Mangilall Estates (P) Ltd. Vs. DCIT (ITAT Kolkata)
The dispute in question is for the transfer of the property in the manner prescribed in sub-clauses (v) introduced in section 2(47) with effect from April, 1988. In our considered view the events which had taken place constituted transfer which includes any transaction which allows possession to be taken/retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882. Thus any transaction entered into in any manner which has the effect of transferring or enabling the enjoyment of any immovable property amounts to transfer under section 2(47) of the Act. Accordingly capital gains would be taxable in the year in which such transactions are entered into, even if the transfer of the immovable property is not effective or complete by way of registration under the general law. Under section 2(47)(v ) any transaction involving allowing of possession to be taken over or retained in part performance of a contract of the nature referred to in section 53A of the 1882 Act would come within the ambit of section 2(47)(v). In order to attract section 53A, therefore, there should be an agreement for consideration; it should be in writing; it should be signed by the transferor, it should pertain to transfer of immovable property; the transferee should have taken possession of the property and the transferee should be ready and willing to perform his part of contract. Therefore, capital gains would be taxable in the year in which such transactions were entered into, even if the transfer of the immovable property was not effective or complete for want of registration under the general law. Therefore, the tax ability of capital gains at the hands of the assessee did not fall in the assessment year 2012-2013.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-20, Kolkata dated 09.12.2014. Assessment was framed by DCIT, Central Circle-V,, Kolkata u/s 143(3)/153D of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his order dated 30.01.2014 for assessment year 2012-13.
Shri Subash Agarwal, Ld. Advocate appeared on behalf of assessee and Shri A.K. Tiwari, Ld. Departmental Representative appeared on behalf of Revenue.
2. The assessee has raised following grounds of appeal:-
“1. That the Ld. CIT(A) erred in confirming the action of Assessing Officer in not allowing the various administrative expenses claimed by the assessee against income from other sources without appreciating the fact that they are necessary expenditure to run a company.
2. That the Ld. CIT(A) erred in taxing the capital gain in the year under consideration ignoring the fact that transfer within the meaning of sec. 2(47) had already taken place in AY 1992-93 within the meaning of sec. 53A of Transfer of Property Act.
3. That the Ld. CIT(A) erred in not appreciating the fact that section 50C is not applicable in the case of appellant as the agreement to sell was entered into prior to introduction of section 50C in statute.
4. That the Ld. CIT(A) erred in not accepting the plea of the appellant that even if sec 50C is made applicable, stamp duty val9uation as on the date of agreement should be adopted and not of the date of registration.
5. The appellant craves leave to add to, alter, to delete from or substantiate the above ground of appeal”
3. First issue raised by assessee in ground No.1 is that Ld. CIT(A) erred in confirming the order of Assessing Officer by sustaining the dis allowance of various administrative expenses on the ground that no business activity was carried on by assessee.
4. Briefly, the facts are that the assessee is a private limited company and engaged in business of letting out of immovable property. The assessee in the year under consideration has shown certain income in its computation as detailed under:-
