SMT. PARULBEN S. SHAH,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-11(2), AHMEDABAD

By way of this appeal, the assessee appellant has challenged correctness of the order dated 24th March, 2015 passed by the learned CIT(A), in the matter of assessment under section 143(3) r.w.s. 147 of the Income Tax Act, 1961, for the assessment year 2010-11.

Grievances of the assessee, in substance, are that (a) learned CIT(A) erred in holding that the date of acquisition of the property sold by the assessee is required to be taken is 16.11.1998 (i.e. date of registration of purchase date) and not 22.07.1997 (i.e. the date on which purchase deed was entered into) and the indexed benefit was thus wrongly given as for F.Y. 1998-99 as against F.Y. 1997-98; and (b) learned CIT(A) erred in declining adjustment of Rs.5,00,000/- towards cost of improvement of the flat sold. Learned representatives fairly agree on the identification of above issues requiring my adjudication.

So far as the first issue is concerned, the relevant material facts are like this. During the relevant previous year, the assessee sold a residential flat. This flat was purchased by him vide purchase deed dated 22.07.1997 which was registered, in sub- Registrar’s office on 16.11.1998. The authorities below are of the view that it’s the date of registration of a document which really matters, and, accordingly, financial year 1998- 99 is treated as the year in which asset was acquired, and the indexation was computed

I have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position.

I have noted that it is not even in dispute that entire purchase consideration of Rs.9,00,000/- was paid, vide cheques dated 2nd May 1997, and the deed was entered into on 22nd July 1997, even though it was admittedly registered much later on 16.11.1998. The mere fact that registration has taken place on a later date does not obliterate the fact that purchase deed was executed on 22.07.1997, and rather ratifies that act and relates back to that transaction. I, therefore, uphold the plea of the assessee and direct the Assessing Officer to give indexation benefit for cost of purchases by treating 22.07.1997 as date of acquisition. To this extent, plea of the appellant is upheld.

As regards the claim for alleged cost of improvement at Rs.5,00,000/-, learned counsel for the assessee fairly conceded his inability to produce any evidence establishing, in even indicating, cost of improvement. In this view of the matter, this plea is rejected.

In the result, the appeal is partly allowed in the above terms. Pronounced in the open court today on the 15th day of October, 2018.