AJIT SINGH ARORA v. FIRST WEALTH TAX OFFICER
[Citation -1987-LL-0212-6]

Citation 1987-LL-0212-6
Appellant Name AJIT SINGH ARORA
Respondent Name FIRST WEALTH TAX OFFICER
Court ITAT
Relevant Act Wealth-tax
Date of Order 12/02/1987
Assessment Year 1980-81 TO 1982-83
Judgment View Judgment
Keyword Tags immovable property • conveyance deed • valuation date • total cost • net wealth • donee
Bot Summary: The total cost to the assessee being Rs. 4,03,051, was brought to assessment by the WTO. The assessee s contention was that it should be valued as per the provisions of r. 1BB of WT Rules, 1957. 8th Feb., 1980 between Sudarshan Chits Limited and the assessee is not transferred so far and it is settled law that in case of an immovable property of the value equal to or exceeding Rs. 100, the title to the property cannot pass to the transferee till the conveyance is executed and registered vide CIT vs. Bhurangya Coal Co. 34 ITR 802, 804-5 and CIT vs. Ganga Properties 77 ITR 637. Before us the assessee reiterated the claim of r. 1BB by contending that t h e property was lodged for registration on the date of the execution of the conveyance deed on 8th Feb., 1980. The delay in registration was submitted to be not on account of any omission on the part of the assessee. We are concerned in this case with a question as to whether the property known as Karuna, belongs to the assessee, as by virtue of s. 2(m) only in that case it could so part of the net wealth of the assessee. Even though we find a genuine hardship to the assessee in this case, and whatever was to be done by the assessee in this case, and ultimately evidenced by the registered document. Even though we find a genuine hardship to the assessee in this case, and whatever was to be done by the assessee had been done by lodging the document for registration and there was nothing more to be done by him, we find ourselves unable to accept this argument of the assessee in view of the binding decision of the Bombay High Court in the case of Amarchand J. Agarwal vs. Union of India 26 CTR 286: 142 ITR 402 as affirmed by the Division Bench in 31 CTR 122: 142 ITR 410.


These appeals are by assessee against orders of CWT(A) for t h e asst. yrs. 1980-81 to 1982-83. Since all these appeals raise common dispute, they are being disposed of by this common order for sake of convenience. By conveyance deed dt. 8th Feb., 1980 assessee purchased land admeasuring 484-95 sq. mts. with bungalow thereon known as 'Karuna situated at Chakala, Andheri (E) on Andheri-Kurla Road, Bombay for sum of Rs. 3,75,000. deed of conveyance was lodged for registration on same day by receipt No. 081879 with Sub Registrar of Documents. It was, however, registered much after valuation dates viz., on 23rd Dec., 1986 at serial No. S-314/80. It was stated before us that this is normal time registration takes place for properties in Bombay. total cost to assessee being Rs. 4,03,051, was brought to assessment by WTO. assessee s contention, however, was that it should be valued as per provisions of r. 1BB of WT Rules, 1957. CWT(A) also did not agree with claim of assessee. He held that conveyance deed dt. 8th Feb., 1980 between Sudarshan Chits (India) Limited and assessee is not transferred so far and it is settled law that in case of immovable property of value equal to or exceeding Rs. 100, title to property cannot pass to transferee till conveyance is executed and registered vide CIT vs. Bhurangya Coal Co. (1958) 34 ITR 802, 804-5 (SC) and CIT vs. Ganga Properties (1970) 77 ITR 637 (SC). He, therefore, held that assessee is not owner of property at Karuna Park and hence question of application of r. 1BB did not arise in this case as assessee cannot be assessed as owner of immovable property in form of residential house. amount of Rs. 3,75,000 paid by assessee in pursuance of conveyance deed dt. 8th Feb., 1980 was held to be asset of assessee includible in his net wealth as this was advance paid by him towards purchase of property. He further held that under Indian Law, concept of beneficial ownership is not recognised vide Bombay High Court decision in case of CIT vs. Zorastrian Building Society Ltd. (1976) 102 ITR 499 (Bom). In this view of matter, he directed WTO to treat Rs. 3,75,000 as assets of assessee liable to wealth tax in place of amount of Rs. 4,03,051 taken by him. Before us assessee reiterated claim of r. 1BB by contending that t h e property was lodged for registration on date of execution of conveyance deed on 8th Feb., 1980. delay in registration was submitted to be not on account of any omission on part of assessee. It was delay of Govt. agency for which assessee should not be deprived of his rights. ld. counsel of assessee also filed copy of index No. II dt. 24th Dec., 1986 indicating registration on 23rd Dec., 1986 and contended that by virtue of s. 47 of Registration Act, transaction has to operate from date of conveyance, i.e., 8th Feb., 1980. ld. departmental representative