Allotment-based holding period governs capital gains treatment, and a section 54F claim can be entertained without a revised return.

A contractual right created by an allotment letter for an identified flat was treated as a capital asset whose holding period ran from the date of allotment, not from the later buyer's agreement, so transfer of that right was characterised as a long-term capital gain because the period exceeded 36 months. Once that characterisation applied, deduction under section 54F could be claimed even though it was not made through a revised return, and the appellate authority could entertain the claim. The deduction was accepted in principle, with the computation sent back only for limited verification by the Assessing Officer.

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Issues: (i) Whether the capital gain arising from transfer of the right to acquire the flat was long-term capital gain or short-term capital gain; (ii) Whether deduction under section 54F could be allowed notwithstanding that the claim was not made through a revised return.

Issue (i): Whether the capital gain arising from transfer of the right to acquire the flat was long-term capital gain or short-term capital gain.

Analysis: The right acquired under the allotment letter created a contractual right in personam in favour of the assessee and restrained the builder from dealing with the identified flat otherwise than in accordance with that allotment. The holding period of that right had to be computed from the date of allotment, not from the later date of registration of the buyer's agreement. On that basis, the period exceeded 36 months. The transfer was therefore of a long-term capital asset and the gain could not be treated as short-term capital gain.

Conclusion: In favour of the assessee. The gain was held to be long-term capital gain.

Issue (ii): Whether deduction under section 54F could be allowed notwithstanding that the claim was not made through a revised return.

Analysis: Once the gain was held to be long-term capital gain, the assessee became eligible to seek deduction under section 54F for investment in another residential house. The absence of a revised return did not bar the appellate authority from entertaining the claim. Since the correctness of the computation required verification, the matter was sent back only for limited examination by the jurisdictional Assessing Officer.

Conclusion: In favour of the assessee. The claim under section 54F was accepted in principle and remanded for verification.

Final Conclusion: The assessee succeeded on the characterisation of the gain and obtained relief on the investment claim, with only limited verification left to be carried out at the assessment stage.

Ratio Decidendi: For determining the holding period of a right to acquire an identified flat, the relevant date is the date on which the allotment creates an enforceable contractual right, and appellate authorities can entertain a legitimate deduction claim even if it was not made in a revised return.

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