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2016 (11) TMI 1151 - ITAT MUMBAI

2016 (11) TMI 1151 - ITAT MUMBAI - TMI - Allowability of deduction u/s 54 - calculation of holding period - Held that:- It is evident that the date of booking being the date where rights on the flat arose to the assessee and the same constitutes a starting date for calculating the holding period of the asset for the purpose of section 54 of the Act. Accordingly, in this case, the date 30.3.2005 should be the relevant date. AO is directed to compute the holding period accordingly. - Benefit o .....

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of flats, assessee, in any case, is entitled to one of the two merger flats as self occupied flats. AO shall pass a speaking order on this issue after granting a reasonable opportunity of being heard to the assessee - I.T.A. No.472/M/2015 - Dated:- 23-9-2016 - SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER For The Appellant : Shri R.S. Goradia For The Respondent : Shri A. Ramachandran ORDER PER D. KARUNAKARA RAO, AM: This appeal filed by the assessee on 20.1.20 .....

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he Ld CIT (A) has erred in law and on facts in confirming the order of the AO assessing the Long Term Capital Gain offered by the appellant on sale of residential flat at Neelkant Palm, Thane as Short term Capital Gain and consequently denying the benefit of exemption u/s 54 of the Act. (d) Without prejudice to the above and in alternative, the Ld CIT (A) ought to have directed the assessing officer to adopt the market value of the residential premises as on the date of acquisition considered by .....

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ance with the law, charged by the AO. 2. At the outset, Ld Counsel for the assessee brought our attention to the above grounds and mentioned that there are three issues for adjudication viz (i) allowability of deduction u/s 54 of the Act qua issue of computation of holding period with reference to date of allotment of flat; (ii) allowing the benefit of one selfoccupied property; (iii) charging of mandatory interest related issues. 3. Referring to the third issue, Ld Counsel for the assessee subm .....

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also submitted that the rectification application was filed long time ago and the same is still pending before the assessing authorities. 4. After hearing both the parties on this issue, we are of the opinion, the order of the CIT (A) is deficient on the issue with reference to Ground no.3 raised before us. Considering the same, we direct the CIT (A) to adjudicate all the aspects of this ground by passing a speaking order after granting a reasonable opportunity of being heard to the assessee. A .....

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2009 (after four years) and the flat was registered in the name of the assessee on the said date. This flat was subsequently sold on 30.3.2010, which is a date of sale of flat and earned capital gains. Assessee considered the date of booking and the letter of allotment as a basis for computing the holding period and claimed benefit of the long term capital gains. Per contra, Assessing Officer in the assessment proceedings, held that the date of possession of flat cum date of registration on 30.3 .....

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o.3601/M/2012 (AY 2008-2009), dated 22.4.2014 and read out the relevant paras 6 to 8 and submitted that the date of allotment should be relevant for reckoning the holding period of the asset sold. He also submitted that the said decision of the Tribunal was based on the judgment of the Hon‟ble Gujarat High Court in the case of CIT vs. Anilaben Upendra Shah (2003) 262 ITR 657 (Guj.). Further, he also brought our attention to another decision of the Tribunal in the case of Surendra Mohan Kha .....

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reference to the holding period qua the date of booking / date of allotment. In this regard, we have perused the orders of the Tribunal cited above. For the sake of completeness of this order, relevant paras 6 to 8 of the Tribunal‟s order in the case of Richa Bagrodia (supa) are extracted as under:- 6. We heard both the parties and perused the orders of the Revenue Authorities as well as the judgments of the Hon‟ble High Court and the decisions of the Tribunal cited by learned repres .....

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as decided in favour of the assessee by relying on various decisions of the Tribunal as well as the judgment of the Hon‟ble Gujarat High Court in the case of CIT vs. Anilaben Upendra Shah (2003) 262 ITR 657 (Guj). Relevant discussion is given in paras 3 & 4 of the said order of the Tribunal which read as under: 3. There are couple of issues raised in this appeal. Rest of the grounds raised in the appeal are either consequential or general in nature. Accordingly, they are dismissed as g .....

