Itta/351/2013 Of Sri Vimalakumar Agarwal v. The Dy. Commissioner Of Income Tax, Circle 5(3)

IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) PRESENT THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA AND THE HON’BLE SRI JUSTICE K.C. BHANU INCOME TAX APPELLATE TRIBUNAL APPEAL NO.351 OF 2013 DATED:30.8.2013 Between: Vimalkumar Agarwal … Appellant And The Deputy Commissioner of Income TaxCircle 5(3), Aayakar BhavanHyderabad … Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTISENGUPTA AND THE HON’BLE SRI JUSTICE K.C. BHANU I.T.T.A. NO.351 OF 2013 JUDGMENT:(per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) This appeal is preferred against the judgment and order of thelearned Tribunal dt.9.1.2013 and is sought to be admitted on thefollowing suggested questions of law: 1.On thefacts and in the circumstances of the case, whether theorder of the Income Tax Appellate Tribunal is not perverse inholding that recitals in documents carry more weight than thedocumentary evidence, to hold that the possession was handedover in September, 2005 and hence there is a transfer during2005-06?order of the Income Tax Appellate Tribunal is not perverse inholding that recitals in documents carry more weight than thedocumentary evidence, to hold that the possession was handedover in September, 2005 and hence there is a transfer during2005-06? 2.On the facts and in the circumstances of the case, whether theIncome Tax Appellate Tribunal is correct in law in not consideringthe documentary evidences to demonstrate that possession wasnot given during 2005-06 and further that there was no registeredsale deed and hence as per provisions of Sec. 53A of T.P. Act,unless possession is given there cannot be Transfer and therebyerred in holding that there was a transfer during 2005-06?Income Tax Appellate Tribunal is correct in law in not consideringthe documentary evidences to demonstrate that possession wasnot given during 2005-06 and further that there was no registeredsale deed and hence as per provisions of Sec. 53A of T.P. Act,unless possession is given there cannot be Transfer and therebyerred in holding that there was a transfer during 2005-06? 3.On the facts and in the circumstances of the case, whether theIncome Tax Appellate Tribunal is correct in law in not entertainingthe plea to direct for deletion of Rs.53,75,000/- made as excessclaim of deduction u/s.54, on the ground that there is no ground,though there is a ground to the effect that “Any other ground thatmay be urged at the time of hearing” and further that the saidaddition is connected to assessability of Capital Gains?”Income Tax Appellate Tribunal is correct in law in not entertainingthe plea to direct for deletion of Rs.53,75,000/- made as excessclaim of deduction u/s.54, on the ground that there is no ground,though there is a ground to the effect that “Any other ground thatmay be urged at the time of hearing” and further that the saidaddition is connected to assessability of Capital Gains?” We have heard Mr. K. Vasantkumar, learned counsel appearingin support of this appeal and gone through the impugned judgmentand order of the learned Tribunal. The learned Tribunal held on fact that the possession of theproperty was given on 3.9.2005 as per the signed original sale deed dated 3.9.2005, which remains unregistered, and the same can betreated as an agreement for sale. The learned Tribunal relied on thecovenants of the aforesaid instrument. Said covenants read asfollows: “4.4. The vendors hereby assure that the purchaserwould at all times hereafter quietly and peacefully enter upon,occupy or hold, possess and enjoy the schedule propertyhereby conveyed and receive all rents, profits, thereto andincome therefrom without any let up, hindrance, interruption,claim or demand whatsoever from the vendors herein or any person or persons or any party claiming through them. The learned Tribunal held on fact that the possession of theproperty was given on 3.9.2005 as per the signed original sale deed dated 3.9.2005, which remains unregistered, and the same can betreated as an agreement for sale. The learned Tribunal relied on thecovenants of the aforesaid instrument. Said covenants read asfollows: “4.4. The vendors hereby assure that the purchaserwould at all times hereafter quietly and peacefully enter upon,occupy or hold, possess and enjoy the schedule propertyhereby conveyed and receive all rents, profits, thereto andincome therefrom without any let up, hindrance, interruption,claim or demand whatsoever from the vendors herein or any person or persons or any party claiming through them. 5. Indemnity: The vendors hereby undertake toindemnify the purchaser in the event of any claim or right orinterest over the schedule property by third party/parties or inthe event the title of the vendor is found to be defective andundertake to make good the entire loss suffered by thepurchaser.” The Tribunal, however, ignored the other evidences, namelytelephone bills, ration cards etc. The learned Tribunal held that theterms and conditions of the unregistered sale deed, which is treated tobe an agreement for sale, are evidences to establish the factum ofpossession. Mr. Vasantkumar, learned counsel for the appellant, submitsthat the learned Tribunal should not have relied on the recitals of theunregistered deed and should have looked into the other documents,namely, telephone bills and ration cards etc. According to him, theevidence adduced by the assessee is a conclusive proof that the buyerdid not receive possession of the property. He also submits that thedocument is an unregistered one and hence it cannot be looked into. Under these circumstances, the finding of the learned Tribunal that theproperty has been transferred on 3.9.2005 is not correct. After considering the submissions of the learned counsel for theappellant and taking into consideration the findings of the Tribunal,firstly we have to see whether the transaction amounts to ‘transfer’ ornot. We set out the definition of ‘transfer’ in Section 2(47) of theIncome Tax Act, 1961, which reads as follows: 2(47). ‘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 thereofinto, or is treated by him as, stock-in-trade of a businesscarried on by him, such conversion or treatment; orinto, or is treated by him as, stock-in-trade of a businesscarried on by him, such conversion or treatment; or (via) the maturity or redemption of a zero coupon bond; or (v)any transaction involving the allowing of the possession ofany immovable property to be taken or retained in partperformance of a contract of the nature referred to in section53A of the Transfer of Property Act, 1882 (4 of 1882); orany immovable property to be taken or retained in partperformance of a contract of the nature referred to in section53A 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 cooperative society, company orother association of persons or by way of any agreement orany arrangement or in any other manner whatsoever) whichhas the effect of transferring, or enabling the enjoyment of,any immovable property.or acquiring shares in, a cooperative society, company orother association of persons or by way of any agreement orany arrangement or in any other manner whatsoever) whichhas the effect of transferring, or enabling the enjoyment of,any immovable property. Thus, it appears that unlike the definition of ‘transfer’ in theTransfer of Property Act, the aforesaid definition is very wide andexhaustive. The aforesaid definition nowhere suggests that there mustbe compulsorily registerable document or deed, and all that is requiredis payment of some money or any factum of handing over possessionin relation to an agreement. In this case, there is a covenant andpursuant to that, a deed of conveyance has been executed though notregistered. Payment of consideration has also been made. The onlyquestion is whether there is any material to see that possession wasdelivered or not. The unregistered document, by the aforesaidcovenant, which is not a recital at all, shows that possession has beenhanded over, so much so, that the buyer has got the dominant controland possession of the property. As such, it became an owner thereofgoing by above definition of transfer. In our considered view, nothingremains in the matter to transfer the property except to execute thedocument. The grain has already been passed over to the buyer andonly chaff is remaining, namely, formality of registration. When theTribunal and all the authorities came to a fact finding that there has been actual possession on the date of execution of the agreement on3.9.2005, this Court cannot go into the fact finding. Depending uponappreciation of evidence, fact finding is made. We do not find anyelement of law in this appeal. The appeal is accordingly dismissed. There will be no order as to costs. ________________________ K.J. SENGUPTA, CJ ______________________ K.C. BHANU, J 30.8.2013 bnr