TaxTMI 
TaxTMI 
TaxTMI 
2019 (4) TMI 288
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....perty on the issuance of the allotment letter by the builder / seller." 2. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the deduction claimed u/s.54F of Rs.l,09,40,072/-, stating that the house was purchased within two years of sale, as required u/s 54F" 3. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not considering that the addition was made by the AO because it was clearly mentioned in the 2nd para of the allotment letter that the documents regarding allotment would be executed after the same was stamped by the buyers. As the assessee entered into an agreement for sale (for purchasing the under construction flat) on 25.03.2010 and the period of holding of rights from 25.03.2010 to 04.04.2012 is less than 36 months, thereby making the gain on transfer of rights as Short Term Capital Gain". 4. "On the facts and in the circumstances of the case and in law, the Ld.-ClT(A) has erred in not considering that the allotment letter did not contain the flat number nor any unconditional rights to dispose of the property. It is clear that the allotment letter was only an offer and the r....
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....gains as short-term capital gains [STCG]. The assessee defended the same by submitting that the said flat was purchased vide allotment letter dated 26/02/2008 and substantial payment of Rs. 185.50 Lacs was already made by 24/07/2008 and therefore the holding period, as counted from the date of allotment letter, was more than 36 months and therefore the resultant gains were Long-Term Capital Gains. 2.4 However, upon perusal of allotment letter as extracted on para 4.4 of the quantum assessment order, Ld. AO noted that the same did not contain the specific flat number and it mentioned the fact that documents regarding allotment will be executed after the same is stamped by the buyer and therefore, the assessee did not have unconditional right to dispose of the property. Reliance was placed on the decision of Hon'ble Delhi High Court rendered in Gulshan Malik Vs. CIT [43 Taxman.com 200] while arriving at the conclusion that it was only the agreement dated 25/03/2010 which conveyed the right to acquire the property in favor of the assessee. It was also noted that the flat was at under construction stage on the date of agreement. Therefore, the resultant gains, in the opinion of ld. AO....
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....onouncements also to arrive at the said conclusion, which has already been discussed in the impugned order in para nos. 6.5 to 6.8 of the impugned order. Accordingly, Ld. AO was directed to allow the claim of Rs. 109.40 Lacs u/s 54F as claimed by the assessee. Aggrieved, the revenue is in further appeal before us. 4. The Ld. DR, placing reliance on the cited decision of Hon'ble Delhi High Court in Gulshan Malik Vs. CIT [43 Taxman.com 200] supported the stand of Ld. AO by submitting that this decision has already attained finality by way of dismissal of Special Leave Petition by Hon'ble Apex Court on 26/10/2015 vide SLP No. 30670/2014. On the other hand, Ld. Authorized Representative for Assessee [AR] submitted that the issue stood squarely covered in assessee's favor by catena of binding judicial pronouncements and the cited case law of Hon'ble Delhi High Court was distinguishable on facts. Reliance has been placed on the recent decision of Hon'ble Bombay High Court rendered in PCIT Vs. Vembu Vaidyanathan [ITA No. 1459 of 2016 dated 22/01/2019], a copy of which has been placed on record. 5.1 we have carefully heard the rival submissions and perused relevant material on record. U....
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....ever contended that the transfer of the asset in favour of the assessee would be complete only on the date of agreement which was executed on 17th May, 2008. 3. CIT appeals and the Tribunal held the issue in favour of the assessee relying on various judgments of different High Courts including the judgment of this Court in case of CIT v. TATA Services Ltd. [1980] 122 ITR 594/[1999] 1 Taxman 427. Reliance was also placed on CBDT circulars. 4. Having heard learned counsel for the parties, we notice that the CBDT in its circular No.471 dated 15th October, 1986 had clarified this position by holding that when an assessee purchases a flat to be constructed by Delhi Development Authority ("D.D.A." for short) for which allotment letter is issued, the date of such allotment would be relevant date for the purpose of capital gain tax as a date of acquisition. It was noted that such allotment is final unless it is cancelled or the allottee withdraw from the scheme and such allotment would be cancelled only under exceptional circumstances. It was noted that the allottee gets title to the property on the issue of allotment letter and the payment of installments was only a follow-up action a....