Shri Sanjay Kumath, Indore V. The ACIT Circle 2(1), Indore

CO 83/IND/2013

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 9161 (ITAT-INDORE)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 19-12-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 16-08-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: H P VERMA; SAKSHI VERMA
• Assessee Lawyers: R A VERMA
• Keywords: Capital asset; Cost of acquisition
• Section: 54F; 54

Judgement Text

PAGE 1 OF 21 IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : ACNPK4953D I.T.A.NO. 448 /IND/201 3 A.Y. : 2009-10 ACIT, 2(1), INDORE VS. SHRI SANJAY KUMATH, 15/1, SOUTH TUKOGANJ, INDORE. APPELLANT RESPONDENT C.O.NO.83/IND/2013 (ARISING OUT OF I.T.A.NO. 448/IND/2013) A.Y. : 2009-10 SHRI SANJAY KUMATH, ACIT,2(1), 15/1, SOUTH TUKOGANJ, VS. 2(1), INDORE. INDORE CROSS OBJECTOR RESPONDENT DEPARTMEN T BY : SHRI R.A.VERMA, SR. DR RESPONDENT BY : SHRI H.P.VERMA AND MS.SAKSHI VERMA, ADVOCATES DATE OF HEARING : 17 . 1 2 .201 3 DATE OF PRONOUNCEMENT : 19 . 1 2 .201 3 SHRI SANJAY KUMATH, INDORE. I.T.A.NO. 448/IND/2013 AND C.O.NO.83/IND/2013 A.Y. : 2009-10 2 PAGE 2 OF 21 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE AGAINST THE ORDER PASSED BY THE CIT(A), DATED 18.02.2013 FOR THE ASSESSMENT YEAR 20 09-10. 2. THE REVENUE HAS TAKEN FIVE GROUNDS, HOWEVER, THE CONTROVERSY REVOLVES AROUND THE CIT(A)S ACTION FOR TREATING THE CAPITAL ASSETS (FLAT) SOLD BY THE ASSESSEE AS LONG TERM CAPITAL ASSET, THEREBY ALLOWING ASSESSEES CLAIM FOR DEDUCT ION U/S 54F. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERU SED. FACTS IN BRIEF ARE THAT THE ASSESSEE VIDE ALLOTMENT LETTER DATED 22 ND JANUARY, 2005, ALLOTTED A FLAT NO.1202 AT RAHEJA, TIPCO-I, MALAD, MUMBAI. AS PER THIS LETTER OF ALLOTMENT, THE BUILDER M/S. K.RAHEJA UNIVERSAL PVT.LTD., MUMBAI, AGREED TO SELL THE FLAT TO THE ASSESSEE FOR RS. 33,15,750/- BESIDES OT HER CHARGES OF RS. 1,32,480/-. THE ASSESSEE WAS REQUIRED TO SIG N THE LETTER AS A TOKEN OF AGREEMENT WITH THE BUILDER. THE ASSES SEE DULY SIGNED THE LETTER AND ALLOTMENT WAS GIVEN TO ASSESS EE ON SHRI SANJAY KUMATH, INDORE. I.T.A.NO. 448/IND/2013 AND C.O.NO.83/IND/2013 A.Y. : 2009-10 3 PAGE 3 OF 21 22.1.2005. PAYMENT OF RS. 1 LAKH WAS MADE BY THE AS SESSEE ON 22.1.2005, RS. 5,23,150/- ON 26.1.2005 AND THE B ALANCE PAYMENT WAS MADE GRADUALLY. THE ASSESSEE SOLD THE S AID FLAT ON 5.3.2009 AS PER AGREEMENT OF SALE DATED 27.2.200 9 AND CLAIMED DEDUCTION U/S 54F. IN RESPECT OF LONG TERM CAPITAL GAIN SO AROSE. HOWEVER, THE ASSESSING OFFICER DID N OT ACCEPT