TaxTMI 
TaxTMI 
2018 (10) TMI 178
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....l asset. 3. The learned CIT(A) erred in denying the benefit of deduction u/s 54 to the appellant against capital gains from sale of residential property. 4. The appellant craves leave to add, amend, modify or alter the above grounds of appeal to any stage of appellate proceedings. The assessment for impugned AY was framed by Ld. Assistant Commissioner of Income Tax-35(2), Mumbai [AO] u/s 143(3) of the Income Tax Act, 1961 on 30/03/2015 wherein the income of the assessee has been determined at Rs. 177.60 Lacs after certain disallowances as against returned income of Rs. 79.73 Lacs filed by the assessee on 30/09/2012. As evident from grounds of appeal, the subject matter of the appeal is the nature of certain capital gains earned by the assessee during the year and admissibility of deduction u/s 54 as claimed by the assessee, but denied by the lower authorities. 2.1 During assessment proceedings, it was noted that the assessee sold one property situated at Flat No. 308/1, 3rd Floor, D Wing, Oberoi Splendor, Andheri (E), Mumbai [in short 'Property'] on 08/11/2011 for sale consideration of Rs. 197.80 Lacs. Against the same, the assessee claimed expenses on trans....
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....A No. 5720/Mum/2010 dated 25/07/2012] & CBDT circular numbers 471 & 672 dated 15/10/1986 & 16/12/1993 respectively. Finally, the stand of Ld. AO was confirmed by making the following observations:- 7.10 As in the case of the assessee, the agreement entered on 06-10-2008 and later registered on 14-10-2008, it did not give any absolute right in the property under purchase. As extracted above in para 6.4, there are specific clauses which give the builders the right to terminate and sell the premises to a new purchaser. As on the date of agreement, the assessee had paid only 66.20%, the future payments in time were material as per the terms and percentage of payments made, the assessee cannot be held to be owning absolute right. Even on the legal aspect, the decision relied require the period of holding to be considered from date of possession. 7.11 As per the facts of the case and the above decisions, the period between possession and sale would be relevant for transfer of right and occupancy title as in the case of assessee. As the assessee got possession on 04-07- 2011 and sold it on 08-11-2011, the period of holding was only 3 months, and thus the capital gain was....
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....see was specific & a unique property which was clearly identified under the agreement. The agreed sale consideration of the same has been fixed as Rs. 89.34 Lacs, the schedule of which has already been provided in clause 3(B) of the agreement. The assessee, at the time of execution of agreement, out of agreed consideration, had already paid amount of Rs. 57.75 Lacs i.e. approx. 64% of the agreed consideration. 5.3 As per Clause-7 of the agreement, the developer could terminate the agreement in certain event of default as enumerated therein. Upon such event of default, in terms of clause-8, the developer could terminate the agreement and forfeit the specified amount towards losses / damages and refund the balance amount to the purchaser. It is the terms of clauses 7 & 8, which has led the Ld. first appellate authority to conclude that the assessee did not have absolute domain and control on the property till the occupancy or possession of the property. However, the aforesaid clauses, in our opinion, was nothing more than to safeguard the interest of the parties therein in the eventuality of default being made by the other party and did not operate so as to circumvent the right or....
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....e, a person can hold the asset as owner, lessee, tenant, etc. Therefore, the right to the property is held by a person from the date when he enters into an agreement for purchase and not when he acquires possession. A similar phrase has been used in the Explanation (iii) to section 48 which defines the term "indexed cost of acquisition". The said phrase is reproduced hereunder:- (iii) "indexed cost of acquisition" means an amount which bears to the cost of acquisition the same proportion as Cost Inflation Index for the year in which the asset is transferred bears to the Cost Inflation Index for the first year in which the asset was held by the assessee or for the year beginning on the 1st day of April, 1981, whichever is later; (emphasis added) A perusal of the above provision reveals that even for calculating indexation the base year is to be taken as the year from which the capital asset is 'held' by the transferor and not the year in which the asset is acquired by the transferor. Such a difference cannot be ignored. 5.6 So far as the case laws are concerned, we find that in the case of Sushil Kumar Aggarwal, the date of possession was earlier then....