Friday, October 6, 2017

JDA - Taxation of land owner to 'cg't- SC Revisits !

CIT vs. Balbir Singh Maini (Supreme Court)

With  a view to clarifying one's own independent thoughts: 

This, as stated in the SC Judgment itself, is a judgment disposing of a batch of civil appeals, accepting the plea of learned counsel appearing for both sides that common substantial QUESTIONS OF LAW are involved in all these appeals. (FONT supplied)

On the contrary, as succinctly set out at the outset, the only point of issue (at best, a composite one),  which the SC has been called upon to adjudicate and give its opinion,  is this:

“S. 2(47)/ 45: Entire law on whether a joint development agreement entered into by an owner of land with a developer constitutes a "transfer" u/s 2(47) and whether the same gives rise to capital gains chargeable to tax u/s 45 and 48 of the Income-tax Act EXPLAINED IN THE CONTEXT OF THE PROVISIONS OF THE TRANSFER OF PROPERTY ACT, REGISTRATION ACT AND real income theory” (FONT supplied)

And the immediately succeeding narration READS:

"If an agreement, like the JDA in the present case, is not registered, then it shall have no effect in law for the purposes of Section 53A. In short, there is no agreement in the eyes of law which can be enforced under Section 53A of the Transfer of Property Act. THIS BEING THE CASE, WE ARE OF THE VIEW THAT THE HIGH COURT WAS RIGHT IN STATING THAT IN ORDER TO QUALIFY AS A “TRANSFER” OF A CAPITAL ASSET UNDER SECTION 2(47)(V) OF THE ACT, THERE MUST BE A “CONTRACT” WHICH CAN BE ENFORCED IN LAW UNDER SECTION 53A OF THE TRANSFER OF PROPERTY ACT. A READING OF SECTION 17(1A) AND SECTION 49 OF THE REGISTRATION ACT SHOWS THAT IN THE EYES OF LAW, THERE IS NO CONTRACT WHICH CAN BE TAKEN COGNIZANCE OF, FOR THE PURPOSE SPECIFIED IN SECTION 53A." (FONT supplied)

In one's conviction, that  clearly bears out the fact,- so also the operative portions of the SC judgment,-  that the one  and only point of issue  taken to the HC, and thereafter, to the SC, for judicial opinion is that as set out  in the editor's head note (reproduced above).

On the stated premise, the proposition that calls for an independent consideration may be framed thus:

Whether or not the dispute could have been fully and finally settled, if not at the ITAT stage itself, before the HC; that is, without the SC being required or obliged /called upon to adjudicate- as if it were a 'question of law' arising for  the first time for a judicial adjudication, afresh?

In one's long standing and firm conviction, should regard be had to the plethora of case law , on the very same point of issue, -clinching the issue once for all in assessee's favour- and had that is so been forcefully urged / adequately addressed,- a prolongation of/dragging  the dispute  further to the SC could have been ideally avoided.

In support, to briefly indicate, attention is invited to  inter alia the "PRECEDENTS" , -being the case law squarely covering the issue on hand, 'on all fours'; particularly,  to such of the case law cited in the write-ups, displayed/published, and available in public domain, such as in, -  KLJ Journal Issues,- apart from the professional websites of Lci and Taxguru; others being, Linkedin and Facebook.

Case Law:  The leading SC case (Old- setting the 'precedent' for ever)

That is a case decided under the 1922 Act , under the provisions of that Act which  correspond to the provisions of the 1961 Act , of relevance herein. As is to be readily seen, the ruling in that case has been repeatedly , almost consistently ,followed; and  thus, stands approved by most of the court cases, unreservedly, decided under the 1961 Act, as well- conclusively holding the field.  

For specimen (random selected*- to quickly refer):

(*selected for the reason that this a comprehensive study of the provisions of the 1961 Act ; and seen to cover certain arguments addressed in the subject SC Judgment )  

Cross Refer (Related):


Ø Art. titled  ‘Law v Case Law’ – (2014) (3) Kar. L.J.  pg. 1 to 48

SC in Suraj Case >

Sec 53A

NO Registration  - NO Transfer
<> Last of published articles - 2016 (85) Kar. L.J. pg 1-15
    (Alapathy SC cited in the HC case analyzed therein)

TAIL Piece: Closely Related >
-see posted comments thereat !

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