TaxTMI 
TaxTMI 
2020 (2) TMI 1626
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....te that the original assessment order dated 21.12.2016 has been passed u/s143(3) by the Ld. A.O. after due application of mind and after carrying out proper v erification with respect to the issue involved in proceedings u/s 263. Thus, invocat ion of provisions of section 263 of the Act on the basis of change of opinion is not at all justified. 3. The Appellant seeks leave to add, alter and amend the above grounds whenever required." 2. Original assessment in the case of the assessee was framed by the A.O, vide his order passed under Sec. 143(3) of Income Tax Act, 1961 (for short "Act‟), dated 21.12.2016. Subsequently, the Pr. CIT issued a "Show cause‟ notice (SCN) to the assessee therein calling upon him to explain as to why the assessment order passed by the A.O under Sec. 143(3), dated 21.12.2016 may not be revised under Sec. 263 of the Act. 3. As per the SCN, it was observed by the Pr. CIT that the assessee had during the year under consideration sold two flats i.e Flat Nos. 705 & 706, 7th Floor, Tower-B, Building No. 1, Oberoi Exquisite, Goregaon (East), Mumbai, vide two separate agreements dated 17/07/2013 (registered on 19/07/2013) and 21/05/2013 (registered ....
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.... Oberoi Realty Limited, did not vest any right to acquire the property with the asssessee, and only created an interest to acquire the same on the terms and conditions as would be laid down in the "agreement‟ to purchase. Also, it was observed by the Pr. CIT that the assessee had sold the Flat Nos. 705 & 706, 7th Floor, Tower-B, Building No. 1, Oberoi Exquisite, Goregaon (East), Mumbai, vide registered "agreements‟ dated 08.07.2013 and 19.07.2013, respectively, while they were still under construction. Observing, that the property sold by the assessee was still under construction and possession of the same was yet not handed over to him till the date of their sale, the Pr. CIT held a conviction that the same could not be treated as a long term capital asset under Sec.54/54F of the Act. It was further observed by the Pr. CIT, that as the assessee had neither received the possession of the aforesaid flats i.e Flat Nos. 705 & 706, 7th Floor, Tower-B, Building No. 1, Oberoi Exquisite, Goregaon (East), Mumbai, which were under construction, nor used the same for his residence for a period of 3 years, therefore, on the said count also he was not eligible for claim of deductio....
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....ed by the ld. A.R, that the assessee while substantiating his claim for deduction under Sec. 54 of the Act, had brought to the notice of the A.O that he had booked the Flat Nos. 705 & 706, 7th Floor, Tower-B, Building No. 1, Oberoi Exquisite, Goregaon (East), Mumbai, way back in the financial year 2009-10, and had thereafter paid the purchase consideration over the years. In fact, it was submitted by the ld. A.R that complete details of the payments towards purchase consideration of the aforesaid flats was duly reflected in the computation of income that was filed by the assessee along with his return of income. The ld. A.R also drew our attention to the reply dated 28.06.2016 [Page 5 of the assesse‟s "Paper book‟ (APB)] that was filed with the A.O. It was submitted by the ld. A.R that the assessee vide his said reply had filed with the A.O a copies of the "allotment letters‟ for the Flat Nos.705 & 706, 7th Floor, Tower-B, Building No. 1, Oberoi Exquisite, Goregaon (East), Mumbai, both dated 20.02.2010. Also, the copies of the "agreements for purchase‟ of the aforesaid flats dated 05.07.2013 (registered on 08.07.2013) and 04.05.2013 (registered on 08.05.2013....
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....the interest of the revenue, the ld. A.R relied on the judgment of the Hon‟ble Supreme Court in the case of Malabar Industrial Company Limited Vs. CIT (2000) 243 ITR 83 (SC). Also, in support of his claim that where two views existed in respect of an issue, and the A.O had taken one of the plausible view, then the CIT was precluded from exercising his revisional jurisdiction under Sec. 263 of the Act, reliance was placed by the ld. A.R on the judgment of the Hon‟ble Supreme Court in the case of CIT (Central), Ludhiana Vs. Max India Ltd. (2007) 295 ITR 282 (SC). Also, in order to support his claim that no infirmity did arise from the allowing of the assesse‟s claim for deduction under Sec. 54 of the Act, the ld. A.R relied on the order of the ITAT, Mumbai "D‟ bench in the case of Richa Bagrodia Vs. DCIT-12(3), Mumbai (2019) 175 ITD 552 (Mum) and ITAT, Mumbai "F‟ Bench, Mumbai in the case of ACIT vs. Smt. Vandanarama Roi (ITA No. 6173/Mum/2011), dated 07.11.2012. It was submitted by the ld. A.R, that in the aforesaid orders the Tribunal had concluded that in case of sale of flat it is the date of allotment of flat and not the date of handing over of poss....
