TaxTMI 
TaxTMI 
2016 (12) TMI 1911
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....der cannot be termed as erroneous and is not amenable to be revised u/s 263. 4. The Commissioner of Income Tax erred in holding that the gain on sale of property is Short Term Capital Gains ignoring the facts of the case that the Appellant was allotted the share in said land vide Deed of Allotment dated 16.12.2005 and as the property was sold on 22.4.2010, the property is Long Term Capital Asset and consequently the gain on the same is Long Term Capital Gain. 2. Brief facts of the case as noted by learned CIT in the order u/s 263 of the I.T. Act read as under : "The assessee had filed the original return of income for the assessment year 2011-12 on 28/10/2012 declaring total income of Rs. 18,10,610/-. In the computation of income, the assessee had shown sale of an immovable property being land held jointly with 32 other persons. The share on the same was shown at Rs. 1,23,21,982/- and capital gains were calculated at Nil. The computation of capital gain as per return is reproduced herewith- Long term Capital Gains Share in land 22/04/2010 (Sale Consideration) - Rs. 1,23,21,982 Less : Transfer expenses. &n....
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....e correct date of acquisition of the above property is 01/09/2009 and not 16/12/2005, as adopted by the assessee. It is amply clear that the ownership in the property devolves on the assessee w.e.f. 01/09/2009. i) It is also seen from the records that the instant property has been sold by the assessee vide deed of conveyance dated 22/04/2010 to M/s. TRIF Real Estate and Development Private Limited, Mumbai, and the possession thereof has also been handed over by the assessee on that date after the execution of deed. From the above, it is clear that the assessee had purchased the property on 01/0912009 and sold the same on 22/04/2010. The property has been Held by the assessee for .less than 36 months and, therefore, the gain accrued to the assessee is short term capital gain and not long term capital gain as claimed by the assessee in his return of income. As such, the assessee is not entitled to claim deduction u/s 54F of the I. T. Act, 1961 amounting to Rs. 1,02,39,1001-. ii;. In view of the-facts as narrated above; deduction allowed u/s 54F of the Act in the assessment order u/s 143(3) of the Act, needs to be withdrawn. 04 In view of the facts as narrated above, the or....
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....d of allotment dated , December 16, 200~ and executed between the said Society and its original members therein referred to as the Allottees of the Second part and certain members therein referred to as the Consentor Member of the Third Part, the said original members were allotted an undivided share and interest in the said land as per their interest and share and contribution for the purchase of the said land; iv) The deed of allotment dated 16/12/2005 referred to in the sale deed makes it very clear that the assessee alongwith the other members of the society became owners of undivided share in the said land on the date of the Deed of Allotment i.e. 1611212005 pertaining to F. Y. 2005-06 which has been accordingly correctly taken as the year of acquisition by the assessee in its return of income. v) The assessee further enclosed copy of Deed of Allotment dated 16/12/2005 and drawn the attention of this office to the para 1 to 3 of page 6 of the Deed of Allotment and submitted that from the above paras it is amply clear that the allottees including the assessee became the legal owner of the undivided share in the land vide the Deed of the Allotment dated 16/12/2005." 5. H....
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....ion." 7. Against the above order, assessee is in appeal before us. 8. We have heard both the counsel and perused the records. Learned counsel of the assessee submitted that the AO had during the original assessment proceedings examined the details of capital gains and had accepted the same after discussing it in detail in para 4 of the assessment order. Learned counsel further submitted that the assessee has received notice u/s 154/155 of the I.T. Act dated 10-08-2015 proposing rectification of order passed u/s 143(3) of the I.T. Act as under : "On perusal of records, it is seen that the property which was sold at Rs. 1,23,21,982/- was in the possession of Shree Maharaja Agrasen Cooperative Housing Society Ltd.. Till 01/09/2009 and it was transferred in your name on 01/09/2009 by the aid Society. Hence, for calculating the indexed cost of acquisition of the said property, F.Y. 2009-10 ought to have been considered instead of F.Y. 2005-06. Accordingly, the order U/s 143(3) is proposed to be rectified." 9. Thereafter upon assessee's response the AO passed an order u/s 154 dated 02-12-2015 dropping the proceedings u/s 154 of the I.T. Act. Learned counsel further submitted th....
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.... CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the Revenue, unless the view taken by the ITO is unsustainable in law. 12. Further more as regards the merits of the facts of the case is concerned, we find that the issue in dispute is whether agreement/deed of allotment granting of possession after completing all the payment formalities should be taken as date of transfer for the purpose of computation of capital gains or the date of registration of sale deed. We find that this issue is no more res-integra. Hon'ble Apex Court in the case of Shri Sanjeev Lal Etc. vs. CIT in Civil Appeal No. 5899-5900 of 2014 dated 01-07-2014 held as under : "In normal circumstances, the aforestated question has to be answered in the negative. However, looking at the provisions of Section 2(47) of the Act, which defines the word "transfer" in relation to a capital asset, one can say that if a right in the property is extinguished by execution of an agreement to sell, the capital asset can be deemed to have been transferred. Relevant portion of Section 2(47), defining the word "transfer" is as under: "2(47) "transfer", in relation to a capital as....
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....uct leading to no transfer of the property to the proposed vendee but that is not the case at hand. 22. In addition to the fact that the term "transfer" has been defined under Section 2(47) of the Act, even if looked at the provisions of Section 54 of the Act which gives relief to a person who has transferred his one residential house and is purchasing another residential house either before one year of the transfer or even two years after the transfer, the intention of the Legislature is to give him relief in the matter of payment of tax on the long term capital gain. If a person, who gets some excess amount upon transfer of his old residential premises and thereafter purchases or constructs a new premises within the time stipulated under Section 54 of the Act, the Legislature does not want him to be burdened with tax on the long term capital gain and therefore, relief has been given to him in respect of paying income tax on the long term capital gain. The intention of the Legislature or the purpose with which the said provision has been incorporated in the Act, is also very clear that the assessee should be given some relief. Though it has been very often said that common sense....