FATEMA JAFFER GHADIALI ALLIAS, MUMBAI V. ITO 17(1)(3),

ITA 1876/MUM/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3857 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: F
• Next Hearing Date: 05-01-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 31-03-2015
• Court: TRIBUNAL
• Keywords: Capital asset
• Section: 143(3); 54F; 54

Judgement Text

, , F, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI , , , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.1876/MUM/2015 ASSESSMENT YEAR: 2011-12 FATEMA JAFFER GHADIALI ALLIAS FATEMA YUSUF RAJKOTWALA 1007 11-B WING, REKAB CHS LTD. 730, E.S. PATANWALA MARG, GORAPDEO MAZGAON MUMBAI-400033 / VS. ITO 17(1)(3) (ASSESSEE ) (R EVENUE) P.A. NO. AFXPG5975Q / ASSESSEE BY SHRI VIJAY MEHTA (AR) / REVENUE BY SHRI SANJEEV KASHYAP (DR) ! ' / DATE OF HEARING : 05/01/2016 ! ' / DATE OF ORDER: 17/02/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-3 2, MUMBAI {(IN SHORT CIT(A)}, DATED 21.02.2014 FOR THE FATEMA YUSUF 2 ASSESSMENT YEAR 2011-12, PASSED AGAINST THE ASSESSM ENT ORDER PASSED BY THE ASSESSING OFFICER (IN SHORT AO ) U/S 143(3) OF THE ACT. 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE B Y SHRI VIJAY MEHTA, AUTHORISED REPRESENTATIVE (AR) ON BEHALF OF THE ASSESSEE AND BY SHRI SANJEEV KASHYAP, DEPARTMEN TAL REPRESENTATIVE (DR) ON BEHALF OF THE REVENUE. 3. GROUND NO.1: THIS GROUND IS NOT PRESSED AND THEREFORE DISMISSED. 4. IN THIS GROUND THE ASSESSEE HAS CHALLENGED THE ACT ION OF LD. CIT(A) IS NOT FULLY DELETING DISALLOWANCE MADE BY T HE AO ON ACCOUNT OF CONSULTANCY/BROKERAGE CHARGES PAID TO BR OKER NAMELY M/S. PRIME PROPERTY MANAGERS PVT LTD AS FOR AN AMOUNT OF RS.4,78,000/- OUT OF TOTAL AMOUNT OF RS. 8,28,000/. 4.1. THE BRIEF FACTS ARE THAT THE ASSESSEE SOLD A RESID ENTIAL FLAT DURING THE YEAR UNDER CONSIDERATION. THE ASSESSEE C LAIMED TOTAL AMOUNT OF RS.8,28,000/- AS BROKERAGE PAID TO THE AFORESAID COMPANY @ OF 5% OF THE TOTAL SALE CONSIDE RATION. THE AO DISALLOWED THE CLAIM ON THE GROUND THAT NO SUPPO RTING EVIDENCES WERE FILED FOR RENDERING OF SERVICES BY T HE BROKER. THE LD. CIT(A) ACCEPTED THE CLAIM OF THE ASSESSEE P ARTLY AND ALLOWED THE SAME @ 2% OF THE SALE AMOUNT ON AD-HOC BASIS. THE ASSESSEE HAS FILED AN APPEAL BEFORE US FOR THE PART DISALLOWANCE SUSTAINED BY THE LD. CIT(A). FATEMA YUSUF 3 4.2. BEFORE US, IT HAS BEEN SUBMITTED BY THE LD. COUNSE L THAT GENUINENESS OF THE CLAIM HAS NOT BEEN DOUBTED BY TH E LD. CIT(A), AS PART RELIEF HAS BEEN GIVEN. IT IS FURTHE R SUBMITTED THAT BOTH THE LOWER AUTHORITIES HAVE MADE DISALLOWA NCE ON THE BASIS OF PRESUMPTIONS AND WITHOUT CONFRONTING ANY D OUBTS TO THE ASSESSEE AND WITHOUT GIVING ANY OPPORTUNITY IN THIS REGARD, WHEREAS, THE ASSESSEE COULD HAVE SUBMITTED MORE EVIDENCES, IF IT WAS SO DESIRED BY THE AO. 4.3. ON THE OTHER HAND LD. DR HAS RELIED UPON THE ORDER S OF THE LOWER AUTHORITIES. 