9911796707
TMI Blog2014 (2) TMI 1117X X X X Extracts X X X X X X X X Extracts X X X X ..... otted to the appellant on 07.06.1986, vide letter conveyed to the assessee on 30.06.1986 - The assessee paid the first installment on 04.07.1986, thereby conferring a right upon the appellant to hold a flat, which was later identified and possession delivered on a later date - The mere fact that possession was delivered later, does not detract from the fact that the allottee was conferred a right to hold property on issuance of an allotment letter - The payment of balance installments, identification of a particular flat and delivery of possession are consequential acts, that relate back to and arise from the rights conferred by the allotment letter – thus, the ITAT has erred in holding that the transaction does not envisage a long term cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on 06.08.1991. An appeal filed before the Income Tax Appellate Tribunal was dismissed on 15.03.1999. Counsel for the assessee submits that the flat was allotted on 07.06.1986, vide letter, conveyed on 30.06.1986. The first installment was paid on 04.07.1986. The flat was sold on 05.07.1989, i.e., after 36 months. The sale, therefore, results in long term capital gain. It is further contended that right, to hold flat came to vest in the assessee upon allotment and at the latest upon payment of Rs.7500/- on 04.07.1986. The sale of the said flat on 05.07.1989, reveals that the assessee held the capital asset for a period exceeding 36 months. It is further submitted that identification of the flat or physical delivery of possession is irre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was allotted to the assessee, on 30.11.1988, the allotment letter or payment of first installment does not entitle the appellant to claim a long term capital gain. A similar controversy came up for adjudication in ITA No.140 of 2000 (Vinod Kumar Jain v. Commissioner of Income Tax, Ludhiana and others), decided on 24.09.2010. The point for consideration in the aforesaid case was whether capital gain arising from allotment of flat on 27.02.1982, under a scheme framed by DDA, though, the actual flat was allotted and possession was delivered on 15.05.1986 was a long term capital gain as the flat was sold on 06.01.1989. After considering Sections 2(29-A),(42A) read with Section 54 of the Income Tax Act, 1961 as well as Circular No.471, dated 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of a house, the benefit is available if the investment is made within a period of one year before or after the date on which the transfer took place and in case of construction of a house, the benefit is available if the investment is made within three years from the date of transfer. 2. The Board had occasion to examine as to whether the acquisition of a flat by an allottee under the Self-Financing Scheme of the Delhi Development Authority amounts to purchase or its construction by the Delhi Development Authority on behalf of the allottee. Under the Self-Financing Scheme of the Delhi Development Authority the allotment letter is issued on payment of the first instalment of the cost of construction. The allotment is final unless it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital gains. 13. On careful reading of the Circular issued by the Board, para 2 thereof describes the nature of right 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. We find no distinction between the opinion recorded in the aforesaid judgment and the controversy in the present case. Admittedly, the flat was allotted to the appellant on 07.06.1986, vide letter conveyed to the assessee on 30.06.1986. The assessee paid the first installment on 04.07.1986, thereby conferring a right upon the appellant to ho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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