Case Law Details
Seshasayee Steels P. Ltd. Vs ACIT (Supreme Court)
SC held that, under the sale agreement, the Taxpayer had granted mere license to Vijay Shanthi Builders Ltd. which cannot be equated with possession of property which necessarily requires control over the property and not mere occupation and, hence, provisions of Transfer of Property Act, 1882 were not attracted.
On a reading of the agreement to sell dated 15.05.1998, what is clear is that both the parties are entitled to specific performance. (See Clause 14)
Clause 16 is crucial, and the expression used in Clause 16 is that the party of the first part hereby gives ‘permission’ to the party of the second part to start construction on the land.
Clause 16 would, therefore, lead to the position that a license was given to another upon the land for the purpose of developing the land into flats and selling the same. Such license cannot be said to be ‘possession’ within the meaning of Section 53A, which is a legal concept, and which denotes control over the land and not actual physical occupation of the land. This being the case, Section 53A of the T.P. Act cannot possibly be attracted to the facts of this case for this reason alone.
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