4.4. WE HAVE GONE THROUGH THE ORDERS OF THE LOWER AUTHO RITIES. IT IS NOTED FROM THE RECORDS SHOWN BEFORE US THAT T HE ASSESSEE HAS SUBMITTED INVOICE DATED 7.7.2010 OF THE SAID BR OKING COMPANY AMOUNTING TO RS.8,28,000/- WHEREIN BRIEF DE TAILS WERE ALSO GIVEN. THIS INVOICE CONTAINS FULL PARTICU LARS I.E. NAME, ADDRESS, TELEPHONE NUMBERS E-MAIL AND WEBSITE ETC. OF THE SAID COMPANY. IN CASE AO HAD SOME DOUBTS, HE CO ULD HAVE MADE DIRECT VERIFICATION FROM THE BROKER. THE DISAL LOWANCE SHOULD NOT HAVE BEEN MADE MERELY ON THE BASIS OF PRESUMPTIONS. KEEPING IN VIEW, THE SUBMISSIONS OF T HE ASSESSEE AND GIVEN FACTS OF THIS CASE, WE FIND IT A PPROPRIATE TO SEND THIS ISSUE BACK TO THE FILE OF THE AO. THE AO IS AT LIBERTY TO MAKE VERIFICATION OF FACTS DIRECTLY FROM THE SAI D BROKER COMPANY TO CLEAR OF HIS DOUBTS. THE ASSESSEE SHALL ALSO PLACE ALL REQUISITE DETAILS AND EVIDENCES IN SUPPORT OF H IS CLAIM FOR WHICH THE AO SHALL GIVE ADEQUATE OPPORTUNITY OF HEA RING. IT IS FATEMA YUSUF 4 CLARIFIED THAT RELIEF GRANTED BY THE LD. CIT(A) FOR AN AMOUNT OF RS.3,50,000/- IS HEREBY UPHELD AS THE SAME HAS NOT BEEN CONTESTED BY THE REVENUE BEFORE US. THUS, THE ISSUE IS BEING SENT BACK TO THE FILE OF THE AO ONLY QUA THE DISALLOWANCE OF RS.4,78,000/- SUSTAINED BY LD. CIT(A) IN IS ORDER. 4.5. THUS, WITH THESE DIRECTIONS THIS ISSUE IS SENT BAC K TO THE FILE OF THE AO AND THIS GROUND IS TREATED AS PARTLY ALLOWED. 5. GROUND NO.3: IN THIS GROUND THE ASSESSEE HAS CHALLENGED THE ACTION OF LD. CIT(A) IN PARTLY ALLOWING THE NOC CHARGES PAID TO THE BUILDER BY THE ASSESSEE TO THE EXTENT O F RS.7,50,000/- AND DISALLOWING A SUM OF RS.5,00,000/ - OUT OF THE AGGREGATE AMOUNT OF RS.12,50,000/-. FOR PROPER APPRECIATION OF FACTS, RELEVANT PARA OF FINDINGS OF LD. CIT(A) ON THIS ISSUE IS REPRODUCED BELOW: NOC CHARGES OF RS.12,50,000/-: THE APPELLANT HAS SUBMITTED TWO RECEIPTS OF BUILDER M/S. LOKHANDWALA SHELTER INDIA PVT. LTD. DATED 03.06.2010 & 08.06.20 10 FOR RS.7,50,000/- & RS.5,00,000/- RESPECTIVELY, WHICH MENTION THAT THE PAYMENTS ARE TOWARDS TRANSFER CHAR GES FOR APPELLANTS FLAT. THE COPY OF NOC OF BUILDER FO R SALE OF SAID FLAT IS GIVEN UNDER PAGE 33 OF THE PAPER BOOK. THE SAID NOC IS DATED 03.06.2010. ASSUMING THE SAID PAYMENTS WERE NECESSARY FOR GETTING NOC FROM BUILDE R, IT IS NOT EXPLAINED AS TO HOW THE SAID NOC WAS RECEIVE D BY THE APPELLANT BEFORE MAKING THE SECOND PAYMENT OF RS.5,00,000/-. THE TOTAL PAYMENT MADE TO GET THE NO C FOR FATEMA