Capital gains indexation can run from allotment and full payment when enforceable property rights have already crystallised.

For capital gains computation, indexation and cost of acquisition may be linked to the date on which the assessee acquires enforceable rights through allotment and full payment, rather than the later possession certificate; formal possession is therefore not determinative where ownership rights have already crystallised. A claim for cost of improvement in respect of an alleged existing building must be supported by objective evidence of the structure and expenditure, and mere earlier house-property disclosure is insufficient. Credit for TCS reflected in Form 26AS is a verifiable consequential matter and may be granted subject to proof before the Assessing Officer.

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Issues: (i) Whether, for computing indexation and cost of acquisition of the transferred site, the relevant date was the date of allotment and payment of the entire consideration or the later date of possession certificate. (ii) Whether the assessee was entitled to claim cost of improvement in respect of an alleged existing building on the property. (iii) Whether credit for TCS reflected in Form 26AS was to be directed to be granted.

Issue (i): Whether, for computing indexation and cost of acquisition of the transferred site, the relevant date was the date of allotment and payment of the entire consideration or the later date of possession certificate.

Analysis: The holding period and the cost of acquisition for capital gains purposes were examined in the light of the statutory concepts of a capital asset being "held" by the assessee, the definition of short-term and long-term capital asset, and the scheme of computation under section 48. The allotment letter identified the property, the full consideration had been paid soon thereafter, and the assessee had acquired a right in the property from that stage. The later issuance of possession certificate and conveyance-related formalities were treated as consequential and not determinative of the acquisition date for indexation. The reasoning followed the principle that absolute registered ownership is not essential where the assessee has already acquired enforceable rights in the asset.

Conclusion: The issue was decided in favour of the assessee. The date of allotment and payment was held to be the relevant date for indexation and cost of acquisition.

Issue (ii): Whether the assessee was entitled to claim cost of improvement in respect of an alleged existing building on the property.

Analysis: The claim was tested against the requirement of proving an existing structure and corresponding expenditure capable of being included as cost of improvement. Mere disclosure of income from house property in earlier years was held insufficient to establish the existence of a building on the impugned land. In the absence of supporting revenue records or other objective evidence such as utility connections or proof of construction, the claim was not accepted.

Conclusion: The issue was decided against the assessee. No deduction towards cost of improvement was allowed.

Issue (iii): Whether credit for TCS reflected in Form 26AS was to be directed to be granted.

Analysis: The credit claim was treated as a verifiable consequential matter and the assessee was required to produce the necessary evidence for verification by the Assessing Officer.

Conclusion: The issue was decided in favour of the assessee subject to verification and due proof before the Assessing Officer.

Final Conclusion: The appeal succeeded on the principal capital-gains indexation issue and the TCS credit direction, but failed on the claim for cost of improvement, resulting in partial relief to the assessee.

Ratio Decidendi: For capital gains computation, the relevant date for holding and indexation may be the date on which the assessee acquires enforceable rights in the property through allotment and payment, even if formal possession or conveyance is completed later.

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