The actual difference between Agreement to Sell and Sale Agreement/Sale Deed.
By Abhay Harish Shah , Realty Quarter
To sale, any property one must follow two types of agreement mainly which are an agreement to sell and sale agreement or sale deed and must be stamped and registered according to the law of registration. It is possible that the date of registration and the date of execution of an agreement differs which is a normal practice.
One can say that after the registration of an agreement, all the right of that property gets transferred from the seller to the buyer side.
Difference between an agreement to sell and sale agreement.
M/s Talwalkar’s wellness club had consented to sell an apartment for Rs 2.2 crores and had gotten a token amount of Rs 20 lakhs against the arrangement. The consent to sell was executed on February 14, 2011, and was appropriately enlisted. The understanding had a statement such that the deal/exchange would produce results, on the full thought of Rs 2.2 crores being paid. According to the terms of installment in the understanding, the last installment was to be made by May 26, 2011, i.e., in the following financial year. According to the terms of the understanding, the ownership of the property was likewise to be given over on a full installment of the deal thought. The merchant was additionally required to pay for the upkeep charges and different charges, till the ownership was given over. As the date of understanding and the date of conclusive installment/ownership fell in two financial years, a dispute arose between the tax authorities and the citizen, with regards to the year in which the benefit at a bargain of this property would end up assessable. The Income Tax Department treated the date of enrollment of the property, as the date on which the exchange occurred and had, as needs to be, burdened the capital gains in the evaluation year 2011-2012. The question went to the Income Tax Tribunal.
On perusing the understanding completely, the Income Tax Tribunal arrived at a conclusion that the deal or exchange was not finished on the date of execution of the understanding and that the exchange of the property occurred, when the parity installment was made and ownership gave over to the purchaser, which occurred amid the budgetary year 2011-2012. Subsequently, the capital increases were assessable in the evaluation year 2012-2013 and not in the appraisal year 2011-2012, as was finished by the surveying officer wrongly. The council additionally saw that the understanding which was enrolled was an agreement to sell and not a sale agreement.