TaxTMI 
TaxTMI 
1992 (12) TMI 231
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....t was completed under section 144 computing the total income at ₹ 1,48,050. While doing so the Assessing Officer did not allow exemption under section 54(1) of the Act in regarding to capital gains amounting to ₹ 2,40,000 on sale of property at East Patel Nagar sold for ₹ 2,75,000 on 22nd September, 1981, because the Greater Kailash Property claimed to have been purchased was only under an agreement of sale though dated 25th September, 1981 but not under a sale deed being in registered only on 26th February, 1985 beyond statutory period. On appeal, the Commissioner (Appeals) confirmed the assessment order. Hence the instant record appeal by the assessee before us. 3. Learned counsel for the assessee submitted to the effec....
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....n record and the orders of the authorities below as well as the relevant pages of the paper book to which our attention was drawn and also the case laws relied upon by the parties before us. At the outset it would be relevant to list out the chronological events that took place in the instant case as below : 22nd September, 1981 : Date of sale of property at East Patel Nagar 25th September, 1981 : Date of agreement to purchase flat from Paradise Home Builders the flat being at Greater Kailash April 1982 : Month before which the premises to be delivered, i.e., within 7 months of the payment of the earnest money under the above agreement to purchase. September, 1982 : ₹ 2,39,850 was paid by the assessee to the vendor in inst....
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....ired property. It is enough he is in a position to exercise rights in the said property on his own rather than on behalf of the vendor. Further, in common parlance, a person who has paid some money and obtained an agreement regarding an immovable property would be stated to have purchased the property. In the instant case, the assessee had paid major portion of the sale consideration prior to the registration of the sale deed. Further, it was significant that the recitals of the sale deed clearly indicated the prior agreement of sale and as soon as the sale deed was obtained the purchase related back to the date of agreement. Therefore, even by taking into consideration the subsequent event of obtaining the sale deed, it could be said tha....
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....s paid, that the delay in obtaining formal registration of the sale deed was immaterial to the issue and that, therefore, the assessee was eligible for exemption under section 54(1) of the Act. 8. It may also be further added, as it would be pertinent in the present context, that the decision in the case of Commissioner v. Aravinda Reddy (supra), relied upon by the assessee though the Revenue attributed it as distinguishable, to strengthen the view taken by us because the Revenue urged that the actual purchase should have taken place by means of a registered document of sale deed only the relevant essence of the said judgment of the Apex Court is extracted as hereunder : "Four brothers, members of an HUF, partitioned the joint famil....
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....ppens to be the purchaser, and for similar other reasons. 10. Further, the assessee also advanced his arguments that section 2 (42B) defines short-term capital gain as meaning capital gain arising from the transfer or a short term capital asset, and short-term capital asset is defined under section 2(42A) as meaning a capital asset held by an assessee for not more than thirty six months immediately preceding the date of its transfer, thus attempting to draw our attention that the word `held' only is used under section 2(42A) and not the word `own' thus distinguishing ownership. This apart the Board Circular No. 471, dated 15th October, 1986, is also relied upon by the assessee to substantiate his stand, an extract of which is taken....