YUSUF 5 SALE OF FLAT IS VERY HIGH LOOKING AT THE ALE CONSID ERATION OF RS.1,75,00,000/-. IN THE CASE OF DAMODAR NAGLIA VS. ACIT[2007] 12 SOT 599 (MUM. TRIB.), IT WAS HELD THA T TRANSFER CHARGES PAID TO GET NOC OF SOCIETY FOR SAL E OF FLAT IS ALLOWABLE EXPENDITURE U/S 48 OF THE ACT. RELYING UPON THE RATIO OF SAID JUDGMENT, COUPLED WITH AFORESAID OBSERVATIONS, I ALLOW THE FIRST PAYMENT MADE OF RS.7,50,000/- TOWARDS NOC CHARGES. 5.1. IT HAS BEEN SUBMITTED BEFORE US THAT WHEN THE FACT UM OF PAYMENT HAS BEEN ACCEPTED AND GENUINENESS OF THE TRANSACTION IS NOT IN DOUBT, THEN THE CLAIM OF THE ASSESSEE CANNOT BE DENIED ONLY ON THE GROUND THAT TOTAL PAYM ENT MADE BY THE ASSESSEE SEEMS TO BE ON HIGHER SIDE. 5.2. WE HAVE CAREFULLY CONSIDERED ALL THE FACTS AND SUBMISSIONS MADE BEFORE US. WE FIND THAT ACTION OF LD. CIT(A) IS NOT JUSTIFIED. IT HAS BEEN SHOWN TO US ON THE BA SIS OF DOCUMENTS ENCLOSED IN THE PAPER BOOK THAT FULL PAYM ENT OF RS.12,50,000/- HAS BEEN MADE TO THE BUILDER FOR OBT AINING NOC. IT HAS BEEN SHOWN THAT NOC OF THE BUILDER WAS ONE OF THE MAIN CONDITIONS OF THE AGREEMENT FOR SALE MADE BY THE ASSESSEE WITH ITS PURCHASERS. AS PAR CLAUSE 3 OF TH E SAID AGREEMENT, A SUM OF RS.12,50,000/- WAS PAYABLE BY T HE ASSESSEE TO THE BUILDER TOWARDS NOC/TRANSFER CHARGE S. IN CASE AO OR LD. CIT(A) HAD ANY DOUBTS, THE SAME COULD HAV E BEEN CLARIFIED BY THEM DIRECTLY FROM THE BUILDER. ONCE C LAIM IS FOUND TO BE A VALID CLAIM, IT CANNOT BE DISALLOWED OR PAR TLY ALLOWED ON FATEMA YUSUF 6 AD-HOC OR ARBITRARY BASIS. IN OUR CONSIDERED VIEW, THE AMOUNT PAID BY THE ASSESSEE WAS IN THE NATURE OF TRANSFER CHARGES PAID BY THE ASSESSEE TO GET NOC FOR THE SALE OF THE FLAT AND THEREFORE, ALLOWABLE EXPENDITURE U/S 48 OF THE INCO ME TAX ACT 1961. THEREFORE, WE ALLOW THIS CLAIM OF THE ASSESSE E FULLY AND DIRECT THE AO TO GIVE FURTHER RELIEF OF RS.5,00,000 /- THUS, GROUND NO.3 IS ALLOWED. 6. GROUND NO.4: IT DEALS WITH THE GRIEVANCE OF THE ASSESSEE REGARDING THE ACTION OF LOWER AUTHORITIES IN TREATI NG THE CAPITAL GAIN ON SALE OF THE FLAT AS SHORT TERM CAPITAL GAIN AS AGAINST THE LONG TERM CAPITAL GAIN AS WAS CLAIMED BY THE AS SESSEE IN THE RETURN OF INCOME. 6.1. THE BRIEF FACTS ARE THAT THE AO OBSERVED THAT THE DATE OF REGISTRATION FOR SALE WAS 07.07.2010 AND DATE OF PU RCHASE AS PER REGISTERED AGREEMENT WAS 14.6.2009. THE ASSESSE E HAS MADE PAYMENTS TO THE BUILDER IN INSTALLMENTS SINCE 14.6.2009. AS PER AO, THE PROVISION OF SECTION 2(47) OF THE I. T. ACT WHICH DEALS WITH TRANSFER IN RELATION TO CAPITAL ASSET, INCLUDES (I) THE SALE, EXCHANGE OR RELINQUISHMENT OF THE ASSET. FURT HER, THE IMMOVABLE PROPERTY CAN BE LEGALLY AND LAWFULLY