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TMI Blog2011 (7) TMI 1408X X X X Extracts X X X X X X X X Extracts X X X X ..... s in 1997-98. Rs 19.27 lakhs in 1998-99 Rs. 11.52 in 1999-2000 Rs 40.98 lakhs in 2000-01 Rs. 11.04 lakhs in 2001-02 and Rs. 11.37 lakhs in 2004-05. The AO has granted indexation for the amount of investment made in each year and has worked of the capital gains at Rs 8.36 crores against Rs 6.92 crores shown by the assessee. Against this, the assessee has filed his appeal. 4. In appeal it was argued by the learned counsel of the appellant that the action of the AO was not correct and once a property was purchased and paid on instalments., then, the year of indexation was to be taken in which the property was booked. They have cited examples of persons purchasing a flat from a builder when a project is announced and making the initial payments at that time and subsequently as the builder continues to build, making the payments and making the payment of the final installment, when the flat is handed over. In this connection they have relied upon the Hon'ble Mumbai ITAT's decision in the case of Mrs. Lata G. Rohra vs DCIT Central Cir. 39, Mumbai wherein the Hon'ble Tribunal had held that the assessee who had purchased vide an unregistered agreement a flat from a developer which was pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferent. The action of the AO in not allowing indexation in the year in which the plot was purchased for the total investment made in the subsequent 10 to 12 years was correct and the grounds of appeal raised by the appellant stand dismissed and the action of the AO is confirmed. In the result the appeal is dismissed." 6. Aggrieved, Assessee preferred an appeal before us. The assessee had sold flat and undivided interest in the land for a total consideration of Rs.12.5 crores. The assessee claimed indexed cost of acquisition as Rs.5.4 crores, whereas the Assessing officer had adopted indexed cost of acquisition of Rs.4 crores. 7. The contention of the assessee is that they have purchased land during the assessment year 1992-93 and thereafter constructed building thereon. It is the contention of the assessee that the entire cost of land and cost of construction of flat should be considered as having been incurred in the year 1992-93 itself and hence the indexation should be given for the whole cost from that year. The AR strenuously argued that their case is covered by the following decisions: 8. The Mumbai ITAT in the case of Smt. Lata G. Rohra Vs DCIT (2008) 21 SOT 541 has h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found that the assessee filed necessary details before the Assessing Officer and the Assessing Officer had passed assessment order after taking into consideration the same. Hence, merely for the reason that no specific findings had been given in the assessment order, the same could not be said have been passed without application of mind. In this view of the matter, the order under section 263 passed by the Commissioner was to be set aside." 9. The ITAT Mumbai bench in the case of Charanbir Singh Jolly Vs ITO (2006) 5 SOT 89 has held as under: "The assessee had sold a house for certain consideration. He had acquired the said house through an agreement and made the payments towards acquisition of the house property in instalments. While computing the capital gains exigible on the sale of the house property, the assessee had computed the indexed cost of the house on the rate of indexation pertaining to the previous year 1992-93, in which the first instalment of payment was paid by the assessee. The Assessing Officer rejected the claim of the assessee and treated the first instalment paid by the assessee as the cost of acquisition of the house property and treated the subsequent i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 2nd August 1995 and agreement was executed on 27th September 1995. The assessee started making payment from 2nd August, 1995 and was making payment till 28th September 2001. The AO was therefore wrong in holding that the benefit of indexation will be available to the assessee from 27th December 2001, i.e., from the date of execution of the conveyance deed and not from 27th September 1995. By entering into an agreement to allot a flat, the assessee has identified a particular property which the indended to buy from the builder and the builder is also bound to provide the applicant with that property by accepting certain advance amount and making agreement for balance payment as scheduled in the agreement. Thus, going in the provisions, it is not necessary that to constitute a capital asset the assessee must be the owner by way of a conveyance deed in respect of that asset for the purpose of computing capital gain. The assessee had acquired a right to get particular flat, from the builder and that right of the assessee itself is a capital asset. The word 'held' used in sec 2(14) as well as Explanation to sec 48 clear depicts that assessee must have some right in the capital asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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