THE ASSESSEES CONTENTION BY OBSERVING THAT ASSESSE E HAS ACQUIRED THE RIGHT IN THE SAID FLAT BY WAY OF AGREE MENT EXECUTED ON 27.2.2009. THUS, THE DATE OF ACQUISITIO N OF THE SAD FLAT WAS TAKEN BY THE ASSESSING OFFICER AS ON 2 7.2.2009 IN PLACE OF DATE OF ALLOTMENT OF FLAT VIDE ALLOTMENT L ETTER DATED 22.1.2005. PRECISE OBSERVATION OF THE ASSESSING OFF ICER WAS AS UNDER :- THE RELEVANT PORTION OF THE A.O.S FINDINGS IS EXTRACTED AS UNDER:- 4. SHORT TERM CAPITAL GAIN VS. LONG TERM CAPITAL GAIN A. LONG TERM CAPITAL GAIN: ON EXAMINATION AND VERIFICATION OF RETURNS AND SUBMISSIONS FILED BY TH E SHRI SANJAY KUMATH, INDORE. I.T.A.NO. 448/IND/2013 AND C.O.NO.83/IND/2013 A.Y. : 2009-10 4 PAGE 4 OF 21 ASSESSEE, IT IS NOTICED THAT THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN RS.29,37,549/- ON TRANSFER OF ITS RIGHT TO PURCHASES A FLAT FOR RS. 69,00,0 00/-N AGAINST WHICH INDEXED COST OF ACQUISITION RS. 1,21,250/- AND COST OF IMPROVEMENT RS.38,41,201/- (TOTAL RS. 39,62,451/-) HAS BEEN CLAIMED. THE LONG TERM CAPITAL GAIN INCOME HAS BEEN SUBSEQUENTLY CLAIMED EXEMPTED U/S 54F ON ACCOUNT OF INVESTMENT OF NET CONSIDERATION IN CAPITAL GAIN-CDR A/C WITH OBC. RNT MARG, INDORE. B. SHORT TERM CAPITAL GAIN: ON FURTHER EXAMINATION OF THE COPIES OF AGREEMENT FOR TRANSFE R AND AGREEMENT FOR SALE IN RESPECT OF THE PURCHASE AND SALE OF THE ASSESSEES SO CALLED RIGHTS IN A FL AT NO.1202, 12 TH FLOOR, TOWER-I, RAHEJA-TIPCO HEIGHTS, MALAD (E), MUMBAI, IT IS NOTICED THAT THE PERIOD OF HOLDING OF SAID RIGHTS IS LESS THAN THE PRESCRIBED PERIOD OF THREE YEARS AND THEREFORE SHORT TERM CAPITAL GAIN INCOME HAS ACCRUED TO THE ASSESSEE. SHRI SANJAY KUMATH, INDORE. I.T.A.NO. 448/IND/2013 AND C.O.NO.83/IND/2013 A.Y. : 2009-10 5 PAGE 5 OF 21 C. AGREEMENT FOR SALE CONFERRED THE RIGHT TO PURCHASE THE AFORESAID FLAT ON THE ASSESSEE ON 27.02.2009 THE DATE ON WHICH THE AGREEMENT WAS EXECUTED & REGISTERED DURING THE PY. RELEVANT TO ASSESSMENT YEAR 2009-10 BETWEEN THE FOLLOWING PARTIES: M/S. RAHEJA UNIVERSAL PRIVATE LIMITED, MUMBAI (THE DEVELOPER) AND 1. NIRMAL BAPULAL THAKKAR (HUF) (THE FIRST OWNER) 2. SURAT BAPULAL THAKKAR (HUF) (THE SECOND OWNER) 3. DAYAL BAPULAL THAKKAR (HUF) (THE THIRD OWNER) AND SHRI SANJAY KUMATH (THE ASSESSEE & PURCHASER) D. AGREEMENT FOR TRANSFER TRANSFERRING THE SAID RIGHT TO PURCHASE A FLAT IS FOUND TO HAVE BEEN MA DE ON 05.03.2009 DURING THE P.Y. ITSELF BETWEEN: SHRI SANJAY KUMATH (THE ASSESSEE & TRANSFEROR) SHRI SANJAY KUMATH, INDORE. I.T.A.NO. 448/IND/2013 AND C.O.NO.83/IND/2013 A.Y. : 2009-10 6 PAGE 6 