“period of holding”
The decision most relied on for period of holding is CIT v. Jamnadevi Agarwal (328 ITR 656), cited in 230 judgments on BharatTax.
Leading authorities on period of holding
When faced with allegations of bogus long-term capital gains from penny stocks, the Assessing Officer must discharge the onus of proving that the assessee's transactions were not genuine. The assessee can rely on the principle of preponderance of probability, and the Revenue must present substantial evidence to establish that the transactions were a colourable device or that the assessee was an entry operator.
For capital assets acquired by gift or will, the indexed cost of acquisition under Section 48 is computed with reference to the year the previous owner first held the asset. The period of holding for determining if an asset is long-term also includes the previous owner's holding period, as per Section 2(42A).
A tenant holding over after the expiration of the lease term does not automatically create a new tenancy. A tenancy holding over under Section 116 of the Transfer of Property Act arises only if the lessor accepts rent after the lease period, otherwise the tenant's status is that of a tenant at sufferance.
The 20% tax rate under Section 112 applies to capital gains arising from the transfer of a depreciable asset, even if it is deemed a short-term capital gain under Section 50, provided the asset was held for more than 36 months. The fiction created by Section 50 for treating such gains as short-term does not alter the long-term nature of the asset for applying the tax rate under Section 112.
The period of holding a flat for capital gains purposes commences from the date of the allotment letter and the first installment payment, not from the later date of possession or registration.
For capital gains computation, the date of allotment of a residential unit under a construction scheme is the date of acquisition, not the date of agreement or possession. This applies even if possession is delivered later, as the allotment letter confers the right to hold the property.
A business concern can still be considered to be carrying on its business even if there are long intervals of inactivity, provided it is kept alive, retains its registered office, and holds meetings. It is not necessary for a business to have work constantly to be considered in existence.
The holding period of an asset, particularly a flat allotted by the DDA, commences from the date of the allotment letter, not the date of possession or subsequent sale deed registration.
