Law:

Section:

Section 2(47) of the Income-tax Act, 1961, read with section 53A of the Transfer of Property Act, 1882 - Capital gains - Transfer - Assessment year 1991-92 - Whether where transaction relating to transfer of property fully satisfies ingredients of section 53 of Transfer of Property Act, it shall be a transfer in relation to a capital asset, and, fall within purview of 'Transfer' under section 2(47) - Held, yes - Whether a further transfer of interest in said property would amount to transfer of capital asset, and, profit earned on such transfer would be capital gain of assessee - Held, yes FACTS The appellant-assessee entered into an agreement to purchase a plot of land along with the multi-storeyed building. The entire amount of consideration had been paid in pursuance of the sale agreement and the property was taken possession of on a subsequent date. Thereafter, the vendor of the assessee had executed a power of attorney, authorizing one of the directors of the assessee to transfer the property in favour of the assessee or its nominee and, accordingly, the property was transferred to the Government. The assessee had earned a profit from the said transaction and claimed the said profit as short-term capital gain. The Assessing Officer held that no registered sale deed had been executed by the transferor in favour of the assessee, and, therefore, the assessee did not acquire any right, title or interest under said transfer. Thus, income earned by the assessee on further transfer of said property was income from other sources and was taxable as such. On appeal, the Commissioner (Appeals) held that in pursuance of the agreement to sell, the assessee had paid entire amount mentioned therein and had been placed in the possession of the property. Hence, the property in question was transferred in favour of the assessee and the income earned out of transfer of that property to the Government was in nature of short-term capital gain and not income from other sources. On appeal by the revenue, the Tribunal upheld the view taken by the Assessing Officer and, accordingly, allowed the appeal. Against the said order, instant appeal was filed by the assessee. HELD Transfer…

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