TRANSFERRED/CONVEYED ONLY BY THE REGISTERED DEED OF CONVEYANCE AND SECTION 54 OF TRANSFER OF PROPERTY A CT MAKES IT CLEAR THAT A CONTRACT OF SALE DOES NOT BY ITSELF CR EATE ANY INTEREST IN OR CHARGE ON SUCH PROPERTY. THE AO OBSE RVED THAT ANY CONTRACT WHICH IS NOT A REGISTERED DEED OF CONV EYANCE (DEED OF SALE) WOULD FALL SHORT OF THE REQUIREMENT OF SECTION 54 FATEMA YUSUF 7 & 55 AND WILL NOT CONFER ANY TITLE NOR TRANSFER ANY INTEREST IN AN IMMOVABLE PROPERTY (EXCEPT TO THE LIMITED RIGHT GRANTED UNDER SECTION 53A). THUS BY INVOKING SECTION 54 OF TRANSFER OF PROPERTY ACT, IT WAS HELD THAT THE ASSESSEE HAS ACQ UIRED THE SAID PROPERTY ON 17.07.2009, AND SINCE THE PROPERTY WAS HELD FOR LESS THAN THIRTY SIX MONTHS FROM THE DATE, THE GAIN ARISEN THEREON WAS CONSIDERED AS SHORT TERM CAPITAL GAIN. 6.2. BEING AGGRIEVED THE ISSUE WAS CONTESTED BEFORE LD. CIT(A), WHEREIN STAND TAKEN BY THE AO WAS CONFIRMED. 6.3. STILL BEING AGGRIEVED THE ASSESSEE HAS CHALLENGED THIS ISSUE BEFORE THE TRIBUNAL. 6.4. BEFORE US, IT HAS BEEN ARGUED BY THE LD. COUNSEL T HAT COMPLETE FACTS COULD NOT BE APPRECIATED BY THE LOWE R AUTHORITIES AND THAT IS HOW WRONG TREATMENT HAS BEE N GIVEN TO THE CAPITAL GAIN EARNED BY THE ASSESSEE. OUR ATTENT ION HAS BEEN DRAWN ON VARIOUS DOCUMENTS SHOWING THAT ALLOTM ENT OF THE IMPUGNED FLAT WAS DONE PRIOR TO 15.06.2006. IT WAS FURTHER SHOWN ON THE BASIS OF AGREEMENT TO SALE THAT POSSES SION WAS ALSO HANDED OVER TO THE ASSESSEE BEFORE THE DATE OF SALE. THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING JUDGMENTS FOR THE PROPOSITION THAT UNDER THESE CIRCUMSTANCES THE HOLD ING PERIOD OF THE FLAT SOLD SHOULD BE COMPUTED FROM THE DATE O F ALLOTMENT: FATEMA YUSUF 8 1. JUDGMENT OF THE HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF MRS. MADHU KAUL V. CIT AND ANOTHER [363 ITR 54] 2. JUDGMENT OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT V. S.R. JEYSHANKAR [373 ITR 120] 3. ORDER OF THE HONBLE TRIBUNAL, LUCKNOW, IN THE C ASE OF ACIT V SHARAD THADANI [104 TTJ 567] 4. ORDER OF THE HONBLE TRIBUNAL, MUMBAI BENCH, IN THE CASE OF RICHA BAGRODIA V DCIT IN ITA NO. 3601/M/2012 DAT ED 22.04.2014 5. ORDER OF THE HONBLE TRIBUNAL, MUMBAI BENCH, IN THE CASE OF ACIT V SMT. VANDANA RANA ROY IN ITA NO. 6173/MUM/2011 DATED 6. ORDER OF THE HON'BLE TRIBUNAL, MUMBAI BENCH, IN THE CASE OF ACIT V RAMPRAKASH BUBNA IN ITA NO. 6578/MUM/2010 DATED 11.05.2012. 7. ORDER OF THE HON'BLE TRIBUNAL, DELHI BENCH, IN T HE CASE OF DCIT V SMT. SITA DEVI WADHWA IN ITA NO. 239/DEL/201 0 DATED 03.12.2010 6.5. ON THE OTHER HAND, LD. DR HAS RELIED UPON THE ORDE RS OF THE LOWER AUTHORITIES. 