TMI Blog2016 (7) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... get the possession/conveyance of the said flat in favour of the assessee from the said builder. A tripartite agreement was executed vide which the assessee, with the consent of the builder, had agreed to sale his rights in favour of the third party. So far as the observation of the AO that the assessee had to exercise his option within 30 months, the Ld. A.R. of the assessee has brought our attention to the relevant part of the assessment order wherein the assessee had explained to the AO that the time period for exercise of option was extended by the builder to 40 months vide its letter dated 01.07.07 Even otherwise, the assessee had booked the flat, paid earnest money, paid installments at certain stages of the completion of the building as per the schedule of the allotment letter, hence under such circumstances a definite right had accrued to the assessee to get the possession and conveyance of the flat in her favour. Hon’ble Bombay High Court in the case of “CIT vs. Vijay Flexible Containers” (1989 (9) TMI 16 - BOMBAY High Court ) wherein the Hon’ble Bombay High Court has held that the right to obtain conveyance of immovable property is a capital asset and giving up of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty in her name or in the name of her nominee which was to be exercised within 30 months of the date of the allotment letter. That the said letter was dated 31.01.05 and the period of 30 months had lapsed on 31.08.07 and since the period of 30 months had lapsed and the assessee had not entered into an agreement with the builder for the purchase of said flat, hence no rights had accrued to the assessee in the said flat. He therefore held that the entire receipt on sale of said property could at the most be considered as being return of advance in nature of income under section 56 of the Act. That there was no property in existence or right of the assessee in such a property and hence no capital asset was sold by the assessee and thereby no capital gains had been earned by the assessee. Therefore, the benefit under section 54F was not available to the assessee. He accordingly taxed the difference between the amount paid and amount received by the assessee as income from other source calculated at ₹ 36,57,428/-. Aggrieved by the order of the AO, the assessee preferred appeal before the Ld. CIT(A). 4. The Ld. CIT(A), considering the submissions of the assessee and going throu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uses (v) and (vi), immovable property shall have the same meaning as in clause (d) of the section 269UA. The meaning of immovable property under section 269UA has been defined as; (i) any land or any building or part of building, and includes, where any land or any building or part of a building is to be transferred together with any machinery, plant, furniture, fittings or other things, such machinery, plant, furniture, fittings or other things also. Explanation. - For the purposes of this sub-clause, land, building, part of a building, machinery, plant, furniture, fittings and other things include any rights therein: (ii) any right in or with respect to any land or any building or a part of a building (whether or not including any machinery, plant, furniture, fittings or other things therein) which has been constructed or which is to be constructed, accruing or arising from any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other AOP or by way of any agreement or any arrangement of whatever nature), not being a transaction by way of sale, exchange or lease of such land, building or part of a building . 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oney before 14.06.04 and the remaining amount was paid as per the schedule of the installments given in the allotment letter. The period of the said installments paid as observed above was running into four years. The assessee had to pay the installments at the different stages of the construction of the property/flat in question e.g. on the completion of first slab; on the condition of third slab; on the completion of 11th slab and so on and the last installment was payable on possession of the flat being given to the assessee. From the above circumstances it clearly reveals that while making the payment to the builder, the intention of the assessee was not to earn any quick profits but the purpose was of investment. The assessee not only paid the earnest money in the year 2004 but subsequently paid installments to the builder at certain stages of the completion of the construction. However, before the possession of the flat being offered to the assessee, the assessee decided to transfer his rights to a third party at some profit. The said profit was treated by the assessee as capital gains. From the facts narrated above it clearly reveals that the payment made by the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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