Holding period for allotted plot runs from allotment, making the gain long-term and requiring fresh review of section 54 exemption.

For an allotted plot, the holding period for capital gains purposes runs from the date of allotment, not from the date of execution or registration of the conveyance deed, where allotment and possession had already been given. Applying that principle, the asset was treated as a long-term capital asset and the gain as long-term capital gain. The claim for exemption under section 54 was not finally determined on the existing record and was remitted to the Assessing Officer for fresh examination of the supporting evidence.

---

---

Issues: (i) Whether, for computing the holding period of an allotted plot, the relevant date was the date of allotment or the date of registration of the conveyance deed; (ii) Whether the claim for exemption under section 54 of the Income-tax Act, 1961 required fresh examination by the Assessing Officer.

Issue (i): Whether, for computing the holding period of an allotted plot, the relevant date was the date of allotment or the date of registration of the conveyance deed.

Analysis: The plot was allotted to the assessee much earlier, and possession had also been handed over before the sale. The decisive question was whether ownership for capital gains purposes arose on allotment or only on registration. Following the binding jurisdictional precedent, the date of allotment was treated as the relevant date for computing the holding period, not the date of execution or registration of the conveyance deed.

Conclusion: The plot was a long-term capital asset and the capital gain was to be assessed as long-term capital gain.

Issue (ii): Whether the claim for exemption under section 54 of the Income-tax Act, 1961 required fresh examination by the Assessing Officer.

Analysis: Since the gain was held to be long-term capital gain, the assessee's exemption claim could not be finally decided on the existing record and required verification of supporting evidence by the Assessing Officer.

Conclusion: The exemption claim under section 54 was remitted to the Assessing Officer for fresh examination.

Final Conclusion: The assessee succeeded on the characterisation of the gain as long-term capital gain, and the exemption issue was sent back for reconsideration by the Assessing Officer.

Ratio Decidendi: For an allotted plot, the holding period for capital gains purposes is computed from the date of allotment, not from the date of registration of the conveyance deed.

---