Holding period for capital gains runs from allotment and possession, making industrial shed gains long-term rather than short-term.

Gains from transfer of industrial sheds were treated as long-term capital gains because the holding period was counted from the date of allotment and possession, not from the date of the formal sale deed. The expression "held" in section 2(42A) was read broadly to include possession under the allotment and lease-cum-sale arrangement, and section 2(47)(v) recognised transfer through possession in part performance. On that basis, the sheds had been held long enough to fall outside short-term capital gains treatment; the contrary pre-amendment authority was not applied.

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Issues: Whether the gains on transfer of the industrial sheds were assessable as short-term capital gains or long-term capital gains, having regard to the date of allotment, possession and the deeming scope of transfer under the Act.

Analysis: The assessee was allotted the sheds in 1988, was put in possession then, and complied with the allotment and lease-cum-sale conditions. The expression "held" in Section 2(42A) of the Income-tax Act, 1961 was construed as not confined to absolute ownership, and Section 2(47)(v) of the Income-tax Act, 1961 was applied to recognise possession retained in part performance of a contract as transfer. On that footing, the period of holding was to be counted from the date of allotment, not from the date of formal sale deed. The contrary view based on pre-amendment authority was held inapplicable.

Conclusion: The gains were not short-term capital gains; they were long-term capital gains, and the assessee succeeded.

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