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5. The assessee impugned above addition in appeal before CIT (A) and reiterated his submissions. The learned CIT (A) took into account provisions of section 2(47) (v) of Income-tax Act along with section 53A of Transfer of Property Act and concluded that transaction in form of agreement of sale entered by the assessee with Kumaon Constructions amounted to "transfer". From the terms and conditions of the agreement to sell, it was evident that part of land i.e., 3,700 sq. yards out of 7,000 sq. meters had already been taken possession of (by the transferee) and this fact was undisputed. Similarly, 570 Sq. meters of land was utilised for roads and parks during the year under appeal. The learned CIT (A) accordingly concluded that possession of major part of land under agreement had already been passed on to the transferees or its nominees. Thus in his view, part of the contract was performed and case was fully covered by what was envisaged in section 53A of Transfer of Property Act. He was influenced by the expression, "the transferee has taken possession of the property or part thereof" used in section 53A of the Transfer of Property Act. He held that it was not necessary that possession of whole of the property should be taken by the transferee. The CIT (A) confirmed the order of the Assessing Officer. The assessee has brought the issue in appeal before Appellate Tribunal.

It was clear from above that transactions were made in pursuance of agreement of sale dated 25-4-1988. Smt. Sinha also drew our attention to observations at page 542 of learned Author Shri H. S. Gaur on the Transfer of Property Act (8th Edition). The learned author has discussed as to what are the essentials of "part performance of contract" under section 53A. Smt. Sinha also drew our attention to the portion of section 53A providing, "the transferee has, in part performance of the contract, taken possession of the property or any part thereof".

12. In our considered opinion, the approach adopted by revenue authorities is erroneous and unjustified being based upon misconception of legal principles involved in statutory provisions. The part performance of a contract has been taken in the little sense to mean performance of any part to contract i.e. sale of a part of property agreed to be sold, has been taken as part performance. This with respect has been in total disregard of express language of statutory provisions and the well-settled law. Any and every type of performance is no relevant to attract application of provision of section 53A of the Transfer of Property Act and/or section 2(47) of the Income-tax Act. It is by now well-settled that equitable doctrine of part performance was given statutory recognition in section 53A and was designed only to protect possession of a transferee when the transfer falls short of requirements laid down by the law. The plea of part performance can be taken only as a shield in defense and not as a sword. The most important ingredient of doctrine enshrined in section 53 is the change of possession. The transferee, in order to take benefit of the provision, must prove that he has obtained possession or if already in possession, continued to be in possession in part performance of the contract.

13. It is more than clear from the order of the Assessing Officer that he recorded no finding that possession of property other than 3700 sq. meters admittedly transferred was delivered by the assessee. His reasoning for holding that provisions of section 2(47) (v) were applicable, has already been noted and discussed. The Assessing Officer made no attempt to record any finding that possession of balance property was delivered to M/s Kumaon Constructions or their nominee. On appeal, CIT (A) fully concurred with and supported the reasoning given by the Assessing Officer in holding that provisions of section 53A read with section 2(47) (v) of Income-tax Act were applicable to the agreement which was partly performed. The learned CIT (A) in para 2.9 of the impugned order further observed that M/s Kumaon Constructions did have constructive possession of entire land. Unless M/s Kumaon Constructions were in effective possession, it was not feasible for them to deal physically with property and develop it according to their own choice. We are unable to endorse above observation of learned CIT (A) based on assumption and surmises. The terms of the agreement between the assessee and M/s Kumaon Constructions reproduced in para 6 above specifically provided that possession of vacant land will be given only after receipt of entire consideration of Rs. 25,00,000. The learned CIT (A) totally ignored above clause while observing that Kumaon Constructions were in constructive possession of the land. It is one of the conditions for application of section 53A that possession of immovable property should be obtained under the contract which is claimed to be partly performed. Thus possession must be obtained under the contract. In such a situation finding of constructive possession has no meaning. It is, therefore, not possible for us to hold that assessee delivered possession of any land other than 3700 sq. meters sold in the year under consideration. As already noted, there is absolutely no material on record to justify even finding of constructive possession. As the possession of property other than sold was neither given nor allowed to be retained, provision of section 53A of TPA read with section 2(47) (v) of Income-tax Act has no application in this case. On the total consideration received in the relevant period, the assessee returned capital gain which was treated as exempt in view of investment in IDBI Bonds. The assessee has further shown capital gain on sales effected in succeeding year and same has accordingly been assessed. For the reasons given above no further addition under the head capital gain could be made in the year under reference. Therefore we direct the Assessing Officer to accept the capital gain as returned by the assessee. The addition made is directed to be deleted.