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

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”.

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”.

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