TMI Blog2016 (8) TMI 1095X X X X Extracts X X X X X X X X Extracts X X X X ..... mining the question of “use”, but not for the purpose of acquisition contemplated in Sec. 50(1)(iii) of the Act. Occupation could be equated to the term “use” as contemplated u/s 32 of the Act whereas it cannot be equated to the concept of possession to understand the completion of the process of acquisition in terms of Sec. 53A of the Transfer of Property Act. Here, in this matter, assessee did all that he has to do under the contract, and his further act of taking over the property in furtherance of his animus of owning the property thereby excluding every other from dealing with or interfering with the property, is suffice to hold that the assessee acquired the property during the financial year for the purposes of Sec. 50(1)(iii) of the Act. For these reasons, we are unable to accept the contentions of the Revenue that there was no property in existence before the end of the relevant financial year, that there was no agreement between the parties and there is no acquisition that took place during the relevant financial year. We hold that the assessee by his acts of parting with full sale consideration and gaining the ability to have every other person excluded from dealing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 13,27,07,432/-. 3. The Assessing Officer initiated proceedings u/s 143(3) of the Income Tax Act, 1961 (in short the Act ) and called upon the assessee to explain the acquisition of new building, namely, office premises No. 402, situated in the building Capital at BKC, Mumbai at a value of ₹ 13,27,07,432/-. In the return of income, no gain on transfer of depreciable asset being sale of a building for a sum of ₹ 5,82,43,292/- was declared u/s 50 of the Act. The claim of assessee was that the WDV of block of assets at the beginning of previous year was ₹ 1,04,62,779/- and after reducing the sale consideration of the building sold for ₹ 5,82,43,292/- and adding the cost of the new office premises acquired during the year of ₹ 13,27,07,432/-, the resultant WDV of the block of assets came to ₹ 8,46,26,919/- on which depreciation of ₹ 21,91,127/- was claimed. Thus, it was canvassed that there was no gain computable in terms of Sec. 50 of the Act. The Assessing Officer, however, took the view that assessee was not entitled to claim accretion for the cost of acquisition of the new office premises of ₹ 13,27,07,432/- while co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the same was not acquired and used for the purpose of the business during the year under appeal. The Appellant prays that the addition of ₹ 4,77,80,513 may please be deleted in appeal. 2. On facts and circumstances of the case and in law, the learned Commissioner (Appeals) erred in sustaining the disallowance of depreciation of ₹ 21,91,127 made by the learned Assessing Officer on ground that the new office of ₹ 13,27,07,432 in respect of which depreciation was claimed on block of assets was not acquired and used for the purposes of the business during the year under appeal. The Appellant prays that the disallowance of ₹ 21,91,127 may please be deleted in appeal. 3. On facts and circumstances of the case and in law, the learned Commissioner (Appeals) erred in sustaining the disallowance of deprecation of ₹ 60,029 made by the learned Assessing Officer on ground that the machinery in respect of which depreciation was claimed on block of assets was not used for the purposes of the business during the year under appeal. The Appellant prays that the disallowance of ₹ 60,029 may please be deleted in appeal. 4. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see furnished the copies of the allotment letter dated 21.12.2011, letter dated 27.2.2012 by the builder evidencing the handing over of property to the assessee for out-fits, letter dated 7.2.2014 by the builder addressed to the Assessing Officer confirming the contract of sale and handing over of the property, Part-Occupancy Certificates dated 27.7.2012 and 14.12.2012. 10. Except to the extent of existence or non-existence of the property, there does not seem to be much dispute in respect of the genuineness of these documents or assessee paying full sale consideration in respect of the building in question. As a matter of fact, the record does not reveal that the Assessing Officer has taken any steps in that direction by examining the builder or someone else at relevant time on this aspect. Further, by way of letter dated 7.10.2014 the builder unequivocally stated that though they have not entered into a registered agreement with the assessee in respect of the property in question, the legal formalities will be complied with later, but the property was sold and they have handed over the same for fit-outs on 27.2.2012. 11. First point for consideration is whether there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under the allotment letter. 14. As rightly argued by the learned counsel for the assessee, Sec. 50 of the Act does not contemplate use of property to complete the process of acquisition of property. Acquisition is a process whereby the rights of the parties are crystallized in unequivocal terms and each party has complied with or is ready to comply with the mutual obligations. Here, in this case, all that has to be done by the assessee was done by parting with valuable consideration and starting the work of fit-outs well before the end of the financial year. Possession has both physical and psychological components and when once the assessee started with work of fit-outs, having discharged his obligation under the contract, his animus possidendi accompanies the act of corpus possidendi . The distinction between possession and occupation has to be kept in mind, which is relevant only for the purpose of determining the question of use , but not for the purpose of acquisition contemplated in Sec. 50(1)(iii) of the Act. Occupation could be equated to the term use as contemplated u/s 32 of the Act whereas it cannot be equated to the concept of possession to understand the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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