TMI Blog2019 (4) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... [1979 (2) TMI 19 - BOMBAY HIGH COURT]. Therefore, the conclusion drawn by first appellate authority that the gains were Long-Term Capital Gains in nature as counted from 16/03/2005 would require no interference on our part. The appeal stands dismissed to that extent. Manner of computation of the gains - indexation benefit against the cost of acquisition - assessee has paid upfront payment to the extent of 5% upon allotment and the balance payment has been spread over by way of installment during the year 2005 to 2010 - HELD THAT:- Assessee has paid upfront payment to the extent of 5% upon allotment and the balance payment has been spread over by way of installment during the year 2005 to 2010. As against the same, the assessee has sought indexation of full cost on the basis of index for 2005, which, in our considered opinion, is not justified. Logically, the indexation was to be done by applying the indexes of the respective years in which the payments were actually made by the assessee which is in line with the decision of this Tribunal rendered in Lakshman M.Charanjiva Vs ITO [2014 (3) TMI 181 - KERALA HIGH COURT]. Therefore, taking the same view rendered in Nirmal Kumar Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o of the decision of the Hon'ble Bombay High court in case of Chaturbhuj Dwarkadas Kapadia 26O ITR 491(Bom) wherein the date of transfer is the date when part performance u/s 53A of the property Act is made and possession is given. 3. Whether on the facts and circumstances of the case and in law, the Id. CIT(A) erred in holding the date of making payment of small amount of advance(less than 6% of total cost) as date of acquisition without appreciating that the mere booking of fiat does not confer any right in the property per se; rather it only gives a right to purchase the property in future to assessee on agreed terms and conditions. 4. Whether on the facts and circumstances of the case and in law, the Id. CIT(A) erred in accepting the plea of the assessee denying the observation made by AO in asstt order that assessee had accepted the income to be taxed as STCG vide order sheet dated 24.01.2O14, when the assessee had made no such application before the AO to challenge this observation? The order of the CIT(A) is perverse as he accepted the contention of assessee without giving opportunity to the AO to provide the copies of the order sheet noting or call for the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reckoned from December. 2009 i.e. when the purchase documents were registered in assessee s favor and therefore, the gains were to be treated as Short-Term Capital Gains [STCG] only. The perusal of quantum assessment order reveal that the Ld. AR is stated to have conceded to the opinion formed by Ld. AO. Accordingly, the gains were treated as STCG and the indexation benefit was denied to the assessee. Consequently, the set-off of earlier years Long Term Capital Losses for ₹ 6.18 Lacs, as claimed by the assessee, was also denied. Finally, the gains were re-worked as ₹ 122.13 Lacs and the same were treated as STCG in nature. 3.1 However, later on the assessee agitated the stand of Ld. AO before first appellate authority with success before Ld. CIT(A) vide impugned order dated 13/03/2015. The assessee submitted that the right in the stated property was acquired upon booking of the same in the year 2005 and the same right was sold during impugned AY which gave rise to capital gains in the hands of the assessee and therefore, the resultant gains were LTCG in nature. The attention was drawn to the fact that the property was identified at the time of booking o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee acquiesced to this fact even during assessment proceedings. In the alternative, it has been submitted that the benefit of indexation was to be granted when the payments were actually made by the assessee. Per Contra, Ld. Authorized Representative for Assessee [AR], Shri Sanjay Parikh, submitted that the possession was never given to the assessee and the assessee has only sold the right to acquire the stated property. It has been submitted that there is no estoppel against the law and the revenue was obliged to compute the assessee s correct income within statutory framework. 5.1 we have carefully heard the rival submissions and perused relevant material on record. At the outset, we note that there could be no quarrel on the point that assessee s correct income as per law was to be computed and the revenue could not derive benefit out of assessee s ignorance / submissions and could not oust the assessee to raise a legally valid claim before the appellate authorities since there could be no estoppel against the law. 5.2 Proceeding further, upon perusal, the undisputed facts that emerges are that the assessee has acquired the rights in the stated property v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to that extent. 5.3 The revenue has relied upon the decision of this Tribunal rendered in S.Narendrakumar Co. Vs DCIT [62 Taxman.com 184] which is factually distinguishable since in that case the nature of the transactions, itself was under doubt and surplus received by the assessee was held to be assessable under the head Income from other sources . Similarly, the decision of Hon ble Kerala High Court in Lachmandas Sons Vs DCIT [49 Taxmann.com 387] deal the situation wherein the terms of the MOU indicated that the property would not be transferred in the name of the assessee till entire amount was paid. No such covenant is postulated by reservation of allotment letter in the present case. Similarly, the decision of Hon ble Delhi High Court in Gulshan Malik Vs. CIT [43 Taxman.com 200] deals with a situation wherein the confirmation letter dated 06/08/2014 specifically stated that no right to provisional / final allotment accrues until the buyer s agreement is signed and returned to the builders and it further stated that no right to claim title / ownership results from the confirmation letter itself. However, such conditions are missing in the present case before u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the expression used is 'held' as against 'acquired' or 'purchased' as used in other Sections like section 54 / 54F which shows that legislatures were conscious while making use of this expression. The expressions like 'owned' / acquired has not been used for allowing the indexation benefit to the assessee. However, the important question that arises for consideration, at this juncture, is that whether the indexation benefit of even the future installments would also be allowable to the assessee from the year in which the asset is first held by the assessee. For this, our attention has been drawn to the decision of Hon ble Gujarat High Court rendered in Nirmal Kumar Seth Vs CIT [17 Taxmann.com 127] wherein Hon ble court has decided the issue as under:- 6. We have heard both the parties at length and gone through the material available on record. 7. From the record, it appears that the land in question was purchased from the Lucknow Development Authority on instalments basis for which registration was made on 01.12.1982 by paying a sum of ₹ 3000/- only. The remaining payment was made in instalments to Lucknow Develop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the wisdom of higher judicial forum, we hold that the indexation benefit against the cost of acquisition shall be available to the assessee on the basis of index of the year in which the payments were actually made by the assessee. The payment made up-to the date of agreement i.e. 18/10/2007 shall be indexed by applying the index for Financial Year 2007-08. Accordingly, subsequent payments made in different financial years shall be indexed by applying the respective indexes of those years. Ground Number-1 stand dismissed. Therefore, taking the same view, following the higher judicial wisdom of Hon ble Gujarat High Court rendered in Nirmal Kumar Seth Vs CIT [17 Taxmann.com 127], we direct Ld. AO to work out the indexed cost after applying indexes of the respective years in which the payments has actually been made by the assessee. Accordingly, Ground No.5 stands allowed. 5.5 Lastly, it is an undisputed position that additional garage has been purchased by the assessee only during November, 2009 which establishes that is was capable of being transacted separately and therefore, constitute a separate capital asset in the hands of the assessee. Therefore, the gain from tra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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