OF 21 AND M/S. RAHEJA UNIVERSAL PRIVATE LIMITED, MUMBAI (THE CONFIRMING PARTY NO.1) AND 4. NIRMAL BAPULAL THAKKAR (HUF) (THE FIRST OWNER) 5. SURAT BAPULAL THAKKAR (HUF) (THE SECOND OWNER) 6. DAYAL BAPULAL THAKKAR (HUF) (THE THIRD OWNER) AND SHRI JAYESH VELJIBHAI GADHECHA AND MRS. DIVYA JAYESH GADHECHA (TRANSFEREES) SINCE THE ASSESSEE HAS BEEN BESTOWED WITH THE RIGHT TO PURCHASE THE AFORESAID FLAT ON 27.02.2009 AND THE SAID RIGHT HAS BEEN SOLD BY HIM ON 05.03.2009 DURING P.Y. ITSELF, IT WAS REQUIRED O F THE ASSESSEE TO EXPLAIN AS TO WHY THE RIGHTS TO SAL E THE FLAT UNDER CONSIDERATION SHOULD NOT BE CONSIDER ED SHRI SANJAY KUMATH, INDORE. I.T.A.NO. 448/IND/2013 AND C.O.NO.83/IND/2013 A.Y. : 2009-10 7 PAGE 7 OF 21 TO BE VESTED WITH HIM FROM THE DATE OF AGREEMENT OF PURCHASE OF RIGHT I.E. 27.02.2009. E. LETTER OF ALLOTMENT DATED 22.01.2005: IN RESPONSE, THE ASSESSEE THROUGH ITS COUNSEL SHRI MANISH MITTAL FURNISHED A COPY OF ALLOTMENT LETTER OF SAID FLAT STATING THAT THE ASSESSEE ACQUIRED INTER EST IN THE SAID FLAT BY WAY OF RIGHT TO PURCHASE THE SA ID FLAT AT THE PRICE AGREED THEREIN. IT HAS FURTHER B EEN PLEAD THAT THE ASSESSEE HAD BEEN ALLOTTED FLAT UND ER CONSIDERATION ON 22.01.2005, CONFERRING ON HIM RIGH T TO PURCHASE THE SAID FLAT.THE FACT THAT AN AGREEMENT FOR SALE OF FLAT WAS ENTERED ON 27.02.200 9 DOES NOT AFFECT THE RIGHTS CONFERRED ON THE ASSESSE E VIDE ALLOTMENT LETTER DATED 27.02.2009. SUBSEQUENTLY, A COPY OF CERTIFICATE FROM THE ABOVE NAMED DEVELOPER HAS ALSO BEEN FURNISHED IN SUPPORT OF CLAIM OF THE ASSESSEE AS TO THE ACQUISITION OF IRRECOVERABLE RIGHT FROM THE DATE OF ALLOTMENT LETT ER. SHRI SANJAY KUMATH, INDORE. I.T.A.NO. 448/IND/2013 AND C.O.NO.83/IND/2013 A.Y. : 2009-10 8 PAGE 8 OF 21 F. EXISTENCE OF CAPITAL ASSETS: THE ASSESSEES PLEA AS TO THE ACQUISITION OF RIGHTS FROM THE DATE OF ALLOTMENT LETTER IS NOT CORRECT AS THERE EXISTED NO CAPITAL ASSETS AS ON THE DATE OF ALLOTMENT LETTER I N WHICH THE ASSESSEE COULD BE SAID TO HAVE ACQUIRED S O CALLED RIGHT TO PURCHASE THE SAID FLAT. THE ALLOTME NT OF SAID FLAT WAS MADE ONLY ON THE BASIS OF BUILDING PL AN & LAYOUT FOR CONSTRUCTION OF THE PROJECTS PROPERTY. G. TRANSFER:- SINCE THERE EXISTED NO CAPITAL ASSETS , THERE ARISES NO QUESTION OF TRANSFER WITHIN THE MEANING OF SECTION 2(47) OF THE ACT AS ON THE DATE OF ALLOTMENT. IN THE CASE IN HAND THERE WAS NO CAPITAL ASSET IN EXISTENCE AT THE TIME OF BOOKING AND NO RIGHT OR ASSET WAS TRANSFERRED BY THE TENTATIVE ALLOTMENT LETTER, THEN THE SUBSEQUENT SALE OF THE RIGHTS IN F LAT WHICH WERE