TMI Blog2020 (11) TMI 610X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of determining the cost of inflation of the assets, while computing the cost of acquisition of property in terms of section 49 of the Act. This ground of the assessee is allowed. Non-granting cost of improvement, while computing the capital gain - HELD THAT:- There is no iota of evidence that there is an existing building in the impugned land. The only contention of the assessee is that assessee declared income from said property under the head income from house property in earlier assessment years. However, there was no evidence to show that there is a building therein - declaring income in the return of income from Siddharth Nagar Property does not suggest that there is a building in the impugned property. Since the assessee has not furnished any revenue record to show that there is a building or evidence regarding power connections or water connections, in the absence of this evidence, it has to be noted that there is no building in the scheduled property and the assessee is not entitled for any benefit of cost of improvement. This ground of appeal of assessee is allowed. Non giving due credit towards TCS as per 26AS - HELD THAT:- CIT(A) given a direction to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty in the Wealth tax return also, which all corroborate the fact that improvement was effected in construction of a building. 7. The learned CIT(Appeals) erred in not specifically dealing with this ground of appeal and there is no discussion in his appellate order about the claim of the appellant. 8. Without prejudice to the right of the appellant to approach the Assessing Officer to give credit for TCS as per 26AS as directed by the CIT(Appeals) in his order, it is submitted that the CIT(Appeals) ought to have specifically directed the Assessing Officer to give credit for TCS of ₹ 18,165/- as claimed in the return while computing the tax liability. 9. The appellant craves leave to add, delete, substitute any of the grounds before the hearing of appeal. 10. The appellant, therefore, prays that the ITAT may be pleased to set aside the order of CIT(Appeals), delete the additions made in the order of assessment, direct the Assessing Officer to accept the income returned and give credit for TCS as claimed in the return of income, in the interest of justice. 2. The facts of the case are that the appellant was allotted a site bearing No. S-4, Siddhartha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant became entitled for the ownership of the property. The appellant held the property for all practical purposes on de facto basis from the date of letter of allotment and the payment of the total consideration, more particularly in view of the fact that the allotment letter identified the property and the entire consideration was also paid during the financial year 1986-87. For the purpose of easy reference, the chronology of events is given below: 1. Date of application 03.05.1986 2. Date of allotment letter allotting site No.S-4, Siddhartha Layout, Mysuru 20.05.1986 3. Date of payment of entire consideration 29.05.1986 4. Date of execution of agreement 16.06.1998 5. Date of possession certificate 23.06.1998 6. Date of execution of deed conferring title 06.01.2004 7. Date of sale of the site by the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deed in respect of that asset for the purpose of computing capital gain. The appellant had acquired a right to get a particular site from MUDA and that right of the assessee itself is a capital asset. The word 'held' used in s. 2(14) as well as Explanation to s. 48 clearly explains that appellant had some right in the capital asset which is subjected to transfer. By making the payment to MUDA pursuant to the allotment letter, the appellant held the capital asset and, therefore, the benefit of indexation has to be granted to the appellant on the basis of payments made by him for acquiring the said asset and the appellant has rightly claimed the indexation benefit from the dates when he has made the payments to MUDA. As a matter of fact, MUDA on 1.1.1988 issued a show cause notice to the appellant to show cause why the allotment of the site made by the then City Improvement Trust Board should not be cancelled. The appellant satisfactorily replied the authorities and such a proposal to cancel the allotment was withdrawn. This show cause notice proves that the opportunity was given, as the appellant had acquired a vested right by virtue of allotment letter. The decision relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) ITA No.328 of 2003 dated 13.12.2007. 8. He also relied on the CBDT Circular No.471 dated 15.10.1986. 9. On the other hand, Ld. D.R. submitted that date of acquisition of immovable property for the purpose of computation of cost of inflation of indexation to be the date considered on which the assessee got absolute sale deed in his favour. According to the Ld. D.R., the sale deed by Mysore Urban Development Authority (MUDA) was executed in favour of the assessee on 6.1.2004. According to the Ld. D.R., date of granting of possession certificate i.e. 23.6.1998 to be considered for the purpose of computing the indexation cost of the asset and which is related to A.Y. 1998-99. According to the Ld. D.R., allotment letter did not confer any right to acquire a property by the assessee and only created an interest to acquire the same, subject to terms conditions as would be laid down in the agreement to be entered to purchase the said property. 