M/S. Prithvi Consultants Pvt. Ltd v. Deputy Commissioner Of Income Tax, Central Circle, Pundalik Niwas, Rua-De-Ourem, Panaji, Goa

Niti IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL NO.39 OF 2016 M/s. Prithvi Consultants Pvt. Ltd. No.407, 4[th] Floor, Shiv Towers, Patto Plaza, Panaji Goa. ….APPELLANT Versus Deputy Commissioner of Income Tax, Central Circle, Pundalik Niwas, Rua-de-Ourem, Panaji, Goa. ....RESPONDENT Mr Shivan Desai with Mr A. Sardessai, Advocates the Appellant. Ms Susan Linhares with Ms E. Fernandes, Advocates for the Respondents. CORAM: Reserved on : Pronounced on : M. S. SONAK & BHARAT P. DESHPANDE, JJ. 4[th] SEPTEMBER 2023 5[th] SEPTEMBER 2023 JUDGMENT : (Per M.S. Sonak, J.) 1. 2. 3. 4. 5. 6. 7. 8. 9.₹ 10.₹ 11. 12. 13. ₹ 14. 15. 16. 17. 1 (2018) 12 SCC 354 2 (2003) 12 SCC 219 18. 19. 20. 21. 22. 3 (2018) 90 taxmann.com 83 (Bombay) 4 (2003) 129 Taxman 497 (Bombay) 5 (2011) 14 taxmann.com 120 (Karnataka) 23. 24. 25. 26. “23. The effect of the aforesaid amendment is that, on and after the commencement of the Amendment Act of 2001, if an agreement, like the JDA in the present case, is not registered, then it shall have no effect in law for the purposes of Section 53A. In short, there is no agreement in the eyes of the law which can be enforced under Section 53A of the Transfer of Property Act. This being the case, we are of the view that the High Court was right in stating that in order to qualify as a “transfer” of a capital asset under Section 2(47)(v) of the Act, there must be a “contract” which can be enforced in law under Section 53A of the Transfer of Property Act. A reading of Section 17(1A) and Section 49 of the Registration Act shows that in the eyes of law, there is no contract which can be taken cognizance of, for the purpose specified in Section 53A. The ITAT was not correct in referring to the expression "of the nature referred to in Section 53A” in Section 2(47)(v) in order to arrive at the opposite conclusion. This expression was used by the legislature ever since sub-section (v) was inserted by the Finance Act of 1987 w.e.f. 01.04.1988. All that is meant by this expression is to refer to the ingredients of applicability of Section 53A to the contracts mentioned therein. It is only where the contract contains all the six features mentioned in Shrimant Shamrao Suryavanshi V/s. Pralhad Bhairoba Suryavanshi[6], that the Section applies, and this is what is meant by the expression “of the nature referred to in Section 53A”. This expression cannot be stretched to refer to an amendment that was made years later in 2001, so as to then say that though registration of a contract is required by the Amendment Act of 2001, yet the aforesaid expression “of the nature referred to in Section 53A” would somehow refer only to the nature of contract mentioned in Section 53A, which would then in turn not require registration. As has been stated above, there is no contract in the eye of law in force under Section 53A after 2001 unless the said contract is registered. This being the case, and it being clear that the said JDA was never registered, since the JDA has no efficacy in the eye of law, obviously no “transfer” can be said to have taken place under the aforesaid document. Since we are deciding this case on this legal ground, it is unnecessary for us to go into the other questions decided by the High Court, namely, whether under the JDA possession was or was not taken; whether only a licence was granted to develop the property; and whether the developers were or were not ready and willing to carry out their part of the bargain. Since we are of the view that sub-clause (v) of Section 2(47) of the Act is not attracted to the facts of this case, we need not go into any other factual question. 25. The object of Section 2(47)(vi) appears to be to bring within the tax net a de facto 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 enjoyed as a purported owner thereof. The idea is to bring within the tax net, transactions, where, though title may not be transferred in law, there is, in substance, a transfer of title in fact.” 27. 28. 29. 30. 31. 32. 33. 34. BHARAT P. DESHPANDE, J. Digitally signed by NITI K NITI K HALDANKAR HALDANKARDate: 2023.09.05 14:41:36 +05'30' M. S. SONAK, J.