TMI Blog2019 (3) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... it amounts to transfer. No registered deed of sale is required to constitute a transfer. In CIT Vs K Ramakrishanan [2014 (3) TMI 812 - DELHI HIGH COURT] held that in order to determine taxability of capital gain arising from the sale of property, it is the date of allotment of property which is relevant for the purpose of computing holding period and not the date of registration of conveyance deed. No illegality and infirmity in the order passed the ld Commissioner (Appeals), which we affirms. - ITA No.3204/Mum/2016 And ITA No.3316/Mum/2016 - - - Dated:- 30-7-2018 - SHRI SHAMIM YAHAHA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER For The Assessee : Dr. Shivram Senior Advocate with Sh. Aditya Ajgaonkar Advocate For The Revenue : S h ri RAM Tiwari (Sr.DR) Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. These cross appeals are directed against the order of Ld. Commissioner of Income-tax (Appeals)-12 [Ld. CIT(A)], Mumbai dated 24.02.2016 in the assessment order passed under section 143(3) of the Act on 27.03.2014 for Assessment Year 2011-12. The Revenue has raised the following grounds of appeal: ( 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in confirming the gross annual value of house property at Mumbai on ad hoc basis of ₹ 74,31,073/- instead of taking house property at Mumbai as self occupied property and taking it s annual value in its nil. (iv) The ld. Commissioner (Appeals) erred in confirming the charging of interest under section 234B and 234C of income tax Act . 3. The brief facts of the case are that assessee is Executive Vice Chairman and Chief Executive Officer of Allied Blenders Distillery Private Limited, Director of De Vin Private Limited and Director of Henkell Company India Pvt Ltd, deriving his income from Salary , income from House property , income from Capital Gain and from Other Sources . The assessee filed his return of income for relevant assessment year on 23 July 2011 declaring taxable income of ₹ 3,30,85,591/-. Return on income was selected for scrutiny and the assessment order was passed on 27th March 2014 under section 143(3). The assessing officer while passing assessment order made addition of ₹ 51,98,928/-on account of annual letting value (ALV) of property at Flat No.11, Rambha Cooperative Group Housing Society, at Nepean Sea Road, Mumbai agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ences related with the property in USA are also placed on record. The house property in USA was purchased during the assessment year 2010-11 and was shown its self occupied in that period. As there was no scrutiny assessment for assessment year 2010-11. In subsequent year the assessee has revised the return of income and has shown the Mumbai property as self acquired property and has offered the property and USA as let out. The assessee before the assessing officer objected for adoption of fair rental value of similar property in the area as annual letting value (ALV) without any evidence on basis and without prejudice submitted that annual letting value of flat in USA may be taken as deemed to be let out. The assessee also furnished to the assessing officer his calculation regarding the USA property. The assessing officer on the basis of sale consideration of Mumbai property determined the annual letting value of this property at ₹ 6,19,253/-per month on a totally unscientific, arbitrary and on excessive basis. The ld. Commissioner (Appeals) during the First appellate stage held that USA property is occupied by his daughter, therefore it cannot be considered as self occupied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and have gone through the orders of the authorities below. During the assessment the assessee has declared the income from house property of Mumbai flat at ₹ 2797/- as deemed let out. The assessee was asked to justify the income offered by the assessee and the fair rental value of the similar property in the same area. The assessee furnished various details, including the cost of acquisition, rateable value of flat and the other property. The contention of the assessee was not accepted by assessing officer. The assessing officer on the basis of purchased cost estimated the annual letting value (ALV) of Mumbai flat and allowing 30% deduction determined the taxable income at ₹ 51,98,928/-. The contention of the assessee before the assessing officer to treat the USA property for adopting deemed let out was rejected. The ld. Commissioner (Appeals) also held that the USA property is occupied by the daughter of the assessee and cannot be considered as self occupied property. The ld Commissioner (Appeals) instead of considering the substitution of property for the purpose of computing income from house property and holding the USA property is nor self occupied confirmed the ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of one of such houses, which the