ACQUIRED BY THE ASSESSEE ONLY BY THE AGREEMENT FOR SALE ON 27.02.2009 AND SOLD VIDE SHRI SANJAY KUMATH, INDORE. I.T.A.NO. 448/IND/2013 AND C.O.NO.83/IND/2013 A.Y. : 2009-10 9 PAGE 9 OF 21 AGREEMENT FOR TRANSFER ON 05.03.2009 CANNOT BE SAID TO BE A LONG-TERM CAPITAL ASSET. H. IF IT COULD BE PRESUMED AT ALL THAT THERE EXISTE D CAPITAL ASSET IN THE SHAPE OF SO CALLED RIGHTS AND ITS TRANSFER TOOK PLACE ON THE DATE OF ALLOTMENT LETTER , THE ASSESSEE CAN BE SAID TO HAVE ACQUIRED THE RIGHTS IN THE SAID FLAT FOR THE AMOUNT OF BOOKING AMOUNT ONLY . I. PARA-21 OF AGREEMENT FOR SALE STATES HERE AS UNDER: 21. IT IS HEREBY EXPRESSELY AGREED AND PROVIDED THAT SO LONG AS IT DOES NOT IN ANY WAY EFFECT OR PREJUDICE THE RIGHTS HEREUNDER GRANTED IN FAVOUR OF THE PURCHASER IN RESPECT OF THE SAID FLOA T, THE DEVELOPER THE EXPRESSING THE RIGHTS HEREUNDER GRANTED IN FAVOUR OF THE PURCHASER IN RESPECT OF THE SAID FLAT EVIDENTLY INDICATE THE FACT THAT THE ASSESSEE IS BE ING BESTOWED WITH THE RIGHTS TO PURCHASE THE SAID FLAT ONLY THROUGH THE SAID AGREEMENT FOR SALE. IT MAY, SHRI SANJAY KUMATH, INDORE. I.T.A.NO. 448/IND/2013 AND C.O.NO.83/IND/2013 A.Y. : 2009-10 10 PAGE 10 OF 21 THEREFORE, VERY WELL BE SAID THAT RIGHTS HAS BEEN CONFERRED ON ASSESSEE FROM THE DATE OF EXECUTION OF AGREEMENT FOR SALE ON 27.02.2009 AND NOT FROM THE DATE OF ALLOTMENT LETTER. J. PARA- (I) OF THE AGREEMENT FOR TRANSFER DATED 05.03.2009 ALSO CONFIRM THE AFORESAID FACT WHICH READ AS UNDER: (I) PURSUANCE TO THE NEGOTIATION BETWEEN THE PARTIES HERETO, THE TRANSFEROR (THE ASSESSEE) HAVE AGREED TO SELL AND TRANSFER TO THE TRANSFEREE (SHRI JAYESH VELJIBHAI GADHECHA AND MRS. DIVYA JAYESH GADHECHA) AND THE TRANSFEREES HAVE AGREED TO ACQUIRE FROM THE TRANSFEROR (THE ASSESSEE) THE TRANSFERORS RIGHT, TITLE AND INTEREST IN THE SAID ORIGINAL AGREEMENT FOR SALE DATED 27.02.2009 FOR A LUMP SUM.. EVIDENTLY THE TRANSFEROR (THE ASSESSEE) HAS BEEN VESTED WITH THE RIGHT, TITLE AND INTEREST IN T HE SHRI SANJAY KUMATH, INDORE. I.T.A.NO. 448/IND/2013 AND C.O.NO.83/IND/2013 A.Y. : 2009-10 11 PAGE 11 OF 21 AFORESAID FLAT FROM THE DATE OF ORIGINAL AGREEMENT (AGREEMENT FOR SALE) DATED 27.02.2009. K. AGAIN, THE DEVELOPER I.E. M/S. RAHEJA UNIVERSAL PRIVATE LIMITED, MUMBAI HAD ACQUIRED ONLY THE RIGHTS TO DEVELOP FROM THE LAND OWNERS IN 2003 AND HE HAD NOT FULLY PAID OFF HIS AGREED OBLIGATION AS ON THE DATE OF ALLOTMENT TO THE LAND OWNER. THEREFO RE, THE TRANSACTION OF TRANSFER OF RIGHTS BETWEEN DEVELOPER AND LAND OWNERS HAD NOT COMPLETED AS ON DATE OF ALLOTMENT. HENCE, TRANSFER