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2018 (10) TMI 579 - ITAT KOLKATAEntitled to claim long term capital gain on transfer of rights in the Flats - Deduction u/s 54 against capital gains arising out of sale of flats - Legal right over property - AO in his assessment order mentioned that the flats were not in habitable condition in any manner and the assessee had not even got the possession letter from the builder before transfer/ relinquishment and therefore, the properties in question were not residential units on the date of transfer - Held that:- Read in the context of the definitions of "capital asset" and "transfer" the section carries no words of limitation to the effect that a transfer effected by a person backed up with a title passed on under a registered deed alone could be considered as resulting in a profit or gain assessable under section 45. All that the section looks at is the transfer of a capital asset held as understood under section 2(14) of the Act and under section 2(47) of the Act. AO failed to appreciate that the assessee has acquired a legal right in the capital asset in terms of Section. 2(47) of the Act r.w.s. 53A of the Transfer of Property Act 1882. The assessee was having legal right over the property and for this we have to note the definition of capital asset where the word used is "held" in the Section 2(14) read with explanation to Section 48 of the Act clearly depicts rights of the assessee over a capital asset and also specifies the benefit of indexation to be granted to the assessee on the basis of payments made by her for acquiring the said capital asset. In the instant case of the assessee, the right over the property was held by the assessee for the period of 36 months, therefore, on transfer of these properties the ‘long term capital gain’ has been offered by the assessee. The property is acquired is long term capital assets, therefore, the right over the property in question enjoyed by the assessee, the sale of the said property, the consideration was necessarily in the nature of Long Term Capital Gain. At the best, the date of provisional allotment letter dated 30.05.2007 for Upohar Apartment, Kolkata and in respect of two flats jointly held by her with four other persons at Diamond City South, Kolkata, the letter of provisional allotment issued by the builder on 11.04.2007,is to be considered as date of acquisition of right in the property. Thus assessee is entitled to claim long term capital gain on transfer of these Flats. - Decided in favour of assessee.
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