TMI Blog2016 (8) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the flat. In our view the assessee is entitled for deduction u/s 54 of the Act and assessment of this transaction is to be made in assessment year 2012-13 and not in assessment year 2011-12. We direct the AO accordingly. Appeal of the assessee is allowed partly in favour of assessee. - ITA No. 98/MUM/2015 - - - Dated:- 22-7-2016 - Shri Mahavir Singh, Judicial Member And Shri Rajesh Kumar, Accountant Member Appellant by : Shri K.Gopal/Jitendra Singh Respondent by : Shri Sudhamshu Shekhar ORDER Per Mahavir Singh, J. M. This appeal by the assessee is arising out of the order of CIT(A)-34 Mumbai in Appeal No.CIT(A)-34/ITO-19(2)(3)/IT-299/13-14 dated 8/12/2014. Assessment was framed by ITO, Ward 19(2)(3) Mumbai u/s 143(3) of the Income Tax Act, 1961 ( in short the Act ) for the assessment year 2011-12 vide his order dated 29/11/2013. 2. At the outset, Ld. Counsel for the assessee filed revised grounds of appeal because the original grounds filed by him were argumentative in nature. To this, Ld. Sr. D.R has not objected. Ld. Counsel for the assessee also filed additional grounds of appeal stating that the CIT (Appeals) erred in not appreciating the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l ground should not be entertained and for this he also relied on the case law of National Thermal Power Company (supra). He read out the following from the judgment: The Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also. In reply of the above, Ld. Sr. D.R stated that there is no good reason adduced by the assessee for admission of additional ground. 4. We find from the above arguments and facts of the case that the facts relating to transfer of asset are very much available on records i.e. on the records of Assessing Officer as well as CIT (A), hence there is no need to investigate the facts, which are on record. This ground raised by the assessee pertains to a legal issue, which will go to the root of the matter and will decide the issue accordingly. Following the case of National Thermal Power Company (supra), we ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d: Stamp duty 30,700/- 64,498/- Total short term capital gain 1,15,23,102/- 4.10 Since the assessee has completely failed to disclose the transaction regarding sale of property in the return of income and computation of income and is found to have incorrectly claimed, deduction under section 54F in an undisclosed manner. I am satisfied that the assessee has concealed his income of ₹ 1,15,23,102/- being short term capital gain. Therefore, the penalty proceedings for concealment of income are being separately initiated by issue of notice under section. 274 r.w.s. 271(1)(c) of the Income-tax Act, 1961. Aggrieved against the action of the Assessing Officer, assessee preferred appeal before CIT (Appeals), who confirmed the action of the Assessing Officer for assessing this sale consideration as short term capital gain but partly allowed the claim of the assessee by taking stamp valuation of this property under section 50C of the Act at ₹ 81,11,00,500/- instead of value taken by Assessing Officer at ₹ 1,15,87,600/-. Aggrieved against the action of the CIT (Appeals) confirming the Assessing Officer s order, assessee filed second appeal before the Tribunal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew our attention to relevant clause 2(b) of the agreement dated 06-01-2011 and the same reads as under:- 2. The said consideration will be paid by the Purchaser to the Vendor as follows:- (b) The vacant and peaceful possession of the said Flat will be given by the Vendor to the Purchaser in the next 10/30 days because the vendor is himself shifting to another flat where he is to get possession in the next 10/30 days . The learned Counsel for the assessee also referred to the factum of possession given on 14-05-2011 to the purchaser by the assessee. The relevant possession letter in continuation to the agreement dated 06-01-2011 (copy of which is enclosed in assessee s paper book at page 111), which reads as under:- Today, on the 14th day of May 2011 (14/05/2011) (Seller) Mr. Javed Kamruzzama Khan S/o. Mr. Kamruzzama Ghasi Khan has peacefully handed over the possession of Flat No.9, B Wing admeasuring 519 sq. Ft. Carpet area on the 3rd floor of building known as ANNVILLE constructed and lying on plot No.74 of TPS III bearing CTS No.F/769 on village Bandra (W), Taluka Andheri, Banda Subarban to (Purchaser) Mrs. Nilofar Sameer Shaikh W/o. Mr. Mohmed Sadiq Hamid Shai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that reckoned from the date of transfer the assessee has not invested, within six months, the sale proceeds in the long term specified assets. The first appellate authority, in para 3.5, impliedly accepts that in the instant case the date of agreement is different from the date of possession; in his opinion the moot point is whether the date of agreement, i.e. 16.03.2005 or the date of possession, i.e. 20.09.2005 is the relevant date for computing capital gains tax. It is well settled that in order to bring the sale proceeds to tax under the head Capital Gains transfer of the property has to take place in the relevant previous year and in order to come to the conclusion that the transfer has taken place within section 2(47)(v) of Income Tax Act r.w.s. 53A of Transfer of Property Act twin conditions have to be satisfied, i.e. execution of the agreement and handing over of possession. It is not necessary that both conditions should be satisfied in one year but at the same time only upon satisfying the second condition also it would amount to transfer. In this case also there is no dispute that the agreement is dated 16.03.2005 whereas with regard to the date of possession the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be in possession of the premises even in the financial year 1996-97. A copy of possession letter dt. 10th April, 1998, at pp. 57 of the paper book, shows that the possession was handed over to the developer on 10th April 1998. In any event, in terms of Clause 9 of the development agreement, the possession was to be delivered only after the complete payment was made. Admittedly, this condition was not complied with till the end of the relevant previous year. In these circumstances, when only a small portion of sale consideration was received as earnest/deposit money and when the developer could not have, therefore, exercised his rights under the contract which were to crystallize on making the payments after the receipt of no objection certificate from the authorities, it cannot be said that there is anything to indicate, leave aside establish, passing of or transferring of complete control over the property in favour of the developer which is sine qua non for taking the date of contract as relevant for the purpose of deciding the year of chargeability of capital gains. Therefore, on the facts of the present case, the date of development agreement would not really be relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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