6.6. WE HAVE CONSIDERED ENTIRE MATERIAL PLACED BEFORE U S. IT IS NOTED BY US THAT AS PER SCHEDULE OF CONSTRUCTION GI VEN BY THE BUILDER, UP TO 20% OF THE TOTAL COST WAS PAYABLE ON COMPLETION OF 8 TH SLAB AND THE DUE DATE OF PAYMENT BEING 4.9.2006. I T IS FURTHER NOTED BY US THAT ON THE BASIS OF RECEIPT ISSUED BY THE FATEMA YUSUF 9 BUILDER DATED 15.06.2006 THAT THE ASSESSEE WAS ALLO TTED A PARTICULAR FLAT NUMBERED AS FLAT NO.18A ON 18 TH FLOOR AT LOKHANDWALA HARMONY, WORLI, MUMBAI. FURTHER, LETT ER OF THE BUILDER DATED 8 TH JULY 2006, ADDRESSED TO THE ASSESSEE, SHOWS PROVISIONAL ALLOTMENT OF FLAT NO.18A TO THE ASSESSE E. ALL THESE DOCUMENTS CLEARLY SHOW THAT PROPERLY IDENTIFIED FLA T WAS ALLOTTED TO THE ASSESSEE BEFORE 8 TH JULY 2006. THUS, IN VIEW OF AFORESAID FACTS AND CIRCUMSTANCES, AND IN VIEW IF D OCUMENTARY EVIDENCES PLACED BEFORE US, IT COULD BE SAID THAT T HE ASSESSEE GOT RIGHTS IN PROPERTY WAY BACK IN 2006. ON THE B ASIS OF AGREEMENT FOR SALE ENTERED WITH THE SAID BUILDER DA TED 17 TH JULY 2009, IT WAS SHOWN THAT POSSESSION WAS ALSO HA NDED OVER TO THE ASSESSEE BEFORE THE IMPUGNED WAS SOLD DURING THE YEAR UNDER CONSIDERATION I.E., F.Y. 2010-11. THUS, THE I MPUGNED ASSET WAS A LONG TERM ASSET AS THE HOLDING PERIOD B EING MORE THAN 36 MONTHS. WE DERIVE SUPPORT FROM THE JUDGMENT S RELIED UPON BY THE ASSESSEE NAMES OF WHICH HAVE BEEN GIVEN ABOVE. WE HAVE THE BENEFIT OF JUDGMENT OF DELHI BENCH OF I TAT IN THE CASE OF DCIT VS. SMT. SITA DEVI WADHWA (ITA NO.239/DEL/2010) ORDER DATED 3.12.2010, IN WHICH HO NBLE BENCH HAS ANALYSED THE EFFECT OF PROVISIONAL ALLOTM ENT OF THE FLAT WITH RESPECT TO HOLDING PERIOD OF ASSET IN THE HANDS OF THE ALLOTTEE. RELEVANT PORTION OF THE SAID JUDGMENT IS REPRODUCED HEREIN FOR THE SAKE OF READY REFERENCE: 8. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE MATERIAL ON RECORD. THE QUESTION IS AS TO WHETHER T HE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITIONS MADE WHILE FATEMA YUSUF 10 ALLOWING THE CLAIM OF THE ASSESSEE FOR EXEMPTION U/ S 54F OF THE ACT. 9. THE UNDISPUTED FACTS ARE THAT THE ASSESSEE APPLI ED FOR ALLOTMENT OF FLATS TO BE CONSTRUCTED UNDER A GROUP HOUSING SCHEME OF M/S. SHWETA BUILDERS PVT. LTD. CAPITAL GA INS AROSE TO THE ASSESSEES ON SALE OF SHARES. THE ASSES SEES INVESTED THE SAID SALE PROCEEDS OF SHARES JOINTLY W ITH M/S. SHWETA ESTATE PVT. LTD., FOR ALLOTMENT OF A FLAT, B EFORE 31.07.2006. SHWETA ESTATE PVT. LTD., VIDE LETTER DA TED 24.11.2006, HAD MADE A PROVISIONAL ALLOTMENT, ON TH E BASIS OF THE AVAILABLE APPLICATIONS, CONVEYING THE ACCEPTANCE OF THE PROPOSAL OF THE ASSESSEES FOR ALL OTMENT OF A SPECIFIC HOUSE OF THE BELLE VUE SCHEME AT FLAT NO. 4, ON THE SECOND FLOOR. THE ALLOTMENT OF THE FLAT