TaxTMI 
TaxTMI 
2016 (8) TMI 60
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....as raised the following additional ground:- "The CIT(A) as well as the Assessing Officer have failed to appreciate that the transfer of the impugned asset has not taken place during the previous year relevant to the impugned assessment year. Hence, the capital gains are not taxable in the impugned assessment." The assessee"s revised ground also contain this additional ground as well as other grounds which is running into following four grounds:- 1. The Ld. CIT (A) erred in confirming the action of the Ld.A.O. of taxing capital gains on account of transfer of flat situated at 3rd floor in the B wing of Ann Ville" as short term capital gains. 2. The Ld. CIT (A) failed to appreciate that the transfer of the flat took place on 14th May, 2011 on handing over the possession to the purchasers in terms of agreement dated 7th January, 2011. Thus, the impugned asset was held by the appellant for a period of more than 36 months. 3. Without prejudice to the above, the Ld. CIT (A) as well as the Ld.A.O. failed to appreciate that the transfer of the impugned asset has not taken place during the previous year relevant to the impugned assessment year. Hence, ....
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....ee"s father Mr. Karmaruzzama Ghasi Khan was occupying one Flat 9/B, 3rd Floor, in Ann Ville as a tenant. On 16/04/2008, he entered into an agreement with the owners of the Flat by giving up the tenancy rights and by paying a sum of Rs. 33,798/-, he became the owner of the flat. The relevant agreement is enclosed at pages 18 to 77 of assessee"s paper book. Subsequently, on 29/4/2008 assessee"s father executed a gift deed, gifting this flat to assessee and this Gift Deed was registered on 30/04/2008. The copy of Gift Deed is enclosed in assessee"s paper book at pages 97 to 101. Subsequently, on 07/01/2011, assessee entered into an agreement for sale of this flat for a total consideration of Rs. 70.00 lacs but whose market value as per Stamp Duty rates was at Rs. 1,15,87,600/-. The assessee purchased a new flat No.B/103, Pioneer Heritage Residency at Daulat Nagar, Santacruz on 19/1/2011 for a sum of Rs. 85,00,000/-. During the course of assessment proceedings, the AO on perusal of computation of total cost noted that the assessee has not disclosed any income under the head capital gains nor furnished any computation of claim of deduction under section 54 of the Act. This information f....
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....tted facts are that the assessee"s father Mr. Kamruzzaman Ghasi Khan was a tenant of flat No.9, "B" Wing, 3rd floor of "Annville" for more than last ten years. Assessee"s father converted his tenancy rights in ownership by paying 112 times of the monthly rent to his landlord vide agreement dated 16-4-2008. This flat "B/9" was gifted by assessee"s father vide registered Gift Deed dated 29-04-2008. Assessee sold this flat on 07-01-2011 for a sum of Rs. 70 lakhs (the consideration recorded in the Sale Deed). The stamp valuation as per circle rates as valued by Sub-Registrar was at Rs. 1,15,87,600/-. Subsequently, during appellate proceedings before CIT (A), the assessee produced a corrected market value by Sub-Registrar as per circle rate at Rs. 81,11,500/- in place of original value at Rs. 1,15,87,600/-. According to AO, this property was sold by the assessee within thirty two months which is less than thirty six months, the capital gain earned by the assessee is short term capital gain for the reason that the property by assessee"s father was purchased by agreement dated 16-04-2008 and assessee sold this property on 07-01-2011. Thereby the holding period is only thirty two months an....
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....operty was sold to the purchasers by the seller and agreement registered with the sub-registrar on 07/01/2011 vide BDR-1/257/2011. The seller has not paid any remuneration in any form to the purchasers for the period from 07/01/2011 to 14/05/2011. Till today the seller was responsible for all the Govt. taxes, repair costs, electricity bills etc. From today onwards i.e. 14/05/2011, the purchasers having taken legal possession of the above mentioned property will be responsible for all the expenses and costs related to the above mentioned property. The property has been vacated peacefully and is completely vacant. The purchasers have taken complete possession of the above mentioned property peacefully and become the absolute owners of the said flat and now are free to use the said flat in any manner they like. Mr. Javed Kamruzzama Khan has not left behind any furniture, valuables, documents etc. which he can claim later." This factum of handing over possession by assessee to the purchaser was before the AO and before the CIT (A) also. There is discussion in the assessment order qua this fact. Now, the question arises whether the handing over of the possession of ....
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....the financial year relevant to A.Y. 2006-07. In the peculiar nature of this case, if at all the plea of the AO has to be accepted, it would amount to holding that the transfer had not taken place in this year and consequently the sale proceeds cannot be assessed in this year, but the AO having not initiated any proceedings with respect to A.Y. 2005-06 till date the impugned income would escape taxability even in A.Y. 2005-06 and it would really be prejudicial to the interest of the Revenue. Under this peculiar circumstance we have to rationally interpret the findings of the AO as well as the CIT(A) in the backdrop of the clauses in the agreement. As rightly pointed out by the learned counsel for the assessee, the Hon'ble Bombay High Court in the case of Chatrubhuj Dwarkadas Kapadia (supra) has decided the issue by reading the terms of the contract as a whole and by specially taking note of the fact that in the guise of agreement of sale a development agreement was contemplated whereby the developer was held to have taken possession on account of the irrevocable licence granted to him to enter upon the property whereas in the instant case no such finding was given by the tax aut....