TaxTMI 
TaxTMI 
2023 (8) TMI 1334
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....hase agreement that the circle rate/ stamp value adopted by the Stamp Valuation Authority was to the tune of Rs. 2,42,12,415/-. Therefore, he asked the assessee as to why the difference of Rs. 31,12,415/- should not be added to her total income u/s 56(2)(vii)(b) of the Income Tax Act, 1961 (hereinafter "the Act"). And since the assessee did not submit any explanation/details in her support in response to the show cause notice, the AO added the difference of Rs. 31,12,415/-. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) who was pleased to grant partial relief to the assessee by taking note of the fact that the assessee had purchased the property jointly along with four co-owner. Therefore according to Ld. CIT(A) difference of Rs. 31,12,415/- should be apportioned in the hands of four (4) co-owners. So the Ld. CIT(A) found fault with the AO making the entire addition/entire difference of Rs. 31,12,415/- in the hands of the assessee rather than adding only 1/4th of the same. And therefore, he restricted the addition at Rs. 7,78,104/-. Still not satisfied with by the action of the Ld. CIT(A), the assessee is before this Tribunal. 4. I have heard both the parties ....
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....very kind which is not to be excluded from the total income under this Act shall be chargeable to income tax under the head "Income from other sources", if it is not chargeable to income-tax under any of the heads specified in section 14, items A to E. (2) In particular, and without prejudice to the generality of the provisions of sub-section (1), the following incomes, shall be chargeable to income-tax under the head "Income from other sources", namely: - (i).... (vi).... (vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1^st day of October, 2009 [but before the 1^st day of April, 2017]- (a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum; ^8[(b) any immovable property,- (i) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property; (ii) for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, the stamp duty v....
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....flat under consideration on 25.11.2011 and has paid part- consideration of Rs. 3,00,000/- by way of cheque on 15.11.2011. In this factual background, my attention was drawn to the decision of the Hon'ble Bombay High Court in the case of PCIT Vs. Vembu Vaidyanathan (ITA. No. 1459 of 2016) wherein the Hon'ble High Court had an occasions to answer the question as to whether the Tribunal rightly held that letter of allotment of flat be considered as an agreement to sell the flat for the purpose of computing whether that assessee correctly claimed long term capital gain (LTCG) or Short Term Capital Gain (STCG); and the Tribunal had accepted the LTCG claim of the assessee that the sale transaction was after three (3) years by taking into consideration the date of letter allotment of flat and not the date of registration of the property. Drawing my attention first of all to the decision of this Tribunal in the case of DCIT Vs. Shri Vembu Vaidyanathan (ITA. No.5749/Mum/2013 dated 28.10.2015) wherein the Tribunal upheld the action of the Ld. CIT(A) to adopt the date of allotment of the flat for calculation of LTCG claim. The Tribunal held in this regard as under: - "2. The first gr....
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....eement of sale executed by the developer in Nov. 2006 does not refer to the letter of allotment dt. 31 Dec. 2004. iv. Registration is mandatory under section 4(1) of Maharashtra Ownership Flats Regulation of promotion of construction, sale, management and transfer) Act, 1963. v. It is the date of registration that determines the rights of the purchaser and not the date of allotment. The allotment is subject to cancellation and changes but it is only a registered document which is capable of being enforced in a court of law. Hence the contention that date of allotment creates an asset in favour of the assessee is without any basis and devoid of merit. vi. The assessee is not entitled to indexation benefits on the cost of acquisition since the Capital gain is treated as Short Term Capital Gain. 2.4. On appeal, before the ld. Commissioner of Income Tax (Appeals) an elaborate discussion was made, wherein, various decisions from the Tribunal as well as from Hon'ble High Courts including Hon'ble jurisdictional High Court were considered along with CBDT Circular No. 672 dated 16/12/1993 and Circular no.471 dated 15/10/1986. The issue was decided in favo....
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....asset ". A contract for sale of land is capable of specific performance. It is also assignable. (See Hochat Kizhakke Madathil Venkateswara Aiyar v. Kallor Illath Raman Nambudhri, AIR 1917 Mad 358). Therefore, in our view, a right to obtain conveyance of immovable property, was clearly "property" as contemplated by section 2(14) of the I.T. Act, 1961." Unquote. If the totality of facts and the ratio laid down in the aforementioned cases are analyzed in the aforesaid case, the Hon'ble jurisdictional High Court even went to the extent that even right to obtain conveyance of property is a property as contemplated by section 2(14) of the Act. Even a mortgage is a capital asset because by the mortgaged, there is a transfer of interest in the property mortgage from the mortgagor to the mortgagee. Share of partner in a partnership concern is a capital asset as is transfer will give rise to capital gains. Likewise, a business as a going concern would constitute a capital asset within the meaning of section 45 of the Act. Route permits, for plying buses, issued by authorities under the Motor Vehicle Act, are property for the deprivation of which compensation is payable to the permit....
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....he question of law raised by the revenue was as under: - "Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in treating the gain arising from the sale of capital asset as Long Term Capital Gain without appreciating the fact that mere letter of allotment does not lead to creation of proper and effective right over the capital asset sought to be acquired but only on execution of an agreement spelling out all the exact terms and conditions for acquisition." (emphasis given by me) 8. And the Hon'ble High Court while answering the aforesaid question of law upheld the action of the Tribunal as under: - "1. This appeal is filed by the revenue to challenge the judgment of Income Tax Appellate Tribunal. We have considered the following question presented by the revenue:- "Whether on the facts and in the circumstances of the case and in law, the ITAT was justified in treating the gain arising from the sale of capital asset as Long Term Capital Gain without appreciating the fact that mere letter of allotment does not lead to creation of proper and effective right over the capital asset sought to be acquired, but....
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.... houses by co-operative societies or other institutions whose schemes of allotment and consideration are similar to those of D.D.A., similar view should be taken as was done in the board circular dated 15^th October, 1986. In the circular dated 16^th December, 1993 the board clarified as under: "2. The Board has considered the matter and has decided that if the terms of the schemes of allotment and construction of flats/houses by the co-operative societies or other institutions are similar to those mentioned in para 2 of Board's Circular No. 471, dated 15-10-1986, such cases may also be treated as cases of construction for the purposes of sections 54 and 54F of the Income-tax Act." It can thus be seen that the entire issue was clarified by the CBDT in its above mentioned two circulars dated 15^th October, 1986 and 16th December, 1993. In terms of such clarifications, the date of allotment would be the date on which the purchaser of a residential unit can be stated to have acquired the property. There is nothing on record to suggest that the allotment in construction scheme promised by the builder in the present case was materially different from the terms of a....