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TMI Blog2016 (11) TMI 1151X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue after granting a reasonable opportunity of being heard to the assessee - I.T.A. No.472/M/2015 - - - Dated:- 23-9-2016 - SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER For The Appellant : Shri R.S. Goradia For The Respondent : Shri A. Ramachandran ORDER PER D. KARUNAKARA RAO, AM: This appeal filed by the assessee on 20.1.2015 is against the order of the CIT (A)-36, Mumbai dated 1.10.2014 for the assessment year 2010-2011. In this appeal, assessee raised the following grounds which read as under:- 1. (a) The Ld CIT (A) erred in law and on facts in upholding the order of the AO which is illegal and bad in law. (b) The Ld CIT (A) has erred in law and on facts in sustaining the order of the AO computing the total income of the appellant at ₹ 64,69,648/- as against the returned income of ₹ 9,02,800/-. (c) The Ld CIT (A) has erred in law and on facts in confirming the order of the AO assessing the Long Term Capital Gain offered by the appellant on sale of residential flat at Neelkant Palm, Thane as Short term Capital Gain and consequently denying the benefit of exemption u/s 54 of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction u/s 54 of the Act with reference to the long term capital gains earned on the transfer of old asset. Referring to the facts of the case, Ld Counsel for the assessee submitted that the assessee booked a flat on 30.3.2005 and there is a letter of allotment in support of the same. Subsequently, the flat was taken possession by the assessee on 30.3.2009 (after four years) and the flat was registered in the name of the assessee on the said date. This flat was subsequently sold on 30.3.2010, which is a date of sale of flat and earned capital gains. Assessee considered the date of booking and the letter of allotment as a basis for computing the holding period and claimed benefit of the long term capital gains. Per contra, Assessing Officer in the assessment proceedings, held that the date of possession of flat cum date of registration on 30.3.2009 is the relevant date for calculating the holding period. Accordingly, AO computed the short term capital gains and denied the benefit of section 54 of the Act when the gains are reinvested in the new asset. On this factual matrix of the case, Ld Counsel for the assessee submitted that the issue now stands covered in favour of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscussion is given in paras 3 4 of the said order of the Tribunal which read as under: 3. There are couple of issues raised in this appeal. Rest of the grounds raised in the appeal are either consequential or general in nature. Accordingly, they are dismissed as general or consequential. The issues, which need to be adjudicated in this appeal are (i) if the capital gains earned by the assessee are in the nature of the short term as held by the AO or long term capital gains as offered by the assessee in the return. At the outset, Ld Counsel for the assessee mentioned that the assessee purchased a flat vide the allotment letter dated 9.9.2003 from the builder namely Prestige Estates Projects Pvt. Ltd. There was a construction agreement between the parties dated 1.12.2003 and the registered deed of the same was dated on 22.9.2006. The said flat was sold by the assessee to Bennet Coleman Company on 10.11.2006. The assessee earned capital gains on this transaction and offered the same as long term capital gains reckoning the date of allotment i.e., 9.9.2003 for the purpose of determining the holding period of three years relevant for the long term capital gains. However, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m capital gains despite the fact that the physical possession of the flat was given to the assessee much later and, therefore he was entitled to deduction from such gains as per law. 7.1 The conclusion of the Hon ble Gujarat High Court judgment in the case of CIT vs. Anilaben Upendra Shah reads as under: Assessee having held the shares and allotment of a flat in a co-operative housing society for a period of more than 36 moths the capital gain arising from sale of said flat was longterm capital gain and assessee was entitled to benefit of section 80T irrespective of the fact that the assessee did not get possession of the flat in question at the time of allotment and it was constructed later on. 7.2. The conclusion of Hon ble ITAT, Delhi Bench in the case of Jitendra Mohan vs. ITO reads as under: On the facts of the case, assessee held the capital asset (shed) allotted to it on installment basis from 28th December, 1994, the date of payment of second installment and sale thereof on 15th December, 2000, gave rise to long term capital loss even though possession of shed was handed over by DSIDC to assessee on 28th May, 1998. 7.3. The conclusion of Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DR‟s arguments on non-existence of the flat at the time of issuing of allotment letter stands answered by the said judgment of the Hon‟ble High Court of Punjab Haryana (supra). The same view was supported by various decisions of the Tribunal as well as the judgments of the Hon‟ble Gujarat High Court and the relevant conclusions were already extracted in the above paragraphs of this order. Regarding the judgments of the Hon‟ble jurisdictional High Court relied on by the Ld DR are distinguishable on facts. Therefore, considering the above settled nature of the issue as well as the following the principle of consistency, we are of the considered opinion that the ground no.1 raised by the assessee should be allowed. Accordingly, ground no.1 is allowed . 8. Further, we have also perused para 2.1 of the order of the Tribunal in the case of Surendra Mohan Khanna (supra) and the relevant lines are extracted as under:- 2.1. Nothing contrary was brought to our knowledge on behalf of Revenue. Facts being similar, so, following same reasoning, we are not inclined to concur with the finding of CIT (A) because date of acquisition of flat in question will be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Surat, Ld Counsel for the assessee submitted that the Thane property should constitute self occupied property as the same was not let out. 13. On the other hand, Ld DR for the Revenue submitted that this issue may also be sent back to the file of the AO considering the fact that the property at Thane is the merger of two independent flats ie flats no.901 and 902 and there is a dispute about the allowability of one property as self occupied property. On facts, the property at Thane consists of two properties and there is a requirement of adjudication and finding of fact on this issue also. 14. On hearing both the parties on this issue, we are of the opinion that the assessee is, in principle, entitled for one self occupied property. The aspects relating to the merger of two flats into one requires detailed examination by the Assessing Officer. If the AO comes to the conclusion that the flats no.901 and 902 constitutes one functional residential unit, AO should decide accordingly and allow the entire property as self occupied property. Alternatively, if the merger of flats is not borne out of flats, assessee, in any case, is entitled to one of the two merger flats as self occ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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