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TMI Blog2016 (7) TMI 641X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax (PCIT) also noted the fact that the area of the flat was 1215 sq.ft. as per letter of allotment dated 27.11.2006 (112 Sq.M) whereas the agreement for sale dated 28.6.2011, the area of the flat sold was 847 sq.ft.(78.69 Sq.Mtr) which was not noticed by the AO in the assessment proceedings. It was also mentioned in the order of PCIT that the assessee has not filed any documentary evidence in respect of long term capital gains except the allotment letter in support of date of acquisition of the said property such as Registered Agreement of Purchase of the flat by the assessee and also the AO has not discussed the intent letter for the purpose of date of transfer of property to the assessee, The said act of the AO was wrong and caused prejudice to the interest of revenue as he did not find the date of acquisition/ownership of the flat while allowing the indexing the cost of acquisition of the said property. 3. Brief facts of the case are that the assessee during the year sold his flat No.92 in Wing "B"" of Building No.2 LBS Marg, in the Complex known as "Kalpataru Aura" for a total consideration of Rs. 1,17,60,145/- vide agreement dated 28.6.2011. The said flat was admeasure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in appeal before us.. 5. We have carefully considered the rival contentions and perused the materials placed before us including the orders of authorities below and also the case law relied upon by the parties. The ld.AR of the assessee submitted before us that the assessee was allotted flat No.92 in Wing "B"" of Building No.2 in the Complex known as "Kalpataru Aura" on 28.6.2011. The ld. AR drew our attention to pages no.37 and 38 of the paper book which is a letter of intent allotting the flat to the assessee. The ld.AR also brought to our notice the payment schedule as contained at page 39 of the paper book which is reproduced below for the purpose of convenience and better understanding of the fact. Sr. No. Particulars Payment Installment Percentage Amount in Rs. 1 On Booking (Within 07 days) 27th November 2006 5% Rs. 3,34,919/- 2 Within 30 (Thirty) Days of Booking 27th December 2006 15% Rs.10,04,756/- 3 On Completion of Plinth 10% Rs. 6,69,838/- 4 On Completion of 2nd slab 5% Rs. 3,34,919 5 On Completion of 4th slab 5% Rs. 3,34,919 6 On Completion of 6th slab 5% Rs. 3,34,919 7 On Completion of 8th slab 5% Rs. 3,34,919 8 On Completion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2014) 263 ITR 54 (P&H); c) Vinod Kumar Jain Vs. CIT -344 ITR 501 (P&H); d) CIT V/s Ved Parkash And Sons (Huf) (1994) 207 ITR 148 P H, ; e) ACIT V/s Sanjay Kumath (2014) 63 SOT 90 (Indore) f) Charanbir Singh Jolly V/s ITO (2006) 5 SOT 89 (MUM) g) CIT V/s K Ramakrishnan (2014) 363 ITR 59(Del) 7. The lf. AR finally prayed that since the order passed by the AO is neither erroneous nor prejudicial to the interest of the revenue in view of the facts that the AO has rightly allowed the benefit of indexation to the assessee by taking the date of letter of intent on which the token payment were made the as the date of acquisition when the assessee acquired right in the said flat and thus accepted the LTCG retuned by the assessee and as such the twin conditions as envisaged in the provisions of section 263 were not satisfied and therefore the order as passed by the PCIT is wrong and be set aside by taking into considerations the ratio laid down in the above referred decisions. 8. The ld. DR, on the other hand, objected to the arguments of the ld.AR and supported the order of the PCIT heavily. The ld. DR submitted that the date of acquisition of the property is the date of registrati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was given letter of allotment and assessee made payment of Rs. 3,34,919/- out of total purchase price of Rs. 66,98,375. The flat in question was purchased for Rs. 76,04,418/- including the stamp duty, registration value etc and sold for Rs. 1,17,17,145/-. Upon looking into the facts of the case, we find that the assessee become owner of the flat on 27.6.2006 then the allotment letter was issued and advance amount/booking amount was paid to the builder. The case of the assessee also find strong support from the decisions cited before us during the course of hearing. In the case of Smt.Lata G Rohra (supra), the Tribunal has held as under : "As per section 2(14), read with section 2(14)(vi), the rights in flat, acquired by the assessee on execution of purchase agreement on 7-8-1993, came within the purview of the term „capital asset‟. From the perusal of language used in Explanation (iii ) to section 48, which provides for manner of computation of indexed cost of acquisition, it is apparently clear that it refers only to date of cost of acquisition of the asset and not actual payments made by the assessee. Hence, there was no merit in the contention of the revenue that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee‟s claim holding that the possession of the flat was given to the assessee on 15-5-1986 and, therefore, the capital gain on sale of the flat in question was short-term capital gain governed by section 2(42A). On appeal, the Commissioner (Appeals) upheld the view taken by the Assessing Officer. The Tribunal also dismissed the assessee‟s appeal. On appeal to the High Court :" In the case of Ved Prakash and Sons (supra) it has been held by the Hon‟ble Punjab and Haryana High Court as under : "14. We find no merit in this contention of learned counsel. 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 purview ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the said letter of allotment and paying the booking amount, the assessee acquired the right in the said flat. [Para 8] After the entire payment was made by the assessee, agreement was executed on 27-2-2009. Thereafter, the assessee sold the flat on 5-3-2009. Thus, all the rights in the flat were duly acquired by the assessee on 22-1-2005, when he was given letter of allotment which clearly described the precise number of flat so allotted to him. As per the provisions of section 2(47)(ii), "Transfer" in relation to capital assets includes the extinguishment of any right therein. This letter of allotment extinguishes the rights of builder in the said flat in favour of the assessee in respect of this flat and by signing the letter of allotment, the assessee agreed to buy the same and for which payment was also made according to the letter of allotment. [Para 9] Board vide Circular No. 672 after referring Circular No. 471 extended the facility of exemption under sections 54 & 54F in respect of allotment of flat/house. Thus, as per the CBDT Circular also, the assessee acquired the rights/title in the flat by way of allotment letter on 22.1.2005. This allotment letter was duly confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the cost of acquisition of the house for the purpose of long-term capital gains computation was the total cost incurred by the assessee and not the first instalment value as determined by the lower authorities. Hence, the assessing authority was directed to adopt the cost of acquisition as aforesaid and recompute the long-term capital gains taxable in the hands of the assessee accordingly. [Para 9] In the case of CIT V/s K Ramakrishnan (2014) 363 ITR 59(Del), the Hon‟ble Delhi High Court has held as under : "3. In this case, the assessee acquired possession of the plot on December 12, 2005, and sold through a registered sale deed dated January 9, 2008. This court is of the opinion that having regard to the findings recorded by the Tribunal, the assessee had acquired the beneficial interest to the property at least 96 per cent. of the amount was paid, i.e., by October 3, 1999. This court is supported in its findings by a Division Bench ruling of the Punjab and Haryana High Court in Mrs. Madhu Kaul v. CIT [2014] 363 ITR 54/43 taxmann.com 417."" The case law relied upon by the ld.DR in this case are distinguishable on facts and are not applicable to the present case, we th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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