COMMISSIONER OF INCOME TAX versus BALBIR SINGH MAINI

Citation: [2017] 10 S.C.R. 1073 · Decided: 04-10-2017 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Dismissed
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Judgment (excerpt)

[2017] 10 S.C.R. 1073 
COMMISSIONER OF INCOME TAX 
v. 
BALBIR SINGH MAIN! 
(Civil Appeal No. 15619 of2017) 
OCTOBER 04, 2017 
[R. F. NARIMAN AND SANJAY KISHAN KAUL, JJ.] 
Income Tax Act, I961: 
ss.2(47)(v) and (vi), 45 and 48 - Capital gains tax - Exigibility 
A 
B 
to - Assessees were members of a Co-op_erative Housing Society -
C 
Societies entered into Joint Development Agreement (JDA) with 
Developers - Developers were required to make payment in four 
instalments - Developers made payments to the assessees only upto 
second instalment and 7. 7 acres of land out of the total 21.2 acres 
of land was conveyed - The said paid amount suffered capital gains 
tax for assessment years 2007-2008 and 2008-2009 - Further D 
instalments were never paid as the project got interdicted by judicial 
orders and no other conveyance of the remaining land took place 
as per the JDA - Assessing Officer held that the assessees were 
li<ible to capital gains tax also in respect of the remaining 13.5 
acres of land for which no consideration had been received because 
E 
physical and vacant possession of the land had been handed over 
.and ihe same would tantamount to "transfer" within the meaning 
of ss.2(47)(ii), (v) and (vi) of Income Tax Act - Appellate Authority 
as well as Appellate Tribunal of Assessing Officer upheld the order 
of Assessing Officer - High Court decided in favour of the assessees 
holding that no possession had been given of the land in part F 
performance of JDA so as to fall within the domain of s. 53A of 
Transfer of Property Act, 1882 and that in absence of registration 
of JDA, having been executed after 24.9.2001, the agreement did 
not fall u/s. 53A and consequently uls. 2(47)(v) - On appeal, held: 
In order to qualify as a "transfer" of a capital asset uls. 2(47)(v) of G 
· I961 Act, there must be a "contract" enforceable in law uls. 53A of 
I882 Act - Under ss. 17(/A) and 49 of Registration Act, 1908, the 
contract (JDA) which was executed after 24.9.2001, since 
unregistered, cannot be taken cognizance of. for the purpose 
specified in s. 53A of 1882 Act - Therefore, no "transfer" can be 
said to have taken place under JDA - .The assessees did not acquire H 
1073 
1074 
SUPREME COURT REPORTS 
[2017) 10 S.C.R. 
A any right to receive income and hence there was no profit or gain 
arising from the transfer of a capital asset to be brought to tax u/s. 
45 r/w. s. 48 - Transfer of Property Act, 1882- s. 53A - Registration 
Act, 1908 - ss. 17(1A) and 49. 
Transfer of Property Act, 1882: 
B 
s.53A - Nature of - Held: Protection provided u/s. 53A is 
only a shield, to be resorted to as a right of defence. 
s. 53A [as amended by Registration and Other Related Laws 
(Amendment) Act, 2001] - Applicability of -
Held: After the 
amendment, if any agreement/contract is not registered, it shall have 
C 
no effect in law enforceable under 53A - Registration Act, 1908 -
ss.17(/A) and 49. 
Dismissing the appeals, the Court 
HELD: 1. A reading of the Joint Development Agreement 
(JDA) shows that, it is essentially an agreement to facilitate 
D development of 21.2 acres so that the developers build at their 
own cost, after obtaining necessary approvals, flats of a given 
size, some of which were then to be handed over to the members 
of the society. Payments were also to be made by the developer 
to each member in addition to giving each member a certain 
number of flats depending upon the size of the member's plot 
E that was handed over. Payments under the third instalment were 
only to be made after the grant of approvals and not otherwise, 
and that it is an admitted position that this was never done because 
no approvals could be obtained as the High Court ultimately 
interdicted the project. Also, the termination clause shows that 
F in the event of the JDA being terminated, whatever parcels of 
land have already been conveyed, will stand conveyed, but that 
no other conveyances of _the remaining land would take place. 
[Para 16) [1089-A-C] 
2. Section 53A was inserted by the Transfer of Property 
G (Amendment) Act, 1929 to import into India the equitable doctrine 
of part performance. The protection provided under Section 53A 
is only a shield, and can only be resorted to as a right of defence. 
[Paras 18, 19) [1091-A, E-F] 
Shrimant Shamrao Suryavanshi & Anr. v. Pralliad 
H 
Bhairoba Suryavanshi (D) by LRs. & Ors. (2002) 3 SCC 
. COMMISSIONER OF INCOME TAX v. BALBIR SINGH MAINI 
1075 
676 at 682 : [2002] 1 SCR 39
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