KARAN CHAUDHARY,KOLKATA vs. ITO, WARD-30(2), KOLKATA

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ITA 532/KOL/2020Status: DisposedITAT Kolkata08 February 2021AY 2016-173 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the rights in the property, acquired through an allotment letter, constitute a capital asset. Therefore, the profit from its sale should be treated as long-term capital gains.

What were the facts?

The assessee sold rights in a flat, acquired via an allotment letter in 2010, before taking possession. The profit from this sale was treated as income from other sources by the Assessing Officer.

What were the issues?

Whether the profit from the sale of rights in a property, acquired via an allotment letter, is taxable as long-term capital gains or income from other sources.

Which sections of the Income-tax Act were involved?

Section 45,Section 2(14)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, KOLKATA BENCH “SMC” KOLKATA

Before: Shri Sanjay Garg

आदेश /O R D E R The present appeal has been preferred by the assessee against the order dated 27.02.2020 of the Commissioner of Income-tax (Appeals)-8, Kolkata [hereinafter referred to as ‘CIT(A)’].

2.

The only issue raised by the assessee in this appeal is as to whether the income earned from the sale of right in the property / flat which was acquired by the assessee by way of allotment letter from the builder in the year 2010 would qualify as long term capital gains or under the head “Income from other sources”.

1.

Karan Chaudhary Vs. ITO, Wd-30(2), Kol. Page 2 3. The assessee applied for the flat and the allotment letter was issued by the builder in 2010. However, before taking the actual possession of the flat, the assessee transferred his rights in the said flat to some other person earning a profit of ₹21,27,200/-. As per the Income Tax Authorities, the assessee had not got the possession of the immovable property and that what was transferred only was the rights in the property. The Assessing Officer, therefore, held that since the rights in the property did not constitute “capital asset”, therefore, the income from the sale of rights in the said flat was liable to be assessed as income from “other sources”.

4.

Being aggrieved by the said order of the Assessing Officer the assessee preferred appeal before the Ld. CIT(A), however, could not succeed.

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