ITA No.311 of 2015 (O&M) 1 IN HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.311 of 2015 (O&M) Date of decision:2.11.2015 Chiranji Lal Garg Appellant Vs. Commissioner of Income tax, Bathinda and another ..Respondents CORAM: HON BLE MR. JUSTICE AJAY KUMAR MITTAL HON BLE MR. JUSTICE RAMENDRA JAIN 1. Whether Reporters of local papers may be allowed to see judgment? 2. To be referred to Reporters or not? 3. Whether judgment should be reported in Digest? Present: Mr. Sumeet Mahajan, Sr. Advocate with Mr. Amit Kohar, Advocate for appellant. Mr. G.S.Hooda, Advocate for revenue. Ajay Kumar Mittal, J. CM No.18311 CII of 2015 1. There is delay of 578 days in filing appeal. Notice of application was given to respondents. After hearing learned counsel for parties and for reasons stated in application, delay in filing appeal is condoned. CM stands disposed of. ITA No.311 of 2015 2. This appeal has been preferred by assessee under Section 260A of Income Tax Act, 1961 (in short, Act ) against order dated 12.9.2013, Annexure A.1 passed by Income Tax Appellate GURBAX SINGH 2015.11.18 10:07 I attest to accuracy and integrity of this document High Court Chandigarh ITA No.311 of 2015 (O&M) 2 Tribunal, Amritsar Bench, Amritsar (in short, Tribunal ) in ITA No.467 (Asr)/2013 for assessment year 2007-08, claiming following substantial questions of law:- i) Whether on facts and in circumstances of case, Tribunal erred in upholding order of Assessing Officer in bringing to tax entire consideration receivable under JDA dated 25.2.2007 as liable to tax under head Capital gains ? ii) Whether Tribunal erred on facts and in law in holding that there was transfer of immovable property under section 2 (47)(v) of Act read with section 53A of TPA? Iii) Whether Tribunal erred on facts and in law in holding that requirement of registration of JDA under section 53A of TPA could not be read into section 2(47)(v) of Act? iv) Whether Tribunal erred on facts and in law in holding that requirement of registration of JDA under section 53A of TPA was not necessary once power of attorney was registered? v) Whether Tribunal erred in law in construing possession , as contemplated under section 2(47)(v) of Act read with section 53A of TPA, to have wider connotation, to include concurrent possession and/or right to enter into possession? vi) Whether Tribunal erred on facts and in law in holding that possession as contemplated under section 2(47)(v) of Act read with section 53A of TPA was given by society to developers, who held concurrent possession over immovable property? Vii) Whether Tribunal erred on facts and in law in holding that possession as contemplated under section 2(47)(v) of GURBAX SINGH Act read with section 53A of TPA was given by society 2015.11.18 10:07 I attest to accuracy and integrity of this document High Court Chandigarh ITA No.311 of 2015 (O&M) 3 to developers since developers had not only authority/right to enter into immovable property but also to deal with same for various purposes? viii) Whether Tribunal erred on facts and in law in holding that there was transfer under section 2(47)(v) of Act read with section 53A of TPA even though unconditional willingness on part of developers was absent? ix) Whether Tribunal erred on facts and in law in holding that in view of applicability of clause 26 dealing with Force Majeure , it could not be said that unconditional willingness on part of developers was absent? x) Whether Tribunal exceeded its jurisdiction by sitting in judgment on issues concerning civil dispute between parties to JDA and in inter alia holding that (a) there was no default on part of developers in complying with terms of JDA; (b) there was no default on part of developers in making payment; (c) developers were making sincere efforts to obtain all approvals/permissions; and (d) cancellation of JDA and/or revocation of power of attorney by society was not proper and would not stand test of law? xi) Whether Tribunal erred on facts and in law in holding that there was transfer within meaning of section 2(47) of Act despite fact that JDA was terminated/cancelled by society? xii) Whether Tribunal erred on facts and in law in holding that there was transfer even under clause (vi) of section 2(47) of Act? xiii) Whether Tribunal erred on facts and in law in not holding that there was no transfer under clause (ii) of section 2(47) of Act? xiv) Whether Tribunal erred on facts and in law in holding that entire consideration receivable under JDA was GURBAX SINGH taxable without appreciating that same tantamount to 2015.11.18 10:07 I attest to accuracy and integrity of this document High Court Chandigarh ITA No.311 of 2015 (O&M) 4 taxation of hypothetical/notional oncome which is not permissible in law? xv) Whether Tribunal erred on facts and in law in upholding taxation of value of flat as part of consideration receivable under JDA? xvi) Without prejudice, whether Tribunal erred on facts and in law in upholding determination of value of flat at rate of ` 4500/- per square feet? Xvii) Without prejudice, whether Tribunal erred on facts and in law in not adjudicating claim of exemption under section 54F, simply because sections 54 and 54EC were inadvertently mentioned in grounds of appeal and not section 54F of Act? Xviii) Without prejudice whether Tribunal erred on facts and in law in holding that exemption under section 54F of Act was not available on value of flat receivable under JDA? Xix) Whether on facts and in circumstances of case findings arrived at by Tribunal are perverse, inasmuch as no reasonable person correctly informed of provisions of law would come to such conclusion? xx) Whether demand of respondents to demand alleged income tax liability even though as per ruling of this Hon'ble Court rendered in ITA No.200 of 2013, no tax is liable to be paid? xxi) Whether demand is justified once question of law that there is no capital gains has been decided in favour of assessee? 3. facts being identical as in ITA No.200 of 2013 (C.S.Atwal vs. Commissioner of Income Tax, Ludhiana and another), need not be noticed herein again. It was not disputed by learned counsel for parties that issues involved in this appeal have already been decided by GURBAX SINGH 2015.11.18 10:07 I attest to accuracy and integrity of this document High Court Chandigarh ITA No.311 of 2015 (O&M) 5 this Court in C.S.Atwal's case (supra) vide order dated 22.7.2015, wherein it was concluded as under:- 1) Perusal of JDA dated 25.2.2007 read with sale deeds dated 2.3.007 and 25.4.2007 in respect of 3.08 acres and 4.62 acres respectively would reveal that parties had agreed for pro-rata transfer of land. 2) No possession had been given by transferor to transferee of entire land in part performance of JDA dated 25.2.2007 so as to fall within domain of Section 53A of 1882 Act. 3) possession delivered, if at all, was as licencee for development of property and not in capacity of transferee. 4) Further Section 53A of 1882 Act, by incorporation, stood embodied in section 2(47)(v) of Act and all essential ingredients of Section 53A of 1882 Act were required to be fulfilled. In absence of registration of JDA dated 25.2.2007 having been executed after 24.9.2001, agreement does not fall under Section 53A of 1882 Act and consequently Section 2(47)(v) of Act does not apply. 5) It was submitted by learned counsel for assessee- appellant that whatever amount was received from developer, capital gains tax has already been paid on that and sale deeds have also been executed. In view of cancellation of JDA dated 25.2.2007, no further amount has been received and no action thereon has been taken. It was urged that as and when any amount is received, capital gains tax shall be discharged thereon in accordance with law. In view of aforesaid stand, while disposing of appeals, we observe that assessee appellants shall remain bound by their said stand. 6) issue of exigibility to capital gains tax having been GURBAX SINGH 2015.11.18 10:07 I attest to accuracy and integrity of this document High Court Chandigarh ITA No.311 of 2015 (O&M) 6 decided in favour of assessee, question of exemption under Section 54F of Act would not survive any longer and has been rendered academic. 7) Tribunal and authorities below were not right in holding assessee-appellant to be liable to capital gains tax in respect of remaining land measuring 13.5 acres for which no consideration had been received and which stood cancelled and incapable of performance at present due to various orders passed by Supreme Court and High Court in PILs. Therefore, appeals are allowed. 4. In view of above, appeal is disposed of in same terms as in C.S.Atwal's case (supra). (Ajay Kumar Mittal) Judge November 02, 2015 (Ramendra Jain) gs Judge GURBAX SINGH 2015.11.18 10:07 I attest to accuracy and integrity of this document High Court Chandigarh Chiranji Lal Garg v. Commissioner of Income tax, Bathinda and another