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TMI Blog2021 (7) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... This property was sold by the assessee through Sale Deed Dated 25.01.2016. The A.O. referred to the provisions of Section 2(47)(v) of the I.T. Act and came to the conclusion that as per the definition of transfer under the Income Tax Act, 1961, the transfer date of property is taken to be earlier of the date of registration of sale deed or part payment and possession of the property as per Section 53A of Transfer of Property Act. He, therefore, asked the assessee to explain as to why the benefit of indexation should not be disallowed to the assessee and why the resulting short term capital gain should not be added to the total income of the assessee. 2.1. The assessee submitted that the property was allotted to the assessee vide Builder Buyer Agreement Dated 11.04.2011 and allotment letter Dated 08.07.2011. According to the assessee, the allotment letter means that the buyer has the right to hold property and that period of holding should be considered from date of allotment. Relying on various decisions, it was argued that the period of holding is to be taken from the date of allotment letter and indexation is to be done on the basis of payments made. Relying on various decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ete or add any ground of appeal before or during the course of hearing of the appeal." 3.1. Learned Counsel for the Assessee submitted that the A.O. in the instant case has totally ignored the fact that the Buyer's Agreement and allotment letter in respect of property in question was entered into on 11.04.2011 and 08.07.2011 respectively. As per Clause-3 of the Conveyance Deed, it gives reference to the allotment letter Dated 08.07.2011. He submitted that the A.O. has completely ignored this fact and treated the asset to be short term capital asset which is not correct. Further the Ld. CIT(A) distinguished the various decisions cited before him on the ground that assessee has only paid 50% of the purchase consideration before 03 years of sale of the property and, therefore, such asset has to be treated as short term capital asset. 3.2. Learned Counsel for the Assessee submitted that an allotment letter means that the buyer has the right to hold the property. Therefore, execution of sale deed at the subsequent date is irrelevant. He submitted that it is not necessary that the buyer needs to be the owner of the asset with a Registered Deed of Conveyance to determine the holding per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. We have also considered the various decisions cited before us. We find the assessee in the instant case vide Buyers Agreement Dated 11.04.2011 agreed to purchase flat situated at F-502, "Aura", Sector-110/A Tehsil & District Gurgaon, Haryana. The total sale consideration of this flat was Rs. 76,40,625/- and the total area of Flat was 1875 sq. feet. Some additional charges on account of preferred location charges, external development charges, car parking charges etc., were also liable to be paid by the assessee for that flat. The allotmen letter in respect of the Flat was given to the assessee on 08.07.2011, copy of which is placed at pages-34 and 35 of the paper book. Later on at the request of the assessee vide Conveyance Deed Dated 20.10.2015 the area of the Flat was increased from 1875 sq. feet to 1954 sq. feet and basic agreed sale consideration was revised from Rs. 76,40,625/- to Rs. 85,40,675/-. A perusal of the copy of the Conveyance Deed Dated 20.10.2015, placed at Pages 36 to 52 of the paper book shows that the last Para at Page-3 of the Conveyance Deed mentions the allotment letter in respect of the Flat given to the assessee on 08.07.2011. We find the said Flat w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued by the builder which was on 31st December, 2004. The Assessing Officer, however, contended that the transfer of the asset in favour of the assessee would be complete only on the date of agreement which was executed on 17th May, 2008. 4. Having heard learned counsel for the parties, we notice that the CBDT in its circular No.471 dated 15th October, 1986 had clarified this position by holding that when an assessee purchases a flat to be constructed by Delhi Development Authority ("D.D.A." for short) for which allotment letter is issued, the date of such allotment would be relevant date for the purpose of capital gain tax as a date of acquisition. It was noted that such allotment is final unless it is cancelled or the allottee withdraw from the scheme and such allotment would be cancelled only under exceptional circumstances. It was noted that the allottee gets title to the property on the issue of allotment letter and the payment of installments was only a follow-up action and taking the delivery of possession is only a formality. 5. This aspect was further clarified by the CBDT in its later circular No.672 dated 16th December, 1993. In such circular representations were m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that the allottee was conferred a right to hold property on issuance of an allotment letter. The payment of balance installments, identification of a particular flat and delivery of possession are consequential acts, that relate back to and arise from the rights conferred by the allotment letter. 8. In view of what has been recorded hereinabove, we have no hesitation in holding that the Income Tax Appellate Tribunal has erred in holding that the transaction does not envisage a long term capital gain. Consequently, we allow the appeal, set aside order dated 15.02.1999 and answer the substantial questions of law in favour of the assessee." 6.3. We find the Coordinate Bench of the Tribunal in the case of Praveen Gupta vs., ACIT reported in (2012) 20 taxmann.com 308 has held as under :- "29. According to the aforementioned definition, capital asset means property of any kind held by an assessee whether or not connected with the business or profession and it excludes certain items which while considering the facts of the present case are not relevant. Therefore, it has to be seen that whether by entering into an agreement vide which the assessee was allotted a particular fla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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