TaxTMI 
TaxTMI 
2019 (5) TMI 1599
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.... in a pent house situated at 617A, the Magnolias DLF Golf Links, DLF City, Gurgaon. This was reflected in the fixed asset in the books of accounts. The said pent house was jointly owned by the assessee company with Shri Satish Batra who had 50% share in the property. The assesee has purchased the pent house from M/s. DLF, vide allotment letter dated 13.10.2005 and also 'Buyers agreement' was also entered vide agreement dated 8.3.2006. A copy of such agreement are being placed before us in the paper book from pages 72 to 146 and also the agreement to sell dated 29th January, 2015. The assesee has acquired the property by taking a loan of Rs. 3.5 crore from ICIC Bank who directly made payment to DLF on 30.11.2005 and further payment of Rs. 1,23,36,200/- has been made by Shri Satish Batra in respect of share in property to DLF on 30.11.2005. During the year under consideration both the co owners who had sold the property to Shri Pankaj Munjal, son of Shri O.P. Munjal, resident of B-5, Greater Kailash Part-1, New Delhi for a total consideration of Rs. 23,09,08,220/- . Being 50% the owner of the property, the value of sale consideration in respect of the share owned by the assesee came ....
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....ses claimed of Rs. 7,37,462/- in profit & loss account, he directed the AO to verify such expenses from the computation of income and allow accordingly the expenses leading to double addition. " 4. Before us Ld. Counsel for the assessee Shri Ajay Wadwa first of all submitted that here in this case the period of holding of the pent house has to be reckoned from the date of allotment of the property i.e 13.10.2005 and not from the date of possession in 2012. The allegation of the revenue authorities is that, since assessee has received the possession of the flat in July 2012, therefore, the flat itself came into existence only in July, 2012 and prior to this period it was mere right in the property and hence according to them the capital asset which was sold by the assessee was a flat and not the right and therefore, the holding period should be computed from the date of possession to the date of sale. In this regard he submitted that even from the perusal of the agreement to sale dated 29.1.2015 and the buyers agreement dated 8.3.2006, it is clearly borne out that assessee was allotted a flat vide allotment letter dated 13.10.2005. Thus, assessee right in the property had accr....
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.... vs. S. R. Jeyashankar (2015) 373 ITR 120 (Madras) f. Hon'ble Mumbai Tribunal in the case of Anita D. Kanjani v. ACIT (2017) 163 ITD 451 g. Hon'ble Mumbai Tribunal in the case of DCIT vs. Deepak Shashi Bhusan Roy (2018) 96 taxmann.com 648 h. Jindas Panchand Gandhi (2005) 279 ITR 552 (Gujarat) i. CIT vs. Anilaben Upendra Shah (2003) 262 ITR 657 (Guj) j. Hon'ble Kolkata Tribunal in the case of ACIT vs. Mrs. Sheela Chopra in ITA No. 169/Kol/2014 7. He submitted that all the aforesaid judgments clearly laid down the ratio that if Assessee gets the right to hold the flat on issuance of an allotment letter and merely on the fact that possession was delivered letter it cannot be held that prior to the date of possession the assessee was not holding the flat. The payment of balance instalments, delivery of possession are only consequential acts that relate back to and arise from the rights conferred by the allotment letter. 8. Without prejudice, he submitted that in any case the date of apartment buyer agreement by which the DLF has passed on the entire rights in the said property and has agreed to sell the property at an agreed considerat....
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....rty right from the date of allotment letter or at the most from the date of the Buyers Agreement dated 8.3.2006. This right was converted into property by virtue of the same agreement and that property has been sold in this year. Thus, the principle laid down by the Hon'ble Supreme Court wil not apply here. 11. We have heard the rival submissions , perused the relevant findings given in the impugned orders as well as the material referred to before us at the time of hearing. From the facts as discussed in the foregoing paragraphs, it is an undisputed fact that assessee had acquired a flat being 50% owner with DLF Ltd. The acquisition of flat has been stated by way of allotment letter dated 13.10.2005 by which assessee was allotted a particular unit with specified price consideration and immediately after the allotment of the letter the assessee has made the entire payment of the flat. Thereafter, Buyer's agreement was entered into with DLF Limited, whereby assesee got all the rights on the same flat vide agreement dated 8.3.2006 and the entire consideration was paid much prior to the agreement dated which has also been acknowledged by the party in the said agreement. This is evi....
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....d acquired the flat and in pursuance thereof, letter of possession of flat was given. If revenue's stand is taken into consideration, then, if assessee would have sold the flat prior to the possession i.e. July, 2012 would it not have been reckoned as long term capital gain taxable as long term capital gain and whether after the possession of the flat the nature of capital assets gets changed. Such a view cannot be accepted, because possession of the flat is flowing from the terms and conditions mentioned in the buyer's agreement itself. Thus, in our opinion the date of possession cannot be reckoned as a date of the acquisition of the flat for the purpose of computing the period of short term or long term. We are in tandem with the contention of Mr. Ajay Wadhwa that, even if the date of allotment is not to be treated as the date of acquisition, but the date of buyer's agreement dated 8.3.2006 is the date in which the assesee has acquired the rights in the property. Accordingly we direct the AO to treat the date of acquisition of the flat / property on 8.3.2006. 10. Coming to the judgment of Hon'ble Supreme Court in the case of CIT vs Balbir Singh Maini (supra), in that case, ....
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....stly it is a transfer of a long term capital gain; and secondly, the same has to be taxed as long term capital gain. Consequently ground No. 1 to 6 is allowed. 14. Coming to the issue of interest expenses on the interest paid on loan borrowed to the extent of the assessee's share in the property up to the date of possession, as raised in ground No. 8, the same also gets covered in view of our finding given above. We find that, reason for disallowing of interest cost by the AO is as under :- i. "Cost of improvement consists of only interest paid to the financial institutions and not payment to M/s. DLF for any addition or alteration. ii. The Assessee raised excess loan from ICICI to pay on behalf of Sh. Satish Batra iii. Excess amount of Rs. 1,11,94,655/- was shown as advance to Sh. Satish as on 31.3.2006 iv. Advance repaid by Sh. Satish Batra on 27.02.2008 was not used to repay excess loan but was invested in share of M/s. Vimal Plast. v. Assessee was paying huge interest on loan and making interest free advances to sister concerns. vi. Loans granted to the related parties were not for business purpose." 15. Ld. CIT(A) has....
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.... 2012-13 DLF Limited 04.12.2012 95,349.00 Service Charges Towards Service Charges payable to DLF against Bill No.04.12.12 of Rs. 190,698/- and 50% transferred to Mrs. Satish Batra Total-A 95,349.00 2. 2013-14 DLF Limited 01.04.2013 1,880,476.00 HVAC Charges Set-off with Timely Payment Rebate & Compensation DLF Limited 01.04.2013 1,106,524.00 Govt.Tax Set-off with Timely Payment Rebate & Compensation DLF Limited 01.04.2013 1,496,000.00 Cost of Increase in Area Set-off with Timely Payment Rebate & Compensation DLF Limited 01.04.2013 42,800.00 Cost of BTU Meter Set-off with Timely Payment Rebate & Compensation DLF Limited 01.04.2013 57,150.00 Cost of Electric Meter Set-off with Timely Payment Rebate & Compensation DLF Limited 01.04.2013 197,542.00 Service Tax Charged by DLF Set-off with Timely Payment Rebate & Compensation DLF Ho....