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dated 1.12.2003 and the registered deed of the same was dated on 22.9.2006. The said flat was sold by the assessee to Bennet Coleman & Company on 10.11.2006. The assessee earned capital gains on this transaction and offered the same as long term capital gains reckoning the date of allotment i.e., 9.9.2003 for the purpose of determining the holding period of three years relevant for the long term capital gains. However, in the assessment proceedings, AO considered the date of registration i.e .....

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n the case of ACIT vs. Smt. Vandana Rana Roy vide ITA No.6173/M/2011 (AY 2007-2008) dated 7.11.2012, wherein one of us (AM) is a party, and stated that the date of allotment should be reckoned as relevant date for computing the holding period for the purpose of computing the capital gains. In this regard, Ld Counsel brought our attention to para 7 and 8 of the said order of the Tribunal to support his case. The said judgment was decided considering the judgment of the Gujarat High Court in the c .....

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d decisions and we find that there is no dispute on the facts. The only issue that is to be decided is whether date of allotment of the flat or the date of possession of the flat by the assessee should be considered as date of holding for computing the holding period of 36 moths. In alternative, the date of registration should be the relevant date. On perusal of the said decisions relied upon by the Ld Counsel, we find that the decisions are relevant and applicable to the facts of the present ca .....

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onclusion of the Hon ble Gujarat High Court judgment in the case of CIT vs. Anilaben Upendra Shah reads as under: Assessee having held the shares and allotment of a flat in a co-operative housing society for a period of more than 36 moths the capital gain arising from sale of said flat was longterm capital gain and assessee was entitled to benefit of section 80T irrespective of the fact that the assessee did not get possession of the flat in question at the time of allotment and it was construct .....

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the case of Praveen Gupta vs. ACIT reads as under: Assessee can be said to have held the flat when he made the payment to the builder and received the allotment letter, and therefore, benefit of indexation of cost of acquisition of the flat has to be granted to the assessee from the date (1995) when he started making payment to the builder and not from the date of execution of conveyance deed in 2001. 8. All the above decisions are uniform in concluding that the date of allotment is reckoned as .....

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in our opinion, order of the CIT (A) does not call for any interference. Accordingly, the grounds raised by the Revenue are dismissed. 4. Considering the above settled nature of this issue, we are of the opinion that the assessee must succeed on this issue. Accordingly, the relevant grounds of appeal are allowed. 7. From the above settled position of the issue, it can be safely concluded that the date of allotment should be reckoned as the date for computing the holding period for the purpose o .....

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;ble Punjab & Haryana High Court in the case of Mrs. Madhu Kaul vs. CIT vide Income Tax Appeal No.89 of 1999, dated 17th January, 2014 held that the mere fact that possession was delivered later, does not detract from the fact that the allottee was conferred a right to hold property on issuance of an allotment letter. Thus, the ld DR‟s arguments on non-existence of the flat at the time of issuing of allotment letter stands answered by the said judgment of the Hon‟ble High Court o .....

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of the considered opinion that the ground no.1 raised by the assessee should be allowed. Accordingly, ground no.1 is allowed. 8. Further, we have also perused para 2.1 of the order of the Tribunal in the case of Surendra Mohan Khanna (supra) and the relevant lines are extracted as under:- 2.1. Nothing contrary was brought to our knowledge on behalf of Revenue. Facts being similar, so, following same reasoning, we are not inclined to concur with the finding of CIT (A) because date of acquisition .....

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he relevant date. AO is directed to compute the holding period accordingly. In effect, grounds no.1 (a); 1(b) and 1(c) of the appeal are allowed. Considering the relief granted to the assessee in this regard, the adjudication of the ground no. 1(d) becomes academic. Accordingly, the said ground no.1 (d) is dismissed. Ground no.1 is partly allowed. 10. Ground no.2 relates to the allowing of the benefit of self occupied property. Relevant facts connected to the ground are that the assessee owns th .....

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d binding judgment of the Hon‟ble jurisdictional High Court judgment in the case of Tip Top Typography (supra) to the facts of the instant case after affording a reasonable opportunity of being heard to the assessee. We order accordingly. 12. With reference to the property at Thane, Ld Counsel for the assessee submitted that the property is generated out of merger of flats no.901 and 902 into one functional unit. This resultant property was never let out by the assessee during the year und .....

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