TDS Credit on sale of Immovable property allowed in year of transfer of property: ITAT

The Chennai Tribunal in the matter of M/s.Archean Realty P. Ltd. vs Dy. Commissioner of Income Tax held that  credit for TDS shall be given for assessment year for which such income is assessable. Since, the income pertains to transfer of property is assessable for AY 2015-16, the assessee has rightly claimed for credit for taxes for AY 2015-16 only.

The Income Tax Appellate Tribunal (ITAT) further said that Assessing Officer (AO) has wrongly disallowed capital loss for AY 2015-16. As per definition of transfer as defined u/s.2(47)(v) of the Act, any transaction involving allowing of the possession of any immovable property to be taken or retained in part performance of contract of the nature referred to sec.53A of Transfer of Property Act, 1882, or any transaction which has the effect of transferring or enabling the enjoyment of any immovable property is considered as transfer. As per provisions of Sec.53A of Transfer of Property Act, 1882, defines the term part performance, as per which, where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract. If you go by definition of the transfer as is u/s.2(47)(v) of the Act, it is clearly envisages that transfer takes place only when the transferee takes possession of the property or any part thereof and further, the transferee has performed or is willing to perform his part of the contract. Therefore, from the above, it is clear that the transaction shall be treated as transfer only when the possession has been taken or retained by the buyer. In this case, there is no dispute with regard to fact that agreement between the parties dated 12.06.2013 coupled with payment of entire sale consideration of Rs.40 Crs. was taken place in the FY 2013-14 relevant to the AY 2014-15. But, fact remains that possession of the property has been handed over to the buyer on 18.04.2014 only and this has been confirmed by both seller and buyer in writing.

Since, the possession of the property has been handed over to the buyer in the FY 2014-15 relevant to AY 2015-16, ITAT was of considered view, the transfer has been defined u/s.2(47)(v) r.w.s.53A of Transfer of Property Act, 1882, took place in the AY 2015-16 only. Therefore, we are of the considered view that the assessee has rightly computed capital gains/loss from transfer of property for AY 2015-16. The AO & the Ld.CIT(A) without appreciating relevant facts and also on wrong appreciation of relevant provisions of the Act, has disallowed capital loss computed by the assessee from transfer of property for AY 2015-16.

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