TaxTMI 
TaxTMI 
2016 (7) TMI 604
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.... possession of the said property was taken by the assessee on 30.4.2003 and it was sold on 11.5.2006. Therefore, the assessee calculated the period of holding from 30.4.2003. The assessee, according to the date of agreement for purchase, had purchased the property on 5.6.2003. Therefore, the AO treated the holding period from 5.6.2003. Hence, according to the AO, the holding period was of less than 36 months. According to the assessee, from 30.4.2003, holding period was more than 36 months, as the assessee had made a token payment of Rs. 9500/- on 30.4.2003, against the total sale price of Rs. 70 lakhs. The AO treated the holding period as less than 36 months and hence, denied exemption u/s 54F. Aggrieved by the order of AO, the assessee preferred an appeal before the ld.CIT(A), who also denied the claim of the assessee on the ground that it was unbelievable that the seller had handed over the possession of the property worth Rs. 70 lakhs on payment of a mere Rs. 9500/-. During the course of the appellate proceedings, the assessee filed a letter handed over by the seller, showing the date of possession as 30.4.2003. This was also rejected by the ld.CIT(A) on the ground that it was ....
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....ffort to reduce the tax liability by claiming the capital gain as long term and claiming deduction u/s.54F therefrorn. The assessee is a well educated person working with UNDP Project as Senior Advisor and ,is a professor in Tata Institute of Social Science. She is M.A., P.hd by qualification. With such high educational qualification and responsible job, such' a legally invalid claim is not acceptable. While it is true that all additions do not automatically and mandatorily lead to levy of penalty u/s.271 (J)( c), but the facts of the present case in which the assessee has made an blatantly inadmissible and wrong claim, does justify the levy of penalty. The bonafides of the assessee have to be established and cannot be presumed, as held by Hon'ble Delhi Court in the case of CIT vs. Kalindee ARSSPL in ITA No. 480/2012, and in that the assessee has failed. It has also been held by Hon'ble Delhi High Court in the case of CIT vs Zoom Communications Pvt. Ltd. 327 ITR 510 (Del) that:- ""If one takes the view that a claim which is wholly untenable in law and has absolutely no foundation on which it could be made, the assessee would not be liable to imposition of penalty, ev....
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....e or impossible view. As such, it is a debatable issue, on which, concealment penalty, in my considered opinion, is not leviable. For this, support from the following decisions is drawn. A) Armour Chemicals Ltd V/s ACIT (2009) 29 SOT 185 (Mum); B) CIT V/s Haryana Warehousing Corporation (2009) 182 Taxman 107(P&H); C) CIT V/s SSP Ltd ((2010) 189 Taxmann 282 (P&H) D) CIT V/s Dalmia Agencies (P) Ltd (2010) 186 Taxman 155 (Del) 7. Then, besides the decisions supporting the assessee‟s view as noted hereinabove, recently, the Mumbai Bench of the Tribunal, in the case of "Mrs.Sneha Bimal Parekh V/s Principal Commissioner of Income Tax" in ITA No. 5489/Mum/2015 (AY-2012-13) vide order dated 30.6.2016 has considered an identical issue on similar facts, and has decided the issue in favour of assessee by observing and holding as under : "9. We have heard the rival submissions and perused the material on record including the orders of authorities below and case laws relied upon by the rival parties. We find from the page No.36 of the paper book which is a letter of allotment dated 27.11.2006 accompanying the schedule of payment as filed at page 39 of the paper book reveals that the....
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....fficer and the Assessing Officer had passed assessment order after taking into consideration the same. Hence, merely for the reason that no specific findings had been given in the assessment order, the same could not be said have been passed without application of mind. In this view of the matter, the order under section 263 passed by the Commissioner was to be set aside. [Para 9] In the result, the appeal filed by the assessee stood allowed. [Para 10]" In the case of Ms.Madhu Kaul (supra) it has been held by the Hon‟ble Punjab and Hariyana High Court as under : "Admittedly the flat was allotted to the assessee on 7-6-1986 vide letter conveyed on 30-6-1986. The assessee paid the first instalment on 4-7-1986. Thereby conferring a right upon the assessee to hold a flat, which was later identified and possession delivered on a later date. The mere fact that possession was delivered later does not detract from the fact that the allottee was conferred a right to hold property on issuance of an allotment letter. The payment of balance instalments, identification of a particular flat and delivery of possession are consequential acts and relate back to and arise from the rights ....
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....s of the Capital of Punjab (Development andRegulation) Act (27 of 1952) held that the event of some default with regard to payment of instalments which might have been committed by an allottee does not give a right to the Government to resume the land or building and at best it is entitled to recover the amount due on account of non-payment of some of the instalments. The court held that the stipulation in the agreement that in the event of default in making the payment the Government shall have the right to resume the property was an unreasonable restriction on the enjoyment of the property and declared the same ultra vires. In the instant case, the sale though made by a private entrepreneur appears to be in identical terms as normally stipulated in various auction sale/sales by Government agencies where there is stipulation in the agreement to the effect that in the event of default in payment monies already paid shall stand forfeited. Thus, even if it be taken that some amount was yet to be paid by the assessee in terms of the agreement, all the same it cannot be construed that he had no right or interest in the property but was a licensee as sought to be projected by counsel fo....
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....mount, the builder has executed agreement with the assessee on 27-2-2009. The assessee has sold the said flat on 5-3-2009. Since the assessee has acquired all the rights in the flat on 22-1-2005, the period of holding is to be computed with respect to the date of allotment i.e. 22-1-2005. Taking the date of sale as 5-3-2009, the holding period of flat with the assessee was more than 36 months, therefore, there is no infirmity in the order of Commissioner (Appeals) for allowing assessee's claim for exemption under section 54/54F, by treating the capital assets so sold as long-term capital assets. [Para 10]" In the case of Charanbir Singh Jolly (supra) Mumbai Bench of the Tribunal has held as under : The Assessing Officer had adopted the original cost of acquisition at the first instalment value, whereas the assessee had claimed the original cost of acquisition at the total payments made by him. Therefore, the real question was what was the cost of acquisition for the purpose of section 48, whether the amount of first instalment paid by the assessee or the total amount paid by the assessee for acquiring the house. [Para 7 A house property has got its own intrinsic/ma....