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TMI Blog2019 (6) TMI 1052X X X X Extracts X X X X X X X X Extracts X X X X ..... finalized on 31.01.2014 rejecting the claim made by the assessee under section 54F of the Act. The short point involved in this particular case is as to whether "holding period" of a capital asset is to be reckoned from the "date of allotment" or from the "date of possession" of the under lined capital asset. The brief facts leading to this case is this that the assessee purchased an immovable property being Plot No.17 situated at Sector - II, in the residential scheme name 'Ornate Park' in the district of Ahmedabad allotment whereof was made on 15.02.2007. The said property was subsequently sold during the year under consideration on 04.08.2010. Since the property was held by the assessee for more than 36 months the said property was treated as long term capital asset. The assessee claim index cost of acquisition of Rs. 16,41,191/- and index cost of improvement of Rs. 15,02,943/-, the sale consideration was shown for Rs. 61,00,000/-. Accordingly, Long Term Capital Gain (LTCG) of Rs. 29,55,866 arose on such long term capital asset in terms of section 48 of the Act. Further the assessee acquired another property for her share of Rs. 70,00,000/-. The exemption of capital gain was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed by the authorities below. 4. We have heard the rival contentions made by the parties, we have also perused the relevant materials available on record and the judgment relied upon by the Learned Counsel appearing for the assessee. The letter of allotment dated 15.02.2007 as appearing at Page 35/A clearly states the following "... land shall be allotted to you after being converted in NA and after execution of sale deed in favour of association and on payment of decided amount which may please be noted" Page 29A to 29AC of the Paper Book contained the sale deed against the sale consideration of said Rs. 9,00,000/- in respect of the property in question. Page 29/A/A of the Paper Book gives the details of the payment made by the assessee wherefrom it is evident that the assessee has paid the total amount of Rs. 9,00,000/- by way of two cheques both drawn with the Bank of Baroda dated 15.03.2005; Cheque No 886512 Rs. 6,00,000/- and Cheque No.885613 of Rs. 3,00,000/- to the vender of the said property. Thus we are of the view that in terms of the allotment letter the possession of the property was acquired by the assessee upon such payment made on 15.03.2005, though, the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efinition as contained in ITA No.2291/Mum/2015Section 2(47), even when a sale, exchange, or relinquishment or extinguishment of any right, under a transaction the assessee is put in possession of an immovable property or he retained the same in part performance of the contract under Section 53-A of the Transfer of Property Act, it amounts to transfer. No registered deed of sale is required to constitute a transfer. Similarly, any transaction whether by way of becoming a member of or acquiring shares in a cooperative 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, also constitutes transfer and the assessee is said to hold the said property for the purpose of the definition of 'short-term capital gain'. In fact, the Circular No.495 makes it clear that transactions of the nature referred to above are not required to be registered under the Registration Act, 1908. Such arrangements confer the privileges of ownership without transfer of title in the building and are common mode of acquiring flats particularly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the social milieu of a country." Therefore, keeping the aforesaid principles in mind, when we look at Section 48, the language employed is unambiguous. The intention is very clear. When a capital asset is transferred, in order to determine the capital gain from such transfer, what is to be seen is, out of full value of the consideration received or accruing, the cost of acquisition of the asset, the cost of improvement and any expenditure wholly or exclusively incurred in connection with such transfer is to be deducted. What remains thereafter is the capital gain. It is not necessary that after payment of cost of acquisition, a title deed is to be executed in favour of the assessee. Even in the absence of a title deed, the assessee holds that property and therefore, it is the point of time at which he holds the property, which is to be taken into consideration in determining the period between the date of acquisition and date of transfer of such capital gain in order to decide whether it is a short-term capital gain or a long-term capital gain." Thus, from the aforesaid judgment, it is clear that for the purpose of holding an ITA No.2291/Mum/2015 asset, it is not necessary tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proposition that transfer of a property shall be effective only on registration of conveyance deed in view of section 54 of Transfer of Property Act. In our view, it is a settled proposition of law and there is no dispute on that. The absolute legal ownership of an immovable property shall take place in terms of various provisions of Transfer of Property Act which needs to be read with provisions of section 2(47) of Income-tax Act, 1961 for the purpose of computing tax liability arising on account of sale / purchase of immovable properties under Income-tax Act. But the issue here before us is different. As discussed earlier, the holding period is to be determined in terms of section 2(42A) of the Act which has been reproduced and discussed above. The issue of transfer of ownership is not the issue to be decided here for computing the holding period. Therefore, we find that application of the ratio of aforesaid judgment would not be appropriate here. 16. Thus, respectfully following the judgements of various High Courts wherein this very issue has been analysed in detail as discussed above at length, we find that holding period should be computed from the date of issue of al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember acquires the shares in the co-operative housing society and the date on which the member had sold his shares in the said cooperative housing society. In the facts of the instant case, it is clear that the assessee acquired shares in the co-operative housing society and allotted the flat on 15- 11-1979 and she transferred those shares on 4-12-1982. Thus, the assessee had held the shares and allotment of the flat in the said cooperative housing society for a period of more than 36 months. Accordingly, the capital gain in question was rightly held by the Tribunal to be a long-term capital gain. Therefore, the assessee was rightly entitled to the benefit of section SOT of the Income-tax Act, 1961. 9. In view of the above discussion, we answer the question referred to us in the affirmative i.e. in favour of the assessee and against the revenue. 10. The reference accordingly stands disposed of with no order as to costs." In view of the ratio laid down by the Jurisdictional High Court in favour of the assessee for holding the asset for more than 36 months from the date of allotment of the property, we find no justification in the order passed by the authorities below in suc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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