Holding period for flat transfers depends on possession date, not merely the purchase agreement, for capital gains classification.

For computing the holding period of a flat, the decisive date is when possession and ownership rights are acquired, not merely the date of an earlier purchase agreement. The Tribunal noted that part performance and possession after part payment may fix the year of acquisition, but because the findings on the possession date were inconsistent, the matter was remitted for verification. If possession is found to have been taken on 20.12.2000, the resulting gain would be treated as long-term capital gain; otherwise, the classification must be determined afresh on the verified facts.

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Issues: (i) Whether the gain arising from sale of the flat was to be assessed as short-term capital gain or long-term capital gain, and from which date the holding period was to be reckoned.

Issue (i): Whether the gain arising from sale of the flat was to be assessed as short-term capital gain or long-term capital gain, and from which date the holding period was to be reckoned.

Analysis: The dispute turned on the date on which the assessee acquired ownership rights in the flat. The Tribunal noted the rival stands that the flat had been booked earlier, a purchase agreement had been executed, and a later agreement was entered into, but the decisive factor was the date of possession. It held that the year of acquisition had to be considered with reference to the date on which possession was taken after part payment, because ownership under part performance would arise on that basis. Since there was a contradiction between the findings of the Assessing Officer and the Commissioner (Appeals) on the date of possession, the matter required verification by the Assessing Officer.

Conclusion: The holding period was not finally determined; the issue was remitted for verification of the possession date, and if possession was found to have been taken on 20.12.2000, the gain would be long-term capital gain.

Final Conclusion: The revenue's appeal succeeded only to the extent of remand for factual verification, and the classification of the capital gain was left to be determined afresh on the basis of the verified possession date.

Ratio Decidendi: For determining whether gain on sale of a flat is short-term or long-term, the decisive date is the date on which possession and ownership rights are acquired, not merely the date of an earlier agreement to purchase.

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