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TMI Blog2018 (8) TMI 918X X X X Extracts X X X X X X X X Extracts X X X X ..... ated:- 14-8-2018 - SHRI R.C.SHARMA, AM AND SHRI RAM LAL NEGI, JM For The Assessee : Shri Rakesh Joshi For The Revenue : Shri Rajat Mittal ORDER PER R.C.SHARMA (A.M): This is an appeal filed by assessee against the order of CIT(A)-32, Mumbai dated 18/05/2016 for A.Y.2012-13 in the matter of order passed u/s.143(3) of the IT Act, 1961. 2. The only grievance of assessee relates to computation of capital gain of sale of property. The AO has computed period of holding and held that assessee had earned short term capital gain whereas contention of the assessee is that property was held for more than 36 months, therefore, capital gain arose of sale of property was liable to be taxed as long term capital gains. 3. Rival contentions have been heard and record perused. 4. Facts in brief are that the assessee Shri Sanjay kumar Footarmal Jain is individual filed the return of income for AY 2012-13 declaring Total Income of ₹ 6, 84, 760/- on 17-06-2012, the sources of income are under Capital gain and Income from other sources. In the course of scrutiny assessment u/s.143(3), the AO has disallowed claim of long/ term capital gain on sale of god ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate. 9. As a consequences to the agreement dt. 24-04-2008, the balance of payment was received and agreement was subsequently registered with the stamp duty authority on 11-07-2008. In the course of the assessment proceedings, the Ld AO while discussing the relevant terms of the agreement for sale on page no. 2 and page no. 3 of the assessment order dt. 23-04-2015, wrongly held that since the registration for purchase of property is made on 11-07-2008, the period for the holding long term assets benefits should be reckoned from the date of registration and not from date of transfer being 24-04-2008. Therefore AO held that the period of holding the capital assets was less than 36 month. We also observed that the assessee transfer / sold the Godown, and sale transaction was completed on 30-04-2011 with handling over of the possession on the same date. 10. As per learned AO, since the registration of original asset was completed on 11-07-2008 the long term capital assets sold subsequently on 30-04-2011 was held for a period less than 36 months and therefore the capital gain arising out of sale of capital assets was short term capital gain and not a long term capital gain. The LD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase agreement and not by way of allotment letter. The precise observation of the Tribunal with regard to computing capital gain as per provisions of 2 (47) of the IT Act are crystal clear. Precise observation of the Co-ordinate Bench was as under:- 8. We have gone through the facts and circumstances of the case, orders passed by the lower authorities, submissions made and judgements relied upon before us by both the sides. The chronology of relevant events in this regard is as under:- 1. Date of allotment of office unit to the assessee - 11-04-2005 2. Date of signing of the agreement to sell - 28-12-2007 3. Date of registration of the aforesaid property with the Registrar - 24-04-2008 4. Date of sale of aforesaid property 11-03-2011 The AO has computed the holding period from the date of registration, i.e. 24-04-2008 and accordingly it was held that when the property was sold on 11-03-2011 it was held for less than 36 months and, therefore, it was 'short term capital asset'. On the other hand, assessee has claimed that the property was held by the assessee since when allotment letter was issued to the assessee of the said property, i.e. on 11-04- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is further noted by us that Hon'ble Karnataka High Court in the case of CIT vs A Suresh Rao 223 Taxmann 228 (Kar) dealt with similar issue wherein the significance of the expression 'held' used by the legislature has been analysed and explained at length. Hon'ble High Court analysed various provisions of the Act pertaining to computation of capital gain under various situations and also circulars issued by the CBDT on this issue. Relevant portion of the observation wherein the issue before us has been properly analysed is reproduced hereunder:- 12. The definition as contained in Section 2 (42A) of the Act, though uses the words, a capital asset held an assessee for not more than thirty-six months immediately preceding the date of its transfer , for the purpose of holding an asset, it is not necessary that, he should be the owner of the asset, with a registered deed of conveyance conferring title on him. In the light of the expanded definition as contained in Section 2(47), even when a sale, exchange, or relinquishment or extinguishment of any right, under a transaction the assessee is put in possession of an immovable property or he retained the same in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the approach of the courts and the interpretation to be placed is clearly set out by the Apex Court in the case of Smt. Saroj Aggarwal vs CIT 156 ITR 497 wherein it is held as under: Facts should be viewed in natural perspective, having regard to the compulsion of the circumstances of a case. Where it is possible to draw two inferences from the facts and where there is no evidence of any dishonest or improper motive on the part of the assessee, it would be just and equitable to draw such inference in such a manner that would lead to equity and justice. Too hyper-technical or legalistic approach should be avoided in looking at a provision which must be equitably interpreted and justly administered...............Courts should, whenever possible unless prevented by the express language by any section or compelling circumstances of any particular case, make a benevolent and justice oriented inference. Facts must be viewed in the social milieu of a country. Therefore, keeping the aforesaid principles in mind, when we look at Section 48, the language employed is unambiguous. The intention is very clear. When a capital asset is transferred, in order to determine the capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id that assessee held the property immediately from the date of allotment letter. 14. In the case of CIT vs K Ramakrishnan (supra), Hon'ble Delhi High Court analysed the provisions of the Act and held that date of allotment is relevant for the purpose of computing holding period and not the date of registration of conveyance deed. Similarly in the case of CIT vs S.R. Jeyashankar(supra), Hon'ble Madras High Court took a similar view following the aforesaid judgment and held that holding period shall be computed from the date of allotment. It is noted by us that similar view has been taken by other High Courts in the judgments which have been relied upon by the Ld. Counsel before us and mentioned in earlier part of our order. 15. In the assessment order, the Ld. AO has placed reliance upon the judgment of Hon'ble Supreme Court in the case of Suraj Lamps Industries Pvt Ltd (supra) for the proposition that transfer of a property shall be effective only on registration of conveyance deed in view of section 54 of Transfer of Property Act. In our view, it is a settled proposition of law and there is no dispute on that. The absolute legal ownership of an immovable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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