TMI Blog2014 (6) TMI 933X X X X Extracts X X X X X X X X Extracts X X X X ..... t No. 702. Therefore we direct the AO to allow the claim of long term capital loss on sale of right in Flat No. 702. However in respect to Flat No. 703 the same may be verified by the AO. Having said so we set aside the order impugned and direct the AO to decide the date of allotment of flat No. 703 in the light of evidence placed on record and any other enquiries deemed fit by the AO in this matter. Needless to say that adequate opportunity be granted to the assessee before passing any order in this aspect. - ITA No. 2003/Del/2013 - - - Dated:- 30-6-2014 - SHRI S. V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI A. T. VARKEY, JUDICIAL MEMBER Appellant by : Gautam jain, CA Respondent by : A Mishra, CIT DR ORDER PER A. T. VARKEY, JUDICIAL MEMBER This is an appeal preferred by the assessee against the order of the ld CIT(A), XXXII, New Delhi dated 23.01.2013 for the Assessment Year 2010-11. 2. The grounds of appeal are as follows:- 1. The ld CIT(A) erred on facts and in law to dismiss appellant s ground that the order passed by the Assessing Officer u/s 153A/143(3) of the Income Tax Act, 1961 is bad both on facts and in law. 2. The ld CIT(A) erred on fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Palms, Building No. 9, Wing-D at Akurli Road, Kandiwali (East), Mumbai. The Assessing Officer observed that the flats were purchased on 05.06.2007 and the possession was given after 27.06.2008. He, therefore, held that the flats were not owned by the assessee for more than 36 months prior to the date of sale on 16.07.2009. Therefore he treated the gain accrued as short term capital gains and not as long term capital gains as the asset was held for less than 36 months. The Assessing Officer computed the short term capital gains as under:- Sale consideration ₹ 1,30,90,601/- Less : Cost of acquisition ₹ 1,14,12,325/- Short term capital gain ₹ 16,78,276/- 9. Aggrieved by the said order of the Assessing Officer the assessee filed an appeal before the ld CIT(A) who was pleased to confirm the order of the Assessing Officer and dismiss this ground of appeal preferred by the assessee. Aggrieved by the said order of the ld CIT(A) the assessee is before us. 10. The ld AR, Shri Gautam Jain contended that the ld CIT(A) failed to appreciate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preamble and other terms of the agreement and submitted that it is explicitly stated that the assessee have been holding the said premises as the absolute and exclusive owners; and have sold all the rights, title and interest of the assessee in the said both premises to the transferor for the agreed consideration. And this would be evident from the terms of the sale agreement dated 16.07.2009, wherein the preamble it has been stated as under:- (iii) And in terms of the said agreement for sale dated 5th June 2007, the said Messrs. B.R. Associates Pvt. Ltd.(the transferors herein), have paid the full consideration amount to the said developers M/s Lokhandwala Construction Industries Ltd. However, the said M/s. B. R. Associates Pvt. Ltd. (the transferors herein), although they have been holding the said premises as the absolute and exclusive owners thereof, are yet to take possession of the said premises from the said Developers M/s. Lokhandwala Construction Industries Ltd. (iv) A Co-operative Housing Society of the Flat Owners of the said Building No. 9 of Whispering Palms XXclusive is yet to be formed by the said Developers M/s. Lokhandwala Construction Industries ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 014 CIT Vs. K Ramkrishnan (Pag 190-193 to JPB-II) 14. In the light of the aforesaid case laws it was pleaded by Shri Gautam Jain that addition of ₹ 16,78,276/- as short term capital gain by Assessing Officer which was confirmed by the ld CIT(A) should be deleted. The ld AR, also stated that the allotment of the two flats i.e. 702 and 703 in the building Whispering Palms, Building No. 9, Wing-D at Akurli Road, Kandiwali (East), Mumbai was allotted to the assessee and brought to our notice a letter dated 21.05.2006 which is extracted below:- M/s. B. R. Associates Pvt. Ltd. Date 21/05/2006 Essel House U.P.C. 10, Asaf Ali Road, New Delhi Pin Code 110002 Dear Sir, Ref Your Flat No. 702 In Building:Whispering Palms Xxclusive-D at Akurli Road, Kandivili (E) We have pleasure to inform you that PLINTH in the above referred building has been completed. As per the terms of the agreement you are required to make the payment as given below: Particulars Due Amount Interest Total amount 1. Earnest money 2,19,700.00 