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TMI Blog2012 (12) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment proceedings noted that the assessee had declared long term capital gains of Rs.7,70,175/- from sale of flat. The said flat had been booked by the assessee vide agreement dated 11.4.1994. Subsequently, the assessee entered into agreement of purchase dated 8.4.1997. The payments for the flats had been made in instalments during the period 11.4.1994 to 28.2.2004 aggregating to Rs.8,66,325/-. The flat had been sold for a sum of Rs.16,50,000/- on 5.9.2005. The assessee had computed the indexed cost of acquisition of flat at Rs.11,46,940/- taking the holding period from 8.4.1997. The AO, however, observed that the assessee had made payment of final instalment on 28.2.2004 after which fresh agreement dated 28.12.2004 was entered into. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been sold at the construction stage itself. The AO also observed that the possession of the property is not given by the builder until the final payment was made. The assessee thus, had only right to acquire the property and had no right to enjoy the property as owner. The AO, therefore, did not accept the claim of the assessee that the holding period should be counted from the date of agreement. He, therefore, treated the gain as short term capital gain. While computing short term capital gain the AO adopted stamp duty value of Rs.19,98,568/- as sale consideration in place of actual consideration of Rs.16,50,000/- under provisions of section 50C and computed short term capital gain at Rs.11,19,243/-. 3. The assessee disputed the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he submissions made before the lower authorities that the assessee had acquired the rights in the flat vide agreement dated 8.4.1997 and agreement dated 28.12.2004 had been entered by the assessee only for the purpose of payment of proper stamp duty as in the previous agreement, there was shortfall of stamp duty. The assessee had entered into fresh agreement only to protect its interest as the builder had committed several irregularities in construction of the building. It was accordingly urged that the holding period should be counted from 8.4.1997. The ld. AR placed reliance on the judgment of Hon'ble High Court of Bombay in the case of CIT vs. Vimal Lalchand Mutha (187 ITR 613) and on the judgment of Hon'ble High Court of Madras in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g into second purchase agreement is that previous agreement dated 8.4.1997 was not properly stamped and, therefore, assessee had to enter into second agreement to safeguard its interest as the builder had committed several irregularities. The AO gave a finding that the assessee had not produced any evidence for taking possession of the flat and, therefore, he concluded that the assessee had acquired the flat only by agreement dated 28.12.2004 after making full payments. The flat had been sold on 5.9.2005. The AO, has held that the holding period of the flat was only about nine months and, therefore, he treated capital gain as short term capital gain. CIT(A) has given a finding that the assessee had produced evidence regarding taking possess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in that case the assessee had entered into formal purchase agreement in December 1978 and she had transferred her right, title and interest in the flat vide agreement dated April 1983. The Hon'ble High Court, therefore, held that the assessee had transferred the right in the flat after holding the same for more than 36 months and the gain was, therefore, long term capital gain. The right of the assessee in the flat vide agreement dated 1978 was only the right to acquire the flat which it appears had been transferred by the assessee in April'83. The right to acquire a flat is also an asset, transfer of which results into capital gain. In the present case, we are concerned with the transfer of flat itself as owner. The assessee got owner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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