TaxTMI 
TaxTMI 
2019 (2) TMI 1059
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....e of site on the date of agreement for lease-cum-sale. As per the further terms of this agreement, the assessee has to construct the building on the site within two years from the date of agreement. The assessee should not alienate the site for a period of 10 years. The assessee took possession of the property and constructed a building. As per the agreement, for 10 years the assessee has to pay annual lease charges and at the end of 10 years period, the property will be conveyed to the assessee. It is not in dispute that the assessee complied with the aforesaid terms of lease-cum-sale agreement and was in possession of the property and put up construction on the site on the date of agreement and subsequently. 3. The society by registered sale deed dated 31.08.2014 conveyed the property to the assessee. The fact that the assessee was allotted the site as per the terms of lease-cum-sale agreement dated 22.3.2001 and the fact that assessee complied with all the conditions in the said lease-cumsale agreement have been acknowledged in the sale deed. 4. The assessee sold the site as well as the building constructed thereon under a Sale Deed dated 03.12.2014. The assessee computed ....
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....means capital gain arising from the transfer of a short-term capital asset;" 10. We have to look at the definition of the term "Short term capital gain" because what is not short term capital gain is Long term capital gain and that is the way Long term capital gain has been defined in the Act. Short term capital gain means capital gain arising from the transfer of a short term capital asset. Short term capital asset has been quite exhaustively defined, covering several situations. For the present appeal the portion of the definition which says 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" alone is relevant. 11. It is not in dispute that the Assessee paid cost of the site as early as 22.3.2001 and was in possession of the property as lessee cum Agreement holder with right to obtain conveyance of absolute interest over the land that was leased. The expression "held by the Assessee" in the context of Sec.2(42A) of the Act, is rather ambiguous, in the sense that it does not speak of the date of vesting of legal title to the property. Even the provisions of sec.2(47)(v) & (vi)....
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...."The definition as contained in Section 2 (42A) of the Act, though uses the words, "a capital asset held an assessee for not more than thirty-six months immediately preceding the date of its transfer", for the purpose of holding an asset, it is not necessary that, he should be the owner of the asset, with a registered deed of conveyance conferring title on him. In the light of the expanded definition as contained in Section 2(47), even when a sale, exchange, or relinquishment or extinguishment of any right, under a transaction the assessee is put in possession of an immovable property 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 t....
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.... legalistic approach should be avoided in looking at a provision which must be equitably interpreted and justly administered Courts should, whenever possible unless prevented by the express language by any section or compelling circumstances of any particular case, make a benevolent and justice oriented inference. Facts must be viewed in the social milieu of a country." Therefore, keeping the aforesaid principles in mind, when we look at Section 48, the language employed is unambiguous. The intention is very clear. When a capital asset is transferred, in 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 tak....
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....aspect which is to be noted is that the assessee purchased property in the name of himself, his wife - Smt. Geeta Prakash and his son - Shri Amit Prakash. 17. The AO was of the view that to claim deduction u/s. 54F of the Act, the assessee should not own more than one house, other than the new asset. Since as per the description of the property purchased by the assessee given above consisted of two door nos., the AO was of the view that the assessee purchased two house properties and therefore cannot claim deduction u/s. 54F of the Act as he owned more than one house property, other than the property that was transferred. Another objection of the AO was that to claim exemption u/s. 54F of the Act, the property had to be purchased only by the assessee in his name and since the assessee's wife and children were also added as purchasers, the assessee can claim deduction u/s. 54F of the Act only to the extent of 1/3rd of sale consideration invested in acquiring the new property. In that view of the matter, the AO computed the disallowance u/s. 54F of the Act as follows:- "7.0 From the above, it can be seen that the assessee has declared purchase investment for the purpose o....
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....set. The factual details with regard to acquisition of the property by the Assessee has already been set out in the earlier paragraph of this order. The details of the payment made by the Assessee are given in pages 11 to 12 of Assessee's paper book and the same is as follows:- Sl. No. RTGS Date 1 Bank name & S.B. A/c # of Purchasers Favouring Bank name & S.B. A/c # of Vendors Amount (Rs.) 1 27/06/2014 The National Co-op Bank Ltd., Gandhi Bazar, Bangalore - SB A/c.# 10323 of Sri.B.R. Prakash & Smt. Geetha Prakash Sri.Padmanabha Ranganath Chari Bank of Maharastra, Dholpur House, Shahjahan Road, UPSC, New Delhi-A/c. # 20072297678 71,28,000/- la Income tax deducted at Source - - Paid by Challan Serial # 00024 dt.28/06/2014 72,000/- 2 27/06/2014 The National Co-op Bank Ltd., Gandhi Bazar, Bangalore - SB A/c.# 10323 10323 of Sri.B.R. Prakash 86 Smt. Geetha Prakash Sri.Padmanabha Srinivas Chari Indian Overseas Bank, 1565, Swastik Vihar, Panchikula - A/c.# 156501000001392 71,28,000/- 2a Income tax deducted at Source - - Paid by Challan Serial # 00066 dt.28/06/2014 72,000/- 3 27/06/2014 The N....
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....s purchased only one property and not two properties. In this regard, the decisions cited by the ld. Counsel for the assessee before us supports the plea of the assessee viz., the decision of the Delhi High Court in the case of CIT Vs. Gita Duggal (2013 30 taxmann.com 230 (Delhi). In the aforesaid decision, the facts were that the assessee entered into a development agreement pursuant to which the developer demolished the property and constructed a new building comprising of three floors. In consideration of granting the development rights, the assessee received Rs. 4 crores and two floors of the new building. The AO held that in computing capital gains, the cost of construction of Rs. 3.43 crores incurred by the developer on the development of the property had to be added to the sum of Rs. 4 crores received by the assessee. The assessee claimed that as the said capital gains was invested in the said two floors, she was eligible for exemption u/s 54. The AO rejected the claim on the basis that the units on the said floors were independent & self-contained and not "a residential house" and granted exemption for only one unit. The CIT(A) and Tribunal upheld the assessee's claim by re....
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....rson while constructing a residential house. The physical structuring of the new residential house, whether it is lateral or vertical, cannot come in the way of considering the building as a residential house. The fact that the residential house consists of several independent units cannot be permitted to act as an impediment to the allowance of the deduction u/s 54/54F. It is neither expressly nor by necessary implication prohibited. 21. We are therefore of the view that the Assessee was entitled to claim deduction u/s.54F of the Act in respect of investment in the property bearing Door No.37 & 37/1, 1st Main Road, N.R.Colony, Bangalore. 22. The next issue is as to whether the deduction u/s.54F of the Act has to be restricted to only 1/3rd of the cost of acquisition of the new asset for the reason that the Assessee purchased the property along with the name of his wife and son shown as purchaser in the document under which the property was purchased. 23. The stand of the Revenue is that to claim deduction u/s.54F of the Act, the purchase of the new asset should be only in the name of the transferor i.e., the Assessee. To the extent the capital gain is invested in the join....