MR. DEBARSHI SENGUPTA vs. THE ASSISTANT COMMISSIONER OF INCOME TAX

The assessee is in appeal under Section 260-A of the Income Tax Act, 1961 (for short, ‘1961 Act’) challenging the order passed by the Income Tax Appellate Tribunal ‘B’ Bench, Bengaluru (for short, ‘the Tribunal’) in IT(IT)A.No.618/Bang/2023 dated 04.12.2023 for the assessment year 2011-12.

The assessee filed return of income for the assessment year 2011-12. The assessee has purchased a flat in the year 2006 which was registered in 2008 and the

The assessee preferred appeal before the Commissioner of Income Tax (Appeals) (for short, ‘CIT(A)’) by producing additional evidence to establish the date of purchase of the capital asset in question. The CIT(A) by order dated 27.06.2023 rejected the claim. The Tribunal at the instance of the assessee under impugned order rejected the appeal by holding that the assessee purchased the capital asset under deed of apartment dated 22.09.2008 and the sale was on 22.02.2011, before expiry of 36 months/three years, hence, the assessee is not entitled to long term capital gain.

Learned counsel Sri.Balram R. Rao appearing for the assessee submits that in view of the law prevailing in the State of Maharashtra, the appellant/assessee was put in possession of the flat/capital asset on 25.03.2006. Thereafter, the appellant/assessee has continued to pay electricity and property tax. The formal deed of transfer was made by deed of apartment dated 22.09.2008. The assessee has sold the property on 22.02.2011. It is submitted that, the date of possession in the year 2006 ought to have been considered instead of the deed of apartment executed on 22.09.2008 to determine the long term or short term. Learned counsel submits that the CIT(A) and the Tribunal failed to consider the evidence placed on record namely, the possession letter and property tax paid to municipal corporation in support of the case of the assessee. Hence, learned counsel prays this Court to remand the matter for re-consideration by the Tribunal.

Learned counsel inviting to the compilation of papers filed on 13.08.2021 submits that these documents are part of the record before the Tribunal. The said submission of the learned counsel is placed on record.

Per contra, learned senior standing counsel Sri.E.I.Sanmathi, appearing for the respondent/Revenue submits that the appellant/assessee in the registered deed of apartment dated 15.11.2010 acknowledges the possession as on that date. Hence, the said date is to be counted for determining the period of holding of the capital asset. Learned counsel further submits that the registered document prevails over the letters issued by the builder.

Having considered the submissions of the learned counsel appearing for the parities, the short dispute is the date to be reckoned for computing the period of holding of capital asset. According to the assessee, it is from 25.03.2006, whereas according to the Revenue, it is on 22.09.2008, the deed of apartment.

We have perused the additional material placed by the assessee before the CIT(A) and the Tribunal. The letter dated 25.03.2006 indicates that the builder has placed the appellant/assessee in possession of the flat No.A-202 on 25.03.2006 and the same is acknowledged by the assessee. Further, the builder has filed application to Pune Municipal Corporation seeking partial occupancy of the building, which request was granted on 08.03.2006. The partial occupancy certificate includes that No.202 i.e., the Capital asset in question. It appears, thereafter Possession Letter dated 25.03.2006 is issued. Further, the assessee has paid property tax from 2006 onwards to Pune Municipal Corporation.

However, the deed of apartment has recital recording handing over possession and acknowledgement of possession on the date of deed of apartment. The Assessing Officer, the CIT(A) and the Tribunal by placing reliance on the recitals in the deed of apartment held that