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2019 (7) TMI 27 - HC - Income TaxLTCG v/s STCG - sale of industrial sheds - the assessee was put in possession of the sheds soon after it was allotted - date of allotment or date of registration is relevant for period of holding - CBDT Circular No.471, dated 15.10.1986 - HELD THAT:- Our view is strengthened by the decision of the Karnataka High Court in the case of Income Tax Officer Ward 6(1) vs. R.Sathyanarayana, [2007 (12) TMI 468 - KARNATAKA HIGH COURT] wherein, the Court took note of the fact that the assessee was put in possession of the property in 1992 and was enjoying the property as that of an absolute owner except to fulfill the terms and conditions of the lease-cum-sale deed. Assessee was enjoying the property as an owner and that he was put in possession of the property in terms of the agreement and such possession has to be treated as if he was enjoying the property under the part performance of the contract as defined under Section 53A of the TP Act. Thus, the Court held that if the assessee was enjoying the property under the provisions of the TP Act, it has to be considered the date of ownership from the date on which he was put in possession of the property. Accordingly, the Court held that the transaction has to be treated as a long term capital gains, as the assessee was enjoying the property for more than 36 months. We note from the circular is that the Board held that the date of allotment of the flat should be reckoned for the purposes of computing the capital gain. We would be well justified in applying the said decision of the Board to the case on hand also, though the present case does not relate to a residential accommodation. In any event, the terms and conditions of the agreement are more or less similar and both are wholly owned Government of Tamil Nadu Undertakings which have allotted the properties, that is, in the case of the assessee which has been allotted by the SIDCO and in the circular issued by the Board, it is an allotment by the Delhi Development Authority. Order passed by AO treating the industrial sheds as a short-term capital asset is incorrect and it should be treated as a long term capital asset and the gains arising therefrom should be assessed as low tax effect. - Decided in favour of the appellant/assessee.
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