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Income Tax Appellate Tribunal, MUMBAI BENCHES “A”, MUMBAI
Before: Shri Mahavir Singh, JM & Shri Ramit Kochar, AM
आदेश / O R D E R
Per Mahavir Singh, JM :
This appeal by the assessee arising out of order of Commissioner of Income-tax (Appeals)-40, Mumbai in appeal No.CIT(A)-40/IT-723/2014-15 dated 01.03.2016. The only issue in this appeal of assessee is against the order of CIT(A) in taking the acquisition date as 15.12.2009 instead the claim of the assessee of acquisition of the property as 08.04.2008 and claim of long term capital gain and also deduction u/s 54F of the Income-tax Act, 1961 (hereinafter “the Act”). For this, assessee has raise following grounds:-
´1. On the facts and circumstances of case and law, the Ld.CIT(A) erred in confirming the gain arising on from transfer of property as Short Term capital gain instead of Long Term Capital Gain.
. Shri Aditya Anil Sejpal HUF. 2. On the facts and circumstances of case and law, the Ld.CIT(A) erred in not allowing the exemption under section 54F of Long term gain arose on transfer of property. 3. On the facts and circumstances of case and law, the Ld.CIT(A) erred in taking Period of holding from the date 15.12.2009 instead of 08.04.2008.”
We have heard rival contentions and gone through the facts and circumstances of the case. Briefly stated facts are that the assessee is a HUF. The assessee sold immovable property at Jogeshwari, i.e., a flat in a society, on 31.05.2011, which was purchased vide agreement dated 15.12.2009 and according to A.O. the period of holding was less than 36 months. The assessee claimed that this property was purchased on 08.04.2008 vide allotment-cum-reservation letter issued by the builder on payment of Rs.30,00,000. The total purchase consideration of this flat was Rs.76,87,900. The assessee claimed the sale consideration as long term capital gain amounting to Rs.80,53,000 and claimed exemption u/s 54F of the Act, by investing the same in new property at Vikhroli. According to A.O. the date of agreement to purchase, i.e., registered agreement should be taken as the date of purchase and hence he considered the holding period less than 36 months and treated the capital gain as short term. He also disallowed consequential claim of exemption u/s 54F of the Act. Aggrieved, the assessee preferred appeal before CIT(A), who also confirmed the action of the A.O.
We find that the assessee has given events of property under dispute, which read as under:-
. Shri Aditya Anil Sejpal HUF. Date Particular 03.01.2008 Appellant has booked a under construction flat (a right in property) for Rs.76,87,900/- from M/s.Panchratna Builder and make the first payment of Rs.10,00,000/-. 08.04.2008 Builder issued allotment cum reservation letter to the appellant for the allotment of flat. Till 8.4.08 appellant has made payment of Rs.30,00,000/- to the builder. 15.12.2009 Registered agreement of property was made. Till this date appellant has paid Rs.60,00,000/- out of Rs.76,87,900/- for the sale consideration of such property. The balance 16,87,900/- was remain due to builder. The right in such property is acquired by the appellant on 08.04.2008. Thereafter only for legal formality agreement of the property was registered on 15.12.2009. 31.05.2011 Appellant without taking the possession of flat sold the flat (i.e. right in property) to Mr.Vikram Gunjal by a registered agreement for Rs.1,27,62,100/- (total sale consideration was Rs.1,44,50,000/- however out of that Rs.16,87,900/- which was remain due to builder is paid by Mr.Vikram Gunjal to builder directly). 08.11.2011 Invested in residential flat on from Wadhwa Residency Pvt. Ltd. For Rs.1,65,32,500/-.
3.1 We find from the above events of property, which are not at all in dispute. The only disputed point is whether the date of acquisition can be considered i.e. when builder issued reservation-cum-allotment agreement to the assessee on a payment of Rs.30,00,000 or when a registered agreement of property was made. We find that this issue is covered by the decision of the Hon’ble Punjab & Haryana High Court in the case of Vinod Kumar Jain v. CIT (P&H) of 2000 dated 24.09.2010, wherein the Hon’ble High Court has held that once the assessee gets title to the property on the issuance of an allotment letter and the payment of installments is only a consequential action upon which the delivery of possession flows and in calculation of holding period, the period from the date of allotment and up to the date of possession will also be counted for the purpose of computation of . Shri Aditya Anil Sejpal HUF. capital gains. Similar view is taken by co-ordinate Bench of the ITAT Delhi Benches in the case of Praveen Gupta v. ACIT, wherein it is held as under:-
“Assessee can be said to have held the flat when he made the payment to the builder and received the allotment letter, and therefore, benefit of indexation of cost of acquisition of the flat has to be granted to the assessee from the date (1995) when he started making payment to the builder and not from the date of execution of conveyance deed in 2001. All the above decisions are uniform in concluding that the “date of allotment” is reckoned as the date for computing the holding period for the purpose of capital gains. The date of allotment in this case being 19.11.2001 and the date of sale is 23.8.2006, therefore, the holding period is much more than 36 months. In this case, the gains earned by the assessee on the sale of flat have to be computed as capital gains. Without prejudice, even if the date of possession, being 14.8.2003, is considered, the assessee is still entitled to the benefits of the Long Term Capital Gains. Therefore, in our opinion, order of the CIT(A) does not call for any interference. Accordingly, the grounds raised by the Revenue are dismissed.”
3.2 In view of the above precedents, we are of the view that the date of allotment is to be reckoned as the date for computing the holding period for the purpose of computation of capital gains. In the present case, the date of allotment being 08.04.2008 and the date of sale being 31.05.2011, therefore, the holding period is more than 36 months. In this case, the gains earned by the assessee on the sale of flats have to be computed as capital gains, but indexation is to be done on the basis of payment made proportionately. The Assessing Officer will also allow consequential exemption u/s.54F of the Act, in view of the assessee invested this sale proceeds in residential flat in Wadhwa Residency Private Limited for a sum of Rs.1,65,32,500. The A.O. will verify facts relating to investment of this sale proceeds in residential flats. In terms of the above, we restore the matter back to the file of the Assessing
. Shri Aditya Anil Sejpal HUF. Officer, who will consider the capital gain as long term and will allow consequential exemption u/s 54F after verification.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced on this 04th day of October, 2016. आदेश क� घोषणा �दनांकः को क� गई ।