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TMI Blog2023 (1) TMI 1002X X X X Extracts X X X X X X X X Extracts X X X X ..... eckoned from the date of the allotment i.e in the F.Y. 1998-99. Respectfully following the above decision, we allow the ground raised by the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... TR 594 and has held as follows: What is a capital asset is defined in section 2(14) of the IT. Act, 1961. Under that provision, a capital asset means property of any kind held by an assessee, whether or not connected with his business or profession. The other sub-clauses which deal with what property is not included in the definition of capital asset are not relevant. Under section 2(47), a transfer in relation to a capital asset is defined as including the sale, exchange or relinquishment of the asset or the astonishment of any night therein or the compulsory acquisition thereof under any law. The word "property", used in section 2(14) of the I.T. Act, is a word of the widest amplitude and the definition has re-emphasised this by use of the words "of any kind. Thus, any right which can be called properly will be included in the definition of "capital asset". A contract for sale of land is capable of specific performance. It is also assignable. (See Hochat Kizhakke Madathil Venkateswara Aivar v. Kallor Illath Raman Nambudhri, AIR 1917 Mad 358). Therefore, in our view, a right to obtain office premises, was clearly "property" as contemplated by s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... showed long-term capital gain at Rs. 39.42 lakhs. The Assessing Officer worked out indexed cost of acquisition on the basis of purchase price from 1993 and completed the assessment. However, the Commissioner was of the view that the assessee had not tiled any evidence with respect to various payment made towards the purchase price and the indexed cost of acquisition worked out on the basis of financial year 1993 was incorrect and, hence, the assessment order was erroneous and prejudicial to the interest of revenue. Accordingly, he initiated revision proceedings under section 263. The Commissioner, however, set aside the order of Assessing Officer and directed the Assessing Officer to compute the correct long-term capital gain by adopting the indexed cost of acquisition on the basis of the date on which the property was held after registration of the conveyance deed. In instant appeal, the assessee contended that she was deemed to be owner for property from 7-8-1993 and accordingly, the capital gain was to be worked out from that date as per Explanation (Hi) to section 48. and since the asset had been held for the first time in 1993 cost inflation index of that year was to be ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for us ITAT Mumbai Judgment is more relevant and at the same time same is more beneficial to us too. All the relevant documents to prove our contention was filed before your good self kindly take into consideration the above facts and various judgments by Hon'ble high courts and tribunals and allow the long term capital gain and allow the claim of your assessee." 5. After considering the submissions of the assessee, Assessing Officer rejected the same by observing as under: - "8. To summarize the matter, the assessee had transferred an office and 892 equity shares allotted to it by Bharat Diamond Bourse on 19.5.2012. This office and also the shares were allotted to him by Bharat Diamond Bourse only On 29.7.2010. Although the assessee has contributed to the funds of Bharat Diamond Bourse against which a provisional allotment of office space was made to it, it must be borne in mind that no right was created in any office space primarily because no office space was into existence at the time of contribution of funds by the assessee and secondarily because the office complex so built up by Bharat Diamond Bourse was itself taken on lease by them from MMRDA on 31st March, 2010. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 143(3) of the Income Tax Act, 1961 passed determining the Total Taxable Income at Rs.2.41,72,865/- on 28/03/2016 While completing the assessment, the assessing officer had made addition of Rs. 74,38.617/-ie.(1.47.42.958-73,04,341) which constitutes difference in the nature of capital gain from long term to short term on office premises sold during the year under consideration. GROUND NO. 1: ADDITION OF CAPITAL GAIN AMOUNTING TO RS. 74,38,617/ 1) Your appellant is engaged in the manufacturing and trading of cut & polished diamonds during the year under consideration. Your appellant had sold the office premises Bearing No. BC-4021 in Bharat Diamond Bourse. BKC for consideration of Rs. 1,93,00,000/- to M/s Veer Gems on 19/05/2012 2) The addition was made on the basis that your appellant had shown the acquisition of the property in FY 1998-99 & over the next years has carried out improvements in the property. As per sale agreement pursued the allotment of said premises on 29/07/2010. Therefore, the asset so transferred becomes short term capital asset on the date of its transfer and capital gain on sale of the same asset would constitute short term capital gain. 3) G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital gain. The controversy between the assessee and the revenue revolves around the question as to when the assessee can be stated to have acquired the capital asset. The assessee argued that the residential unit in question was acquired on the date on which the allotment letter was 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 CIT appeals and the Tribunal held the issue in favour of the assessee relying on various judgments of different High Courts including the judgment of this Court in case of Commissioner of Income Tax, Bombay City | Vs. TATA Services Limited Reliance was also placed on CBDT circulars 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and making a part payment, the assessee has acquired irrevocable tight, title