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TMI Blog2010 (5) TMI 852X X X X Extracts X X X X X X X X Extracts X X X X ..... d in confirming disallowance of deduction under section 54F of the Act in respect of capital gains arisen from transfer of residential house property. 3. The brief facts emerging from the records are that the assessee is a proprietor of M/s. Oscar Marine Services which is in the business of technical services and consultancy. In the return of income the assessee has shown sales of two flats bearing No. X-702 and Z-702 at Andheri. The admitted the cost of acquisition of these flats after indexation shown at ₹ 14,78,877. The total sale consideration of these two flats is ₹ 22,75,000. Consequently, the long-term capital gain was computed at ₹ 7,96,123. The assessee claimed the deduction under section 54F as the capital gains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see as well as the revenue have challenged the impugned order. The assessee is aggrieved by the denial of exemption under section 54F, whereas the revenue has questioned the benefit of indexation with respect to payment made by the assessee prior to agreement for purchase allowed by the CIT(A). 5. Before, us, the learned AR of the assessee has submitted that when the CIT(A) has held that the capital gain arising out of sale of the two flats is a long-term capital gain then the assessee is entitled for the claim under section 54F of the Act. He has alternatively asked that the long-term capital gain arisen from transfer of residential house property ought to have been allowed under section 54 if it was not allowed under section 54F of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of application for allotment of flats by enclosing a cheque of ₹ 6,000. It is pertinent to mention here that at the time of booking of flats, the flats were not in existence even the proposed site plant was also not in existence as the same was yet to be approved. Therefore, when the assessee booked the flats, the structure was not in existence. Even otherwise the transaction of booking of the flats was only a tentative allotment letter and the same cannot be termed as transfer of any capital asset for availing the claim under section 54F. 8. The transfer of long-term capital asset is a primary requirement of relevant provisions of section 54F with proviso to sub-section (1). The provisions of sub-section (1) of section 54F mandates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en registered and the transfer has not been completed in the manner prescribed therefor by law, the transferor is barred from enforcing against the transferee any right in respect of the property other than the right expressly provided by the terms of the contract. Under the Income-tax Act, 1961 by inserting clause (v) to section 2(47), the definition of the term transfer includes the transaction which fulfils the conditions provided under section 53A of Transfer of Property Act. Thus, the provisions of section 53A of Transfer of Property Act does not provide any transfer but it talk about the situation when the right created in favour of the transferee cannot be defeated otherwise than the terms and conditions expressly provided in the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8/Mum./2009 9. The revenue has raised various grounds. However, the only issue arises is whether in the facts and circumstances, the CIT(A) is justified in holding that two flats at Andheri sold by the assessee in the current year are long-term capital assets and is entitled indexation in respect of payment made for the assessment years 1994-95 to 1997-98. 10. The assessee computed the capital gain after indexation of the payment made by the assessee during the financial years 1994-95 to 1997-98 and 2001-02. The Assessing Officer denied indexation. The CIT(A) allowed the claim of indexation on the ground that the assessee acquired the right in the flats and therefore, the payment made by the assessee in the instalments will not affect rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee are not applicable in the present facts and circumstances of the case. Since, in the present case, the asset was not in existence and it is not the case of payment in instalments for existing assets. Moreover, when the plans were also not approved by the authorities at the time of booking and issue of tentative allotment letter then it cannot be said that the assessee had acquired the asset at the time of payment prior to the agreement entered on 22-11-2001. It would have been a different case if the payment would have been made in instalment against the existing asset to be transferred to the assessee. As per the provisions of section 48, the indexation of cost of acquisition is given by comparing the cost of inflation index ..... X X X X Extracts X X X X X X X X Extracts X X X X
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