2017 (2) TMI 1017 - AT - Income Tax

Gain on sale of rights in immovable property - LTCG or STCG - selection of date - Held that - CIT(A) in question on this issue is wrong against law and facts because the CIT(A) has considered the date of the execution of the sale deed for the purpose of assessing the Long / Short Term Capital Gain. Accordingly, specifically in view of the above mentioned law, we set aside the finding of the CIT(A) on this issue and direct the Assessing Officer to reconsider the claim of the assessee on the basis of the allotment letter for the purpose of assessing the Long / Short Term Capital Gain in accordance with law.

Summary

Issues:
1. Determination of capital gains as Short Term Capital Gain (STCG) instead of Long Term Capital Gain (LTCG) on the sale of rights in immovable property.

Analysis:
Issue NO.1:
The appeal was filed against the order by the Commissioner of Income Tax (Appeals) regarding the treatment of gain on the sale of rights in immovable property as STCG instead of LTCG for the Assessment Year 2009-10. The assessee argued that the date of allotment of the property should be considered to assess the capital gain as LTCG. The assessee cited legal precedents such as Madhu Kaul Vs Commissioner of Income Tax and Another, ITO 8(3)(1) Vs. Shangrila Golf & Health Resorts Pvt. Ltd., and Commissioner of Income Tax Vs. Girish L. Ragha. The Assessing Officer had considered the date of sale for computing capital gains, resulting in STCG. The tribunal found that the CIT(A) erred in not considering the date of allotment for calculating capital gains. Relying on legal precedents, the tribunal held that the date of allotment should be considered for assessing LTCG. Consequently, the tribunal allowed the appeal, directing the Assessing Officer to reconsider the claim based on the allotment letter to determine LTCG or STCG accurately.

In conclusion, the tribunal allowed the appeal, setting aside the CIT(A)'s decision and directing the reconsideration of the capital gains assessment based on the date of allotment to determine LTCG or STCG correctly.