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2016 (2) TMI 346 - ITAT MUMBAI

2016 (2) TMI 346 - ITAT MUMBAI - TMI - Taxability of the sale of property as Short Term Capital Gains OR long Term Capital Gains - denial of exemption claimed u/s 54F - Held that:- Possession of the flat was given subsequently. The assessee then sold the flat on 05/07/1989. In the return of income the assessee disclosed the capital gain arising from the sale of flat as LTCG. The authorities below treated the capital gain arising there from as STCG. Their Lordships held that the capital gains ari .....

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onsequential acts that relate back to and arise from the rights conferred by the allotment letter. In this view of the matter, the transaction was held to LTCG.

Capital gains arising from sale of the said Flat No. 702, Mumbai Central, Mumbai by the assessee is to computed as LTCG as the period of 36 months is to be taken from 18/10/2005, i.e. the date of allotment to 11/12/2009 i.e. the date of sale. We accordingly uphold the order of the Ld.CIT (A) on this issue and dismiss the groun .....

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n held that it is obligatory on the part of the AO to draw the assessee’s attention to the lawful relief available and that if such exemption /deduction was otherwise available to the assessee, the same should be allowed. Finding no reason to interfere with the order of the Ld. CIT (A) in the matter, we dismiss the ground raised by Revenue. - Decided in favour of assessee - ITA No. 4559/MUM/2014 - Dated:- 13-1-2016 - SHRI JASON P. BOAZ (AM) AND SHRI RAM LAL NEGI (JM) For The Appellant by : Shri. .....

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iny. The assessment was completed u/s 143(3) of the Act vide order dt. 12/03/2013, wherein the total income of the assessee was determined at ₹ 60,85,170/-. On appeal, the Ld. CIT(A) vide order dt. 28/04/2014 allowed the assessee the relief claimed by it, by taxing the sale of a property as Long Term Capital Gains (LTCG ) and, also by allowing the assessee s claim for exemption u/s 54F of the Act. 3.1 Aggrieved by the order of the CIT(Appeals-27, Mumbai dt. 28/04/2014, the revenue has pref .....

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ground which may be necessary. 3.2 The Ld Dr was heard in support of the grounds raised and placed strong reliance on the findings in the order of the Assessing Officer (AO) on the above issues of taxability of the sale of property as Short Term Capital Gains and denial of exemption claimed u/s 54F of the Act. 3.2.1 Per contra, the Ld. AR supported the order of the Ld CIT(A) as being in order and prayed for the same to be upheld. It was submitted that in the year under consideration, the assesse .....

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a total consideration of ₹ 32,31,000/- from M/s Parekh Holdings. At the time of allotment of the flat No. 702 by the builders vide allotment letter dt. 18/10/2005, the assessee had already paid on amount of ₹ 10,00,000/- and the balance was to be paid subsequently in installments till possession. The Ld. AR submitted that the AO did not accept the assessee s computation of LTCG as he was of the view that since the agreement for purchase of the said that from Parekh Holdings was dt. .....

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. 3.2.2 The Ld AR submitted that as per settled law on this issue, the date of purchase of Flat No. 702, Mumbai Central, from M/s Parekh Holdings is 18/10/2005; i.e the date on which the builder issued the letter of Allotment of the said flat upon payment of ₹ 10,00,000/- on 02/09/2005 by the assessee. The said flat/property was sold by the assessed vide agreement dt. 11/12/2009 for ₹ 70,00,000/-(50C value was ₹ 82,83,000/-) and therefore according to the Ld. AR the assessee ha .....

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pport of the above proportion, the Ld. AR for the assessee placed reliance, inter alia, on the decisions of: (i) Ms. Madhu Kaul vs. CIT (2014) 363 ITR 54(P&H) (ii) Circular No. 471 dt. 15/10/1986; (iii) Smt. Vandana Rana Roy (ITA No. 6173/Mum/2011 dt. 07/11/2012; (iv) B.R. Associates Pvt. Ltd. (ITANO.2003/Del/2013 dt 30/06/2014) 3.2.3 In the light of the above judicial precedents and facts of the case on hand, it was prayed that the impugned order of the Ld. CIT(A) holding that since the afo .....

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med exemption u/s 54F of the Act on the investment made in purchase of another property, whereby the taxable Capital Gains was worked out at NIL. The period of 36 months was reckoned by the assessee from 18/10/2005, the date of allotment to 11/12/2009 the date of sale. On the other hand, the AO was of the view that since the date of agreement with the builder was 19/02/2009, the period of holding the property by the assessee being less than 36 months, the said transaction would be liable for STC .....

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the builders have confirmed to the assessee that pending formal sale agreement, Flat No. 702 in the aforesaid premises has been reserved for the assessee and have also recorded that in this regard they have received an amount of ₹ 10 Lakhs vide Cheque no: 0888570 dt. 02/09/2005 drawn on OBC Bank as part Payment. 3.3.2 We find that a similar factual matrix as in the case on hand has been considered and addressed by the co-ordinate bench of the ITAT Delhi Bench in the case of B.R. Associates .....

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after 27.06.2008. The said basis adopted by the AO cannot be countenanced because of the law laid down by various judicial precedents on the subject in hand and also it is factually incorrect to state that the flats were taken on possession by the assessee on or after 27.06.2008, for the simple reason that a perusal of the sale agreement itself would reveal that the flats were sold before the same were taken on possession by the assessee. 20 In the light of the aforesaid case laws, it is clear t .....

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ed 21.05.2006, which clearly refers to the progress in the construction of flat No. 702; and it is also reminder to the assessee to remit the rest of the part payment, which clearly goes on to substantiate the contention of the assessee that Flat No. 702, was in fact allotted to it and also to the fact that the construction of the said flat began soon after the first installment was paid by the assessee on 15.04.2006. Thus we find that the appellant had acquired the valuable right, title and int .....

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then sold the flat on 05/07/1989. In the return of income the assessee disclosed the capital gain arising from the sale of flat as LTCG. The authorities below treated the capital gain arising there from as STCG. Their Lordships held that the capital gains arising from the sale was LTCG. At para 7 thereof, their Lordships have observed that when the assessee paid the first installment on 04/07/1986 after allotment on 07/06/1986, this act conferred upon the assessee a right to hold the flat. The m .....

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