WAS MAD E UNDER THE SCHEME BY SHWETA ESTATE PVT. LTD. THE PAYMENT THEREFORE WAS LINKED TO INSTALMENTS OF THE COST OF CONSTRUCTION. THIS SCHEME WAS, THEREFORE, FOUND BY THE LD. CIT(A) TO BE EXACTLY SIMILAR TO THE SFS OF THE DDA. CBDT CIRCULAR NO. 474 DATED 15.10.86 WAS FOUND TO HAVE LIBERALLY INTERPRETED THE PROVISIONS OF SECTIONS 54 AND 54F OF THE I.T. ACT, CONCERNING FLATS UNDER THE SFS OF THE DDA, TREATING THE ALLOTMENT OF FLATS THERE-UNDER AS CASE S OF CONSTRUCTION FOR THE PURPOSE OF CAPITAL GAINS. THIS BENEFIT WAS FOUND TO HAVE BEEN EXTENDED VIDE CIRCULAR NO. 6 72 DATED 16.12.93, TO FLATS OR HOUSES CONSTRUCTED BY C O- OPERATIVE SOCIETIES OR OTHER INSTITUTIONS, IF THE T ERMS OF THE SCHEME OF ALLOTMENT OF FLAT UNDER CONSTRUCTION WERE SIMILAR TO THE SFS OF THE DDA. THE LD. CIT(A) FOUND THAT UN DER THE FATEMA YUSUF 11 BELLE VUE SCHEME OF SHWETA ESTATE PVT. LTD., THE AL LOTMENT LETTER HAD BEEN ISSUED ON PAYMENT OF THE FIRST INST ALMENT OF THE COST OF CONSTRUCTION. THIS ALLOTMENT WAS TO BE FINAL, UNLESS INVESTED OR WITHDRAWN UNLESS THE ALLOTTEE WI THDREW FROM THE SCHEME, WHICH FACTS WERE FOUND TO BE IN PA RI MATERIA WITH THE SFS OF DDA, WHEREUNDER, THE ALLOTT EE GETS TITLED TO THE PROPERTY ON ISSUANCE OF THE ALLO TMENT LETTER AND THE PAYMENT OF INSTALMENT IS LATER AND T AKING OF DELIVERY IS A FORMALITY. 10. IT WAS IN THE ABOVE FACTS THAT THE LD. CIT(A) O BSERVED THAT THE BENEFIT OF SECTION 54F OF THE I.T. ACT WAS AVAILABLE TO THE PRESENT ASSESSEES ALSO. 11. BEFORE US, THE DEPARTMENT HAS NOT BEEN ABLE TO DEMONSTRATE AS TO HOW THE LD. CIT(A) HAS COMMITTED ANY ERROR IN GRANTING EXEMPTION AVAILABLE U/S 54F OF TH E ACT TO THE PRESENT ASSESSEES, IN THE FACTS DISCUSSED. IT H AS NOT BEEN DEMONSTRATED AS TO HOW THE BELLE VUE SCHEME OF SHWETA ESTATE PVT. LTD. IS ANY DIFFERENT FROM THE S FS OF DDA. AS SUCH, IT HAS NOT BEEN EXPLAINED AS TO HOW, IF AT ALL, CBDT CIRCULAR NOS. 474 DATED 15.10.86 AND 672 DATED 16.12.93 ARE NOT APPLICABLE TO THE PRESENT ASSESSEES. BENEFIT U/S 54F OF THE ACT WAS REFUSED T O THE ASSESSEES FOR THE REASON THAT THE ASSESSEES WERE NE ITHER IN POSSESSION OF THE PROPERTY, NOR WAS THEIR TITLE QUA THE PROPERTY CLEARED, NO ALLOTMENT LETTER HAVING BEEN I SSUED TO THE ASSESSEES. HOWEVER, AS DISCUSSED BY THE LD. CIT (A), IN VIEW OF THE AFORESAID CBDT CIRCULARS, POSSESSION OF THE PROPERTY BEFORE THE STATUTE THOROUGHLY PRESCRIBED P ERIOD OF FATEMA YUSUF 12 TWO YEARS FROM THE DATE ON WHICH CAPITAL GAINS AROS E, IS NOT MANDATORY. FURTHER, AS PER THESE CIRCULARS, ALL OTMENT OF FLATS SHALL BE TREATED AS CONSTRUCTION FOR THE P URPOSE OF CAPITAL GAINS. FURTHER, WHAT WAS CONSIDERED BY THE AO TO BE A MERE PROVISIONAL ALLOTMENT BY SHWETA ESTATE PV T. LTD., WAS FOUND BY THE LD. CIT(A) AND IN OUR VIEW, CORRECTLY, TO BE A FINAL ALLOTMENT, DESPITE THE USE OF THE WORD PROVISIONAL IN THE LETTER. THIS WAS DUE TO T HE FACT THAT IN THE LETTER, SHWETA ESTATE PVT. LTD. HAD SPE CIFIED THE APARTMENT NUMBER, THE FLOOR NUMBER, THE TYPE OF FLA T, THE TOWER NUMBER AND THE PHASE OF THE REAL ESTATE PROJE CT. IT HAS BEEN TURNED AS PROVISIONAL ALLOTMENT, SINCE T HE SAID ALLOTMENT LETTER WAS TO BE SUCCEEDED BY AN APARTMEN T BUYER AGREEMENT, WHICH WAS TO BE SIGNED BY THE ALLO TTEE WITHIN 30 DAYS FROM THE DISPATCH. THIS WAS A LEGAL ARRANGEMENT BETWEEN SHWETA ESTATE PVT. LTD. AND THE ASSESSEES - ALLOTTEES, SANS WHICH, THE TRANSFER OF THE SPECIFIC FLAT COULD NOT HAVE BEEN EFFECTED. THE ASS ESSEES HAD PAID THE INITIAL INSTALMENT AND HAD MADE A PROP OSAL WITH SHWETA ESTATE PVT. LTD. FOR ALLOTMENT OF FLAT. SHWETA ESTATE PVT. LTD. HAD ACCEPTED SUCH PROPOSAL AND HAD ALLOTTED THE SPECIFIC FLAT TO THE ASSESSEES AND SO, THERE WAS NO PROVISIONAL ALLOTMENT. 12. IN VIEW OF THE ABOVE FACTS, FINDING NO ERROR IN THE WELL REASONED ORDER PASSED BY THE LD. CIT(A), WE HEREBY UPHOLD THE SAME, REJECTING THE GROUNDS RAISED BY THE DEPAR TMENT IN BOTH THE CASES. FATEMA YUSUF 13 6.7. IN ADDITION TO THE ABOVE, IN OUR CONSIDERED VIEW T HE HOLDING PERIOD SHOULD BE COMPUTED FROM THE DATE OF ALLOTMENT OF FLAT, AS RIGHT IN ALLOTMENT WAS ALWAYS A RIGH T IN THE PROPERTY. THUS, WHEN THE ASSESSEE WAS GIVEN POSSESS ION OF THE FLAT, THE DATE OF ITS HOLDING PERIOD SHALL RELATE B ACK TO THE DATE WHEN THE SAID FLAT WAS ALLOTTED TO THE ASSESSEE. WE TAKE SUPPORT IN THIS REGARD FROM THE JUDGMENT OF HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF VINOD KUMAR J AIN V. CIT 344 ITR 501. 6.8. THUS, VIEWED FROM ANY ANGLE, WE FIND THAT HOLDING PERIOD OF THE FLAT SOLD BY THE ASSESSEE IS MORE THAN 36 MO NTHS. THUS, KEEPING IN VIEW FACTS OF THE CASE BROUGHT BEFORE US AND THE AFORESAID JUDGMENTS, IT IS HELD THAT FLAT SOLD BY T HE ASSESSEE WAS LONG TERM ASSET AND ACCORDINGLY CAPITAL GAIN AR ISING ON SALE OF SUCH ASSET IS HELD TO BE ASSESSED AS LONG T ERM CAPITAL GAIN. THUS, GROUND NO.4 IS ALLOWED. 7. GROUND NO.5: IN THIS GROUND THE ASSESSEE HAS CHALLENGED THE ACTION OF LD. CIT(A) IN HOLDING THE ACTION OF L D. AO IN NOT ALLOWING THE BENEFIT OF U/S 54. 7.1. ON THE BASIS OF THE PERUSAL OF THE FACTS, IT IS NO TED THAT BENEFIT OF DEDUCTION U/S 54 WAS DENIED INTER ALIA O N THE GROUND THAT INVESTMENT IN THE NEW ASSET WAS NOT MAD E WITHIN A STIPULATED TIME PERIOD. IT HAS BEEN CONTENDED BY THE LD. AO THAT INVESTMENT IN THE NEW ASSET SHOULD HAVE BEEN M ADE WITHIN THE TIME PERIOD OF TWO YEARS I.E. UPTO 7.07. 