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TMI Blog2010 (9) TMI 850X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Facts as narrated in the appeal are that the assessee filed its return for the assessment year 1989-90 wherein a note had been given by him that capital gains on account of sale of residential flat in New Delhi were exempt from tax. The assessing officer asked for the details and reasons from the assessee for claiming exemption. It was also sought to be furnished as to when the possession of the flat that had been sold on 6.1.1989, had been handed over to him. The assessee furnished the desired information and documents, including the copy of allotment letter besides stating that he was entitled to exemption as per the provisions of Section 2(29A) of the Act. The assessee had claimed that he purchased another flat at New Delhi on 31.1.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of attorney. It was further sought to be contended before the appellate authority that the assessee was allotted the flat on 27.2.1982 and on the date the allotment letter was issued, he became absolute owner of the property, and as per the circular of the Board of Direct Taxes, bearing No.471 dated 15.10.1986, which provides that if the sale is made through special power of attorney the same was permissible and as such the sale of the flat under reference made after a period of 36 months, was a long term capital gain and exempted from tax under Section 2(29A) of the Act. It was further urged before the CIT (A) that the assessing officer had incorporated wrong provisions and given reference of the second allotment letter dated 15.5.1986. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case is, whether the capital gain arising on allotment of flat under the scheme of the DDA on 27.2.1982 of which actual flat number and delivery of possession took place on 15.5.1986 and the flat having been sold on 6.1.1989, was a long term capital gain; and consequently, whether the assessee was entitled to set off the same under Section 54 of the Act. 8. The assessee relied upon judgment of this Court in Commissioner of Income Tax v. Ved Parkash and sons (HUF), (1994) 207 ITR 148 (PandH) and Circular No.471 dated 15.10.1986 [162 ITR (st.) 41] to contend that allottee gets title to the property with the issuance of allotment letter and payment of instalments is only a followup action and taking of the delivery of possession is on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer. A conjoint reading of aforesaid provisions leads to one conclusion that a capital asset which is held by the assessee for 36 months would be termed as a long term capital asset and any gain arising on account of sale thereof would constitute long term capital gain. 12. It would also be advantageous to refer to Circular No.471 dated 15.10.1996 [162 ITR (st.) 41] issued by CBDT on which heavy reliance has been placed by the assessee whereby instructions have been issued regarding treatment of capital gains tax in case of a flat purchased under Self-Financing Scheme. It reads thus:- "CIRCULAR NO. 471 Capital gains tax- Whether investment in a flat under the Self-Financing Scheme of the Delhi Development Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failure on the part of the Delhi Development Authority to deliver the possession of the flat after completing the construction, the remedy for the allottee is to file a suit for recovery of possession. 3. The Board have been advised that under the above circumstances, the inference that can be drawn is that the Delhi Development Authority takes up the construction work on behalf of the allottee and that the transaction involved is not a sale. Under the Scheme, the tentative cost of construction is already determined and the Delhi Development Authority facilitates the payment of the cost of construction in instalments subject to the conditions that the allottee has to bear the increase, if any, in the cost of the construction. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agee or on account of part performance of an agreement, etc. Conversely, all such other persons who may be termed as lessees, mortgagees with possession or persons in possession as part performance of the contract would not in strict parlance come within the purview of "owner". As per the Shorter Oxford Dictionary. Edition 1985, "owner" means one who owns or holds something; one who has the right to claim title to a thing." 15. Now adverting to the case law relied upon by learned counsel for the revenue, reference is made to Smt. Beena K. Jain's case (supra). The assessee therein had sold office premises on 23.7.1987 which had resulted in long term capital gain. Prior thereto, the assessee had entered into an agreement for purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X
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