Capital gains on immovable property turn on the proven date of acquisition, with indexation tied to verified payment dates.

The tax treatment of gains from an immovable property depends on the date when enforceable rights, title and interest are actually acquired, not merely on an asserted booking or allotment date. Where the allotment terms and supporting evidence are not on record, the period of holding cannot be conclusively fixed and the distinction between short-term and long-term capital asset remains open for factual verification. Indexation of cost likewise cannot be allowed mechanically from an unsupported acquisition date; it must align with the established acquisition timeline and, where payments are made in instalments, with the actual dates of payment. The matter therefore requires fresh factual examination before the Assessing Officer.

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Issues: (i) Whether the flat was a short-term or long-term capital asset, depending on the date on which the assessee acquired rights, title and interest in it; (ii) whether indexation of cost was allowable on the basis of the claimed date of acquisition.

Issue (i): Whether the flat was a short-term or long-term capital asset, depending on the date on which the assessee acquired rights, title and interest in it.

Analysis: The dispute turned on whether the assessee acquired only a contractual or beneficial right on allotment, or acquired enforceable rights, title and interest in the flat on the basis of the allotment letter. The record contained a booking letter dated 26.07.1992 and references to a later allotment date of 01.08.1994, but the latter document was not produced before the Tribunal. In the absence of the allotment terms, the actual date of acquisition of ownership rights could not be conclusively determined. The Tribunal held that the matter required verification of the allotment terms and the surrounding evidence by the Assessing Officer.

Conclusion: The issue was restored to the Assessing Officer for fresh determination; if rights, title and interest are found to have been acquired on 01.08.1994, the gain would be assessable as long-term capital gain.

Issue (ii): Whether indexation of cost was allowable on the basis of the claimed date of acquisition.

Analysis: Since the date of acquisition of the capital asset itself was not established, the claim for indexation on the basis of the asserted date of purchase could not be finally adjudicated. The Tribunal also noted that where payments were made in instalments, indexation would have to correspond to the actual dates of payments, and not mechanically from an unsupported claimed date of allotment or purchase. This required reconsideration by the Assessing Officer after giving the assessee an opportunity to adduce evidence.

Conclusion: The claim for indexation was not finally decided and was sent back for reconsideration on facts.

Final Conclusion: The appeal succeeded only to the extent that the matter was remitted for fresh examination and the assessee was left to establish the correct date of acquisition and consequential capital gains treatment.

Ratio Decidendi: Where the date on which enforceable rights in an immovable property were acquired is not established on the record, the nature of the capital asset and the related indexation claim cannot be conclusively determined without factual verification of the allotment terms and supporting evidence.

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