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2019 (5) TMI 1386 - AT - Income TaxComputation of capital gain - LTCG or STCG - sale of properties - period of holding - date of holding of property reckoned from registered sale deeds OR completion/occupation certificate of the properties - HELD THAT:- The assessee should be deemed to be the owner of the properties from the date of execution of the registered sale deeds. The definition of short term capital asset u/s 2(42A) means a capital asset held by the assessee for not more than 36 months immediately preceding the date of its transfer. In the facts of the present case, the assessee having held the property from 23rd December 2005 till the date of transfer on 22nd January 2010, it has to be held as a long term capital asset. Merely because the occupation certificate was issued by the competent authority at a later stage, for whatever may be the reason, it will not mean that the assessee was not held the property from the date of execution of the registered sale deeds. The Hon'ble Jurisdictional High Court in Bina Indra Kumar [2014 (12) TMI 1110 - BOMBAY HIGH COURT] has held that even where the assessee has executed an agreement of sale, the date of holding of property has to be reckoned from the date of agreement of sale. While expressing such opinion, the Hon'ble Jurisdictional High Court did not accept the contention of the Department that the holding period of the property should be reckoned from the date of issuance of occupation certificate by the Municipal Corporation. Thus assessee was holding the properties from the date of execution of registered sale deeds i.e., 23rd December 2005. Hence, the assessee held the property for a period of more than 36 months prior to the date of transfer. That being the case, the gain derived from the sale of properties have to be assessed as long term capital gain. Deduction u/s 48(1) - cost of improvement and expenditure incurred in connection with the transfer of property - HELD THAT:- Claim of the assessee requires verification on the basis of evidences furnished by the Assessing Officer. If the assessee can demonstrate through supporting evidences that the expenditure was incurred prior to the date of sale of property, the deduction claimed can be allowed. Accordingly, we restore this issue to the Assessing Officer for fresh verification. As regards the pre–operative expenditure after verifying the details of such expenditure has submitted before us by the learned Authorised Representative, we are of the view that such expenditure is not in connection with the transfer of property but are routine expenditure related to the business of the assessee. Therefore, we agree with Commissioner (Appeals) that pre–operative expenditure is not allowable. Insofar as payment of brokerage and professional fee are concerned, assessee’s claim was disallowed mainly due to lack of any supporting evidence. AR has submitted that all the bills relating to such expenditure were filed before the Departmental Authorities. Without entering into the controversy whether supporting evidences relating to these expenditures were filed or not, we are inclined to restore the issue to the AO for enabling the assessee to justify its claim by furnishing supporting evidence - Appeal is partly allowed for statistical purposes.
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