Capital gains arose if possession of land was transferred, though agreement to sell was terminated later on

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Capital gains arose if possession of land was transferred, though agreement to sell was terminated later on 

[2019] 102 taxmann.com 185 (Kerala)/[2018] 409 ITR 599 (Kerala)
 
IT : Where pursuant to agreement to sell, possession of land was handed over by assessee and sale consideration was received, provisions of section 2(47) would apply and mere fact that contract was subsequently terminated by mutual consent, would not improve case of assessee to wriggle out of purview of section 2(47)
 
Section 2(47) of the Income-tax Act, 1961, read with section 53A of the Transfer of Property Act, 1882 – Capital gain – Transfer (Immovable property) – Assessment year 1999-2000 – A search proceeding was carried out in case of assessee-company – In course of said proceedings, Assessing Officer found that assessee had entered into an agreement to sell a property to MAPL – Since capital gain arising from said sale transaction was not disclosed, Assessing Officer made addition to assessee’s income – In appellate proceedings, assessee pointed out that dispute arose between parties subsequently and, thus, sale agreement was terminated – It was also pointed out that assessee had returned sale consideration received from MAPL – Tribunal having accepted assessee’s explanation, deleted addition made by Assessing Officer – Whether since it was not disputed that possession was handed over in pursuance of agreement to sell, provisions of section 2(47) would squarely apply – Held, yes – Whether, therefore, mere fact that contract was subsequently terminated by mutual consent, would not improve case of assessee to wriggle out of purview of section 2(47) – Held, yes – Whether, therefore, impugned order of Tribunal was to be set aside and addition made by Assessing Officer was to be restored – Held, yes
 
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