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9. Aggrieved by the order of the Commissioner (Appeals), the revenue is in appeal before us contending, inter alia, that the builder has given possession of the land without which he cannot develop the land and construct the flats. As per section 2(47)(v) of the Income Tax Act read with section 53A of the T.P. Act, transfer of possession of land would amount to part-performance of the contract and by virtue of the extended meaning given to the term 'transfer', the assessee is liable to be taxed under the head 'capital gains'. The Departmental Representative took us through the detailed order passed by the assessing officer in support of his plea that transfer of legal title is not necessary in order to constitute 'transfer' and in the instant case, all the conditions stipulated in section 2(47)(v) read with section 53A of the T.P. Act are fulfilled. The developer is willing to abide by the terms of the contract and the assessee never showed any intention to cancel the contract and, therefore, on the receipt of instalment amounts and after handing over the possession to the developer, the transfer can be said to have taken place and thus the sum of Rs. 1.80 crores is liable to be taxed in the year under consideration.

"52. 'Licence" defined.-Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a licence."

In other words, the plea of the assessee is that the developer is given permission to construct the flats and this permission would be effective only when the developer is allowed to enter the plot legally. For this purpose, he was granted licence so that developer will not become a trespasser in the assessee's land during the course of carrying on the developmental activities. The learned counsel also invited our attention to section 53A of the T.P. Act to point out the difference in the language of section 2(47)(v) of the Act vis-a-vis section 53A of the TP Act. Section 2(47)(v) and Explanation thereto reads as under :

(i) any land or any building or part of a building, and includes, where any land or any building or part of a building is to be transferred together with any machinery, plant, furniture, fittings or other things, such machinery, plant, furniture, fittings or other things also.

Explanation.For the purposes of this sub-clause, 'land, building' part of a building, machinery, plant, furniture, fittings and other things' include any right therein; "

13. Comparing the language of the provisions under the Income Tax Act and section 53A of the T.P. Act, the learned counsel contended that in order to treat a particular transaction as amounting to transfer under the Income Tax Act, the transferee, in part performance of the contract, should take possession of the property whereas under section 53A of the T.P. Act, the language used is "..taken possession of the property or any part thereof which abundantly shows that the transfer of possession should not be in part in order to constitute a 'transfer' under the Income Tax Act. Elaborating his submissions further, the learned counsel explains that section 2(47)(v) deals with complete possession of property and not mere licence or a part possession for carrying on the developmental activities and, therefore, such alleged possession did not fall within the meaning of 'transfer' under the Income Tax Act. He further submitted that one of the conditions laid down in section 53A of the T.P. Act is that the transferee should either perform or willing to perform his part of the contract and the willingness of the transferee to perform his part of the contract can be proved only in a Court of Law, by producing evidence on record, before invoking section 53A of the T.P. Act. Explaining this argument further, the learned counsel adverted our attention to p. 35 of the paper-book No. 1 to highlight that the last instalment is due in May, 1988 whereas the transferee paid the last instalment in four equal instalments beginning from 1-8-1988 and thus, after 1-5-1988, the assessee had a right to terminate the contract because the transferee has not paid the instalment and in such cases it is to be positively proved by the revenue that the case falls under section 53A of the Act and the transferee is willing to perform his part of the contract, whereas no such material was furnished by the revenue.

16. We have carefully considered the rival submissions and perused the record as well as the case law cited before us. The case of the assessing officer precisely is that by virtue of the amendment to section 2(47)(v) of the Income Tax Act, there is a "transfer" of immovable property in the year under consideration. In order to appreciate as to whether the facts suggest "transfer" of immovable property in the year under consideration, it is necessary to bear in mind the facts and circumstances of the instant case and the specific clauses in the agreement, dated 29-7-1987 as amended by the supplementary agreements, dated 24-9-1987. Admittedly, the last instalment falls due in the month of May, 1988. For the assessment year under consideration, the previous year ends on 31-3-1988. The clauses in the agreement, which are extracted hereinabove, amply show that the possession of the property is agreed to be given to the developers only upon payment of the last instalment and till such time, the assessee has a right to revoke the contract in certain eventualities. The language used in the contract also, to our mind, indicates that it is not a case of transferring the possession of the property to the developers to enjoy absolute rights over the said property, but it is a case of mere licence to him to enter upon and carry on the developmental activities in the said property. In the light of the specific clause in the agreement, as regards the transfer of possession of the property, it is for the revenue to prove that the assessee gave possession of the property to the developers before the end of the previous year relevant to assessment year 1988-89 and such transfer of possession, if any, debars the assessee from enforcing against the transferee or persons claiming under him any right in respect of the property. Thus, neither in terms of section 2(47)(v) of the Income Tax Act, nor in terms of section 53A of the T.P. Act, the impugned transaction can be classified as "transfer" of capital asset or would be considered as allowing of the possession of any immovable property in part-performance of a contract of the nature referred to in section 53A of the T.P. Act. As rightly pointed out by the learned counsel for the assessee, the transaction can at best be classified as an agreement granting licence to the developers within the meaning of section 52 of the Easement Act, 1882. It may also be noted that the revenue has not brought any material to show that as on 31-3-1988 i.e. the last day of the previous year, the developer was willing to perform the contract on his part. On the contrary, the factum of delayed payment of the last instalment would indicate that the assessee had the privilege to terminate the contract as per terms of agreement and the other party cannot have any protection under law to seek specific performance of the contract or to take shelter under section 53A of the T.P. Act. Thus, the conditions stipulated in section 53A of the T.P. Act are also not satisfied. Thus, on a careful perusal of the agreements and upon a plain interpretation of the concerned provisions, we are of the view that the impugned agreements did not give rise to any transfer, in the previous year relevant to assessment year 1988-89, of the assessee's land at Thane and, therefore, the consideration receivable by the assessee by virtue of the impugned agreements is not taxable under the head 'capital gains' in this year. We, therefore, uphold the order of the Commissioner (Appeals) and dismiss the appeal filed by the department.