2007 (7) TMI 538

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..... flat) as short-term capital gain in place of long-term capital gains declared by the appellant. 2. The learned CIT(A) erred in not verifying the fact that the appellant had never taken possession of the flat and what was sold by the appellant was the right in the flat and the appellant had incorrectly shown the transaction as sale of flat in place of right in flat. 3. Without prejudice to the above, the learned CIT(A) erred in holding the sale of flat as short-term capital gain by treating the date of possession as the date of acquisition, while the date of first payment should have been treated as the date of acquisition of flat." 2. The brief facts are that the assessee entered into an agreement for purchase of flat on 15-2-1992. .....

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..... at para 4 of p. 2. He vehemently contended that the first appellate authority has recorded that the builder confirmed to have handed over the possession of the said flat to the assessee and on the assessee receiving the possession of the flat, the right in the flat has undergone a change and the asset in question was the flat itself. As the assessee has acquired the flat in 1997 and sold the same in the same year the gain arising on this transfer was short-term capital gain. 5. Rival contentions heard. On a careful consideration of the case and on a perusal of the ease laws cited as well as the papers on record we are of the considered opinion that the asset that was transferred in this case is the right to acquire the flat. The learne .....

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..... utir itself and therefore, what was to be allowed as deduction for working out the capital gains was not the cost of tenancy but the cost of ownership rights. In view of the said finding, the Tribunal remanded the matter, back to the Assessing Officer to work out the market value of Janki Kutir as on 4-8-1983 and, allow as a deduction the cost of the asset sold to work out the capital gains. This is a pure finding of fact. No interference is called for." 6. Thus as we have held that the nature of asset which is transferred is only certain rights in a flat, the date of acquisition should necessarily be the date of entering into an agreement i.e., 15-2-1992. Thus the gain in question should be assessed as a long-term capital gain. In .....

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