TaxTMI 
TaxTMI 
2020 (11) TMI 610
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....t of acquisition of the Financial Year 1986-87 while working out the capital gain arising from the transfer of that asset. 3. The learned CIT(Appeals) failed to appreciate that the appellant "held- the property in question right from the date of payments and no cost was paid later to MUDA, which allotted the site in favour of the appellant, and these facts establish that the property was acquired in the financial year 1986-87 itself. 4. The learned CIT(Appeals) erred in not considering the decisions of various High Courts, including the jurisdictional High Court and orders of ITATs relied upon by the appellant during the appeal proceedings. which squarely apply to the facts of the appellant's case. 5.. The learned CIT(Appeals) erred in not allowing the inflated, cost of improvement on the construction of a building at a cost of Rs. 3,00,000 as claimed by the appellant before the Assessing Officer. 6. The Learned CIT(Appeals) erred in not noticing that the appellant had offered income from house property in respect of the structure existing on the land for many years and had shown the property in the Wealth - tax return also, which all corrobo....
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.... the Authority on 11.9.1986 has also been mentioned. The relevant clause of the agreement reads as follows: "WHEREAS the First Party has purchased the site described int he Schedule for a sum of Rs. 3,34,314/-(Rupees Three lakh thirty four thousand three hundred fourteen only) as per allotment order dated: 20-5-1986, and the same has been confirmed by the Authority on 11.9.1986. On confirmation the First Party, has paid the full cost of the schedule site on 29.6.1986." 3. A possession Certificate was issued on 23.6.1998. Later, the MUDA has executed a deed on 61h January, 2004 conferring the title on the site to the appellant. The property held by the appellant from the date of allotment was sold by him on 9.5.2012 in favour of one Sri Parasmal Dak. Significantly, the sale deed at page 2 clearly mentions about the allotment letter dated: 20.5.1986. The claim of the appellant is, that since the entire consideration was paid to MUDA as per the letter of allotment, and an agreement has also been entered into on 19.6.1998, confirming the purchase of the site by the appellant by allotment letter dated:20.5.1986, the appellant became entitled for the ownership of the prope....
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.... issuance of allotment letter and full payment of cost of the site. The issuance possession certificate is only a consequential action upon which delivery of possession flows. Therefore, the date of allotment letter and payment of consideration viz., 29.5.1986 is the year of acquisition for the purpose of calculation of inflated cost of acquisition. Further, he drew our attention to the Explanation (iii) to s. 48 which entitles the assessee to the indexation benefit and also to Explanation (iii) to s. 48 refers to the words 'the asset'. It means some capital asset which is subject-matter of sale on which long-term capital gain is to be computed. 6. Thus, going into the provisions, it is not necessary that to constitute a capital asset the appellant must be the owner by way of a conveyance deed in respect of that asset for the purpose of computing capital gain. The appellant had acquired a right to get a particular site from MUDA and that right of the assessee itself is a capital asset. The word 'held' used in s. 2(14) as well as Explanation to s. 48 clearly explains that appellant had some right in the capital asset which is subjected to transfer. By making the p....
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....cts of the case. He relied on the following judgements:- i. Anita D. Kanjani Vs. ACIT (2017) 49 CCH 0043 Mum Trib. ii. Praveen Gupta Vs. ACIT ITAT, Delhi 'F' Bench (2011) 137 TTJ 0307 iii. CIT Vs. S.R. Jeyashankar High Court of Madras (2015) 373 ITR 0120 iv. Madhu Kaul Vs. CIT and another High Court of Punjab & Haryana (2014) 363 ITR 0054(P&H). v. CIT-III Vs. A. Suresh Rao High Court of Karnataka (2014) 223 Taxman 0228 (Karnataka). vi. CIT Vs. Ved Prakash Rakhra High Court of Karnataka (2015) 370 ITR 0762 (Karn). vii. Vinod Kumar Jain Vs. CIT & Ors. High Court of Punjab & Haryana (2012) 344 ITR 0501. viii. Pradeep Kar Vs. ACIT ITA 596/Bang/2014 dated 11.5.2016 ix. ITO Vs. R. Sathyanarayana High Court of Karnataka (ITA 25 of 2001 dated 17.12.2007). x. CIT Vs. B.K. Saroja (High Court of Karnataka) ITA No.328 of 2003 dated 13.12.2007. 8. He also relied on the CBDT Circular No.471 dated 15.10.1986. 9. On the other hand, Ld. D.R. submitted that date of acquisition of immovable property for the purpose of computation of cost of inflation of indexation to be the date considered on which the ass....
