9911796707
TMI Blog2015 (11) TMI 1010X X X X Extracts X X X X X X X X Extracts X X X X ..... earing No.219, 220, 221, 318 & 319 in the building named 'Platinum Techno Park', at Vashi. The AO asked the assessee to furnish the complete details in this regard. On perusal of the details, the AO observed that the assessee had agreed to purchase the above mentioned office premises for a consideration of Rs. 68,64,000/- and had paid an amount of Rs. 48,02,000/- as advance to the builder on 02.09.05. The assessee relied upon a provisional allotment letter dated 02.09.05 issued by the builder to the assessee in this respect. Thereafter, the builder got its building plan and specifications approved from Navi Mumbai, Municipal Corporation on 03.08.06 and thereafter issued a final allotment letter dated 04.08.06 to the assessee. The said building 'Platinum Techno Park' was being built specifically for activities related to information technology and as the assessee was not involved in the activity related to information technology, hence, it decided to sell/transfer its rights in the above mentioned office premises. On 17.12.08, it was informed by the builder to the assessee that the builder had sold rights of the assessee for a consideration of Rs. 1,18,64,000/-. The resultant surplu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced clause (3) which mentioned that 'the commencement certificate date 03.08.06 has been issued' could find place in the allotment letter dated 02.09.05. The facts itself speak that the above stated allotment letter dated 02.09.05 was in fact written/issued back dated after the issue of commencement certificate dated 03.08.06. The Ld. CIT(A) further observed that in both the letters dated 02.09.05 and 04.08.06, nowhere, the schedule of payment was mentioned, but, it had been simply stated that the same would be decided in agreement of sale to be executed in due course. Even the above letters did not talk about total consideration for the above stated '5 offices' nor was any date or time limit for entering into an agreement of sale specified. There was no mention of any obligation on the part of the assessee or on the part of the builder regarding the transactions in question. The Ld. CIT(A) further observed that there was neither any registered document nor any power of attorney given by the assessee to the builder for transferring his rights in the property in question. The assessee was not the signing party in any document executed for the transfer of his right to final purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22 ITR 594 (Bom), CIT v. Vijay Flexible Containers - 186 ITR 693 (Bom), K. R. Shrinath v. ACIT - 268 ITR 436 (Mad), J.K.Kashyap v. ACIT - 302 ITR 255 (Del), CIT v. Smt. Laxmidevi Ratani - 296 ITR 363 (M.P.), ACIT v. Hansaben Mehta - 90 lTD 44 (Mum) and Jagdish Chander Malhotra v. ITO - 64 lTD 251 (Del) which clearly held that even a right/interest in a property is a capital asset within the meaning of Sec.2(14) and the gain arising there from is chargeable to capital gains tax u/s 2(47) r.w.s.45. The Appellant also draws your kind attention to the decision of Jaipur ITAT in Jitendra Kumar Gupta v. ITO - (2008) 8 DTR (Jp) (Trib) 330 wherein the honourable bench concluded that "Assessee having advanced a sum of Rs. 7 lacs for purchase of a flat which deal could not fructify and assessee having received certain amount by way of settlement the transaction involved transfer of capital asset by extinguishment of right acquire the flat hence AO was justified in accepting the assessee's claim of capital gains and CIT's revisional order observing that the issue needed reconsideration could not be sustained." 6. Apart from that the Ld. A.R. of the assessee has submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er itself speak that the same is a fabricated one. Admittedly, no approval of building plan, necessary permissions and even commencement certificate was issued to the assessee till 03.08.06. The Municipal Corporation had issued commencement certificate and necessary approvals etc. only on 03.08.06. The so called office premises were neither in existence on 02.09.05 nor there was any likelihood of their existence on the said date as no site/building plan etc. were sanctioned by any competent authority. The work had not commenced on the said date which in fact, can be said to have commenced on 03.08.06 only. Mere making of payment by the assessee to the builder, even prior to sanction of the building plan itself, cannot be said to have yielded in a vested right in the assessee to get a property which was neither in existence at that time nor any process for construction of the same had started. Another peculiar fact of the case is that in the letters dated 02.09.05 and also in the letter dated 04.08.06 which is verbatim copy of the other, in the opening lines, it has been mentioned that the authorized user of the space allotted is "activity relating to information technology only". E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, the rights if any relating to the offices in question which were likely to be built by the builder had accrued to the assessee only on 04.08.06. However, there was no payment schedule of installments, any likely date of completion of the project or the balance consideration payable by the assessee agreed to between the parties. Even the assessee in its balance sheet, the copy of which has been furnished by the ld. AR during the course of arguments, has shown the amount paid for the purchase of the alleged office premises under the head "Loans, Advances & Deposits" not under the head "Fixed Assets" or "Investments", which itself show that the assessee never treated the alleged rights as its capital asset. The Ld. A.R. of the assessee has strongly relied upon the decision of the Hon'ble Delhi High Court in the case of "CIT vs. Ram Gopal" [2015] 55 Taxman.com 536 (Del.) wherein the Hon'ble High Court has held that even booking rights or right to purchase or rights to obtain the title of the property is also a capital asset for the purpose of provisions of section 2(47) read with section 54 of the Act. The Hon'ble Delhi High Court while holding so has relied upon the another de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d' that is "held" by the assessee. The Hon'ble Delhi High Court giving a wider interpretation has held that even the rights or interest in a property are kinds of property that are transferable capital assets. However, we find that the above proposition of law laid down by the Hon'ble Delhi High Court in the case of "CIT vs. Ram Gopal" (supra) as well as in the case of "Gulshan Malik vs. CIT" (supra) does not apply to the facts and circumstances of the case of the assessee. What the Hon'ble Delhi High Court has held that even the rights in the property are transferable capital asset. However, for that purpose, there should be a property in existence or even giving a wider interpretation there should be a property which is likely and apparently coming into existence e.g. if the construction of the flat is started and the flat is likely to come in existence. However, when there is no property in existence and nor any definite process for the creation of the same has started, how can the one get a transferable right or interest into such a fictional property which itself cannot be said to be even a "property". Therefore, the case law relied upon by the assessee is not applicable to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
