TaxTMI 
TaxTMI 
2021 (4) TMI 455
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.... the Assessing Officer in considering the original asset sold by the appellant as short term capital asset on the facts and circumstances of the case. 4.The authorities below ought to have appreciated that the original asset sold by the appellant is a long term capital asset and accordingly a sum of Rs. 7,21,250/-could not have been taxed as short term capital gains on the facts a circumstances of the case. 5.The authorities below failed to appreciate that there existed an oral contract and certain rights in the property existed from the date of the allotment of the property and accordingly the date of allotment ought to be considered for calculating the period of holding on the facts and circumstances of the case. 6.The authorities below failed to appreciate that the appellant had paid a substantial portion of the cost of the asset at the time of the allotment i.e. in 1995-96 and hence substantially fulfilled her part of the contract thereby creating substantial rights in the asset on the facts and circumstances of the case. 7.The authorities below erred in law in disallowing the claim of Rs. 4,95,755/- being expenses incurred by the appellant f....
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.... was acquired by the appellant only after receiving the possession of the property. Hence the property in question do not become a long term capital asset and taxed the entire sale consideration as short term capital gains as per the provisions of section 2(42A) of the Act. 2.5.Firstly, it is submitted that the learned assessing failed to appreciate the fact that the appellant had made a total payment of Rs. 22,53,255/- as against the cost of acquisition allowed by the learned assessing officer of Rs. 17,57,500/-. The following is the chart which depicts the clear position of the claim of cost of acquisition by the appellant amounting to Rs. 22,53,255/-: Year_ Amount paid Indexed Cost Indexed Amount 50% Share 1995 - 96 16,75,900/- 281 32,86,195/- 2006 - 07 3,64,106/- 519 3,86,556/- 2007 - 08 2,13,249/- 551 2,13,249/- Total Cost of Acquisition 22,53,255/- 38,86,000/- 19,43,000/- Consideration received from sale of property 32,00,000/- 32,00,000/- 6,00,000/- Net Gain / Loss 9,46,745/- (6,86....
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....een issued from the account of the appellant. Copy of E- mail and bank statement enclosed. i. Courier, Postage, TTK service charges 19/06/2007 5,225/- j. Power of Attorney charges, travelling to Indian Consulate for attestation. 2,475/- Total cost of acquisition of flat 22,53,255/- 2.7 It is submitted further that the above mentioned payments which have been tabulated in the above chart are all allowable expenditure and which has been incurred in connection to the flat of the appellant. The learned assessing office erred in not treating the same for the purpose of arriving at the total cost of acquisition of the flat. The Act specifically allows the appellant to claim any expenditure incurred and incidental towards purchase or sale of the capital asset which the learned assessing officer failed to appreciate. 2.8. As regard to the issue whether the sale consideration received by the appellant is a long-term or short term capital asset, it is submitted that the physical possession of the property was given to the appellant by the developer only on 14/08/2006 but whereas the learned assessing officer failed to a....
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....at the property which the appellant has sold along with her husband jointly is a long term capital asset. Thus, the appellant humbly pray before your Honour to delete the addition made by the learned assessing officer of Rs. 7,21,250/- under the head short term capital gains for the advancement of substantial cause of justice. 3. The other ground is ground No.7 with regard to incurring expenditure by assessee for purchase and protection of the property should be considered as a part of the cost of acquisition. At this time Ld. A.R. has not put any serious objection on this issue. However, submitted that payment of commission by 2% of Rs. 16 lakhs worked out to Rs. 32,000/- on sale which was incurred by assessee to be reduced from the sale consideration. 4. Ld. D.R. submitted that there was only payment of advance by assessee for purchase of flat and assessee actually purchased the said property vide sale deed dated 11.8.2006 and the A.O. has considered this date as date of acquisition and for the purpose of computation of capital gain and if we consider this date, the A.O. is justified in determining the income on sale of flat as short term capital gain only. The advance paym....
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....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 ownership without transfer of title....
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....riented 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 short-term capital gain or a long term capital gain.' 10.1 Further, in the case of Richa Bagrodia v. Dy. CIT [2019] 103 taxmann....
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....s. Therefore, now the issue to 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 v. 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 v. Anilaben Upendra Shah [2003] 262 ITR 657 (Guj.) apart from other decisions of the Tribunal in the case of Jitendra Mohan v. ITO [2007] 11 SOT 594 (Delhi) and also another decision of the ITA T in the case of Pravin Gupta v. ACIT and the relevant propositions are....
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....flat when he made the payment to the builder 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- 112001 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 interfere. 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,....
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....reference to section 2(47)(v) of the Act and the 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." 6. Further, in the case of Sri Bhatkal Rama Rao Prakash in ITA No.2692/Bang/2018, the Tribunal vide order dated 04.01.2019 held as under: "8.We have heard the rival submissions. The dispute between the Assessee and the Revenue is as to whether the gain on sale of the RR Property which was obtained originally on 22.03.2001 on lease from the society which was subsequently conveyed absolutely by the society to the Assessee by a registered sale deed dated 31.08.2014 can be said to be a LTCG. 9.Sec.2(29B) of the Act defines Long term capital gain as follows:- "long-term capital ....
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....3.2001 has to be accepted, ITA No. 2692/Bang/2018 Page 5 of 17 keeping in mind the policy and object of the provisions giving exemption from levy of tax on capital gain. 12.The Hon'ble Karnataka High Court in the case of CIT Vs. Dr.Shakuntala ITA No.117 of 2006 judgment dated 19.9.2007 had to deal with a case where the Assessee got a site allotted in her favour by the Bangalore Development Authority (BDA) under a lease-cum-sale agreement dated 28.2.1981 and was put in possession of the site allotted. She got absolute sale deed from BDA only on 19.9.1996. She sold the property on 25.3.1997. The question before the Hon'ble Karnataka High Court was as to whether the capital gain can be regarded as LTCG or STCG. The case of the revenue was that the period of holding had to be reckoned from 19.9.1996 and the capital gain had to be regarded as STCG. The plea of the Assessee was that the holding period had to be reckoned from 18.2.1981 the date on which the Assessee got possession of the property under lease-cum-sale agreement was accepted by the Hon'ble Karnataka High Court. Similar decisions were rendered by the Hon'ble Allahabad High Court in the case of Smt.Rama Rani Kalia 35....
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....avoidance of capital gains liability by recourse to transfer of rights in the manner referred to above. A person holding the Power of Attorney is authorized the powers of owner, including that of making construction though the legal ownership in such cases continues to be with the transferor. The intention of legislature is to treat even such transactions as transfers and the capital gain arising out of such transactions are brought to tax. Further, the Circular No.4 71 goes to the extent of clarifying that for the purpose of Income-tax Act, the allottee gets title to the property on the issuance of the allotment letter and the payment of installments is only a follow up action and taking the delivery of possession is only a formality. In case of construction agreements, the tentative cost of construction is already determined and the agreement provides for payment of cost of construction in installments subject to the ITA No. 2692/Bang/2018 Page 7 of 17 condition that the allottee has to bear the increase, if any, in the cost of construction. Therefore, for the purpose of capital gains tax the cost of the new asset is the tentative cost of construction and the fact that the amount....