assessee may, at his option, specify in this behalf; b) the annual value of the house or houses, other than the house in respect of which the assessee has exercised an option under clause (a) shall be determined under sub-section (1) as if such house or houses had been let In the instant case, the assessee is the owner of seven flats situated at Mumbai and Pune apart from a house under construction at Lonavala. The assessee, no doubt, has specified earlier that the flat at Maryland is self occupied house property. However, during the course of assessment proceedings, she changed her stand and requested the A.O. to consider the flats at Vikas Anand at Khar as self occupied property since it was beneficial to her. Under these circumstances, we are of the considered opinion that the A.O. should have considered the flats at Vikas Anand Co. Op. Hsg. Soc., Khar as self occupied house property instead of Maryland property claimed in the return of income especially when he has changed the method of computation of income from self occupied house property by adopting 8% of cost of construction as ALV as against Municipal ratable value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axed the gain on sale of property and short-term capital gain. The ld. DR prayed for reversing the order of Commissioner (Appeals) and to restore the order of assessing officer. 16. On the other hand the ld.AR of the assessee submits that assessee during the year assigned his right in a Garden Villa Apartment at a project called Palm Springs in Gurgoan to Adnis Buildcon Private Limited for reconsideration of ₹ 5.70 Crore. The agreement made between the assessee and Adnis Buildcon Private Limited is dated 28th of May 2010. The builder has given the confirmation dated 10 September 2010, copy of which was given to the assessing officer and is also filed on record at page No100 of the paper book. The assessee has also filed the ledger and bank statement evidencing the receipt of the sale consideration. The assessee acquired the rights in the said property on 19th March 2007 from Mrs Kajal Aijaz. Agreement between the seller and assessee was executed on 12th February 2007, copy of which is placed on record at page No. 67 to 70 paper book. The assessee also filed the copy of confirmation of the builder about the transfer right confirmation dated 19th March 2007. The receipt of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income tax Act. The definition of short-term capital asset as per section 2(42A), the legislature has used the expression held . It may be further noted that in various other allied or similar section, the legislature has preferred to use the expression acquired or purchased e.g. in section 54/54F. Thus, the legislature was conscious of the fact while making use of this expression. The expression like owned has not been used for the purpose of determining the nature of asset as short-term capital asset or long-term capital asset. The intention of legislature is clear that for the purpose of determining the nature of capital gain, the legislature was concerned with the period during which asset was held by the assessee for all practical purposes on de facto basis. The legislature was apparently not concerned with the absolute legal right ownership of the asset for determining of the holding period. 18. In support of his submission the ld AR of the assessee relied upon the decision of Tribunal in Anita D. Kanjani Versus ACIT [2017] 163 ITD 451 (Mumbai Tri), CIT Vs A Suresh Rao [2014] 223 Taxman 228 (Karn) and in Vinod Kumar Jain Vs CIT (344 ITR 501) (P H). The learned AR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed right from Mrs Kajal Aijaz. The assessing officer disputed it assessee has purchased the right from Mrs Kajal Aijaz but had still not received that for right in the property. The proper right in the property was received by assessee only when builder head given its approval by signing the bias agreement dated 7 November 2007. The learned Commissioner (Appeals) further noted that the assessee, during the appellate proceeding, filed confirmation letter dated 19 March 2007, wherein the builder had confirmed the transaction that the captioned property has been transferred in the name of the assessee on 19.03.2007. From this letter it s also clear that effectively the assessee received the right in the property on 19th March 2007. Therefore, the period of holding of the said property started from 19 March 2007 to September 2010 which is more than 36 months. Hence, the right in the property held by the assessee s long-term so the capital gain arrives is also longterm capital gain and directed the assessing officer to work out the gain as long-term capital gain. The assessing officer was also directed to verify the claim of expenses of ₹ 9,56,250/- and the additional cost incurre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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