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2014 (3) TMI 474 - HC - Income TaxTaxability of capital gains – STCG OR LTCG – Whether the booking rights to the apartment accrued to the assessee on the date of application for allotment/confirmation of allotment or on the date of execution of the agreement to sell i.e. the buyer’s agreement – Held that:- A right or interest in an immovable property can accrue only by way of an agreement embodying consensus ad idem - The nature of the right sought to be transferred here is the right to purchase the apartment and obtain title, termed “booking rights” - Only that agreement which intends to convey these rights according to both parties can be considered as the source of accrual of rights to the assessee - the Builders do not intend to convey any right of provisional/final allotment or any right to claim title/ownership under the confirmation letter - There being no intention to convey rights in this document, it would be impermissible for the Court to find that the right to obtain title/“booking rights” emanated from the confirmation letter - These rights may only be located in the Buyer’s agreement - the date of acquisition of the capital asset must be considered the date of signing of said agreement i.e. 4.11.2004 – thus, the capital asset in the form of these rights was held for a period of 35 months and 28 days, i.e. a short-term capital asset thus rendering the profits from the transfer of this capital asset taxable as short-term capital gains. It is incorrect to say that the assessee had no right or interest in the property until the completion of payment of all instalments under the agreement as the assessee was a beneficial owner from the date of signing the agreement, having been put in possession of the property as of that date - Section 2(42A) of the Act only uses the term “held” and not “owned”, thus indicating that a capital asset need not only refer to full title over any property – thus, there is no infirmity in the order of the Tribunal – Decided against Assessee.
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