TaxTMI 
TaxTMI 
2018 (8) TMI 918
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....on 17-06-2012, the sources of income are under Capital gain and Income from other sources. In the course of scrutiny assessment u/s.143(3), the AO has disallowed claim of long/ term capital gain on sale of godown of Rs. 5, 71, 282/- on the ground that tht capital gain arisen out of sale of the original assets i.e. godown has not being held for the period more than 36 months . The LD AO has treated entire capital gain on sale of long term capital assets as short term capital gain and added Rs. 86, 82, 000/-. 5. By the impugned order, CIT(A) confirmed the action of the AO against which assessee is in further appeal before us. 6. At the outset learned AR placed on record the order of the Co-ordinate Bench in case of Anita D Kanjani in ITA No.2291/Mum/2015 dated 13/02/2017 wherein similar issue was decided in favour of the assessee. 7. On the other hand, learned DR relied on the order of the lower authorities and also decision of Bombay High Court in case of Rasiklal M. Parikh dated 10/03/2017. 8. We have heard rival contentions and carefully gone through the orders of the authorities below. We have also deliberated on the judicial pronouncements referred by lower authoriti....
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....on 30-04-2011 was held for a period less than 36 months and therefore the capital gain arising out of sale of capital assets was short term capital gain and not a long term capital gain. The LD AO accordingly added entire capital gain of Rs. 86, 82, 000/- without granting the benefit of cost of indexation of original capital assets and deduction u/s. 54F of the Act. 11. Chronological events are as under:- 1. Date of purchase agreement duly stamped 24/04/2008 2. Date of Registration of purchase agreement 11/07/2008 3. Date of Registration of sale agreement 11/04/2011 4. Date of handingover possession to buyer 30/04/2011 12. As per the provision of the Act, the clause (v) and clause (vi) of the section 2 (47) envisaged a transfer with payment of part consideration and possession / enjoyment of the property. The clause (v) and clause (vi) of the section 2 (47) does not stipulates the registration of the immovable property being mandatory condition in order to constitutes transfer within the meaning of provision of Section 2(47) of the act. That is to say transfer for the purpose of Section 2 (47) of the income Tax Act means a defacto ownership....
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....rty, i.e. on 11-04-2005; when the property was duly identified and part payment was made. It was alternatively argued that in any case, if the date of transfer of property is to be taken as the beginning point of holding period, then the date of signing of the agreement i.e. 28-12-2007 should be taken into account and not the date of registration of the agreement in terms of section 47 of Registration Act, 1908 as has also been clarified by the Hon'ble Supreme Court in the above mentioned two judgements. 9. With a view to resolve this dispute, we have firstly analysed the provisions of section 2(42A) which defines 'short term capital asset' as under:- "Section 2(42A) in the Income- Tax Act, 1961 (42A) "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": Perusal of aforesaid definition shows that the legislature has used the expression 'held'. It is further noted by us that in various other allied or similar sections, the legislature has preferred to use the expression 'acquired' or 'purchased' e.g. in section 54 / 54F.....
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....or he retained the same in part performance of the contract under Section 53-A of the Transfer of Property Act, it amounts to transfer. No registered deed of sale is required to constitute a transfer. Similarly, any transaction whether by way of becoming a member of or acquiring shares in a co- operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever, which has the effect of transferring, or enabling the enjoyment of any immovable property, also constitutes transfer and the assessee is said to hold the said property for the purpose of the definition of 'short-term capital gain'. In fact, the Circular No.495 makes it clear that transactions of the nature referred to above are not required to be registered under the Registration Act, 1908. Such arrangements confer the privileges of ownership without transfer of title in the building and are common mode of acquiring flats particularly in multistoried constructions in big cities. The aforesaid new sub- clauses (v) and (vi) have been inserted in Section 2(47) to prevent avoidance of capital gains liability by recourse to transfer of rights in the m....
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.... order to determine the capital gain from such transfer, what is to be seen is, out of full value of the consideration received or accruing, the cost of acquisition of the asset, the cost of improvement and any expenditure wholly or exclusively incurred in connection with such transfer is to be deducted. What remains thereafter is the capital gain. It is not necessary that after payment of cost of acquisition, a title deed is to be executed in favour of the assessee. Even in the absence of a title deed, the assessee holds that property and therefore, it is the point of time at which he holds the property, which is to be taken into consideration in determining the period between the date of acquisition and date of transfer of such capital gain in order to decide whether it is a short-term capital gain or a long-term capital gain." Thus, from the aforesaid judgment, it is clear that for the purpose of holding an asset, it is not necessary that the assessee should be the owner of the asset based upon a registration of conveyance conferring title on him. 11. Similarly, in the case of Madhu Kaul (supra), the Hon'ble Punjab & Haryana High Court analysed various circ....