued in ITA 25 & 27/CHD/2017 and in the facts of the present case also the point at issue is fully covered by the decision of the Apex Court in the case of in the case of CIT Vs Balbir Singh Maini (2017) 86 Taxmann.com 94 wherein the decision of the jurisdictional High Court in the case of Shri Charanjit Singh Atwal has been affirmed. Accordingly, it was the submission of the lar that the appeal of the Revenue is not maintainable. 3. The ld. Sr.DR relies upon the assessment order. 4. We have heard the rival submissions and perused the material on record and find that on facts the issue is identical to the facts as considered in the case of ITO V Smt. Nirmal Sharma & ITO V Smt. Rama Rani in ITA Nos. 25 & 27/CHD/2017. It is seen that the issue was considered by the Co-ordinate Bench in the said appeals considering

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identical receipts pursuant to the very same agreement. It is seen that for identical reasons, the AO held the receipts to be exigible to the Long Term Capital Gains. The CIT(A) considering the facts relied upon the decision of the jurisdictional High Court in the case of Shri Charanjit Singh Atwal. The said decision is under challenge in the present proceedings. As noted, identical issue has been considered by the Co-ordinate Bench and the departmental appeal has been dismissed. For ready reference, the relevant extract of the said decision for ITO Vs Smt. Nirmala Sharma & another is extracted hereunder : “5.1 Considering the facts and the position of law thereon, the CIT(A) came to the conclusion that the decision of the jurisdictional High Court in the case of Charanjit Singh Atwal was applicable. The relevant finding challenged by the Revenue is extracted hereunder : “Further, a perusal of the assessment order shows that the addition was made based on the decision of the Hon'ble ITAT in the case of Charanjit Singh Atwal in ITA No. 448/Chd/2011 dated 23.07.2013 as the core facts in that appeal were identical with the facts of the instant case. On further appeal, the Hon'ble Punjab & Haryana High Court on 22.07.2015 has decided the issue in favour of Sh. Charanjit Singh Atwal. The relevant portion of the judgment of Hon'ble High Court in the case of C.S. Atwal vs. CIT, Ludhiana is reproduced as under: "46. We summarize our conclusions as under: 1. Perusal of the JDA dated 25.02.2007 read with sale deeds dated 02.03.2007 and 25.04.2007 in respect of 3.08 acres and 4.62 acres respectively would reveal that the parties has agreed for pro-rata transfer of land. 2. No possession had been given by the transferor to the transferee of the entire land in part performance of JDA dated 25.02.2007 so as to fall within the domain of section 53A of 1882 Act. 3. The possession delivered, if at all, was as a licensee for the development of the property and not in the capacity of a transferee. 4. Further Section 53A of 1882 Act, by incorporation, stood embodied in section 2(47)(v) of the Act and all the essential ingredients of Section 53A if 1882 Act were required to be fulfilled. In the absence of registration of JDA dated 25.02.2007 having been executed after 24-.09.2001, the agreement does not fall u/s 53A of 1882 Act and consequently Section 2(47)(v) of the Act does not apply. 5. It was submitted by Learned counsel for the assessee appellant that whatever amount was received from the developer, capital gains tax has already been paid on that and sale deeds have also been executed. In view of cancellation of JDA dated 25.02.2007, no further amount has been received and no action thereon has been taken. IT was urged that as and when any amount is received., capital gains tax shall be discharged thereon in accordance with law. In view of the aforesaid stand, while disposing of the appeals, we observe that the assessee appellants shall remain bound by their said stand. 6. The issue of eligibility to capital gains tax having been decided in favour of the assessee, the question of exemption u/s 54F of the Act would not survive any longer and has been rendered academic. 7. The Tribunal and the authorities below were not right in holding the assessee-appellant to be liable to capital gains tax in respect of remaining land measuring 13.5 acres for which no consideration had been received and which stood cancelled and incapable of performance at present due to various orders passed by the Supreme Court and the High Court in PILs. Therefore, the appeals are allowed. 5.2 No change in position of facts was brought to our notice by the ld. Sr.DR. In the face of facts which remain unrebutted on record and no distinction on facts has also been brought to our notice by the Revenue noticing that the legal position as addressed by the

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jurisdictional High Court has been affirmed by the Hon'ble Apex Court, the appeals of the Revenue are dismissed. The Cross Objections of the assessee are dismissed as not pressed. Said order was pronounced in the Open Court at the time of hearing itself. 6. In the result, appeals of the Revenue alongwith Cross Objections of the assessee are dismissed.”

Sd/- Sd/-

( डा. बी.आर.आर. कुमार) (�दवा �संह ) (Dr. B.R.R. KUMAR) (DIVA SINGH) लेखा सद�य/ Accountant Member �याय�क सद�य/Judicial Member “पूनम” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant - 1. ��यथ�/ The Respondent - 2. आयकर आयु�त/ CIT 3. आयकर आयु�त (अपील)/ The CIT(A) 4. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File 6.

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar ITAT,Chandigarh.