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....e 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 the purpose of the definition of 'short-term capital gain'. In fact, the Circular No.495 makes it clear that transactions of the nature referred to above are not required to be registered under the Registration Act, 1908. Such arrangements confer the privileges of owne....
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....ke 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 taken into consideration in determining the period between the date of acquisition and date of transfer of such capital gain in order to decide whether it is a shortterm capital gain or a long term capital gain." 10.1 Further, in the case of Richa Bagrodia in ITA No.3....
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....be decided by the Tribunal relates to if the date of allotment should be considered for the purpose of computing the said long term capital gains. In this regard, Ld Counsel filed various decisions to suggest that the date of allotment must be considered for the purpose of computing the long term capital gains instead of date of registration. Ld Counsel filed the order of the Tribunal in the case of ACIT vs. Smt Vandana Rana Roy vide ITA No. 6173/M/2011 (A Y 2007-2008) dated 7.11.2012, wherein one of us (AM) is a party, and stated that the "date of allotment" should be reckoned as relevant date for computing the holding period for the purpose of computing the capital gains. In this regard, Ld Counsel brought our attention to para 7 and 8 of the said order of the Tribunal to support his case. The said judgment was decided considering the judgment of the Gujarat High Court in the case of CIT vs. Anilaben Upendra Shah (2003) 262 ITR 657 (Guj) apart from other decisions of the Tribunal in the case of Jitendra Mohan vs. ITO (2007) 11 SOT 594 (Del) and also another decision of the ITA T in the case of Pra vin Gupta vs. ACIT and the relevant propositions are extracted in para 7 of the Tri....
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....lder and received the allotment letter, and therefore, benefit of indexation of cost of acquisition of the fiat has to be granted to the assessee from the date (1995) when he started making payment to the builder and not from the date of execution of conveyance deed in 2001." 8. All the above decisions are uniform in concluding that the "date of allotment" is reckoned as the date for computing the holding period for the purpose of capital gains. The date of allotment in this case being 19.11.2001 and the date of sale is 23.8.2006, therefore, the holding period is much more than 36 months. In this case, the gains earned by the assessee on the sale of flat have to be computed as capital gains. Without prejudice, even if the date of possession, being 14.8.2003, is considered; the assessee is still entitled to the benefits of the Long Term Capital Gains. Therefore, in our opinion, order of the CIT (A) does not call for any interference. Accordingly, the grounds raised by the Revenue are dismissed." 4.Considering the above settled nature of this issue, we are of the opinion that the assessee must succeed on this issue. Accordingly, the relevant grounds of appeal are al....
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.... judgement of Hon'ble High Court relied by the assessee's counsel in the case of A. Suresh Rao cited (supra) is a direct judgement applicable to the facts of the case. Being so, we have no hesitation in reversing the finding of the Ld. CIT(A) on this issue and direct the A.O. to consider the date of allotment of property i.e. 20.5.1986 for the purpose of determining the cost of inflation of the assets, while computing the cost of acquisition of property in terms of section 49 of the Act. This ground of the assessee is allowed. 12. Next ground for our consideration with regard to the non-granting cost of improvement, while computing the capital gain. The contention of the Ld. A.R. is that there was a building in the impugned property and the cost has to be considered while computing the cost of acquisition of the impugned property. 13. We have heard the rival submissions and perused the materials available on record and gone through the orders of the authorities below. There is no iota of evidence that there is an existing building in the impugned land. The only contention of the assessee is that assessee declared income from said property under the head "income from house pro....