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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 ..... lat. In favour of assessee. - ITA No. 140 of 2000 - - - Dated:- 24-9-2010 - Adarsh Kumar Goel, Ajay Kumar Mittal, JJ. S.S. Narula, Adv., for the Appellant Rajesh Katoch, Adv., for the Respondent JUDGEMENT Ajay Kumar Mittal, J: 1. This appeal under Section 260A of the Income-tax Act, 1961 (for short "the Act") has been filed by the assessee against the order dated 14.3.2000, passed by the Income Tax Appellate Tribunal, Chandigarh Bench (SMC) Chandigarh, (in short "the Tribunal") in ITA No.1928/Chandi/92, for the assessment year 1989-90. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal vide order dated 7.9.1992, Annexure A-4 and also took a view that the flat was allotted on 15.5.1986 and as such the same remained with the assessee for less than 36 months and was, thus, not exempted as per the provisions of the Act. 4. The assessee carried the matter in appeal before the Tribunal and all contentions that were raised before the assessing officer and the CIT (A) were also raised therein. The pleas of the assessee did not find favour with the Tribunal as well. It was observed that the flat was allotted on 15.5.1986 and the letter issued in that behalf indicated the flat number and it called upon the assessee- allottee to deposit the balance amount. The appeal was consequently dismissed by the Tribunal, vide order dated 14.3.2000. 5. On the strength of the above facts and circumstances, the assessee raised the following substantial question of law for adjudication by this Court: "Whether on the facts and circumstances of the present case and the provisions of Section 2(29A) and Section 2(42A) read with section 54 of the Income Tax Act, the flat allotted to the appellant vide allotment letter dated 27.2.1982 is a long term capital gain and furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee for not more than thirty-six months immediately preceding the date of its transfer. 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 would be construction for the purpose of ss.54 and 54F of the IT Act, 1961. 15/10/1986 CAPITAL GAINS SECTIONS 54, 54F. Secs. 54 and 54F of the IT Act, 1961, provide that capital gains arising on transfer of a long-term capital asset shall not be charged to tax to the extent specified therein, where the amount of capital gain is invested in a residential hou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that an allottee acquires on allotment of flat under Self-Financing Scheme. According to it, the allottee gets title to the property on the issuance of an allotment letter and the payment of instalments is only a consequential action upon which the delivery of possession flows. 14. The next issue is the meaning to be assigned to the word "held" occurring in Section 2(42A) of the Act. A Division Bench of this Court in Ved Prakash's case (supra) while interpreting the provisions of Section 2(42A) of the Act elaborated the expression "held by an assessee", in the following words:- "As is clear from a bare reading of section 2(42A) of the Act, the word "owner" has designedly not been used by the Legislature. The word "hold", as per dictionary meaning, means to possess, be the owner, holder or tenant of (property, stock, land ....). Thus, a person can be said to be holding the property as an owner, as a lessee, as a mortgagee 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 pu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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