10. We have heard the rival submissions and perused the materials available on record and gone through the orders of the authorities below. In the present case, assessee got allotment letter for site No.S-4, Siddharth Layout, Mysor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld 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 in multistoried constructions in big cities. The aforesaid new subclauses (v) and (vi) have been inserted in Section 2(47) to prevent avoidance of capital gains liability by recourse to transfer of rights in the manner referred to above. A person holding the Power of Attorney is authorized the powers of owner, including that of making construction though the legal ownership in such cases continues to be with the transferor. The intention of legislature is to treat even such transactions as transfers and the capital gain arising out of such transactions are brought to tax. Further, the Circular No.4 71 goes to the extent of clarifying that for the purpose of Income-tax Act, the allottee gets title to the property on the issuance of the allotment letter and the payment of installments is o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty, 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 shortterm capital gain or a long term capital gain. 10.1 Further, in the case of Richa Bagrodia in ITA No.3601/Mum/2012 dated 22.4.2014, the Tribunal considered similar issue and observed as under: 4. We heard both the parties and perused the orders of the Revenue Authorities as well as the judgments of the Hon'ble High Court and the decisions of the Tribunal cited by learned representatives of both the parties. The only issue that is to be decided is whether the date of allotment of the flat or the date of possession of the flat by the assessee should be considered as the date for computing the holding period of 36 months. On perusal of the cited orders of the Tribunal (supra), we find that an identical issue came up for adjudication before the Tribunal in the case of Meena A Hemnani (supra), order dated 17th January, 2014 wherein one of us (AM) is a party and the issue was decided in favour of the assessee by relying on various decisions of the Tribunal as well as the judgment of the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ben Upendra Shah (2003) 262 ITR 657 (Guj) apart from other decisions of the Tribunal in the case of Jitendra Mohan vs. ITO (2007) 11 SOT 594 (Del) and also another decision of the ITA T in the case of Pra vin Gupta vs. ACIT and the relevant propositions are extracted in para 7 of the Tribunal's order dated 7.11.2012. The said paras 7 and 8 from the order of the Tribunal in the case of Smt Vandana Rana Roy read as under: 7. We have heard both the parties, perused the cited decisions and we find that there is no dispute on the facts The only issue that is to be decided is whether date of allotment of the flat or the date of possession of the fiat by the assessee should be considered as date of holding for computing the holding period of 36 moths. In alternative, the date of registration should be the relevant date. On perusal of the said decisions relied upon by the Ld Counsel, we find that the decisions are relevant and applicable to the facts of the present case. The conclusion of the Hon ble Gujarat High Court judgement in the case of CIT Vs. Jindas Panchand Gandhi reads as under: Assessee having sold the fiat allotted to him by a co-operative housing society after a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y interference. Accordingly, the grounds raised by the Revenue are dismissed. 4.Considering the above settled nature of this issue, we are of the opinion that the assessee must succeed on this issue. Accordingly, the relevant grounds of appeal are allowed. 7. From the above settled position of the issue, it can be safely concluded that the date of allotment should be reckoned as the date for computing the holding period for the purpose of capital gains. In the instant case, the date of allotment is 11.04.2003 (FY 2003-2004) and the date of sale of the propert' is 14.10.2007, therefore the holding period is more than 36 months. Therefore, the capital gains earned by the assessee on the sale of the flat have to be treated as 'long term capital gains'. The assesee paid the first installment on 11.4.2003, thereby conferring a right to hold a flat, which was later identified and possession delivered on later date. The Hon'ble Punjab Haryana High Court in the case of Mrs. Madhu Kaul vs. CIT vide Income Tax Appeal No.89 of 1999, dated 17th January, 2014 held that the mere fact that possession was delivered later, does not detract from the fact that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gone through the orders of the authorities below. There is no iota of evidence that there is an existing building in the impugned land. The only contention of the assessee is that assessee declared income from said property under the head income from house property in earlier assessment years. However, there was no evidence to show that there is a building therein. In our opinion, declaring income in the return of income from Siddharth Nagar Property does not suggest that there is a building in the impugned property. Since the assessee has not furnished any revenue record to show that there is a building or evidence regarding power connections or water connections, in the absence of this evidence, it has to be noted that there is no building in the scheduled property and the assessee is not entitled for any benefit of cost of improvement. This ground of appeal of assessee is allowed. 14. The last ground for our consideration is with regard to the non giving due credit towards TCS as per 26AS at ₹ 18,165/-. The Ld. CIT(A) given a direction to the A.O. to give TCS credit to the assessee after due verification. Accordingly, the assessee shall produce the necessary evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X
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