TaxTMI 
TaxTMI 
2018 (10) TMI 579
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....The grievances raised by the assesseein its appeal, being ITA No.514/Kol/2016, for Assessment Year 2011-12,are as follows: "1. For that on the facts and in the circumstances of the case, the Ld. CIT(A) ought to have allowed the deduction u/s 54 of the Act amounting to Rs. 22,87,429/- against capital gains arising out of sale of flats. 2. For that on the facts and in the circumstances of the case, the Ld. CIT(A) ought to have considered that the flats were held by the assessee for more than 3 years and were taxable as long term capital gains. 3. That the appellant craves leave to add, alter or delete all or any of the grounds of appeal." 4. The brief facts qua the issue are that assessee is a school teacher cum administrator of school and has been earning income under the head salary. The assessee also declared long term capital gain on sale of flats.During the assessment proceedings, the assessing officer examined the assessee's documents relating to provisional allotment of flats which were later on relinquished in favour of others which was termed as transferred. The ld AO noticed that the said flats though allotted in the name of the assessee but th....
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....ther has declared any income under the head house property from those stated three flats. The Assessing Officer further noted that it was proved beyond doubt that the properties in question had not been used for residential purpose any time before the transfer. Therefore, an inference can be drawn that the assessee failed to fulfil all the conditions as required by section 54 of the Act. Besides, on the date of transfer or relinquishment, the assessee was owner of more than two existing house property, therefore, the assessee is not entitled to exemption u/s 54F of the Act. Therefore, the Assessing Officer disallowed the exemption claimed by the assessee u/s 54 of the Act, to the tune of Rs. Rs. 22,87,429/-. 5. Aggrieved by the stand so taken by the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A) without any success. The ld CIT(A) observed that normally the builders provisionally allotted the properties to the assessee on receipts of first installment and the assessee transferred/relinquished said provisional allotment, though after full payments but at the time when the properties were still under construction. Hence, there were no real purcha....
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....ITA No.473/Kol/2012 for Assessment Year 2008-09 order dated 29.11.2013 wherein it was held that since the assessee was owning legal rights over the apartments for a period of more than thirty-six months and the sale proceed out of its sale consideration were in the nature of long term capital gain( LTCG ) and were invested for purchasing the new house property for residential purpose within a period of one year from the date of sale of property. 8. On the other hand, Ld. DR for the Revenue haspointed out that there was no real purchase and sales of properties and the assessee actually made profit by transferring or relinquishing her provisional letter of allotment after making full payments by installments over a period of three years, hence assessee is not eligible to claim exemption under section 54 of the Act. 9. We have given a careful consideration to the rival submissions and perused the materials available on record, we note that assessee booked a flat at Upohar Project, Kolkata on 23/05/2007, by paying the first installment of Rs. 6,00,000/- and the Builder issued a 'provisional letter of allotment' on 30/05/2007. The assessee further paid a sum ofRs.36,54,078....
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....rein it was held that, " a reading of section 45 shows that capital gains tax is chargeable on "any profits or gains arising from the transfer of the capital asset". Read in the context of the definitions of "capital asset" and "transfer" the section carries no words of limitation to the effect that a transfer effected by a person backed up with a title passed on under a registered deed alone could be considered as resulting in a profit or gain assessable under section 45. All that the section looks at is the transfer of a capital asset held as understood under section 2(14) of the Act and under section 2(47) of the Act. According to us, the AO failed to appreciate that the assessee has acquired a legal right in the capital asset in terms of Section. 2(47) of the Act r.w.s. 53A of the Transfer of Property Act 1882. The fact needs appreciation is that the periodic payments for the period i.e., identified and held by the assessee stretched for a period of more than 36 months i.e., from the date of allotment of flats vide allotment letter dated 30.05.2007. Therefore, the said allotment issued on 30.05.2007 and the acknowledgement receipt of initial booking amount had vested upon hi....
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....of the Coordinate Bench in the case of M/s. Anindya Dutta in ITA No.473/Kol/2012, for Assessment Year 2008-09, order dated 29.11.2013 wherein similar facts were discussed and it was held as under: "9. Further, Board's Circular No. 471 dated 15-10-1986, has also been considered by Hon'ble Bombay High Court in the case of CIT v. Hilla J.B. Wadia 216 ITR 376 (Bom), it was held that Section 54 of the Act has to be construed in the context of the manner in which residential properties are now being constructed in a city like Bombay where, looking to the cost of the land, co-operative housing societies are being formed for constructing a building in which flats are allotted to members. This must also be viewed as a method of constructing residential tenements. What we have to see is whether the assessee has acquired a right to a specific flat in such a builder which is being constructed by the society and whether he has made a substantial investment within the prescribed period which will entitle him to obtain possession of the flat so constructed and in which he intends to reside. The material test in this connection is domain over the flat and investment in it. Central....
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....see had never become owner of the property by any express or deemed provisions of the law including section 53A of the Transfer of property Act. That the assessee doesn't qualify to be the owner of the House property as per Section 27 of the act, as the owner of House Property is a person who has got the valid legal right of the property registered in his own name under the Transfer of property Act, 1882 or deemed owner as per proviso of section 53A of Transfer of Property Act. That the assessee had only acquired a right on the date of booking of the flat by way of an agreement w.e.f. 4.2.2004 which was still to be constructed. That in this concerned case there is no land or building on the date of transfer and it merely was a right to get a flat in future which was sold by the assessee. That the assessee had booked two flats although in joint name; the entire amount was paid by him from his own account and entire gain belongs to him only. Therefore, right of the assessee was in two flats to be constructed in future and not a single house as is required in the provisions of section 54 of the Act. For this now, we have to go through t....
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.... and 'lands' and, therefore, the singular 'a residential house' also permits use of plural by virtue of section 13(2) of the General Clauses Act. In the present case before us, it is clear that the builder/developer has carried out construction of a residential scheme and he constructed residential apartments. Even the property identified and held by assessee was in the nature of house property and the said property was for the use of the assessee's residential purpose. But from the facts, it is clear that there are two flats i.e. namely No.1103 & 1104 in Ashoka Tower, Parel, Mumbai and these two flats were purchased by assessee for the purpose that the same could be used by him and his wife as a single residential premises but these are actually two residential apartments built by builder-cum-developer. According to us, the assessee became the owner of property u/s. 53A of the Transfer of Property Act in terms of CBDT Circular No. 471 dated 15-10-1986. Here, we are in agreement with the argument of Ld. Counsel for the assessee that assessee was owning legal rights over the said apartments for a period of more than thirty-six months and the sale proceed out of i....