OF THE RIGHT TO THE ASSESSEE BY THE RIGHT HOLDER DEVELOPER CANNOT BE SAID TO BE CLEAR AND FREE FROM ENCUMBRANCE AS ON TH E DATE OF ALLOTMENT LETTER RELIED UPON BY THE ASSESSE E AND UPHILL THE COMPLETION OF PROJECT PROPERTY. IN VIEW OF THE DISCUSSION MADE IN THE FOREGOING PARES, THE ASSESSEE CANNOT BE SAID TO HAVE ACQUIRED THE RIGHT TO PURCHASE A FLAT FROM THE DATE OF ALLOT MENT LETTER AS CLAIMED BY HIM. THE ASSESSEE HAS ALSO RELIED UPON THE CERTIFICATE DATED 01.08.2011 ISSUED SHRI SANJAY KUMATH, INDORE. I.T.A.NO. 448/IND/2013 AND C.O.NO.83/IND/2013 A.Y. : 2009-10 12 PAGE 12 OF 21 BY THE DEVELOPER. THE DEVELOPER IS NOT, HOWEVER, AN AUTHORITY TO DECIDE AS TO WHEN THE IRRECOVERABLE RI GHT HAD ACCRUED TO THE ASSESSEE. 4. BY THE IMPUGNED ORDER, THE LD. CIT(A) ALLOWED ASSES SEES CLAIM FOR DEDUCTION U/S 54/54-F BY TREATING THE DAT E OF ALLOTMENT AS A DATE OF ACQUISITION FOR TREATING THE FLAT AS LONG TERM CAPITAL ASSETS IN THE HANDS OF THE ASSESSEE, A FTER HAVING THE FOLLOWING OBSERVATIONS :- 4.3 I HAVE CONSIDERED THE A.O.S ORDER AS WELL AS THE APPELLANTS SUBMISSION. FURTHER I HAVE ALSO TAKEN NOTE OF THE CASE LAWS RELIED UPON BY THE APPELLANT. HAVING CONSIDERED ALL THE FACTS OF THE CASE, I FIND MERITS IN THE ARGUMENTS OF THE APPELLANT. I AGREE WITH THE APPELLANTS A/R THAT THE APPELLANT ACQUIRED RIGHT TO PURCHASE OF THE SAID FLAT ON PART PAYMENT OF PURCHASE SHRI SANJAY KUMATH, INDORE. I.T.A.NO. 448/IND/2013 AND C.O.NO.83/IND/2013 A.Y. : 2009-10 13 PAGE 13 OF 21 CONSIDERATION I.E. ON 22/01/2005. ACCORDINGLY THE APPELLANTS GAIN WILL BE CONSIDERED AS LONG TERM CAPITAL GAIN. EVEN FIND THAT THE CASE LAWS RELIED UPON BY THE APPELLANT ALSO SUPPORT THE SAID CONTENTION OF THE APPELLANT. FURTHER I FIND THAT THE SAID VIEW IS ALSO SUPPORTED BY CBDT CIRCULAR NO. 471 DATED 15/10/1986 & CBDT CIRCULAR NO. 672 DATED 16/12/1993. IT IS CLEARLY HELD BY THE BOARD THAT THE ALLOTTEE GETS TITLE TO THE PROPERTY ON THE ISSUANCE OF THE ALLOTMENT LETTER AND THE PAYMENT OF INSTALLMENTS IS ONLY A FOLLOW UP ACTION AND TAKING THE DELIVERY OF POSSESSION IS ONLY A FORMALITY. EVEN IT IS ALSO EVIDENT THAT THE BOARD VIDES CIRCULAR NO. 672 AFTER REFERRING SHRI SANJAY KUMATH, INDORE. I.T.A.NO. 448/IND/2013 AND C.O.NO.83/IND/2013 A.Y. : 2009-10 14 PAGE 14 OF 21 CIRCULAR NO. 471 EXTENDED THE FACILITY OF EXEMPTION UNDER SECTION 54 & 54F IN RESPECT OF ALLOTMENT OF FLAT/HOUSE. THUS, TAKING NOTE OF ALL THESE FACTS OF THE CASE, I CONSIDER IT PROPER AND APPROPRIATE TO HOLD THAT THE A.O. WAS NOT JUSTIFIED IN REJECTING HE CLAIM OF THE APPELLANT IN RESPECT OF RIGHT TO PURCHASE I.E. DATE OF ALLOTMENT. FURTHER I FIND THAT THE APPELLANT IS ALSO ENTITLED TO DEDUCTION U/S 54F AS THE ENTIRE SALE CONSIDERATION VALUE OF THE SAID FLAT/HOUSE WAS INVESTED IN CAPITAL GAIN- CDR A/C WITH OBC. RNT MARG, INDORE. ACCORDINGLY THIS GROUND OF APPEAL IS ALLOWED. SHRI SANJAY KUMATH, INDORE. I.T.A.NO. 448/IND/2013 AND C.O.NO.83/IND/2013 A.Y. : 2009-10 15 PAGE 15 OF 21 5. DEPARTMENT IS IN APPEAL AGAINST THE SAID ORDER OF C IT(A). 6. SHRI R. A. VERMA, SR. DR, ON BEHALF OF THE REVENUE CONTENDED THAT AS ON THE DATE OF ALLOTMENT I.E. 22. 01.2005, NO CAPITAL ASSET WAS EXISTED, THEREFORE, THE LD. CIT(A ) WAS NOT JUSTIFIED IN TAKING THE DATE OF ACQUISITION AS ON 2 2.1.2005. AS PER CONTENTION OF LD. SR. DR, THE FLAT WAS ACQUIRED BY THE ASSESSEE ONLY BY WAY OF AGREEMENT OF PURCHASE EXECU TED ON 27.2.2009, WHICH WAS SOLD BY THE ASSESSEE ON 05.03. 2009. PERIOD OF HOLDING OF FLAT BY ASSESSEE WAS JUST FOR FEW DAYS. THUS, THE ASSESSING OFFICER WAS JUSTIFIED IN TREATI NG THE FLAT SO SOLD AS SHORT TERM CAPITAL ASSETS. HE RELIED ON THE DECISIONS REPORTED AT 57 ITR 185 ( S. C. ), 218 ITR 1 ( KERAL A , 234 ITR 850 (MUMBAI) AND ALSO DECISION OF I.T.A.T. MUMBAI B ENCH REPORTED AT 102 ITD 437. IN VIEW OF THESE DECISIONS , CONTENTION OF LD. SR. DR WAS THAT AGREEMENT FOR SALE EXECUTED ON 27.2.2009 CONFERRED RIGHT TO PURCHASE ON THE ASS ESSEE AND NO RIGHT WAS ACQUIRED VIDE ALLOTMENT LETTER DATED 2 2.02.2005. ACCORDINGLY, IT WAS PLEADED THAT FLAT SO SOLD WAS H ELD BY THE ASSESSEE FOR LESS THAN 36 MONTHS, THEREFORE, THE AS SESSING SHRI SANJAY KUMATH, INDORE. I.T.A.NO. 448/IND/2013 AND C.O.NO.83/IND/2013 A.Y. : 2009-10 16 PAGE 16 OF 21 OFFICER WAS JUSTIFIED IN TREATING THE GAIN AROSE OF SALE OF FLAT AS SHORT TERM CAPITAL GAIN. 7. ON THE OTHER HAND, SHRI H.P.VERMA AND MS. SAKSHI VERMA, APPEARING ON BEHALF OF THE ASSESSEE CONTENDE D THAT LETTER OF ALLOTMENT DATED 22.01.2005 BESTOWED THE R IGHT OF FLAT ON THE ASSESSEE AND AFTER SIGNING THE SAID ALLOTMEN T LETTER, THE ASSESSEE AGREED FOR ALLOTMENT AND IN CONSIDERATION OF WHICH HE HAS MADE PAYMENT OF RS. 1 LAKH ON THE VERY SAME DAT E AND SUBSEQUENT PAYMENT OF RS. 5,23,150/- WAS MADE ON 26.1.2005 AND SO ON. AS PER LD. AUTHORIZED REPRESEN TATIVE, THE WORD PROPERTY DOES NOT MEAN MERELY PHYSICAL PROPERTY BUT ALSO MEANS THE RIGHT, THE TITLE OR INTEREST IN IT. