https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=766662 https://www.taxtmi.com/caselaws?id=766662 Revision u/s 264 - claim of long term capital gains made - whether the AO was right in rejecting the stand taken by the assessee and holding that the date of acquisition of the subject property should be reckoned as 18.3.2008, when the agreement for sale was executed and registered in terms of the Maharashtra Apartment And Ownership Act and not from the date of allotment, namely, 1.8.2006. HELD THAT:- The definition of transfer as defined under the Transfer of Property Act should not be emerged while considering whether a transaction is a transfer under the provisions of the Income Tax Act. Undoubtedly, on the date of allotment, namely, 1.8.2006 a right has accrued in favour of the appellant/assessee. This is more so because the developer has accepted that the assessee has paid a sum of Rs.3,13,000/- by cheque dated 29.7.2006 which was prior to the allotment order dated 1.8.2006. The revenue does not dispute the fact that the payment schedule has been adhered to by the assessee and ultimately on the date when the agreement for sale was executed, namely, 27.12.2007, 82.5% of the entire sale price payable has been paid by the assessee. Prior to the date of sale in favour of the third party which took place on 29.4.2010 the entire consideration has been paid by the assessee which has been acknowledged by the developer. All these payments are a consequence of an allotment made on 1.8.2006 and, therefore, it has to be held that the right over the property in question accrued in favour of the assessee as on the date of allotment i.e. 1.8.2006. Undoubtedly, the letter of allotment and the payment made thereafter has created in favour of the assessee an interest in the asset directly and it was by way of an agreement/or otherwise. It would be beneficial to take note of the decision of the Hon ble Supreme Court in Saraswati Devi v. Delhi Development Authority and Others [ 2013 (1) TMI 1058 - SUPREME COURT] for the purpose of understanding as to what would the term encumbrance mean. The word encumbrance imports within itself every right or interest in the land, which may subsist in a person other than the owner; it is anything which places the burden of a legal liability upon property. Further it was held that the word encumbrance in law has to be understood in the context of the provision under consideration but ordinarily its ambit and scope is wide. Thus, apart from the definition of the word encumbrance as explained in the aforementioned decision, it should be understood in the context of the provision under consideration which, in our instant case, is the Income Tax Act. Undoubtedly, a direct interest on the property stood created in favour of the assessee as and when the letter of allotment was issued, namely, 1.8.2006 because prior to the date of letter of allotment, the payment was made by the assessee in July, 2006 which has been acknowledged in the letter of allotment. Therefore, we are of the view that the order passed by the PCIT as well as the assessment order calls for interference. Accordingly, this appeal is allowed. The order passed in the writ petition is set aside and the writ petition is allowed. The matter is remanded back to the assessing officer with the direction to take note of the date of allotment, namely, 1.8.2006 as the date of transfer of the subject asset in favour of the assessee and accordingly, the assessment shall be completed. Case-Laws Income Tax Tue, 25 Feb 2025 00:00:00 +0530