TMI Blog2016 (11) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... tudy and perusal to determine whether in fact the assessee acquired rights, title and interest in the flat vide the said allotment letter dated 01-08-1994. The order of the AO did mention about this allotment letter dated 01-08-1994. CBDT Circular No. 471 dated 15th October 1986 and also CBDT circular no. 672 dated 16-12-1993 stipulates that in case of allotment of flat under self financing scheme of Delhi Development Authority(DDA) and co-operative societies , the date of allotment shall be the date of construction for the purpose of Section 54/54F of the Act. Thus, by virtue of allotment letter dated 01-08-1994 , prima facie it appears that the assessee has acquired the interest , rights and title in the property but the said allotment letter dated 01-08-1994 is not placed on record by the assesssee to enable us to study detailed terms and conditions. The matter in our considered view, need to be set aside and restored to the file of the AO for re-determination of the issue on merits by the AO after examining the terms and conditions of allotment letter dated 01-08-1994 to enable the AO to determine whether the assessee has in-fact acquired rights , title and interest in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the assessee including sale and purchase agreement. Despite repeated requests by the AO , the assessee merely filed a copy of rough purchase agreement wherein there were no dates mentioned and there was no registration evidence or payment of stamp duty. Further, no copy of the sale agreement was filed and only supporting with respect to the sales were two receipts of ₹ 12 lacs and ₹ 5,46,000/- stated to be towards the consideration for sale of the property were filed. The assessee has computed the long term capital gain by considering the property to have been sold for a consideration of ₹ 17,46,000/- and taking the purchase cost at ₹ 4,80,150/- and the date of purchase as year 1986 and hence consequently the indexed cost was shown at ₹ 18,89,733/-. Apart from the above, the assessee has also claimed property tax of ₹ 1,41,111/- against the sale consideration. The A.O. observed that the actual date of purchase was not verifiable from the documents filed by the assessee but it was clear to the A.O. that the purchase had been made subsequent to the year 1987 as the plot on which the property was constructed had been allotted to the builder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted the letter of allotment received by the assessee on 26th July, 1992. The assessee submitted that the payments were made slab wise from time to time after the booking was made and the A.O. has erred in treating the asset as short term capital asset and disallowed the indexation of cost because no agreement was entered into between the assessee and the builder, Apex Hotel Enterprises P. Ltd. The assessee relied on the case of CIT v. Tata Tele Services Ltd., 122 ITR 594, Kizhakke Madathil Venkateshwara Iyer, AIR 1917 Mad 358 and others to support the contention that any right in property would be capital asset which is also assignable. Therefore, it was submitted that right to obtain conveyance of immovable property was clearly property as contemplated under section 2(14) of the Act. Registration and conveyance is not necessary to prove purchase of any capital asset. It was also contended that unregistered document is not covered u/s 50C of the Act by relying upon the decision of the Tribunal in the case of Pravin Gandhi in ITA No. 2216/Mum/2009 and in the case of Navneet Kumar Thakkar v. ITO reported in (2008)110 ITD 525(Jod)(SMC). The ld. CIT(A) observed that in the inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the builder dated 5th April, 1993 filed by the assessee showed that the builder called upon the assessee to deposit the amount of ₹ 80,000/- which clearly indicates that till 5th April, 1993 full payment of the flat had not been made and the assessee had not acquired ownership rights as on this date and thus the date of acquisition of ownership right was not clear and is certainly not the year 1986 , the date from which indexation had been claimed by the assessee and thus the A.O. rightly denied the indexation claimed by the assessee. It was observed that the capital asset in the form of immovable property came to be held by the assessee only on the date the assessee acquired ownership right by the purchase deed. The ld. CIT(A) held that since the flat was sold and the period for which it was held is not ascertainable, the A.O. had rightly denied the indexation. The learned CIT(A) held that the right of ownership is to be treated as held for less than 36 months, hence, the gain is from transfer of a short term capital asset and was liable to be taxed as short term capital gain. With respect to the applicability of section 50C of the Act, the ld. CIT(A) accepted the contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as date of construction of the flat for the purposes of Section 54/54F of the Act. 8. The ld. D.R., on the other hand, relied upon the decision in the case of Hon ble Delhi High Court in the case of Gulshan Malik v. CIT (214) 43 taxmann.com 200 (Delhi) and submitted that the flat shall be deemed to be acquired when the agreement to sell has been entered into by the assessee with the Builder and hence period of holding shall have to be calculated from the date of agreement to sale with the Builder. It is also submitted that the indexation cannot be allowed on the total cost but is allowable based on the actual payments made by the assessee from time to time and that too from the date of agreement to sale with the Builder provided the assets is long term capital asset. 9. We have considered the rival contentions and also perused the material available on record including the case laws cited by the parties. We have observed that the assessee has booked flat bearing No. 601 in 6th floor in the building known as Pujit Plaza situated at plot No. 67, Sector 11, Belapur, Navi Mumbai for a consideration of ₹ 4,80,150/- on 26th July, 1992 wherein the builder agreed to sell the fl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO after examining the terms and conditions of allotment letter dated 01-08-1994 to enable the AO to determine whether the assessee has in-fact acquired rights , title and interest in the said flat by virtue of the said allotment letter dated 01-08-1994 . The assessee has sold the flat in March 2008 and hence if it is held by the AO that the assessee acquired rights, title and interest in the flat w.e.f. 01-08- 1994 i.e. the date of allotment, the gains shall be brought to tax as long term capital gains. The assessee will be allowed to file all necessary evidences and explanations before the AO to support his contentions to determine the actual date when the assessee acquired rights, title and interest in the flat. The AO shall grant sufficient and adequate opportunity of being heard in accordance with principles of natural justice in accordance with law. Since the assessee has made the payment for flat slab wise in installments over a period of time and hence , the assessee consequentially will be entitled for indexation computed with respect to the date of actual payments of installments slab wise made from time to time rather than indexation on total cost of flat from the da ..... X X X X Extracts X X X X X X X X Extracts X X X X
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