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Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD
Before: SHRI PRAMOD KUMAR&
PER Ms. MADHUMITA ROY - JM: The instant appeal filed by the Assessee is directed against the order dated 01.10.2014 passed by the Commissioner of Income Tax (Appeals) – XV, Ahmedabad arising out of the order dated 31.01.2014 passed by the Assistant Commissioner of Income Tax (O ), Circle – 9, Ahmedabad under section 143(3) of the Income Tax Act, 1961 (hereinafter referred as to ‘the Act’) for Assessment Year 2011-12. 2. The assessee, an individual filed his return of income declaring total income of Rs.43,47,210/- on 19.03.2012 which was processed initially u/s 143(1) of the Act. The matter was selected under scrutiny; notices were served Assessment Year 2011-12 upon the assessee on 10.09.2012 followed by further notices dated 03.09.2013, 13.09.2013 and 12.11.2013 due to change of incumbent. Ultimately, the assessment was finalized on 31.01.2014 rejecting the claim made by the assessee under section 54F of the Act.
The short point involved in this particular case is as to whether “holding period” of a capital asset is to be reckoned from the “date of allotment” or from the “date of possession” of the under lined capital asset.
The brief facts leading to this case is this that the assessee purchased an immovable property being Plot No.17 situated at Sector – II, in the residential scheme name ‘Ornate Park’ in the district of Ahmedabad allotment whereof was made on 15.02.2007. The said property was subsequently sold during the year under consideration on 04.08.2010. Since the property was held by the assessee for more than 36 months the said property was treated as long term capital asset. The assessee claim index cost of acquisition of Rs.16,41,191/- and index cost of improvement of Rs.15,02,943/-, the sale consideration was shown for Rs.61,00,000/-. Accordingly, Long Term Capital Gain (LTCG) of Rs.29,55,866 arose on such long term capital asset in terms of section 48 of the Act. Further the assessee acquired another property for her share of Rs.70,00,000/-. The exemption of capital gain was claimed u/s 54F of the Act in the return of income to the extent of the LTCG of Rs.29,55,866/-. The relevant purchase deed of the impugned property, the bills for cost of improvements and the allotment letter dated 15.02.2007 were duly submitted before the Assessing Officer in order to justify the holding of the property for more than 36 months by the assessee. It is pertinent to mention that the Nilam R Kataria vs. ACIT(O ) Assessment Year 2011-12 property was acquired by the assessee in the year 2005 by making payment of Rs.9,00,000/- through account payee two cheques drawn with the Bank of Baroda both dated 15.03.2005. However, such plea of the assessee was not found acceptable by the Learned Assessing Officer. Since the property was registered on 30.09.2009 the Learned AO was of the opinion that the assessee acquired the absolute ownership and title of the property on the date of registration of the same when the possession was handed over to the assessee. He thus treated the capital gain on sale of the said plot of land shown by the assessee in her return of income as Short Term Capital Gain (STCG) on the premise that such property was held by the assessee for less than 36 months. Ultimately, addition of Rs.49,02,300/- was made rejecting the deduction under section 54F of the Act. In appeal, the said order was confirmed by the first appellate authority. Hence, the instant appeal before us.
At the time of hearing of the instant appeal, the Learned Counsel appearing for the assessee submitted before us that both the authorities have proceeded on a wrong footing in determining the “holding period” reckoned from the “date of possession” i.e. on 30.09.2009 when the purchase deed was executed. The property was sold on 04.08.2010, thus the “holding period” was less than 36 months. But it is a well settled principle of law that the “holding period” in terms of section 2(42A) of Act is to be reckoned from the “date of allotment” and not the “date of possession”. He also relied upon the judgment passed by the Mumbai Tribunal in the matter of Anita D. Kanjani-vs-ACIT in ITA No. 2291/Mum/2015 as also in the matter of CIT-vs-Anilaben Upendra Shah reported in 262 ITR 657 (Guj) passed by the Hon’ble Gujarat High Assessment Year 2011-12 deletion of addition made by the authorities below. On the other hand, the Learned Representative of the Department relied upon the order passed by the authorities below.
We have heard the rival contentions made by the parties, we have also perused the relevant materials available on record and the judgment relied upon by the Learned Counsel appearing for the assessee. The letter of allotment dated 15.02.2007 as appearing at Page 35/A clearly states the following “… land shall be allotted to you after being converted in NA and after execution of sale deed in favour of association and on payment of decided amount which may please be noted” Page 29A to 29AC of the Paper Book contained the sale deed against the sale consideration of said Rs.9,00,000/- in respect of the property in question. Page 29/A/A of the Paper Book gives the details of the payment made by the assessee wherefrom it is evident that the assessee has paid the total amount of Rs.9,00,000/- by way of two cheques both drawn with the Bank of Baroda dated 15.03.2005; Cheque No 886512 Rs.6,00,000/- and Cheque No.885613 of Rs. 3,00,000/- to the vender of the said property. Thus we are of the view that in terms of the allotment letter the possession of the property was acquired by the assessee upon such payment made on 15.03.2005, though, the deed of sale was ultimately executed before the office of the