Overview of the Case<\/h2>\n\n\n\n
Case: – ACIT, Circle-02, Kota, vs. Sh. Ijyaraj Singh, Raj Bhawan Road, Kota-18\/06\/2020<\/strong><\/em><\/p>\n\n\n\n It has\nbeen observed that Capital gain tax would not attract merely based on the fact\nthat the sale deed is registered, and the transfer could not be concluded due\nto incomplete payment responsibilities. It has held by the Jaipur (ITAT) bench\nof the Income Tax Appellate Tribunal.<\/p>\n\n\n\n As per the\nfacts of the case, assessee transferred his land using the registered sale deed\npaid by cheques for a consideration of Rs 3.40 Cr. Moreover, two were tarnished\nand returned unpaid to the assessee out of these cheques. <\/p>\n\n\n\n While completing the assessment against the assessee, the demanded income tax from the assessee held that the Revenue transfer of land has been done through these two registered sale deeds<\/strong><\/a> only, in this case. Moreover, the sales deliberation was mutually settled, accepted upon, and considered established before signing and registering the sale deed previously with the Registering Authority in India.\u00a0<\/p>\n\n\n\n Parties\nclaimed that the transaction is a substantial note to levy of capital gains\ntax, and deduction for not receiving any part of sales consideration in the\nfuture, is not satisfactory under the provisions of Act from the overall worth\nof compensation. <\/p>\n\n\n\n On the\nother hand, the assessee held that registration is not proof of a functioning\nallocation\/transfer of property. Consequently, the parties had intended that\ndespite transfer by way of sale and execution of registration of sale deed, it\nwill become operative only on payment of\nthe complete deliberation sum.<\/strong> <\/p>\n\n\n\n By considering this particular opinion, the transfer will only be affected only by receipt and payment of entire sale consideration<\/strong>. It will not be affected at the time of registration of sale deed and execution. <\/p>\n\n\n\n The\nTribunal noted that the purpose and intentions of the\nparties could be gathered from the conduct of the parties and the reading of\nthe sale deed only on encashment and clearance of both the cheques that is the\neffective transfer of title in the land shall happen or not. It will not get\ndetermined at the time of registration of the sale deed and execution of\nit. <\/p>\n\n\n\n Therefore,\nit cannot be held to be a discharge and liberations of entire sale\nconsideration at the time of implementation\/execution of the sale deed, for\nmere handing over the cheques, which have been consequently tarnished and\nreturned unpaid to the assessee. It has been evident that Shri Rajeev Singh has\nfailed to discharge the full sale consideration, which is an absolute violation\nof the terms of sale deed by so agreed and stated in the sale deed.<\/p>\n\n\n\n Afterward, the matter has again been challenged separately before the Civil Court for cancellation of sale deed under the ‘Negotiable Instruments Act<\/em><\/strong>[1]<\/em><\/strong><\/a><\/sup>‘<\/em><\/strong> for the ‘dishonor of cheques’ because of breach of contract. After fair trial and discussion, Tribunal noted proving that the intention was that the transfer would be valid only on receipt of the full sale consideration at the time of entering into the sale deed”.<\/p>\n\n\n\n Read our article<\/b>:ITAT: Capital Gain Deduction Claim if No Returns filed<\/a><\/mark><\/p>\n\n\n\n It has observed that the Tribunal held by putting faith in the decision of the Supreme Court in the case of ‘CIT V\/s. Shoorji Vallabhdas & Co’ deciding <\/strong>on the Capital Gain<\/em>.<\/p>\n\n\n\n Even though sale deed has been registered, Supreme court was therefore of the deliberated view that, the intention of the parties and the given terms of the sale deed at the time of entering into the said sale have not to adhere if the entire sale consideration has not been settled<\/strong> <\/p>\n\n\n\n It has\nopined that there is no income accrues and no transfer of the impugned land\nconcerning Capital Gain. As a result, no\nliability towards capital gains tax rises on the part of the assessee<\/strong>. <\/p>\n\n\n\n This brings us to the concept of Capital Gain which cannot be any levy of tax on hypothetical income, which has either accrued\/arisen or received by the assesse, and thereby can only be brought to tax.<\/p>\n\n\n\nHeld by Tribunal<\/h3>\n\n\n\n
Facts of the Case<\/h3>\n\n\n\n
Contentions of Parties<\/h3>\n\n\n\n
![\"Contentions](\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/06\/image-164.png\")
<\/figure><\/div>\n\n\n\nTribunal Notes<\/h3>\n\n\n\n
Conclusion: Overall Observation <\/h2>\n\n\n\n