M/S Surjeet Kaur Dalam vs The Commissioner Of Income Tax, Chandigarh & Ors.

Rupinderjit Chahal, J.

The present appeal has been preferred by the assessee under Section 260A of the Income Tax Act, 1961 (for short, “the Act”) against the order dated 29.07.2013 passed under Section 254(1) of the Act by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as “the Tribunal”) in ITA No. 1156/chd/2011 for the assessment year 2007-08.

The facts leading to the filing of the present appeal, in brief, are that the appellant is an individual and widow of late Shri Natha Singh Salam, who was a member of Punjabi Cooperative House Building Society Limited (hereinafter referred to as “the Society”). The Society owned 21.2 acres of land in Village Kansal, in which the appellant’s husband had rights in respect of a 500 square yards plot. On 25.02.2007, the Society entered into a Tripartite Joint Development Agreements (JDA) with Hash Builders Private Limited, Chandigarh, and Tata Housing Development Company Limited, Mumbai, whereby the developers agreed to develop the land belonging to the Society in consideration of development rights. The consideration payable to the individual members was partly monetary and partly in the form of built-up flats, depending upon the size of their respective plots.

Pursuant to the aforesaid JDA, payments were made only up to the second instalment and an area of 7.7 acres of land was registered in favour of Tata Housing Development Company Limited, Mumbai. Disputes thereafter arose between the Society/members and the developers with regard to further payments under the JDA. The appellant, being entitled under the JDA in respect of a 500 square yards plot, was to receive monetary consideration of ₹82,50,000/- and one flat measuring 2250 square feet. She, however, actually received a sum of ₹33 lakhs, comprising ₹15 lakhs during the relevant previous year and ₹18 lakhs during the subsequent year.

The appellant’s husband died on 16.05.2005, whereafter she became a member of the Society as his nominee. The appellant claimed to be a super senior citizen and was not an existing income-tax assessee. She did not possess a Permanent Account Number and, being illiterate and unaware of the requirements of the Income Tax Act, did not file a return of income or pay tax in respect of the capital gains allegedly arising from the aforesaid transaction. The Assessing Officer thereafter issued notice to the appellant under Section 148 read with Section 147 of the Act. Vide order dated 29.02.2010 passed under Sections 144/143(3)/147 of the Act, the Assessing Officer held that execution of the JDA amounted to a “transfer” within the meaning of Section 2(47) of the Act. Relying upon Section 2(47)(v) read with Section 53A of the Transfer of Property Act, 1882, and referring to the grant of rights and handing over of possession in favour of Tata Housing Development Company Limited, the Assessing Officer held that the transfer had taken place during the previous year relevant to the assessment year 2007-08. The Assessing Officer also invoked clauses (ii) and (vi) of Section 2(47) of the Act. Consequently, the Assessing Officer brought the entire consideration to tax under the head “Capital Gains”, comprising ₹82,50,000/- towards monetary consideration and ₹1,01,25,000/-towards the fair market value of the 2250 square feet flat, calculated at the rate of ₹4,500/- per square foot. After allowing deduction towards cost of acquisition of ₹6,32,953/-, long-term capital gain of ₹1,77,42,047/- was assessed in the hands of the appellant.

Aggrieved by the aforesaid assessment order, the appellant preferred an appeal before the Commissioner of Income Tax (Appeals), which came to be dismissed vide order dated 23.08.2011, thereby affirming the action of the Assessing Officer. The appellant thereafter challenged the aforesaid orders before the Tribunal, principally contending that execution of the JDA did not constitute a taxable transfer during the relevant assessment year and that consideration which had neither accrued nor been actually received could not be subjected to capital gains tax. The Tribunal, however, dismissed the appeal vide the impugned order. Hence, the present appeal.

Learned counsel for the parties are ad idem that the issue arising in the present appeal is no longer res integra and stands concluded by the judgment of this Court dated 22.07.2015 in ITA No. 200 of 2013, titled C.S. Atwal v. Commissioner of Income Tax, Ludhiana and another. The said judgment pertains to the very same Joint Development Agreements dated 25.02.2007 and examined, inter alia, the scope and legislative intent of Section 2(47)(ii), (v) and (vi) of the Income Tax Act, 1961, the requirements for attracting Section 53A of the Transfer of Property Act, 1882, the nature and effect of possession delivered pursuant to the JDA, and the question as to whether the transaction gave rise to taxable capital gains.

In C.S. Atwal (supra), upon consideration of the relevant statutory provisions and the material on record, this Court recorded its findings on the aforesaid aspects, including the legal effect of the JDA, the nature of possession delivered thereunder and the applicability of Section 2(47)(v) of the Income Tax Act, 1961, read with Section 53A of the Transfer of Property Act, 1882. Since the present appeal arises from the very same JDA and involves an identical controversy, the findings recorded therein directly govern the issue before this Court. Consequently, the controversy raised in the present appeal stands concluded by the aforesaid decision.

Since the facts and the issue involved in the present appeal are covered by the aforesaid judgment in C.S. Atwal (supra), no separate or independent consideration of the same issue is called for. The present appeal is, accordingly, disposed of in terms of the judgment dated 22.07.2015 passed by this Court in C.S. Atwal v. Commissioner of Income Tax, Ludhiana and another, ITA No. 200 of 2013.

Pending miscellaneous application(s), if any, shall also stand disposed of.