PHULCHAND RAMGOPAL AGARWAL LEGAL HEIR MR.PRADEEP AGARWAL,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 3(3), MUMBAI

Grounds of appeal are as below: 1. Ld. CIT(A) erred in law & on facts in confirming assessment order adopting the year of acquisition as F.Y.2011-12 holding rights over property was acquired on the date of execution of purchase agreement as against year F.Y.2010-11 without appreciating the facts that rights in property were acquired when substantial payment was made to builder against booking of the flat. 2. Ld. CIT(A) erred in law and on facts in confirming assessment order computing indexation adopting year of acquisition F.Y.2011-12 instead of F.Y.2010-11 in computing long term capital loss without properly considering the facts of the case and law applicable.

Facts in brief are that the assessee claimed Long Term Capital loss of Rs 1,28,25,955/-in respect of a flat purchased for Rs 5,84,00,000/-and sold for Rs 8,22,92,608/- on 12.03.2018. For acquisition, payments were made in instalments staring from 27.09.2010 to 31.03.2012 with major part paid in FY 2011-12.The property was booked at Bangalore by making advance booking payments on 27.09.2010 of Rs.3,47,00,000/- and Rs. 79,00,000/- on 31.01.2011. Total payment prior to date of registration was Rs 4,26,00,000/-.The agreement for purchase was formalised on 04.04.2011 wherein the schedule in Purchase Agreement total payment of Rs 4,26,00,000/- was acknowledged. Total cost of the flat was Rs 6,28,48,800/-.The assessee claimed indexation of the cost from FY 2010-11 as substantial payment Rs 4,26,00,000/-was made in that year while the Department allowed indexation from the year of agreement FY 2011-12 year in which it was registered. Issue for consideration here is P a g e | 3 A.Y. 2018-19

Before us, the assessee reiterated the contentions as made before the lower authorities. It is further submitted that it acquired interest in said property on 27.09.2010 pertaining to the FY 2010-11, when substantial payment was made and the said property being under construction, there was no agreement/allotment letter of that date. In the written submission reliance is placed on Radha Kishan Kungwani vs. ITO in ITA No. 1106/Jp/2018, dt. 19th Aug., 2020,Dhanraj Dhadda & Sons (P) Under the law, there is no requirement that any agreement should be in a particular form or be on a stamp paper or registered. It is also argued that for purpose of capital gains, date of allotment be date of acquisition, for determination of LTCA/STCA or benefit of investment u/s 54, 54F as held in the case of Vimal Chandlal Gupta, 187 ITR 613,Richa Bagadia 175 ITD 552, Mum, Keyur Hemant Shah 199 TTJ 388 Mum. Reliance is also placed on Shri Praveen. Gupta 137 TTJ 0307 (Delhi). 5. The ld.DR has placed reliance on the orders of authorities below.

We have carefully considered all the relevant facts of the case and find that although initial two payments aggregating to Rs 4.26 cr. were made in the FY 2010-11,the actual agreement was entered into only on 04.04.2011.Not even an allotment letter seems to have been issued to the assessee on making initial payments as evident from the contentions made and duly considered by the lower authorities. Therefore, there is no basis for claiming that the assessee became entitled to all interest, title, claims which shall be binding on the other party. It is only on execution of the agreement dated 04.04.2011 that such rights were vested in the assessee and not before it. The word “held” used in section 2(14) as well as Explanation to section 48 of the Act clearly depicts that assessee must have some right in the capital asset which is subject to transfer which is absolutely lacking in the instant case. We further find that none of the case laws relied upon lay down that only on the basis of payments without support of any allotment letter or agreement, the assessee would be become rightful owner in the said property. Accordingly, we do not find any reason to interfere in the matter and uphold the appellate order.

In the result, appeal of the assessee is dismissed. Order pronounced in the open court on 06.08.2025. SANDEEP GOSAIN PRABHASH SHANKAR (न्याययक सदस्य /JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER)