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2014 (4) TMI 1153 - ITAT MUMBAI

2014 (4) TMI 1153 - ITAT MUMBAI - TMI - Nature of Capital gains - LTCG v/s STCG - treatment given by the AO to the capital gains as short term instead of long term as claimed by the assessee - whether the date of allotment of the flat or the date of possession of the flat by the assessee should be considered as the date for computing the holding period of 36 months? - Held that:- The “date of allotment” should. be reckoned as the date for computing the holding period for the purpose of capital g .....

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, which was later identified and possession delivered on later date. - The Hon’ble Punjab & Haryana High Court in the case of Mrs. Madhu Kaul vs. CIT [2014 (2) TMI 1117 - PUNJAB & HARYANA HIGH COURT ] 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 .....

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ment year 2008-2009. 2. At the outset, Shri Niraj Sheth, Ld. Counsel for the assessee brought our attention to ground no.3 as well as the additional ground raised by the assessee and mentioned that the said grounds are not pressed. After hearing the Ld. DR in this regard, the said ground no.3 as well as the additional ground raised by the assessee are dismissed as not pressed. 3. Referring to ground no.1 and 2, Ld. Counsel mentioned that the only issue involved in these grounds is whether the ca .....

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,69,48,520/-. During the assessment AO noticed that the assessee claimed capital gains of ₹ 1,41,06,633/- on sale of property; ₹ 4,97,017/- on sale of shares and ₹ 13,10,036/- as short term capital gains on sale of shares and mutual funds after setting off of brought forward losses of ₹ 47,329/-. In the assessment, AO did not allow the said capital gains of ₹ 1,41,06,633/- on sale property as long term capital gains as claimed by the assessee in the return and treat .....

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t given by the AO to the capital gains as short term instead of long term as claimed by the assessee in the return. Aggrieved, the assessee is again in appeal before the Tribunal. 4. Before us, narrating the above facts, at the outset, Ld. Counsel for the assessee mentioned that an identical issue came up before the ITAT, Mumbai Bench in the case of ACIT vs. Smt. Vandanan Rana Roy vide ITA No.6173/M/2011 (AY 2007-2008) as well as in the case of Meena A Hemnani vs. ITO vide ITA No. 5998/M/2010 (A .....

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also relied on another judgment of the High Court in the case of CIT vs. Tata Services Limited [1979] Taxman 427 (Bom.). 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 representatives of both the parties. The only issue that is to be decided is whether the date of allotment of the flat or the date of possession of the flat by the assessee should. be considered as .....

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003) 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 general or consequential. The issues, which need to be adjudicated in this appeal are (i) if the capital gains earned by the assessee are in the nature of the short term as held. by the AO or long .....

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ns 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., 22.9.2006 the date of registration and determined the short term capital gains. Therefore, now the issue to be decided by the Tribunal relates to if the date of allotment should. be consider .....

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ned 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 case of CIT vs. Anilaben Upendra Shah (2003) 262 ITR 657 (Guj) apart from other decisions of the Tribunal in the case of Jitendra Mohan vs. ITO (2007) 11 SOT 594 (Del) and also another deci .....

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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 case. The conclusion of the Hon ble Gujarat High Court judgment in the case of CIT vs. Jindas Panchand Gandhi reads as under: Assessee having sold. the flat allotted to him by a co-operative hou .....

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society for a period of more than 36 moths the capital gain arising from sale of said flat was long term 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 constructed later on. 7.2. The conclusion of Hon ble ITAT, Delhi Bench in the case of Jitendra Mohan vs. ITO reads as under: On the facts of the case, assessee held. the capital asset (shed) allotted to i .....

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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 the date for computing the holding period for the purpose of capital gains. The date of allotment in this case being 19.11.2001 and the date of sale is 23.8.2006, therefore, the holding period .....

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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 of capital gains. In the instant case, the date of allotment is 11.04.2003 (FY 2003-2004) and the date of sale of the property is 14.10.2007, therefore the holding period is more than 36 months .....

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