INCOME TAX ACT, 1961

Section 45

Capital gains - Chargeability - Sale of the property by the Vendee cum AGPA-holder whether could be considered as sale of property by the assessee -

Pursuant to an agreement of Sale cum GPA and handing over of possession, assessee claimed that he transferred property in favour of vendee/GPA-holder. Assessee contended that he received entire sale consideration, therefore, according to him, transfer was complete. Thereafter, GPA-holder sold property to another person and assessee's name was only included as vendor, but document neither contained signature of assessee nor assessee received any sale consideration. Therefore, Long Term Capital Gain could not be brought to tax in his hands in relevant assessment year. Held: Since vendee paid entire sale consideration and took possession of property, vendee became owner of property under section 53A of Transfer of Property Act and under section 2(47) it is a transfer of property. Vendee executed Sale Deed by virtue of the said AGPA, as he sold the property to another party. Sale of the property by the Vendee cum AGPA-holder cannot be considered as sale of property by the assessee. Assessee's name was only included as vendor, but document neither contained signature of assessee nor assessee received any sale consideration. Therefore, Long Term Capital Gain could not be brought to tax in his hands in relevant assessment year.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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