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.... in the "agreement to purchase‟ the said property. In order to drive home his aforesaid view, it was observed by the Pr. CIT that the letter of allotment, dated 20.02.2010 merely mentioned the allotment of a particular property without specifying any details of obligations upon fulfilment of which the property was to be acquired and also the rights in lieu of the same. Apart from that, the Pr. CIT in order to buttress her claim that the assessee on the basis of the letter of allotment, dated 20.02.2010 was not vested with the rights as that of an "owner‟ of the aforesaid property, had therein referred to certain facts as were discernible from the letter of allotment viz. (i) that, the builder had the right to terminate the allotment at its sole discretion; (ii) that, neither the assessee was entitled to occupy nor the builder was liable to hand over the occupation of the property unless and until the assessee had made all the payments in accordance with the allotment letter; (iii) that, the assessee had agreed with the builder that he would not sell, transfer, deal with or otherwise dispose off in any manner whatsoever, the aforesaid property until 04.11.2011; (iv) that....
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....s issued to him by the builder i.e M/s Oberoi Realty Limited.; and (ii). that, the assessee had not yet obtained the "Occupancy Certificate" (OC) from the competent authority for the aforesaid property viz, Flat Nos. 705 & 706, 7th Floor, at Oberoi Exquisite, Goregaon (East), Mumbai, and the construction of the same was not yet completed, therefore, the house sold not being in a habitable condition was thus not eligible for deduction under Sec. 54 of the Act. 9. We have deliberated at length on the observations of the Pr. CIT and are unable to find ourselves to be in agreement with the same. Insofar the observation of the Pr. CIT that the aforesaid property viz. Flat Nos. 705 & 706, 7th Floor, at Oberoi Exquisite, Goregaon (E), Mumbai, were yet not complete at the time of their sale is concerned, the same does not find favour with us. On a perusal of the records, we find that the assessee had filed a "Completion certificate‟, dated 12/01/2011 issued by the Architects, wherein they had stated that the 7th Floor Slab had been completed. Apart from that, the assessee had filed with the A.O the copies of the "agreements to purchase‟ i.e dated 05.07.2013 (registered on 08.0....
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....order passed by him under Sec. 143(3), dated 21.12.2016. 11. We have deliberated at length on the aforesaid view taken by the Pr. CIT, and are of the considered view that the same could not have formed the basis for exercise of revisional jurisdiction by the Pr. CIT under Sec. 263 of the Act. As per the records to which our attention was drawn by the ld. A.R in the course of the hearing of the appeal, we find that the A.O while framing the assessment had raised specific queries as regards the entitlement of the assessee towards claim of deduction under Sec. 54 of the Act. For instance, the A.O vide his letter dated 28.10.2016 [Page 17 of "APB‟] had called upon the assessee to substantiate his claim for deduction under Sec. 54 of the Act, in the backdrop of the fact that both the purchase and sale of the property had taken place during the year under consideration itself i.e A.Y 2014-15. It was queried by the A.O, as under (relevant extract of the query letter) : "During the year under consideration you have sold two residential flats i.e flat No. 705 and 706 in Oberoi Exquisite. You have also worked out Long term capital gain (LTCG) and claimed exemption under section 54 o....
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....he issue that as to whether or not the A.O had taken one of the possible view as regards the entitlement of the assesse for claim of deduction under Sec. 54 of the Act. At this stage, we may herein observe that the view taken by the A.O that the date of allotment of the flats i.e 20/02/2010 was to be taken as the basis for calculating the period of the holding by the assessee, on the date of framing of the assessment was supported by the order of the jurisdictional Tribunal i.e ITAT, Mumbai Bench "F‟, Mumbai in ACIT, 18(3), Mumbai Vs. Smt. Vandana Rana Roy [ITA No. 6173/Mum/2011, dated 07/11/2012]. In the said case, the Tribunal had observed that the "date of allotment" was to be reckoned as the date for computing the holding period for the purpose of capital gains. Also, in the case of Richa Bagrodia Vs. Dy. CIT [2019] 175 ITD 552 (Mum), the jurisdictional Tribunal has held that in case of sale of flat it is the date of allotment of the flat and not the date of giving of possession of flat which has to be considered for computing the holding period of 36 months. We further find that the Hon‟ble High Court of Punjab & Haryana in the case of Madhu Kaul Vs. CIT & Anr. [20....