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2019 (4) TMI 1479 - ITAT VISAKHAPATNAMCapital gain - LTCG OR STCG - part performance of contract - transfer of capital asset - vendors after receiving the entire sale consideration refused to execute sale deed - assessee had filed a suit for specific performance in Lok Adalat who directed the assessee to pay an amount to one of the vendors-Sri Boorugu Ramesh Babu and also directed all the vendors to execute sale deed or sale-cum-GPA - computation of period of holding of asset from date of payment of consideration or from date of GPA execution - HELD THAT:- We find that when the assessee paid substantial amount in the F.Y. 2005-06 and the assessee is having interest on the property, in our opinion, the Assessing Officer is not justified in treating the sale proceeds received by the assessee out of the sale of land dated 12/07/2012 as a short term capital gain. In this case, the assessee has paid the entire sale consideration and the vendors are not ready to execute, then he filed a suit for specific performance and the matter has been referred to Lok Adalat. Before the Lok Adalat, the vendors and vendee agreed for the terms and conditions which were entered in F.Y. 2005-06 and accordingly sale-cum-GPA was executed, therefore the transaction took place in the F.Y. 2005-06 and not on the date of execution of sale-cum-GPA executed. Hon'ble Bombay High Court in the case of Amarjeet Thapar (2018 (12) TMI 1151 - BOMBAY HIGH COURT] has observed that the assessee had entered into an agreement for purchase of the property in the year 1992. The sale deed could not be executed only because the appropriate authority refused to grant no objection certification and instead, ordered compulsory acquisition thereof. This order was declared as illegal and ab initio void by the High Court, the sale deed was ordered to be executed in favour of the assessee-petitioner, there is no reason for not to accept the assessee’s contention that the execution of the sale deed by virtue of the judgment of the High Court would relate back to the original agreement to sale. The petitioner was thus entitled to claim the benefit of cost indexation from the said date. When the assessee has already paid more than 80% of the sale consideration, it cannot be find fault with the assessee as the assessee has performed his duty by paying almost all the sale consideration. It is the duty of the vendors to have executed the sale deed. Under these facts and circumstances of the case, we are of the opinion that the judgment of the Hon'ble Bombay High Court squarely applies to the facts of the present case. - Decided against revenue
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