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2016 (8) TMI 1048 - ITAT MUMBAI

2016 (8) TMI 1048 - ITAT MUMBAI - TMI - Industrial gala sold - taxation as STCG or LTCG - consequent deduction under section 54EC - Held that:- It is an undisputed fact from the perusal of the record that, assessee had acquired the industrial gala by way of ‘registered sale agreement’ dated 27.03.1994 for a total consideration of ₹ 6,90,000/-. As per the payment of demand schedule, the entire payment of ₹ 8,74,000/- including the sale consideration as well as other outgoings was to b .....

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n the builder was unable to cooperate with the maintenance, the keys were taken back by the assessee on 01.01.2005. On these facts, it cannot be held that the effective date of ownership and right in the property in the assessee should be reckoned from 01.01.2005, that is, when the keys were given by the builder to the assessee. In fact, when the registered sale agreement was executed on 27.03.1994, the assessee had acquired the right in the property and such right got further fortified by the f .....

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ssessee’s right in the property when the builder has received the full consideration in FY 1998-99 and handed over the property with all rights and possession and was merely caretaker of the property. Thus, on the facts of the case, we hold that the assessee not only had right in the property for more than 3 years, but also was actually owner of the property, therefore, the sale of the property in the year 2005 has to be treated as sale of long-term capital assets and gain has to be assessed as .....

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d by the above named assessees against separate impugned orders of even date, 05.09.2013, passed by Ld. CIT(Appeals)-8, Mumbai for the quantum of assessment passed under section 143(3) r.w.s. 254 for the assessment year 2006-07. Since similar issue is involved in both the appeals arising out of identical set of facts, therefore, same were heard together and are being disposed off by way of this consolidated order. For the sake of ready reference, we will first take-up appeal in ITA No.7117/Mum/2 .....

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la in Chandivili, Saki Naka road, Andheri (East), Mumbai shown by the assessee as short-term-capital-gain (STCG). The assessee had worked out the long-term-capital-gain in the computation of income at ₹ 2,82,520/- in the following manner: B Long Term Capital Gains Sale consideration of Industrial Gala>(a) 20,70,000 Less: Indexed Cost (Total Costs ₹ 910,481/-) >(b) -16,87,480 Long Term Capital Gains (a - b) 3,82,520 Less: Deduction u/s 54EC -Amount Invested ₹ 550,000/-382, .....

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6,481 TOTAL 910,481 All these payments were also shown in the audited Balance sheets, right from financial years 1993-94 to 1998-99. The AO applied the provision of section 50C and considered the sale consideration of ₹ 31,58,200/-. After objections raised by the assessee with regard to the FMV as per Stamp value, the matter was referred to the Valuation Officer who valued the property at ₹ 26,93,000/-. The short-term capital gain was thus computed at ₹ 17,82,519/-, that is, (2 .....

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the issue of determination of long-term-capital-gain / short-term-capital gain. In the set aside proceedings also, the AO, completed the assessment without any change and the short-term-capitalgain has been computed at the same income. The assessee s contention has been that the entire payment was made in the year 1998 itself and occupation certificate was also obtained from BMC on 03.08.1998, therefore, when the property was sold in the relevant financial year, that is, FY 2005-06, then it has .....

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ituation in so far as the nature of capital gain is concerned, because assessee got the final possession only on 01.01.2005, when key was handed to the assessee by the builder. 4. Before the Ld. CIT(A), the detailed submissions were made which has been incorporated by the CIT(A) from the pages 5 to 10 of the appellate order. However, he summarily rejected assessee s contention after observing and holding as under:- I have considered the facts of the case and contention of the appellant. I find t .....

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refore, the right of ownership was acquired by the appellant is on that date. It is of ownership that stands transferred and not the right to possession. Therefore, I do not find any infirmity in the order of the Assessing Officer and the same is confirmed and the grounds of appeal are dismissed . 5. Before us, the Ld. Counsel after explaining the entire facts and the background of the case submitted that the industrial gala in question was acquired in pursuance of registered sale agreement date .....

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the assessee flow from the registered sale agreement dated 27.03.1994 only. The builder has merely handed over the keys on 01.01.2005. He clarified that, there was an obligation cast upon the builder and assessee under Clause 14 of the Registered sale deed which is appearing at page 12 of the paper book, wherein it has been stated that, assessee will get deemed legal possession of the property on expiry of 7 days from the notice from the builder of having received occupation certificate from BMC .....

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were with the builder only for the purpose of maintenance for which the assessee had also paid maintenance amount. Since the builder could not take care or properly maintain the property, then it was decided that keys should be taken from the builder which was received on 01.01.2005. Thus, mere handing over the key by the builder to the assessee cannot be reckoned as the date for considering the period of holding of the property. 6. On the other hand, Ld. DR strongly relied upon the order of th .....

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ideration of ₹ 6,90,000/-. As per the payment of demand schedule, the entire payment of ₹ 8,74,000/- including the sale consideration as well as other outgoings was to be done upto financial year 1998-99. The entire payment as per the agreement was in fact made before financial year 1998-99. Occupation certificate was also issued on 10.03.1998. Thus, the property was not only complete but also occupation certificate was issued. It has been submitted by the assessee that, only for the .....

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