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE G ONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND ALS O DELIBERATED ON THE JUDICIAL PRONOUNCEMENT CITED BY THE LD. SENIOR DR WITH REFERENCE TO THE FACTUAL MATRIX OF THE CASE. HERE, THE QUESTION INVOLVES REGARDING RIGHT ACQUIRE D BY THE ASSESSEE THROUGH ALLOTMENT LETTER ISSUED BY THE BUI LDER. VIDE THIS ALLOTMENT LETTER, THE ASSESSEE WAS ALLOTTED FL AT NO.1202 AT SHRI SANJAY KUMATH, INDORE. I.T.A.NO. 448/IND/2013 AND C.O.NO.83/IND/2013 A.Y. : 2009-10 17 PAGE 17 OF 21 12 TH FLOOR OF MULTI-STORIED BUILDING NAMED AS RAHEJA TI PCO, MUMBAI. VIDE THIS ALLOTMENT LETTER, BUILDER M/S. K. RAHEJA UNIVERSAL PVT.LTD, AGREED TO SELL THE FLAT TO THE A SSESSEE FOR RS. 33,15,750/- BESIDES OTHER CHARGES OF RS. 1,32,480/- . AFTER SIGNING THE SAID LETTER OF ALLOTMENT AND PAYING THE BOOKING AMOUNT, THE ASSESSEE ACQUIRED THE RIGHT IN THE SAID FLAT. PAYMENT OF FLAT WAS MADE AS UNDER :- DATE PAYMENT (RS.) 22.01.2005 1,00,000/ - 26.01.2005 5,23,150/ - 09.07.2005 3,11,575/ - 28.04.2006 1,40,20 9/ - 03.01.2007 11,21,672/ - 23.03.2007 1,40,209/ - 24.05.2007 1,40,209/ - 21.09.2007 1,40,209/ - 06.11.2007 1,40,209/ - 31.03.2008 2,80,418/ - 9. AFTER THE ENTIRE PAYMENT WAS MADE BY THE ASSESSEE , AGREEMENT WAS EXECUTED ON 27.2.2009, THEREAFTER,THE ASSESSEE SOLD THE FLAT ON 5.3.2009. THUS, ALL THE RIGHTS IN THE FLAT WAS DULY ACQUIRED BY THE ASSESSEE ON 22.1.2005, WHEN HE WAS SHRI SANJAY KUMATH, INDORE. I.T.A.NO. 448/IND/2013 AND C.O.NO.83/IND/2013 A.Y. : 2009-10 18 PAGE 18 OF 21 GIVEN LETTER OF ALLOTMENT WHICH CLEARLY DESCRIBED T HE PRECISE NUMBER OF FLAT SO ALLOTTED TO HIM. AS PER THE PROVI SIONS OF SECTION 2(47)(II) TRANSFER IN RELATION TO CAPITA L ASSETS INCLUDES THE EXTINGUISHMENT OF ANY RIGHT THEREIN. T HIS LETTER OF ALLOTMENT EXTINGUISHES THE RIGHTS OF BUILDER IN THE SAID FLAT IN FAVOUR OF THE ASSESSEE IN RESPECT OF THIS FLAT AND BY SIGNING THE LETTER OF ALLOTMENT, THE ASSESSEE AGREED TO BUY THE SAME AND FOR WHICH PAYMENT WAS ALSO MADE ACCORDING TO THE LA TTER OF ALLOTMENT. DECISIONS CITED BY LD. SENIOR DR ARE DIS TINGUISHABLE ON FACTS. WE FOUND THAT CBDT VIDE CIRCULAR NO. 4781 DATED 15.10.1986 AND CIRCULAR NO.672 DATED 16.12.1993 HEL D AS UNDER :- THE ALLOTTEE GETS TITLE TO THE PROPERTY ON THE I SSUE OF THE ALLOTMENT LETTER AND THE PAYMENT OF INSTALMEN T IS ONLY A FOLLOW UP ACTION AND TAKING THE DELIVER Y OF POSSESSION IS ONLY A FORMALITY. 