and interest including possession in the house property in the form of Godown. The registration of the property which was done subsequently on 11-07-2008 was only a formality. And therefore the period of 36 months of holding of long term capital Assets should be reckoned from 24-04-2008 and not from 11-07-2008 as wrongly adopted by the LD AO. The holding period becomes more than 36 months and consequently, 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. c) The decision pronounced by ITAT, D Bench, Mumbai in case of ITO 30(2)(3) vs. Smt. Meeta Bhavesh Ganatra, Mumbai ITA No: 5149/Mum/2017[419 Taxpundit261] In the given judgment, the assessee purchased 7 Nos. of Industrial Galas at Malad, Mumbai from one Builder viz. Homeland Realtors arid Developers Private Limited in the year 2007 jointly with her husband Mr. Bhavesh Natwarlal Ganatra at an agreed consideration of Rs.53,75,700/- Homeland Realtors Mid Developers Private Limited issued the Allotment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e him to say that he "held" the asset for more than 36 months to entitle him to the benefit of long-term capital gain. This court is of the opinion that having regard to the findings recorded by the Tribunal, the assessee had acquired the beneficial interest to the property at least 96 per cent. In view of the reasons the courts is satisfied that the Tribunal's impugned In view of the reasons the courts is satisfied that the Tribunal's impugned order does not disclose any error calling for interference. GROUND NO. 2: INITIATION OF PENALTY PROCEEDINGS U/S 271 (1) (C) OF THE INCOME TAX ACT, 1961: The Learned AO at the time of passing the assessment order levied penalty u/s 271(1)(c) for furnishing inaccurate particulars of income. Our client hereby request you to drop the penalty proceedings u/s 271(1)(c) based on the following judgments pronounced by the ITAT in case of ITAT, E Bench, Mumbai in case of The DCIT 8(3), Mumbai v/s. Tristar Jewellery Exports Private Limited [ITA No: 6435/Mum/2013] In the above mentioned judgment, appeal had been filed by the department against the order of CIT (A) in deleting the penalty of Rs. 11.94,545/-. The AO levied the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f shares along with the said space in Tower -B along with parking slot got allotted in 29.07.2010 ?. The said property with 200 shares was sold on 19.5.2012 wherein parking lot was not transferred. However, assessee instead of taking proportionate value of purchase consideration took entire purchase value for Capital Gain computation. In view of facts and circumstances narrated above, assessee's appeal in Gr No 1 fails as assessment order passed u/s 143(3) of the Act for AY 2013-14 is hereby sustained." 8. Aggrieved assessee is in appeal before us and filed the revised grounds of appeal which is reproduced below: - "1. The learned NFAC erred in denying the Appellant the benefit of indexation on the cost by holding that the capital gains earned by the Appellant from the transfer was not long term capital gains but short term capital gains. 2. The Appellant craves leave to add, amend, alter or delete any or all the above grounds of appeal." 9. At the time of hearing, Ld. AR brought to our notice relevant facts from the orders of the Assessing Officer and Ld.CIT(A) and he submitted that no doubt the sale agreement was made on 19.12.2012, however, it is relevant to notice t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has constructed the complex of buildings knowns as Bharat Diamond Bourse at Bandra Kurla Complex. The assessee being the member of Bharat Diamond Bourse has applied for allotment of office space at the above said building complex and Bharat Diamond Bourse allotted to the assessee by letter of allotment of equity shares and grant of occupancy rights dated 29.07.2010 and duly registered with the sub-registrar of Assurances, Mumbai Suburban District which comprises of block of shares of 892 equity shares of ₹.1000 each fully paid and office premises No. BC4021 admeasuring 624 sq.ft carpet area equivalent of 892 build-up area on the fourth floor in "B" Tower central wing of the complex which was constructed in the year 2009 on all that piece and parcel of land situated within the complex. 15. The dispute arose in this case is relating to date of acquisition of the right over the property by the assessee. As per the record submitted before us from the books of Bharat Diamond Bourse clearly indicates that assessee has been allotted office space and subsequently made several payments commencing from 31.08.1999 as per ledger extract. It is brought to our notice in the similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for determining the holding period of the property under consideration. On the basis of our aforesaid observations, we are unable to persuade ourselves to subscribe to the claim of the revenue that the acquisition of the property under consideration was to be reckoned from 02.08.2010 i.e. the date on which the valid title of the rights in the property got vested with the assessee on the basis of a registered document and equity shares were allotted in its favour. 11. As pursuant to the final and binding allotment carried out by lottery system, the assessee vide allotment letter dated 03.12.1999 was allotted the property under consideration i.e Office No. EE6011, Bharat Diamond Bourse (built up area of 5,750 sq. ft.), therefore, it can safely be concluded that a right towards the aforesaid property got vested with the assessee from the said date. Also, as is discernible from the records, the assessee as on the date of allotment had parted with substantial portion of consideration towards the cost of acquisition of the property under consideration. Our aforesaid view is further fortified from the observation of the CIT(A), wherein he had observed, that a transfer application dated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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