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TMI Blog2019 (6) TMI 1052X X X X Extracts X X X X X X X X Extracts X X X X ..... said property on 04.08.2010. In that view of the matter, the capital gain is to be treated as long term capital gain arising out of the sale of the said long term capital asset and the assessee is entitled to the exemption u/s 54F as claimed in her return. We, therefore, find no merit in such addition made by the authorities below. The addition is therefore, deleted. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... said plot of land shown by the assessee in her return of income as Short Term Capital Gain (STCG) on the premise that such property was held by the assessee for less than 36 months. Ultimately, addition of ₹ 49,02,300/- was made rejecting the deduction under section 54F of the Act. In appeal, the said order was confirmed by the first appellate authority. Hence, the instant appeal before us. 3. At the time of hearing of the instant appeal, the Learned Counsel appearing for the assessee submitted before us that both the authorities have proceeded on a wrong footing in determining the "holding period" reckoned from the "date of possession" i.e. on 30.09.2009 when the purchase deed was executed. The property was sold on 04.08.2010, thus the "holding period" was less than 36 months. But it is a well settled principle of law that the "holding period" in terms of section 2(42A) of Act is to be reckoned from the "date of allotment" and not the "date of possession". He also relied upon the judgment passed by the Mumbai Tribunal in the matter of Anita D. Kanjani-vs-ACIT in ITA No. 2291/Mum/2015 as also in the matter of CIT-vs-Anilaben Upendra Shah reported in 262 ITR 657 (Guj) passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed as follows : "10. It is noted that the letter of allotment was issued to the assessee on 11-04- 2005, the letter of allotment makes a mention of the identity of the flat as office unit No.107, located at First Floor of Everest Grande. It also makes a mention that total consideration of the said property is a sum of ₹ 29,64,000/- out of which a sum of ₹ 5 lakhs was paid by the assessee on 04-04-2005 by cheque No.539104 as part payment against the said office unit. 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 n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entative cost of construction is already determined and the agreement provides for payment of cost of construction in installments subject to the condition that the allottee has to bear the increase, if any, in the cost of construction. Therefore, for the purpose of capital gains tax the cost of the new asset is the tentative cost of construction and the fact that the amount was allowed to be paid in installments does not affect the legal position. Therefore, in construing such taxation provisions, what should be 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 ITA No.2291/Mum/2015 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court that conjoined reading of section 2(14), 2(29A) and 2(42A) clarifies that holding period of the assessee starts from the date of issuance of allotment letter. Since allottee gets title of the property on the issuance of allotment letter and payment of first installment is only a consequential action upon which delivery of possession flows. Even if the sale deed or agreement to sell is executed or registered subsequently but the assessee always had a right in the property since the date of issuance of allotment letter. Therefore, it can be said 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 ITA No.2291/Mum/2015 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 Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as subsequently sold on 04.12.1982. The question came as to whether the assessee had held shares and allotment of flat in the said society for a period of more than 36 months reckoned from 15.11.1979. The order was passed in affirmative by the Hon'ble Tribunal itself holding the capital gain as long term capital gain and the benefit under section 80T was extended to the assessee which was confirmed by the Jurisdictional High Court. While doing so, the Hon'ble Jurisdictional High Court observed as follows: "8. It is thus clear that the member of a co-operative housing society only owns the shares in that society. The right to enjoy or derive from any land or building belonging to the co-operative housing society is merely an incidental right flowing from the ownership of the shares. A member of a co-operative housing society cannot sell all his shares in a co-operative housing society and still retain any interest in any property, whether land or building, belonging to a co-operative housing society and allotted/let out to the member. Similarly, a member of a cooperative housing society to whom a flat or land is allotted cannot transfer such land or building without selling the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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