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2017 Supreme(P&H) 529
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
AJAY KUMAR MITTAL, RAMENDRA JAIN, JJ.
Pr. Commissioner of Income Tax, Jalandhar-I, Jalandhar - Appellant
Vs.
Dr. Amrik Singh Basra, Miani Road, Dasuya - Respondent
ITA No. 191 of 2017 (O&M)
Decided On : 08-05-2017
For the Appellant : Mr. Vivek Sethi
The main legal point established in the judgment is the interpretation and applicability of Section 2(47)(ii), (v), and (vi) of the Income Tax Act, as well as the essential ingredients for the applicability of Section 53A of the Transfer of Property Act 1882.
Headnote:
Income Tax Act - Interpretation of Section 2(47)(ii), (v), and (vi) - Section 53A of the Transfer of Property Act 1882 - Summary of Acts and Sections: The court discussed the applicability of Section 2(47)(ii), (v), and (vi) of the Income Tax Act, as well as the essential ingredients for the applicability of Section 53A of the Transfer of Property Act 1882. It also interpreted the meaning of 'possession' and the taxable capital gains arising from the transaction entered by the assessee.
Fact of the Case:
The respondent-assessee filed a return of income for the assessment year 2008-09, declaring total income. The Assessing Officer computed long term capital gain arising from the transfer of land and added it to the declared income. The CIT(A) deleted the addition, and the Tribunal dismissed the appeal filed by the revenue, holding that the case of the assessee was covered by a previous court decision.
Finding of the Court:
The court found that the case of the assessee was covered by a previous court decision and that the substantial questions of law claimed in the appeals were not able to be controverted by the appellant-revenue.
Issues: The issues involved included the interpretation of Section 2(47)(ii), (v), and (vi) of the Income Tax Act, the essential ingredients for the applicability of Section 53A of the Transfer of Property Act 1882, the meaning of 'possession', and the determination of taxable capital gains arising from the transaction entered by the assessee.
Ratio Decidendi: The court concluded that the JDA did not fall under Section 53A of the Transfer of Property Act 1882, and consequently, Section 2(47)(v) of the Income Tax Act did not apply. It also held that the assessee was not liable to capital gains tax in respect of remaining land for which no consideration had been received and which stood cancelled and incapable of performance at present.
Final Decision: The appeals were dismissed, and the decision rendered in a previous court case was found to be applicable to the present appeals.
Ajay Kumar Mittal, J.
1. This order shall dispose of ITA Nos.191 and 192 of 2017, as according to the learned counsel for the appellant-revenue, the issue involved in both these appeals is identical. However, the facts are being extracted from ITA No.191 of 2017.
2. The appellant-revenue has filed the instant appeal under Section 260A of the Income Tax Act, 1961 (in short, “the Act”) against the order dated 19.10.2016, Annexure A.3, passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (in short, “the Tribunal”) in ITA No. 572(ASR)/2015, claiming following substantial questions of law:-
(i) “Whether on the facts and circumstances of the case, the Hon’ble ITAT was justified in deleting the addition made by AO relying upon the decision of Hon’ble High Court in the case of C.S. Atwal Vs. CIT in ITA No. 200 of 2013, when SLP has been filed by the department in the case?
(ii) Whether on the facts and circumstances of the case and in law, the Hon’ble ITAT erred in relying upon the order of Hon’ble High Court and was justified in holding that the transfer of land by members of a Cooperative Society by signing an irremovable Power of Attorney in the name of the Developer and also by signing a Joint Development Agreement (JDA) would constitute ‘transfer’ within the meaning of section 2(47)(ii) of the Income Tax Act, 1961 (the Act) read with Clause (v) and Clause (vi) of the said section so as to attract Capital Gain within the meaning of section 45 read with section 48 of the Act?
(iii) Whether on the facts and circumstances of the case and in law, the Hon’ble ITAT erred in relying upon the order of Hon’ble High Court and was justified in holding that no possession had been given by the transferor to the transferee of the entire land in part-performance of Joint Development Agreement dated 25.02.2007 so as to fall within the scope of Section 53A of the Transfer of Property Act 1882 ignoring the fact that the combined reading of the clauses of the duly registered irrevocable Special Power of Attorney and the JDA would clearly show that the developer was handed over possession of the property whereby the assessee was authorized to enter upon the property not only for the purposes of development but other purposes also, including mortgage and sale of that property?
(iv) Whether on the facts and in the circumstances of the case and in law, the Hon’ble ITAT erred in relying upon the order of Hon’ble High Court and was justified in holding that in the absence of registration of JDA dated 25.02.2007 having been executed after 24.09.2001, the agreement does not fall under Section 53A of the Transfer of Property Act, 1882 and consequently, section 2(47)(v) of the Income Tax Act, 1961 does not apply to the present case, failing to appreciate the fact that this requirement of registration cannot be read into clause (v) of Section 2(47) of the Income Tax Act, 1961 because the said provision refers only to the contract of the nature of section 53A of the T.P. Act without going into the controversy whether or not such agreement is required to be registered?
(v) Whether on the facts and in the circumstances of the case and in law, the Hon’ble ITAT erred in relying upon the order of Hon’ble High Court and was justified in holding that the Society has transferred the land through JDA on a pro-rata basis, and that only the money received against which sale deeds have also been executed could be taxed and the money to be received later cannot be presently taxed ignoring the fact that as per section 45 read with Section 48 of the Income Tax Act, in case of capital gain, the tax has to be paid on the total consideration arising on transfer which include the consideration which has been received as well as consideration which has arisen and became due and may be received later on?
(vi) Whether on the facts and in the circumstances of the case and in law, the Hon’ble ITAT erred in relying upon the order of Hon’ble High Court and was justifi