2,600.00 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since the said flats were not owned by the appellant/ assessee for more than 36 months before the sale took place, so the consideration for sale of Flats in the hands of the assessee could not attract long-term capital gains but it was a short-term capital gains; and computed it to ₹ 16,78,276/- and whereas, the claim of the assessee/ appellant was that the date of booking and first payment for the flats in question took place on 15.04.2006 and therefore that date should be reckoned for the purpose of calculating of 36 months as held by various Hon‟ble High Courts on similar matters. The short question before us is to decide, which date should be taken as the date of purchase for the purpose of calculating 36 months before sale of asset for the purpose of computing capital gains. Ld AR took our attention to page 57, 58 which is an application dated 15.04.2006 of the assessee for Flat No. 702 and Page No. 59 and 60 which is the Developers Statement of Account of flat No. 702. Copy of the ledger account of Flat No. 702 Construction (Developer) at Page 49 was also highlighted. Likewise the application form at Page 102-103 for flat No. 703 were shown. Statement of account o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he widest import and, subject to any limitation which the context may require, it signifies every possible interest which a person can clearly hold and enjoy. It was held that there is no reason or justification to give any restricted meaning to the word asset as defined. Section 2(e) of the Wealth-tax Act when the language employed shows that it was intended to include property of every description. Thereafter, he relied on the decision of the Hon'ble Bombay High Court in the case of CIT vs. Tata Services Ltd. (1980] 122 ITR 594, wherein it was held that the word property used in section 2(14) of the Act is the word of the widest amplitude and the definition is re-emphasized this by the use of the words of any kind . It was held that any right which can be called property will be included in the definition of capital asset , It was held that a right to obtain conveyance of immovable property is clearly property as contemplated by section 2(14) of the Act. The next case law referred to by the learned counsel is the decision of the Hon'ble Supreme Court in the case of Sunil Siddharthbhai v. CIT [1985] 156 ITR 509, wherein it was held that the expression transfer of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payment terms on which revenue has heavily relied are concerned, they are the pre-condition for getting physical possession but as far as the right to obtain conveyance subject to fulfillment of conditions is concerned, that condition has got no relevance. Therefore, in view of aforementioned decisions, we are of the considered opinion that the assessees got the legal possession of the property on 10-07-1990 in case of Shri Sharad Thadani and Shri Manav Thadani and in case of Ms. Mrinalini Thadani on the date when her name was also included as per the request of Shri Gullu Thadani. Admittedly, if these dates are taken as the date of possession, there is no dispute that the capital asset sold was a long-term capital asset. This problem can be viewed from one another angle also by taking a hypothetical situation. Supposing that this property would not have come into existence and prior to that itself the assesses preferred to sell the allotment letter per se for consideration. Whether this would have been covered within the purview of capital gain or not needs to address to in view of the definition of capital asset as per section 2(14). It cannot be denied that the allotment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke into account the date of allotment of the flat from the builder to the assessee, and it is pertinent to take note that from that date onwards the right to the said property is acquired by the assessee. In this case we find that the assessee had made the 1st payment for the flats (702 and 703) on 15.04.2006 and the said fact is corroborated by the letter written by the builder to the assessee dated 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 interest in property on 15.04.2006 for flat No. 702. Therefore we direct the AO to allow the claim of long term capital loss on sale of right in Flat No. 702. 21. However in respect to Flat No. 703 the same may be verified by the AO. Having said so we set aside the order impugned and direct the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X
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