2012, FATEMA YUSUF 14 WHEREAS THE ASSESSEE HAS INVESTED A SUM OF RS.70,00 ,000/- ON 26.11.2012 WHICH IS BEYOND THE PERMISSIBLE TIME AS PRESCRIBED U/S 54 OF THE ACT. 7.2. WITH THE ASSISTANCE OF BOTH THE PARTIES, IT HAS BE EN SHOWN TO US THAT DATE MENTIONED IN THE RECEIPT ISSUED BY BUILDER NAMELY M/S. KRYPTON CONSTRUCTION DATED 30 TH AUGUST 2012 EVIDENCING PAYMENT OF RS.70,00,000/- SHOWS DATE OF PAYMENT AS 26.11.2012, WHEREAS THE CORRECT DATE IS 26.11.20 10. OUR ATTENTION HAS BEEN DRAWN UPON THE BANK STATEMENT FI LED BY THE ASSESSEE SHOWING THAT CORRECT DATE OF PAYMENT IN FAVOUR OF M/S. KRYPTON CONSTRUCTION VIDE CHEQUE NO.490907 FOR A SUM OF RS.70,00,000/- IS 26.11.2010. IT WAS SUBMITTED T HAT THIS CONFUSION HAS TAKEN PLACE BECAUSE OF MENTIONING OF INCORRECT DATE BY M/S KRYPTON CONSTRUCTION. 7.3. WE FIND FORCE IN THE ARGUMENT OF LD COUNSEL. IT AP PEARS THAT CORRECT DATE OF PAYMENT IS 26.11.2010. BUT TO MEET ENDS OF JUSTICE AND IN ALL FAIRNESS, WE FIND IT APPROPRI ATE TO SEND THIS ISSUE BACK TO THE FILE OF THE AO FOR THE LIMITED PU RPOSE OF VERIFICATION OF CORRECT DATE OF PAYMENT. THE AO IS DIRECTED TO VERIFY THE CORRECT DATE OF PAYMENT AND GRANT APPROP RIATE RELIEF TO THE ASSESSEE AS PER LAW U/S 54. 8. DURING THE COURSE OF HEARING, LD. COUNSEL HAS ALSO DRAWN OUR ATTENTION TO THE ADDITIONAL GROUND FILED BY THE ASSESSEE AND REQUESTED FOR AN APPROPRIATE DIRECTION TO ALLOW RELIEF U/S FATEMA YUSUF 15 54 AVAILABLE TO THE ASSESSEE AS PER LAW UP TO THE A MOUNT OF INVESTMENT MADE BY THE ASSESSEE IN THE NEW ASSET. 8.1. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE. BOTH THE PARTIES AGREED THAT DEDUCTION U/S 54 SHOULD BE ALLO WED UP TO THE AMOUNT OF INVESTMENT MADE IN THE NEW ASSET. THU S, TAKING INTO ACCOUNT ALL THE FACTS, THE AO IS DIRECTED TO V ERIFY THE REQUISITE FACT IN TERMS OF OUR DIRECTION IN GROUND NO.5 ABOVE, AND CONSIDER FULL AMOUNT OF INVESTMENT MADE FOR COM PUTING DEDUCTION ALLOWABLE U/S 54 AS PER LAW AND HE SHOULD NOT RESTRICT IT TO THE AMOUNT OF CLAIM MADE IN THE RETU RN. THUS, THIS GROUND IS ALSO SENT BACK TO THE FILE OF THE AO FOR THE PURPOSE OF VERIFICATION OF REQUISITE FACTS AND TREA TED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH FEBRUARY, 2016. SD/- (SANJAY GARG ) SD/- (ASHWANI TANEJA) '# / JUDICIAL MEMBER $# / ACCOUNTANT MEMBER MUMBAI; $ DATED : 17/02/2016 CTX? P.S/. .. %'&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. & '( / THE APPELLANT 2. )*'( / THE RESPONDENT. 3. + + , ( & ) / THE CIT, MUMBAI. 4. + + , / CIT(A)- , MUMBAI FATEMA YUSUF 16 5. /0 ) 1 , + &' 12 , / DR, ITAT, MUMBAI 6. 3 4 / GUARD FILE. / BY ORDER, * /& ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI