- (1.) The present appeal has been filed by the Department under Section 260A of the Income-Tax Act, 1961 against the judgment and order passed by the Income Tax Appellate Tribunal, Lucknow in ITA No. 143/Luc/2003, for the assessment year 1995-96.
(2.) On 01.04.2008, a Coordinate Bench of this Court has admitted the present appeal, on the following substantial questions of law:- "1.Whether on the fact and circumstances of the case Income Tax Appellate Tribunal was justified in concluding that there was no extinguishment of right in the property, in question, by the assessee and no transfer of capital asset within the meaning of Section 2(47)(ii) of the Income Tax Act, 1961 during the previous year relevant to the assessment year 1995-96. 2.Whether on the fact and circumstances of the case Income Tax Appellate Tribunal has not erred in law in holding that vide original agreement dated 29.12.1994 registered on 04.01.1995 it was only intended to transfer the impugned property and the transfer took place after March 1997, only, on the basis of a certificate dated 29.08.2000 issued by the builder to this effect, in total disregard to the provisions of Registration Act, 1908. 3.Whether on the fact and circumstances of the case Income Tax Appellate Tribunal was right in law in holding that the impugned property had been converted into stock in trade and thus CBDT Circular No. 791 was applicable, without rebutting the merits of the finding of facts recorded by the Assessing Officer in this respect".
(3.) The brief facts of the case are that assessee is a widow and 81 years old lady. The assessee is the owner of the premises know as "Dady Villa", situated at R.F. Bahadurji Marg (Meera Bai Marg), Lucknow. On 29.12.1994, the assessee entered into an agreement with the builder Shivalik Real Estate Promoters Pvt. Ltd. As per agreement, an area of 18603 sq. ft. was to be developed into a multi story apartment. The builder developed the land and constructed a complex known as "Khushnuma Complex". The built up area was 1,670.3147 sq. mtrs. The builder was to give 35% of the built up area to the assessee or its sale value if the assessee wanted it to be sold through the builder. The builder was to get 65% of the built up area along with undivided 65% interest on the land. On 28.03.2000, the Assessing Officer made assessment under Section 147 of the Act holding that since assessee had handed over the possession of the plot to the builder in pursuance of an agreement for transfer i.e. in part performance of a contract referred to in Section 53A of the Transfer of Property Act, the transfer took place during the previous year itself in view of the provisions of Section 2(47) of the Act.;