Provisional allotment and later registration determined the holding period, making the property a short-term capital asset.

Provisional allotment and a mere letter of intent did not create final ownership rights for capital gains purposes where the premises, title documents, and possession were crystallised only later. Because the identity and extent of the flat changed over time and the lease deed was registered, the share certificate and occupancy certificate were issued, and possession was granted only in 2010, the holding period was computed from financial year 2010-11. The property was therefore treated as a short-term capital asset, and the resulting gain was taxable as short-term capital gain.

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Issues: Whether the assessee acquired the premises in 1991-92 on the basis of the initial allotment so as to treat the asset as a long-term capital asset, or whether the acquisition had to be reckoned from the year 2010 when the lease deed was registered and possession was granted, resulting in short-term capital gain.

Analysis: The initial allotment was held to be provisional and only a letter of intent, not a firm or final allotment conferring enforceable rights. The identity and extent of the premises also changed through subsequent allotments over time, and the final allotment crystallized only upon issuance of the share certificate, occupancy certificate, execution of the lease deed, registration of documents, and grant of possession in 2010. The cited precedents were distinguished on the ground that they involved final allotments or crystallized rights at an earlier stage. In the absence of a registered instrument, legal title and enforceable ownership rights were treated as arising only upon registration.

Conclusion: The holding period was to be computed from financial year 2010-11, not from 1991-92. The property was therefore a short-term capital asset and the resultant gain was taxable as short-term capital gain, against the assessee.

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