9911796707
TMI Blog2019 (12) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... t the AO to consider the date of agreement to sell as the date of acquisition and accordingly compute the long-term capital gain. The grounds raised by the assessee are accordingly allowed. - ITA No.2914/Del/2019 - - - Dated:- 18-12-2019 - Shri R.K. Panda, Accountant Member For the Assessee : Shri Kapil Goel, Advocate For the Revenue : Shri Saras Kumar, Sr.DR ORDER This appeal by the assessee is directed against the order dated 29.11.2018 of the CIT(A)-1, Noida, relating to Assessment Year 2014-15. 2. Although a number of grounds have been raised by the assessee, they all relate to the order of the CIT(A) in not considering the date of agreement as the date of purchase for computation of capital gain u/s 48 of the IT Act. 3. Facts of the case, in brief, are that the assessee is an individual and filed his return of income on 29th March, 2015, declaring a taxable income of ₹ 25,89,000/-. The AO, during the course of assessment proceedings, noted that the assessee has sold residential property situated at H.No.B, 8th Floor, Tower No.8, Ozone P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the order and submitted that the Hon ble High Court in the said decision has also held that the date of agreement to sell the property shall be considered as the date on which the property has been transferred for the purpose of computation of capital gain. He accordingly submitted that this being a covered matter in favour of the assessee by various decisions, the CIT(A) was not justified in treating the gain as short-term capital gain as against long-term capital gain as treated by the assessee. 7. The ld. DR, on the other hand, heavily relied on the orders of the AO and the CIT(A). 8. I have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the assessee. I have also considered the various decisions relied on by the ld. Counsel for the assessee. I find the assessee, in the instant case, has sold the residential property on 12th April, 2013 and there is no dispute of the same. For the computation of the capital gain arisen out of the aforesaid sale, the assessee has taken the date of purchase of the above property as 31.01.2009 which is the date of agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(42A) of the Act in determining as short term capital asset for holding the same for less than 36 months immediately preceding the date of its transfer. Consequently, the ultimate claim under section 54F for exemption on capital gain arising out of such Long Term Capital asset needs to be allowed. In this respect we are also inspired by the judgment passed by the Bombay Tribunal in the case of Anita D Kanjani in holding that for the purpose of holding asset it is not necessary that the assessee should be the owner of the asset based upon a registered conveyance confirming title on him. The Hon'ble Tribunal 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve. A person holding the Power of Attorney is authorized the powers of owner, including that of making construction though the legal ownership in such cases continues to be with the transferor. The intention of legislature is to treat even such transactions as transfers and the capital gain arising out of such transactions are brought to tax. Further, the Circular No.471 goes to the extent of clarifying that for the purpose of Income-tax Act, the allottee gets title to the property on the issuance of the allotment letter and the payment of installments is only a follow up action and taking the delivery of possession is only a formality. In case of construction agreements, the tentative 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 provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a), the Hon'ble Punjab Haryana High Court analysed various circulars and provisions of the Act that on allotment of flat and making first installment the assessee was conferred with a right to hold a flat which was later identified and possession delivered on later date. The mere fact that possession was delivered later, would not detract from the fact that assessee (allottee) was conferred a right to hold the property on issuance of an allotment letter. The payment of balance amount and delivery of possession are consequential acts that relate back to and arise from the rights conferred by the allotment letter upon the assessee. 13. In the case of Vinod Kumar Jain vs CIT 344 ITR 501 it was held by Hon'ble Punjab Haryana High 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntly, the property sold by the assessee would be long term capital asset in the hands of the assessee and the gain on sale of the same would be taxable in the hands of the assessee as Long Term Capital Gain. We direct ITA No.2291/Mum/2015 accordingly. 17. As a result, grounds raised by the assessee are allowed in terms of our directions as given above. However, the alternative issue raised by the assessee is not being adjudicated at this stage. 18. In the result, the appeal of the assessee is allowed. The issue again came up before the Hon'ble Jurisdictional Gujarat High Court in the case of Anilaben Upendra Shah. In that case the assessee had become the member of a Co-operative Society by acquiring share therein on 15.11.1979. Possession of the flat was delivered to the assessee in October 1981 which was 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed by the authorities below in such capital gain as short term capital gain by considering the holding period from the date of registration of the property as on 30.09.2009 instead of date of allotment on 15.02.2007. In our considered opinion the assessee held the property for more than three year w.e.f 15.02.2007 when the allotment letter was issued in the name of the assessee till the date of subsequent sale of the 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 under section 54F of the Act as claimed in her return. We, therefore, find no merit in such addition made by the authorities below. The addition is therefore, deleted. 5. In the result, assessee's appeal is allowed. 9. The various other decisions relied on by the ld. Counsel for the assessee also support his case to the proposition that for the purpose of considering the period of holding, the date of allotment is relevant. In view of the above discussion, I set aside the order of the CIT(A) and direct ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
