IN INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES E : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER ITA.No.2310/Del./2019 Assessment Year 2010-2011 Smt. Madhu Gangwani, New Delhi 110 048. ACIT, PAN ADYPG0306Q C/o. M/s. RRA TAXINDIA vs., Circle 30 (1), D-28, South Extension, Part-I, New Delhi. New Delhi. PIN 110049. (Appellant) (Respondent) Shri Rakesh Gupta, And For Assessee : Shri Somil Aggarwal, Advocates. For Revenue : Shri K. Hauthang, Sr. D.R. Date of Hearing : 23.09.2019 Date of Pronouncement : 01.10.2019 ORDER PER BHAVNESH SAINI, J.M. This appeal by Assessee has been directed against Order of Ld. CIT(A)-10, New Delhi, Dated 12.02.2019 for A.Y. 2010-2011, challenging reopening of assessment under section 147 of I.T. 2 ITA.No.2310/Del./2019 Smt. Madhu Gangwani, New Delhi. Act, challenging Order of Ld. CIT(A) on reason that capital gain is not subjected to tax in assessment year under appeal, challenging addition of Rs.30 lakhs and Rs.3,58,067/- and interest under sections 234A, 234B and 234C of I.T. Act, 1961. 2. Briefly facts of case are that return of income in this case was filed on 14.09.2010 declaring income of Rs.43,41,970/-. return was revised declaring income of Rs.41,72,080/-. assessment was reopened under section 148 of I.T. Act. In this case information was received from ADIT, Investigation that in course of investigation of suspicious transaction report in case of Shri Ranish Karki, it came to light that assessee had signed sale agreement with Shri Rajnish Karki for sale of property L-1/13, Hauz Khas Enclave, New Delhi for Rs.3,25,00,000/- . During investigation, it was also seen that assessee had 50% ownership in this property and Shri Roop Chand had remaining 50% share in property. On 07.08.2008, Sh Roop Chand released ownership of his 50% share in favour of assessee for Rs.29,00,000/-. 3 ITA.No.2310/Del./2019 Smt. Madhu Gangwani, New Delhi. Therefore, assessee became full owner of property in question. property was sold to Shri Rajnish Kharki on 31.03.2009 for consideration of Rs.3.25 crores. It was also submitted that transfer of property was registered on 01.04.2009 through registered sale deed. assessee did not showed capital gain on transfer of this property in A.Y. 2009-10. assessee has showed capital gain in computation of income for assessment year under appeal i.e., 2010-2011 and claimed deduction under section 54 of IT Act, 1961 of Rs.2,17,12,940/- computation of capital gain is reproduced in assessment order. assessee was asked to explain why benefit of indexation should not be restricted to land and building purchased during F.Y. 2005-2006 as 50% share in property has been purchased during F.Y. 2008- 2009. assessee furnished complete details and agreed with view of Department. capital gain of 50% share in property will be treated as long term capital gains and remaining 50% will be treated as short term capital gain. Computation of which is noted in 4 ITA.No.2310/Del./2019 Smt. Madhu Gangwani, New Delhi. assessment order. computation of assessee was therefore, not found correct. Further computation was made. It was also found from calculation of short term capital gain of assessee, she deducted amount of Rs.60 lakhs under Head Furniture and Fittings , in support of which, copy of Agreement was filed. It was found that expenditure is related to period before acquisition of property was made. From submission of assessee. it was seen that expenditure made by assessee was in two parts i.e., Rs.30 lakhs in 2006 and Rs.30 lakhs in 2008. Show cause notice was issued to assessee that furniture and fixture was not allowable deduction. A.O. ultimately made addition of Rs.30 lakhs. Further, it was found that some expenses were made in property in period prior to date of acquisition for which Rs.3,58,067/- were disallowed. assessee challenged reopening of assessment and aforesaid additions before Ld. CIT(A). However, appeal of assessee has been dismissed. 5 ITA.No.2310/Del./2019 Smt. Madhu Gangwani, New Delhi. 3. We have heard Learned Representative of both parties and perused material available on record. 4. first and foremost question raised by Learned Counsel for Assessee had been that transfer of property did not take place in assessment year under appeal, therefore, no capital gain is chargeable in assessment year under appeal. Reassessment is invalid and bad in Law. 5. Section 45 of I.T. Act provides that any profits and gains arising for transfer of capital asset effected in previous year shall, save as otherwise provided in Section 54 etc., be chargeable to Income Tax under Head Capital Gains and shall be deemed to be income of previous year in which transfer took place. Section 2(47)(v) of I.T. Act provides definition of Transfer Transfer in relation to capital asset includes any transfer involving allowing on new possession of any immovable property to be taken or retained in part performance of contract of nature referred to in 6 ITA.No.2310/Del./2019 Smt. Madhu Gangwani, New