TMI Blog2024 (4) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee had to apply for allotment of flat as a measure of commercial expediency. The ledger account of such parties where in the receipt of money is reflecting was also placed on record. Further, a summary sheet reflecting the date of receipt of amount and the date of payment for flat is also submitted by the assessee. Assessee had applied the fees amount towards the purchase of flat as per the terms agreed upon. It can further emerges from the records that the assessee had duly offered such receipt amount to its income on cash basis in accordance with its method of accounting which is also evident from the ledger accounts of such parties. CIT(A) was not right in sustaining the addition in respect of interest incurred on account of amount standing as advance in respect of interest incurred on account of amount standing as advance in respect of such parties. Decided in favour of assessee. Capital gain computation - determination of holding period of asset - Date of reckoning of holding of capital asset - whether the date of allotment of flat or the date of buyer s agreement, would have to be considered for the purpose of considering the holding period of asset by the assessee? - HE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the amount paid to such parties in the earlier years which is standing under the head loans and advances' as opening balance. In this regard, the Ld. AR pointed out that the interest on account of payment made in earlier year to such parties aggregates to Rs. 14,16,000/- (12,00,000 pertains to amount paid to M/s Chintel India Ltd. in earlier years). The Ld. AR further pointed out that no addition was on account of interest in earlier years that are A.Y. 2011-12 and A.Y. 2012-13. In such circumstances, considering the interest on account of opening balance is bad in law and as well as on facts. The Ld. AR further submitted that payment was made from the current account held with ABN Amro Bank which became the Royal Bank of Scotland which are reflected in the ledger accounts. The party wise interest paid listing placed in the paper book also reveals that no interest was paid to such bank. The Ld. AR further submitted that the said bank account is reflecting under the head current assets in the balance sheet. The Ld. AR submitted that it is not a case of the assessee that it had not applied for the flat itself. It is the case of the assessee that the assessee had to apply for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the following decisions: 1. S. A. Builders Ltd. vs. CIT (2007) 288 ITR 1 (SC) 2. Hero Cycles (P.) Ltd. vs. CIT (2015) 379 ITR 347 (SC) 3. PCIT vs. Basti Sugar Mills Co. Ltd. (Del. HC) (ITA No. 205 order dated 28.09.2018) 4. DCIT vs. M/s Jetair Pvt. Ltd. (Tri. Del.) (ITA Nos. 2712, 2713 and 6884/Del/2015 order dated 19.09.2018) 5. Chemical Sales and Services 3N vs. ITO (Tri. Del.) (ITA No. 4146/Del/2015 order dated 26.09.2018) 6. PCIT vs. DLF Holding Ltd. (Del. HC) (ITA No. 1012/2018 order dated 28.09.2018) Thus, the Ld. AR submitted that the disallowance made, deserves to be deleted. The Ld. AR further submitted that the balance sheet of the assessee reveals that it has its own funds to the tune of Rs. 56,73,773. Thus, no disallowance can be made to the extent of such amount advanced (Interest of Rs. 6,80,853) in view of the recent judgement of the Hon'ble Supreme Court in case of CIT vs. Reliance Industries Ltd. (2019) 410 ITR 466 (SC) wherein it has been held that where the interest free funds are available with the assessee, it could be presumed that the investments were first made from the interest free funds available with the assessee. The Ld. AR relied upon the followi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ground No. 2 raised by the assessee is allowed. 7. The Ground No. 3 raised by the assessee is with regard to the date of reckoning of holding of capital asset i.e. whether the asset is to be construed as being held from the date of allotment of flat or from the date of agreement. 8. We have heard the rival submissions and perused the materials available on record. We find that Bestech India Pvt Ltd (Builder) allotted Flat No. D-702 , Park View Spa, Sector-47 , Gurgaon via allotment letter dated 20.8.2009. The agreement with the buyer was executed on 13.7.2010. The assessee sold the flat to Mr Goonmeet Singh Chauhan on 8.4.2014 relevant to Asst Year 2015-16. The assessee filed its return of income declaring long term capital loss of Rs 17,95,278/- computing long term capital gains, assessee computed the period holding from the date of allotment to the date of sale i.e. 20.8.2009 to 8.4.2014 comprising of 43 months. The ld. AO during the course of assessment proceedings rejected the contention of the assessee and observed the period of holding has to be considered from the date of buyers agreement i.e. 13.7.2010. Accordingly, the ld. AO observed that the assessee had held the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cember, 1993 the board clarified as under: 2. The Board has considered the matter and has decided that if the terms of the schemes of allotment and construction of flats/houses by the cooperative societies or other institutions are similar to those mentioned in para 2 of Board's Circular No.471, dated 15-10-1986, such cases may also be treated as cases of construction for the purposes of sections 54 and 54F of the Income-tax Act. It can thus be seen that the entire issue was clarified by the CBDT in its above mentioned two circulars dated 15th October, 1986 and 16th December, 1993. In terms of such clarifications, the date of allotment would be the date on which the purchaser of a residential unit can be stated to have acquired the property. There is nothing on record to suggest that the allotment in construction scheme promised by the builder in the present case was materially different from the terms of allotment and construction by D.D.A.. In that view of the matter, CIT appeals of the Tribunal correctly held that the assessee had acquired the property in question on 31st December, 2004 on which the allotment letter was issued. 10. The revenue s Special Leave Petition (SLP) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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