TMI Blog2014 (3) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... ition 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. - ITA 55/2014, C.M. APPL. 2383/2014 & 2384/2014 - - - Dated:- 14-3-2014 - S. Ravindra Bhat And R. V. Easwar,JJ. For the Appellant : Sh. Prakash Kumar and Sh. Sheel Vardhan, Advocates. For the Respondents : Sh. Rohit Madan, Sr. Standing Counsel. ORDER Mr. Justice S. Ravindra Bhat 1. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m capital gain. No deduction under Section 54 was allowed since it is available only in respect of long-term capital gains. The total income was thus assessed to be Rs. 32,10,145/-. The appeal against the order of the AO before CIT-A was dismissed by an order dated 25.11.2011, on the grounds that the rights in the apartment accrued to the appellant only when the apartment was purchased by the agreement dated 4.11.2004. It was also noted that only rights in the property and not title were transferred vide the agreement of 2.11.2007 as the assessee never had possession of the apartment. The assessee s second appeal before the ITAT was also dismissed vide order dated 27.02.2013 on the ground that no rights in the property accrued to the appellant/allottees on the date of filing of the application for allotment i.e. 31.7.2004, as notes 1 and 2 enclosed with the confirmation letter dated 06.08.2004 received in response to the allotment application states clearly that no rights to the property would accrue to the allottees until the buyer s agreement was signed and returned; the buyer s agreement was executed only on 4.11.2004. Consequently, the ITAT found that the capital asset was sold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asset means property of any kind held by an assessee, whether or not connected with his business or profession, but does not include xxx (42A) short-term capital asset means a capital asset held by an assessee for not more than thirty-six months immediately preceding the date of its transfer: xxx (47) transfer , in relation to a capital asset, includes, - (i) the sale, exchange or relinquishment of the asset ; or (ii) the extinguishment of any rights therein ; or (iii) the compulsory acquisition thereof under any law ; or (iv) in a case where the asset is converted by the owner thereof into, or is treated by him as, stock-in-trade of a business carried on by him, such conversion or treatment ; or (iva) the maturity or redemption of a zero coupon bond ; or (v) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882) ; or (vi) any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement dated 4.11.2004, which finding is subsequently confirmed by the ITAT by additionally relying on the receipts at the time of confirmation of allotment. Thus, in these facts, the question of whether the booking rights are a transferable capital asset is not contentious. The judgment in Ved Parkash (supra) is also consequently of no assistance in this matter since the reasoning therein turns on whether capital asset refers only to title to property as opposed to other rights/interests in the property. 8. This being the case, the only question that arises for consideration is 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. This Court is of the opinion 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Section 2(42A) of the Act, in any event only uses the term held and not owned , thus indicating that a capital asset need not only refer to full title over any property. Ved Parkash (supra) can thus be distinguished on two grounds, first, that in the instant matter, booking rights are sought to be sourced in the allotment application/confirmation letter and not in an agreement to sell, second, no right of possession or similar beneficial interest was conveyed to the assessee in the instant case when the application for allotment was made/confirmation letter was received. The agreement to sell was considered to be the source of a beneficial interest to the assessee in Ved Parkash (supra) only because the right of possession had been transferred to the assessee along with the agreement to sell.There cannot be any parity between the allotment application/confirmation letter in the instant case and the agreement to sell in Ved Parkash (supra), since the confirmation letter specifically states that no right of provisional allotment/final allotment will result from it to the assessee. 11. This Court is thus of the opinion that there is no legal infirmity in the order of the IT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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