objected to admission of this index No. II dt. 24th Dec., 1986 to be admitted as evidence, same being additional evidences, produced for first time before Tribunal. On merits ld. departmental representative relied upon orders of authorities below. We have considered rival submissions. We are concerned in this case with question as to whether property known as Karuna, belongs to assessee, as by virtue of s. 2(m) only in that case it could so part of net wealth of assessee. This question has come up for consideration before their Lordships of Supreme Court in Nizam s Nawab Sir Mir Osman Ali Khan vs. CWT (1986) 57 CTR (SC) 89: (1986) 162 ITR 888 (SC) wherein it has been held that property can be said to be belonging to person if he is owner of property and his ownership is evidence title which passes when document of conveyance deed is registered. person may be said to be owner in certain circumstances when he is in position to exercise all rights attached to or pertaining to property even in absence of registered document; but that could be said as belonging to him only when registered document of conveyance is executed. assessee s learned counsel submitted that in case of Supreme Court there was no executed document or conveyance deed and, therefore, this decision may not be applicable to facts of this case.. Where document is executed and lost for registration on 8th Feb., 1980 viz., before valuation date and ultimately evidenced by registered document. Though it is registered on 23rd Dec., 1986 it has to have operation document. Though it is registered on 23rd Dec., 1986 it has to have operation w.e.f. 8th Feb., 1980. Even though we find genuine hardship to assessee in this case, and whatever was to be done by assessee in this case, and ultimately evidenced by registered document. Though it is registered on 23rd Dec., 1986 it has to have operation w.e.f. 8th February 1980. Even though we find genuine hardship to assessee in this case, and whatever was to be done by assessee had been done by lodging document for registration and there was nothing more to be done by him, we find ourselves unable to accept this argument of assessee in view of binding decision of Bombay High Court in case of Amarchand J. Agarwal vs. Union of India (1982) 26 CTR (Bom) 286: (1983) 142 ITR 402 (Bom) as affirmed by Division Bench in (1982) 31 CTR (Bom) 122: (1983) 142 ITR 410 (Bom). In this case Bombay High Court has after referring to Supreme Court decision in case of Ram Saran Lal vs. Domini Kuer AIR 1961 SC 1747 held at page 408 as under: "From this decision of Supreme Court it is crystal clear that sale, which is admittedly not complete until registration of instrument, cannot be stated to have been completed earlier by virtue of s. 47 of Registration Act. This decision of Supreme Court was followed in later decision in case of Hiralal Agarwal v. Rampadarath Singh AIR 1969 SC 294, and in view of these two decisions of Supreme Court, submission of Shri Tijoriwala that transfer in present case should be deemed to have been completed on date of execution of document cannot be entertained." Their Lordships have also considered case of T.V. Kalyanasundaram Pillai vs. Karuppa Mooppanar AIR 1927 PC 42, wherein their Lordships of Privy Council in case of gift, which also is considered complete when deed is registered have held that when instrument is signed and handed over to donee and accepted by donee and donor has done everything in his power to make gift effective, fact that it is not registered, would not negate gift though at same time to enforce such gift registration is necessary solemnly. In that case donor was held to have no power to revoke gift prior to registration of instrument. After considering this case of Privy Council their Lordships further held at page 409 as under: "It is difficult to appreciate how dictum laid down by Privy Council would have application to facts of present case. In my judgment it is not possible to hold that transfer is complete on date of execution and registration only makes sale complete. There is no distinction between transfer of title and completion of sale, and in view of decision of Supreme Court, title passes only when document is registered under provisions of Registration Act. mere fact that such transfer operates from date of execution is not sufficient to conclude that title itself passes on date of execution." In view of above discussion, we find ourselves unable to accept contention of assessee. bungalow does not belong to him as there was n o registered document of title in his favour on respective valuation dates. value to be assessed in hands of assessee would, therefore, be amount paid by him to seller for purchasing property viz., Rs. 3,75,000, as held by CWT(A). question of valuation as per provisions of r. 1BB thus, does not arise. In result, appeals are dismissed. *** AJIT SINGH ARORA v. FIRST WEALTH TAX OFFICER
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