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TMI Blog2017 (11) TMI 1233X X X X Extracts X X X X X X X X Extracts X X X X ..... ard together and are being disposed of by this common order for the sake of convenience. ITA No. 5653/MUM/2016 (Assessment Year: 2013-14) 2. Brief facts which have given rise to the present appeal are that the assessee an individual filed his return of income for the relevant assessment year declaring the total income of Rs. 22,90,400/-. The return was processed and after scrutiny, AO determined the total income of the assessee at Rs. 96,87,900/-, after making disallowance of exemption claimed by the assessee u/s 54 of the Act and making addition of Rs. 73,97,500/- as income from short term capital gain and Rs. 9,414/- towards income from other sources. The AO noticed during assessment proceedings that the assessee and his wife Ms. Vandana Mishra jointly booked Flat No. 2401, Grandeur Bldg., Vasant Marvel, Phase-II, Mallad (East) from M/s Sheth Developers Pvt. Ltd. for Rs. 46,02,500/- (including Rs. 9,61,165/- cost of improvement) in the year 2006. Allotment letter was issued on 26.11.2006. However, the agreement was registered on 21/08/2012. Thereafter, the assessee entered into an agreement with Sh. Divyesh Shah and Smt. Daksha Shah for sale of the said property on 27/08/2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to add alter or delete any portion of this appeal before its conclusion. * This appeal is filed in time and may please be allowed in full. * A detailed paper book along with case laws will be submitted at the time of hearing." 5. Before us, the Ld. counsel for the assessee submitted that the Ld. CIT (A) has wrongly held that since the transfer is of a capital asset comprising of right to acquire property and not building which is residential house, the appellant is not entitled to deduction u/s 54 of the Act. Relying upon the judgments of Hon'ble Bombay High Court passed in CIT Vs. Tata Services Ltd. 122 ITR 594 and CIT Vs. Vimal Lalchand Mutha 187 ITR 613 and decision of Mumbai Tribunal rendered in Anita D. Kanjani, [2017]79 taxmann.com 67(Mumbai Tribunal) submitted that as per the settled law holding period in case of under construction property must be reckoned from the date of allotment and the asset/right acquire in under constructions property/building shall be the capital asset within the meaning of section 2 (14) of the Act. In view of the fact that allotment letter in this case was issued on 26.11.2006, the Ld. CIT (A) has rightly held that the gain is long term ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into an agreement on Nov. 8, 1977 for purchase of a flat, however, the formal agreement with the seller was executed on December 4, 1978. The assessee obtained possession in June 1981. In April 1983, the assessee entered into an agreement for sale of the right title and interest in the said flat and accordingly the same was transferred to the purchaser. The Mumbai Bench of the Tribunal held the gain as long term capital gain by computing the holding period from the date of agreement. In appeal, the Hon'ble Bombay High Court upheld the findings of the Tribunal. In the latest decision of the coordinate Bench rendered in the case of Anita D Kanjani vs. ACIT (supra), the coordinate Bench of the Tribunal has held that holding period has to be computed from the date of issue of allotment letter. In the present case, admittedly, the letter of allotment was issued in favour of the assessee on 26.11.2006 and agreement was entered into on 21.08.2012. Further agreement to sell the said property was entered into on 27.08.2012. Therefore, the Ld. CIT(A) has rightly, held the gain as long term gain by computing the holding period from the date of allotment of letter and not from the subsequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer of long term capital asset and the consequential gain as long term capital gain and since the assessee has invested the said capital gain for purchasing residential house in the same year, the assessee fulfills all the conditions contemplated under section 54F of the assessee. Although it appears from the record that the assessee has not taken the alternative plea of section 54F in the first appeal before the Ld. CIT(A) however, the benefit of the provisions of this section cannot be denied on this ground. We accordingly, modify the order of the Ld. CIT(A) to that extent and allow the benefit u/s 54F of the Act to the assessee. Accordingly, we direct the AO to compute the claim of the assessee in accordance with the provisions of section 54F of the Act. 12. Since, we have allowed the assessee's claim u/s 54F of the Act by holding the gain as long term capital gain we also direct the AO to allow the benefit of indexation of cost of acquisition from the date of each payment. 13. Ground pertaining to interest u/s 234B and D is consequential and the ground pertaining to initiation of penalty u/s 271(1)(c) is premature. Hence, we do not consider it necessary to adjudicate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e lines. Accordingly, we direct the AO to treat the gain from sale of asset in question as long term capital gain and to compute the exemption as per the provisions of section 54F of the Act. We further direct the AO to allow the benefit of indexation of cost of acquisition from the date of payment. 17. Ground pertaining to interest u/s 234B and D is consequential and the ground pertaining to initiation of penalty u/s 271(1)(c) is premature. Hence, we do not consider it necessary to adjudicate the same. ITA No. 6167/MUM/2016 (Assessment Year: 2013-14) The Department has challenged the impugned order passed in respect of assessee sh. Umashankar Mishra on the following grounds: 1. "Whether on the facts and the circumstances of the case and in law, the ld. CIT (A) erred in treating the gain on sale of residential flat as Long Term Capital Gain when the sale has been made within a period of less than 36 months from the date of registration of the said flat. 2. The appellant prays that the order of the CIT (A) on the above ground be set aside and that of the Assessing Officer be restored. 3. The appellant craves leave to amend or alter grounds or add a new ground which may b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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