TaxTMI 
TaxTMI 
2013 (9) TMI 962
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....d Bench, Allahabad in I.T.A. No. 95/Alld/2011, relating to Assessment Year 2004-05. The department-appellant has framed the following substantial questions of law, for consideration:- "1. Whether ITAT has erred in law in upholding the order of CIT (A) without taking into account the fact that after conversion to free hold superior rights accrued to the assessee? 2. Whether the ITAT was justified in law in dismissing the appeal of the revenue without taking into account the fact that, the difference of period of between date of free hold and date of sale is only three days therefore short-term capital gains are to be levied 3. Whether ITAT was justified in giving relief to the assessee without taking into account the decision of V. ....
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....ment of Rs.1,34,567/. She sold the property on 31.03.2004, for Rs.20,00,000/- including the amount paid for free hold. Rs. 4,60,000/- was paid as stamp duty on the sale deed executed declaring the value of the property at Rs.46,05,840/-. The assessee filed a copy of certificate regarding investment of Rs.16,00.000/-, which was deposited in Long Term Capital Gain account, within six months from the date of sale i.e. 24.09.2004. 6. The AO found that since the property was acquired by converting the lease hold right into free hold right on 29.03.2004, and was sold within three days on 31.03.2004, capital gain would amount to short-term capital gain. He added the short term capital gain of Rs.17,30,866/- towards the income of the assessee. T....
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.... the Hon'ble ITAT, Allahabad in Dhiraj Shyamji Chauhan, Allahabad Vs. CIT Allahabad in ITA No. 134(Alld)/2007- Asst. Year 1999-2000 dated Nov 22, 2007, wherein it was held that the conversion of the property from leasehold to freehold is nothing but the improvement of the title of the property, but the fact remains that assessee was the owner even prior to the said conversion, the plea of the appellant is acceptable. As also submitted by the appellant, in the cases of Sri D.N. Chadha & T.N. Chadha [ITA No. 38 & 45 (Alld)/2008 dated February 28, 2008, the Hon'ble ITAT, Allahabad has reiterated the same point of view. In the case of CIT Vs. Sujatha Jewellers [2007] 290 ITR 631 ( Mad) also, the assessee took an immovable property in lease and ....
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....xability under the head 'Capital Gain' ( C.I.T. Vs. Narang Dairy Products (1996 219 ITR 478 (SC). As also decided by Hon'ble ITAT, Allahabad, in the case of Dhiraj Shyamji Chauhan Vs. CIT Allahabad that it was evident that the assessee was holding the property since 1922 on lease basis. Thus, the assessee was having right may be restricted, on the property. The right of the holder of the lease hold property is almost actually as the owner of the property, that for example entire DDA property is sold on lease hold basis. The assessee got the conversion of the property into freehold property, that may be considered as improvement in the title, but the fact remains that the assessee was the owner since 1922 on lease basis." 8. The CIT (A) r....
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....fined in the Act as follows. "Section 2 (42-A) "Short-term capital asset" means a capital asset held by an assessee for not more than thirty six months immediately preceding the date of its transfer; 2 (42-B) "short term capital gain means capital gain arising from transfer of a short-term capital asset; 2 (29-A) "long term capital asset" means a capital asset which is not a short-term capital asset; 2 (29-B) "long term capital gain" means capital gain arising from the transfer of a long-term capital asset." 11. The difference between the 'short-term capital' asset and 'long-term capital asset' is the period over which the property has been held by the assessee and not the nature of tittle over the property. The lessee of the....