TMI Blog2016 (7) TMI 604X X X X Extracts X X X X X X X X Extracts X X X X ..... 7-7-2016 - SHRI A.D.JAIN, JUDICIAL MEMBER For The Appellant : S/Shri Sanjay Kapadia and Navinkumar Mishra For The Respondent : Shri Ajay ORDER PER A D JAIN (JM) This is assessee‟s appeal for assessment year 2007-08 challenging the order of ld.CIT(A) dated 26.12.2014 upholding the penalty levied by the AO of ₹ 9,25,650/- u/s 271(1)( c ) of the Income Tax act, 1961. 2. The brief facts of the case are that the assessee is an individual and had filed return of income on 24.3.2008 declaring total income of ₹ 1,74,236/-. Assessment was completed u/s 143(3) of the Income Tax Act, 1961 on 29.12.2009 at a total income of ₹ 29,24,240/-. During the course of assessment proceeding, it was revealed that the assessee had sold one immovable property and shown the gain from that property as Long term capital gains and claimed exemption u/s 54F. During the course of Assessment proceedings, the AO observed that the holding period of the said property had been shown as more than 36 months. The possession of the said property was taken by the assessee on 30.4.2003 and it was sold on 11.5.2006. Therefore, the assessee calculated the period of holdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim of the appellant that she received possession of the flat on 30-04-2003 on payment of advance of ₹ 9,500/- is far fetched and is not accepted by the Assessing Officer, the CIT(A) as also the ITAT. All these authorities have held that the gains arising from the sale of this flat are short term and not long term as claimed by the appellant. The action of the appellant of claiming the gains as long term on the basis of letter from the seller was found to be a self serving document with no evidentiary value, even by the ITAT. During appellate proceedings, the Authorized Representative could was actually received on 30-04-2003 as claimed. In any case, ownership of the flat and the period of holding is determined by the date of registration of deed of conveyance, as has been held in number of court decisions which in the present case renders the capital gains as short term. The action of the assessee of stretching the period of holding to the date of possession, which in any case has not been accepted by any authority and not supported by any evidence, is an effort to reduce the tax liability by claiming the capital gain as long term and claiming deduction u/s.54F therefrorn. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee has stated the date of possession to be 30.4.2003, which does not find any support from the letter/affidavit of the seller of the property, which has no evidentiary value. 6. I have heard the rival contentions and have perused the material placed on record. The issue is as to whether for the purpose of calculating the date of purchase, the date of allotment is to be considered, or the date of registration. This aspect has been duly considered in various decisions, as relied on by the assessee. In these decisions, it is the date of allotment, which has been held to be the relevant date for the purpose of calculating the date of purchase. That being so, the factum of assessee‟s contention being that she had purchased the flat on 30.4.2003, which remains unsupported, but for the affidavit of the seller, would not be decisive so far as regards the levy of concealment penalty. It is an issue on which the assessee entertains a particular belief, which is not the belief of the taxing authorities and which view, being judicial supported, as above, cannot be said to be an implausible or impossible view. As such, it is a debatable issue, on which, concealment penalty, in my co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er was issued and advance amount/booking amount was paid to the builder. The case of the assessee also find strong support from the decisions cited before us during the course of hearing. In the case of Smt.Lata G Rohra (supra), the Tribunal has held as under : As per section 2(14), read with section 2(14)(vi), the rights in flat, acquired by the assessee on execution of purchase agreement on 7-8-1993, came within the purview of the term capital asset‟. From the perusal of language used in Explanation (iii ) to section 48, which provides for manner of computation of indexed cost of acquisition, it is apparently clear that it refers only to date of cost of acquisition of the asset and not actual payments made by the assessee. Hence, there was no merit in the contention of the revenue that the benefit of indexation should be given on the basis of dates of actual payments made by the assessee. Thus, on merits, the issue was covered in favour of assessee. However, regarding jurisdiction for invoking the provisions of section 263, it was found that the assessee filed necessary details before the Assessing Officer and the Assessing Officer had passed assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e‟s appeal. On appeal to the High Court : In the case of Ved Prakash and Sons (supra) it has been held by the Hon‟ble Punjab and Haryana High Court as under : 14. We find no merit in this contention of learned counsel. As is clear from a bare reading of Section 2(42A) of the Act, the word owner has designedly not been used by the Legislature. The word hold , as per dictionary meaning, means to possess, be the owner, holder or tenant of (property, stock, land ....). Thus, a person can be said to be holding the property as an owner, as a lessee, as a mortgagee or on account of part performance of an, agreement, etc. Conversely, all such other persons who may be termed as lessees, mortgagees with possession or persons in possession as part performance of the contract would not in strict parlance come within the purview of owner . As per the Shorter Oxford Dictionary, edition 1985, owner means one who owns or holds something; one who has the right to claim title to a thing. 15. The apex court in the case Jagdish Chand Radhey Shyam v. State of Punjab, AIR 1972 SC 2587 ; [1972] PLJ 566, while examining the provisions of the Capital of Punjab (D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee on 22-1-2005, when he was given letter of allotment which clearly described the precise number of flat so allotted to him. As per the provisions of section 2(47)(ii), Transfer in relation to capital assets includes the extinguishment of any right therein. This letter of allotment extinguishes the rights of builder in the said flat in favour of the assessee in respect of this flat and by signing the letter of allotment, the assessee agreed to buy the same and for which payment was also made according to the letter of allotment. [Para 9] Board vide Circular No. 672 after referring Circular No. 471 extended the facility of exemption under sections 54 54F in respect of allotment of flat/house. Thus, as per the CBDT Circular also, the assessee acquired the rights/title in the flat by way of allotment letter on 22.1.2005. This allotment letter was duly confirmed by the assessee by making various payments. Out of total payment of ₹ 33.15 lakhs, the assessee made payment of ₹ 6.23 lakhs in the month of allotment itself i.e. January, 2005. Subsequent payment was also made as per the terms agreed with the builder. Only after receipt of entire amount, the buil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion as aforesaid and recompute the long-term capital gains taxable in the hands of the assessee accordingly. [Para 9] In the case of CIT V/s K Ramakrishnan (2014) 363 ITR 59(Del), the Hon‟ble Delhi High Court has held as under : 3. In this case, the assessee acquired possession of the plot on December 12, 2005, and sold through a registered sale deed dated January 9, 2008. This court is of the opinion that having regard to the findings recorded by the Tribunal, the assessee had acquired the beneficial interest to the property at least 96 per cent. of the amount was paid, i.e., by October 3, 1999. This court is supported in its findings by a Division Bench ruling of the Punjab and Haryana High Court in Mrs. Madhu Kaul v. CIT [2014] 363 ITR 54/43 taxmann.com 417. The case law relied upon by the ld.DR in this case are distinguishable on facts and are not applicable to the present case, we therefore, respectfully following the ratio laid down in the above decisions relied on by the ld.AR hold that the assessee acquired the ownership right in the flat on the date of letter of intent when the assessee booked the flat and paid booking amount and not on the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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