TaxTMI 
TaxTMI 
TaxTMI 
2019 (10) TMI 1544
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....and in allowing indexation accordingly. The appellant craves leave to add, alter or amend the ground as may be advised." 2. On the other hand the revenue had challenged the order passed by the CIT(A) on following grounds: "1. Whether on the facts and in the circumstances of the case and as per law, the Ld. CIT(A) has erred in treating the capital gains as Long Term Capital Gain which was assessed as Short Term Capital Gain by the Assessing Officer? 2. Whether on the facts and in the circumstances of the case and as per law, theLd. CIT(A).has erred in holding the Capital Gain as Long Term Capital Gain without appreciating the fact that the property in question was in possession of the original transferor (i.e. Bharat Diamond Bourse) vide Lease Deed dated 31.3.2010, as such any right over the property before 31.3.2010 could not arise in the case of the assessee ? 3. Whether on the facts and in the circumstances of the case and as per law,the Ld. CIT(A) has erred in accepting the date of allotment of area in the proposed structure in Bharat Diamond Bourse as the date of vesting of rights in that proposed premise without appreciating that on that particular date, i.e. on 3.1....
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....the head Short Term Capital Gain (STCG). In reply, it was submitted by the assessee, that as it had applied for the office premises at Bharat Diamond Bourse in the year 1991, and had along with the application made a payment of Rs.43,12,500/-, therefore, the subsequent transfer transaction was rightly brought to tax under the head LTCG. In sum and substance, it was the claim of the assessee, that as it had applied for the allotment of the property way back in the year 1991, therefore, its acquisition was to be related to the said point of time. A.O observed, that the assessee had worked out the total cost incurred for acquisition at Rs.4,05,45,078/-. After indexing the payments made for the premises and the parking space, the assessee had arrived at an indexed cost of acquisition of Rs.9,32,81,766/-. Also, it was observed by the A.O, that a provisional allotment of the property i.e EE6011, Bharat Diamond Bourse (alongwith parking space) admeasuring 5,750 sq. ft. was made to the assessee on 03.12.1999.. Apart there from, it was noticed by him that Bharat Diamond Bourse i.e the company which had allotted the occupancy rights to the assessee in itself had acquired the leasehold rights....
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....The revenue being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. The ld. Departmental Representative (for short "D.R.") took us through the facts of the case. It was submitted by the ld. D.R, that as the occupancy rights of the property were allotted to the assessee vide a registered document by Bharat Diamond Bourse on 02.08.2010, therefore, the said date was rightly adopted by the A.O as the of acquisition of the occupancy rights of the office premises under consideration. It was submitted by the ld. D.R, that the CIT(A) was in error in dislodging the well reasoned observations of the A.O. 7. Per contra, the ld. Authorized Representative (for short "A.R.") for the assessee submitted, that as the assessee had applied for allotment of the office premises with Bharat Diamond Bourse in the year 1991, and along with its application had also paid an amount of Rs.43,12,500/-, therefore, a right in respect of the property under consideration got vested with the assessee on the said date itself. Accordingly, it was submitted by the ld. A.R, that the assessee rightly adopting the date of booking of the property as the date of acquisition of the occupanc....
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....ion. 8. We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record, and also the judicial pronouncements relied upon by them. Admittedly, the assessee had way back in the year 1991 applied for allotment of office premises at Bharat Diamond Bourse. Along with the application, the assessee had also made a payment of Rs. 43,12,500/-. Subsequently, on the basis of lottery system a final and binding allotment of premises identified as Office No. EE6011 (built up area 5,750 sq. ft.) was allotted to the assessee. As observed by us hereinabove, the allotment of occupancy rights and shares of the Sec. 25 company in favour of the assessee were made on 02.08.2010 and 12.08.2010, respectively. It is the claim of the assessee that the date on which it had applied for allotment of the office premises at Bharat Diamond Bourse was to be reckoned as the date of acquisition of the property under consideration. On the contrary, it is the claim of the revenue, that the assessee had acquired the occupancy rights only pursuant to the registered document dated 02.08.2010. Rejecting the aforesaid view, the CIT(A) had....
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....oresaid facts, it can safely be concluded, that the A.O is not correct in observing that Bharat Diamond Bourse had acquired the leasehold rights of the land only on 31.10.2010. In the backdrop of the aforesaid facts, the claim of the A.O that Bharat Diamond Bourse had acquired the leasehold rights only on 31.10.2010 falls to ground. As regards the view of the A.O that as equity shares and occupancy rights in relation to the property were allotted in August 2010, therefore, the acquisition of rights in the property were bestowed on the assessee only from the said date, we are afraid does not find favour with us. In our considered view, for determining the holding period of the property, the date on which the valid title of the property was conferred upon the assessee would not be relevant. Admittedly, a valid title towards the aforesaid property was vested with the assessee on the basis of the registered document, dated 02.08.2010, however, the same would not be conclusive for determining the holding period of the property under consideration. On the basis of our aforesaid observations, we are unable to persuade ourselves to subscribe to the claim of the revenue that the acquisition....