10. BOARD VIDE CIRCULAR NO. 672 AFTER REFERRING CIR CULAR NO. 471 EXTENDED THE FACILITY OF EXEMPTION U/S 54 & 54F IN RESPECT OF ALLOTMENT OF FLAT/HOUSE. THUS, AS PER THE CBDT C IRCULAR SHRI SANJAY KUMATH, INDORE. I.T.A.NO. 448/IND/2013 AND C.O.NO.83/IND/2013 A.Y. : 2009-10 19 PAGE 19 OF 21 ALSO, THE ASSESSEE ACQUIRED THE RIGHTS/TITLE IN THE FLAT BY WAY OF ALLOTMENT LETTER ON 22.1.2005. THIS ALLOTMENT LETTE R WAS DULY CONFIRMED BY THE ASSESSEE BY MAKING VARIOUS PAYMENT AS NARRATED ABOVE. OUT OF TOTAL PAYMENT OF RS. 33.15 L AKHS, THE ASSESSEE MADE PAYMENT OF RS. 6.23 LAKHS IN THE MONT H OF ALLOTMENT ITSELF I.E. JANUARY, 2005. SUBSEQUENT PAY MENT WAS ALSO MADE AS PER THE TERMS AGREED WITH THE BUILDER. ONLY AFTER RECEIPT OF ENTIRE AMOUNT, THE BUILDER HAS EXECUTED AGREEMENT WITH THE ASSESSEE ON 27.2.2009. THE ASSESSEE HAS SO LD THE SAID FLAT ON 05.03.2009. SINCE THE ASSESSEE HAS ACQ UIRED ALL THE RIGHTS IN THE FLAT ON 22.01.2005, THE PERIOD OF HOLDING IS TO BE COMPUTED WITH RESPECT TO THE DATE OF ALLOTMENT I .E. 22.01.2005. TAKING THE DATE OF SALE AS 05.03.2009, THE HOLDING PERIOD OF FLAT WITH THE ASSESSEE WAS MORE THAN 36 M ONTHS, THEREFORE, THERE IS NO INFIRMITY IN THE ORDER OF CI T(A) FOR ALLOWING ASSESSEES CLAIM FOR EXEMPTION U/S 54/54F, BY TREATING THE CAPITAL ASSETS SO SOLD AS LONG TERM CA PITAL ASSETS. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. SHRI SANJAY KUMATH, INDORE. I.T.A.NO. 448/IND/2013 AND C.O.NO.83/IND/2013 A.Y. : 2009-10 20 PAGE 20 OF 21 12. IN THE CROSS OBJECTION, THE ASSESSEE IS AGGRIEVED F OR DELAY IN FILING THE APPEAL BY THE REVENUE. AS PER LD. AUT HORIZED REPRESENTATIVE , THE ASSESSING OFFICER HAS GIVEN EF FECT TO THE ORDER OF CIT(A) ON 26.2.2013, THEREFORE, THE APPEAL FILED BY THE DEPARTMENT ON 13.06.2013, WAS BARRED BY LIMITATION. 13. ON THE OTHER HAND, THE LD. SENIOR DR STRONGLY OBJEC TED TO THE CONTENTION OF THE ASSESSEE REGARDING DELAY IN F ILING THE APPEAL AND CONTENDED THAT THE APPEAL WAS FILED IN D UE TIME, IN SO FAR AS ORDER OF CIT(A) WAS RECEIVED IN THE OFFIC E OF CIT ADMIN. ON 17.4.2013, WHICH WAS DULY MENTIONED IN TH E ORDER PASSED U/S 253(2) DATED 11.6.2013. 14. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FOUND THAT THIS APPEAL WAS FILED ON 13.06.2013 IN RESPECT OF O RDER RECEIVED BY THE OFFICE OF CIT ADMIN. ON 17.4.2013. THUS, THERE WAS NO DELAY IN FILING THE APPEAL BY THE DEPARTMENT . ACCORDINGLY, WE DO NOT FIND ANY MERIT IN THE CROSS OBJECTION FILED BY THE ASSESSEE. 15. IN THE RESULT BOTH THE APPEAL OF THE REVENUE AS WEL L AS CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED . SHRI SANJAY KUMATH, INDORE. I.T.A.NO. 448/IND/2013 AND C.O.NO.83/IND/2013 A.Y. : 2009-10 21 PAGE 21 OF 21 THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 19 TH DECEMBER, 2013. SD/- SD/- (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 19 TH DECEMBER, 2013. CPU* 171812