Delhi. Section 53A of Transfer of Property Act, 1982. It is, therefore, clear that for levy of capital gains tax, there should be transfer of capital asset in previous year relevant to assessment year under appeal. Section 2(47)(v) of I.T. Act provides transfer of capital asset which includes transactions involving allowing of possession of any immovable property to be taken or retained in part performance of contract of nature referred to in Section 53A of Transfer of Property Act. Learned Counsel for Assessee has filed copy of Registered Agreement to Sell Dated 16.01.2009 in support of aforesaid property whereby assessee has agreed to sell property to purchaser Shri Rajnish Karki, subject to part payment and part possession have been handed over to purchaser. This agreement to sell is registered with Sub Registrar. Thus, conditions of Section 2(47)(v) of I.T. Act are satisfied in sense that there is transfer of immovable property on execution of registered agreement to sell whereby part possession is of property in question have been handed over to 7 ITA.No.2310/Del./2019 Smt. Madhu Gangwani, New Delhi. purchaser, subject to part payment. remaining conditions have been satisfied by handing over entire possession of property in question subject to remaining payment on execution of sale deed dated 31.03.2009. Thus, transfer of capital asset is completed in previous year relevant to preceding A.Y. 2009-2010. Revenue has however been relying upon fact that sale deed dated 31.03.2009 since registered on 01.04.2009, therefore, transaction of transfer of capital asset took place in A.Y. 2010-2011 in appeal. We do not agree with view of Revenue. Section 47 of Registration Act, 1908 provides as under: 47. Time from which registered document operates. registered document shall operate from time from which it would have commenced to operate if no registration thereof had been required or made, and not from time of its registration. 5.1. Hon ble Supreme Court in case of CIT vs. Balbir Singh Maini [2017] 398 ITR 531 held as under : 8 ITA.No.2310/Del./2019 Smt. Madhu Gangwani, New Delhi. object of Section 2(47)(vi) appears to be to bring within tax net de facto transfer of any immovable property. expression "enabling enjoyment of" takes color from earlier expression "transferring", so that it was dear that any transaction which enables enjoyment of immovable property must be enjoyment as purported owner thereof, maxim "noscitur sociis" has been repeatedly applied by Supreme Court. recent application of maxim is contained in Coastal Paper Limited v. Commissioner of Central Excise, Visakhapatnam, (2015) 10 SCC 664 at 677, para 25. This maxim is best explained as birds of feather flocking together. maxim only means that word is to be judged by company it keeps. idea was to bring within tax net, transactions, where, though title may not be transferred in law, there was, in substance, transfer of title in fact. 5.2. Considering facts of case in light of above discussion, it is clear that agreement to sell was executed and registered on 16.01.2009 whereby part 9 ITA.No.2310/Del./2019 Smt. Madhu Gangwani, New Delhi. possession of property in question have been handed over to purchaser subjected to part payment. Therefore, transfer of capital asset completes in preceding A.Y. 2009- 2010. This fact is further strengthened by fact that registered sale deed was executed between parties on 31.03.2009 whereby entire terms and conditions are satisfied. full sale consideration have been paid and possession of property have been handed over to purchaser. This fact is further strengthened by Section 47 of Registration Act whereby it is provided that registered document shall operate from date of its execution. In these circumstances, we hold that transfer of capital asset had taken place in preceding A.Y. 2009-2010. Therefore, capital gain tax would not be chargeable in assessment year under appeal i.e., 2010-2011. initiation of re- assessment proceedings are illegal and beyond jurisdiction of A.O. We, therefore, set aside Orders of authorities below and delete entire addition. In this view of matter, there is no need to decide other issues involved in present appeal. Before parting with Order, we 10 ITA.No.2310/Del./2019 Smt. Madhu Gangwani, New Delhi. would like to make it clear that since assessee has declared capital gain in return of income filed for assessment year under appeal and paid self assessment taxes, therefore, assessee would not be entitled to retract from statement so made in return of income. In this view of matter, we allow appeal of assessee. 6. In result, appeal of Assessee allowed. Order pronounced in open Court. Sd/- Sd/- (O.P. KANT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER Delhi, Dated 01st October, 2019 VBP/- Copy to 1. appellant 2. respondent 3. CIT(A) concerned 4. CIT concerned 5. D.R. ITAT E Bench 6. Guard File BY Order Asst. Registrar : ITAT Delhi Benches : Delhi. Madhu Gangwani v. ACIT, Circle-30 (1), New Delhi