9911796707
TMI Blog2017 (9) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... f income for relevant Assessment Year on 28.03.2011 declaring total income of Rs. 6,06,61,470/-. The assessment was completed u/s 143(3) of the Act on 15.03.2013. In the computation of income, the assessee computed the Long Term Capital Gain (LTCG) on sale of right in properties. However, the Assessing Officer (AO) treated the LTCG as Short Term Capital Gain (STCG) and not allowed the deduction u/s 54EC and 54F of the Act. On appeal before the ld. CIT(A), the action of AO was confirmed. Aggrieved, further the assessee has filed this appeal before us. 3. We have heard the ld. Authorized Representative (AR) of the assessee and ld. Departmental Representative (DR) for the Revenue and perused the material available on record. The Ld. AR of the assessee argued that assessee booked two flats on 12.05.2014. The agreement to sale in respect of flats between builder and the assessee was executed on made on 16.11.2006. The agreement to sale was registered with Sub- Registrar on 06.10.2007. The Occupancy Certificate from the builder was received on 22.06.2009. No Objection Certificate (NOC) for transfer of the flat was given by the builder to the assessee on 18.10.2009. The assessee sold the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision relied by revenue. The assessing officer while framing assessment order asked the assessee to submit the various details in respect of long-term capital gain and the deduction claimed under section 54 EC and 54F. The assessee furnished the required details and contended that the assessee acquired two flats on 12 May 2005, on the date the assessee purchased flat and claimed that that benefit of indexation should be given on the basis of date of acquisition of capital assets and not on the basis of actual payments. The assessing officer issued notice to the builder under section 133(6) to submit the complete details of payment received against the sale of flats, copy of agreement, status of building at the time of sale and the completion certificate. In response to the notice under section 133(6) the builder, vide its reply dated 12.02.2013 submitted that at the time of sale, the construction of said building was in progress and approximately completed to the extent of 32%. The builder further submitted that the agreement for two flats was executed on 16th November 2006, which was registered in the office of Sub- Registrar on 6 October 2007 in the name of assessee and his w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R for the revenue is more favorable to the assessee. In the said case the Hon'ble Court considered the question " whether the date of allocation for allotment of the apartment or the date of buyer's agreement ought to be considered the date of acquisition of the capital asset." The Hon'ble High Court answered the said question with the following observation. "4. The question that arises for consideration is whether any right accrued to the assessee by way of the application for allotment that can be considered a capital asset; this would determine whether the date of application for allotment of the apartment or the date of the buyer's agreement ought to be considered the date of acquisition of the capital asset that was sold on 2.11.2007 as well as whether the capital gain is taxable as long-term or short-term capital gains. 5. The appellants submit that by way of application dated 31.7.2004 for allotment and payment of the booking amount, the appellant had acquired the"right to purchase the property"/booking rights, which were extinguished by execution of the agreement to sell dated 2.11.2007 in favour of Smt. Srilekha Nayak, thus making his booking rights a long-term ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1882 (4 of 1882) ; or (vi) any transaction (whether by way of becoming a member of, or acquiring shares in, a co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has the effect of transferring, or enabling the enjoyment of, any immovable property. Explanation 1.-- xxx Explanation 2.--For the removal of doubts, it is hereby clarified that "transfer" includes and shall be deemed to have always included disposing of or parting with an asset or any interest therein, or creating any interest in any asset in any manner whatsoever, directly or indirectly, absolutely or conditionally, voluntarily or involuntarily, by way of an agreement (whether entered into in India or outside India) or otherwise, notwithstanding that such transfer of rights has been characterised as being effected or dependent upon or flowing from the transfer of a share or shares of a company registered or incorporated outside India...." 7. It is clear that a "capital asset" under the Act is property of "any kind" that is "held" by the assessee. Necessarily, a capital asset must be transferable. Thus, to understa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e right to purchase the apartment and obtain title, termed "booking rights". Only that agreement which intends to convey these rights according to both parties can be considered as the source of accrual of rights to the assessee. The confirmation letter dated 6.8.2004 (Annexure 3) specifically states first, that no right to provisional/final allotment accrues until the Buyer's Agreement is signed and returned to the builders and second, that no right to claim title/ownership results from the confirmation letter itself. Thus, it is clear that the Builders do not intend to convey any right of provisional/final allotment or any right to claim title/ownership under the confirmation letter. There being no intention to convey rights in this document, it would be impermissible for this Court to find that the right to obtain title/"booking rights" emanated from the confirmation letter. These rights may only be located in the Buyer's agreement, and thus, the date of acquisition of the capital asset must be considered the date of signing of said agreement i.e. 4.11.2004." 7. In view of the above factual discussion and the decision of Hon'ble Delhi Court the date of execution of agre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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