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TMI Blog2013 (12) TMI 1589X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,15,750/- besides other charges of Rs. 1,32,480/-. The assessee was required to sign the letter as a token of agreement with the Builder. The assessee duly signed the letter and allotment was given to assessee on 22.1.2005. Payment of Rs. 1 lakh was made by the assessee on 22.1.2005, Rs. 5,23,150/- on 26.1.2005 and the balance payment was made gradually. The assessee sold the said flat on 5.3.2009 as per agreement of sale dated 27.2.2009 and claimed deduction u/s 54F. In respect of long term capital gain so arose. However, the Assessing Officer did not accept the assessee's contention by observing that assessee has acquired the right in the said flat by way of agreement executed on 27.2.2009. Thus, the date of acquisition of the sad flat was taken by the Assessing Officer as on 27.2.2009 in place of date of allotment of flat vide allotment letter dated 22.1.2005. Precise observation of the Assessing Officer was as under :- 'The relevant portion of the A.O.'s findings is extracted as under:- 4. SHORT TERM CAPITAL GAIN VS. LONG TERM CAPITAL GAIN a. Long Term capital Gain: On examination and verification of returns and submissions filed by the assessee, it is notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of right i.e. 27.02.2009. e. Letter of Allotment dated 22.01.2005: In response, the assessee through its Counsel Shri Manish Mittal furnished a copy of allotment letter of said flat stating that "the assessee acquired interest in the said flat by way of right to purchase the said flat at the price agreed therein". It has further been plead that" the assessee had been allotted flat under consideration on 22.01.2005, conferring on him right to purchase the said flat.......The fact that an agreement for sale of flat was entered on 27.02.2009 does not affect the rights conferred on the assessee vide allotment letter dated 27.02.2009. Subsequently, a copy of certificate from the above named developer has also been furnished in support of claim of the assessee as to the acquisition of irrecoverable right from the date of allotment letter. f. Existence of Capital Assets: The assessee's plea as to the acquisition of rights from the date of allotment letter is not correct as there existed no capital assets as on the date of allotment letter in which the assessee could be said to have acquired so called right to purchase the said flat. The allotment of said flat was made only on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Raheja Universal Private Limited, Mumbai had acquired only the rights to develop from the land owners in 2003 and he had not fully paid off his agreed obligation as on the date of allotment to the land owner. Therefore, the transaction of transfer of rights between developer and land owners had not completed as on date of allotment. Hence, transfer of the right to the assessee by the right holder developer cannot be said to be clear and free from encumbrance as on the date of allotment letter relied upon by the assessee and uphill the completion of Project Property. In view of the discussion made in the foregoing pares, the assessee cannot be said to have acquired the right to purchase a flat from the date of allotment letter as claimed by him. The assessee has also relied upon the certificate dated 01.08.2011 issued by the developer. The developer is not, however, an authority to decide as to when the irrecoverable right had accrued to the assessee.' 4. By the impugned order, the ld. CIT(A) allowed assessee's claim for deduction u/s 54/54-F by treating the date of allotment as a date of acquisition for treating the flat as long term capital assets in the hands of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lapati Venkataramiah v. CIT [1965] 57 ITR 185 (SC), CIT v. Dr. V.V. Mody [1996] 218 ITR 1/85 Taxman 125 (Kar), CIT v. Dr. D.A. Irani [1998] 234 ITR 850/[2000] 111 Taxman 600 (Bom.) and also decision of I.T.A.T. Mumbai Bench Dy. CIT v. Kishore Kanungo [2006] 102 ITD 437. In view of these decisions, contention of Ld. Sr. DR was that agreement for sale executed on 27.2.2009 conferred " Right to purchase" on the assessee and no right was acquired vide allotment letter dated 22.02.2005. Accordingly, it was pleaded that flat so sold was held by the assessee for less than 36 months, therefore, the Assessing Officer was justified in treating the gain arose of sale of flat as short term capital gain. 7. On the other hand, Shri H.P. Verma and Ms. Sakshi Verma, appearing on behalf of the assessee contended that letter of allotment dated 22.01.2005 bestowed the right of flat on the assessee and after signing the said allotment letter, the assessee agreed for allotment and in consideration of which he has made payment of Rs. 1 lakh on the very same date and subsequent payment of Rs. 5,23,150/- was made on 26.1.2005 and so on. As per ld. Authorized Representative, the word "property " does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 payment as narrated above. Out of total payment of Rs. 33.15 lakhs, the assessee made payment of Rs. 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 builder has executed agreement with the assessee on 27.2.2009. The assessee has sold the said flat on 05.03.2009. Since the assessee has acquired all the rights in the flat on 22.01.2005, the period of holding is to be computed with respect to the date of allotment i.e. 22.01.2005. Taking the date of sale as 05.03.2009, the holding period of flat with the assessee was more than 36 months, therefore, there is no infirmity in the order of CIT(A) for allowing assessee's claim for exemption u/s 54/54F, by treating the capital assets so sold as long term capital assets. 11. In the result, the appeal of the Revenue is dismissed. 12. In the cross objection, the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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