Sri Mahendrasingh Ramsingh Jadav, Bengaluru V. Income tax Officer, Ward-5(3)(5), Bengaluru

ITA 32/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 3611 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 04-01-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR P V PRADEEP KUMAR
• Assessee Lawyers: V K GURUNATHAN
• Keywords: Capital asset; Principle of natural justice; Cost of acquisition; Difference of opinion; Change of opinion
• Section: 143(3); 54F; 234B; 147; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 32 / BANG/201 8 ASSESSMENT YEA R : 20 10 - 11 SHRI MAHENDRASINGH RAMSINGH JADAV, I-104 1, BRIGADE METROPOLIS, WHITEFIELD MAIN ROAD, BENGALURU 560 048. PAN : A CZPJ 4415 H VS. THE INCOME-TAX OFFICER, WARD 5(3)(5), BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI. V. K. GURUNATHAN, ADVOCATE REVENUE BY : DR. P. V. PRADEEP KUMAR, ADDL. CIT DATE OF HEARING : 1 6 . 0 7 .201 8 DATE OF PRONOUNCEMENT : 21 . 0 8 .201 8 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), INTER ALIA, ON VARIOUS GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ID CIT(A) ERRED IN PASSING THE ORDER IN THE MANNER WHICH HE DID. 2. THE CONDITIONS PRECEDENT BEING ABSENT, THE REOPENING OF THE ASSESSMENT U/S.147 IS BAD IN LAW. 3. THE LEARNED CIT(A) HAVING NOT ADJUDICATED THE SUBMISSION MADE BY THE APPELLANT TOWARDS THE VALIDITY OF THE REOPENING U/ S.147 OF THE ACT ITA NO. 32BANG/2018 PAGE 2 OF 10 PRIOR TO THE COMMENCEMENT OF ASSESSMENT PROCEEDINGS, THE ASSESSMENT AS MADE WAS OPPOSED TO LAW AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE AND THUS LIABLE TO BE CANCELLED. 4. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THE EXPLANATION FURNISHED BY THE APPELLANT AND HELD THAT THE CAPITAL GAINS ON SALE OF FLAT NO.302, BUTTERCUP, HIRANANDANI MEADOWS SITUATED AT THANE, WEST MUMBAI RESULTED IN LONG TERM CAPITAL GAINS WHEN THE APPELLANT WAS ELIGIBLE TO GET THE DEDUCTION U/S.54(1) IN RESPECT OF THE INVESTMENT MADE IN THE APARTMENT AT 'SAPPHIRE HEIGHTS', THE APPELLANT HAVING SATISFIED ALL THE CONDITIONS. 5. ON THE FACTS THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THE EXPLANATION AND REFRAINED FROM TREATING THE CAPITAL GAINS AS SHORT TERM CAPITAL GAINS BY DECLINING THE BENEFIT U/S.54 OF THE ACT. 6. WITHOUT PREJUDICE, THE ADDITION IS EXCESSIVE, ARBITRARY AND UNREASONABLE AND LIABLE TO BE DELETED IN TOTO. 7. THE LEARNED ASSESSING OFFICER ERRED IN LEVYING THE INTEREST U/S.234A AND 234B OF THE ACT. 8. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL THE APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED. 2. GROUND NOS. 1 TO 3 RELATE TO THE VALIDITY OF THE REOPENING OF THE ASSESSMENT UNDER SECTION 147 OF THE ACT. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT ORIGINAL ASSESSMENT WAS FRAMED UNDER SECTION 143(3) OF THE ACT IN WHICH THE AO HAS ALLOWED THE DEDUCTIONS CLAIMED UNDER SECTION 54(1) OF THE ACT, BUT SUBSEQUENTLY, THE AO HAS REOPENED THE ASSESSMENT HAVING FORMED A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED THE ASSESSMENT ON THE GROUND THAT ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 54 OF THE ACT FOR THE REASONS THAT HE DID NOT HOLD THE CAPITAL ASSET FOR MORE THAN 3 YEARS. THE LEARNED COUNSEL FOR THE ASSESSEE ITA NO. 32BANG/2018 PAGE 3 OF 10 FURTHER CONTENDED THAT DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS, AO HAS PROPERLY EXAMINED THESE ASPECTS AFTER MAKING A DETAILED ENQUIRY. THEREFORE, REOPENING THE ASSESSMENT ON THE SAME ISSUE AMOUNTS TO A CHANGE OF OPINION. THEREFORE, THE REOPENING IS BAD IN LAW AND THE ASSESSMENT FRAMED CONSEQUENT THERETO DESERVES TO BE SET ASIDE. 3. THE LEARNED DR ON THE OTHER HAND HAS SUBMITTED THAT IN THE ORIGINAL ASSESSMENT PROCEEDINGS, THE AO HAS NOT EXAMINED THE DATE OF ACQUISITION OF THE FLAT WHICH WAS LATER ON SOLD AND CAPITAL GAIN WAS COMPUTED. IN FACT, THE FLAT WAS ACQUIRED ON 06.03.2009 BY VIRTUE OF SALE DEED OF RS.29,08,950/- AND WAS SOLD ON 28.06.2009 FOR RS.62,92,500/-. THEREFORE, THE ASSET IS HELD FOR LESS THAN 3 YEARS AND THE SAME IS TO BE ASSESSED ON SHORT TERM CAPITAL GAIN BUT THE AO IN THE FIRST ROUND OF ASSESSMENT DID NOT EXAMINE THESE ASPECTS. THEREFORE, THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE AO HAS RIGHTLY INVOKED THE PROVISIONS OF SECTION 147 OF THE ACT. 4. WE HAVE CAREFULLY EXAMINED THE ORDERS OF AUTHORITIES BELOW IN THE LIGHT OF RIVAL SUBMISSIONS AND WE FIND THAT IN THE ORIGINAL ASSESSMENT PROCEEDINGS OF WHICH COPY OF ASSESSMENT IS PLACED AT PAGE NOS. 66-69, THE AO HAS NOT EXAMINED THE ACTUAL DATE OF ACQUISITION OF THE FLAT. HE SIMPLY MENTIONED THE DATE OF SALE OF THE PROPERTY AND THE CONSIDERATION RECEIVED BY THE ASSESSEE AND HIS INVESTMENT IN ACQUISITION OF ANOTHER FLAT. THEREFORE, THE DATE OF ACQUISITION OF FLAT NO. 302, BUTTERCUP, HIRANANDANI MEADOWS SITUATED AT THANE, WEST MUMBAI WAS NOT AT ALL EXAMINED BY THE AO WHILE DETERMINING THE ISSUE OF EXEMPTION UNDER SECTION 54 OF THE ACT WITH REGARD TO SALE PROCEEDS RECEIVED BY THE ASSESSEE ON THE SALE OF FLAT NO. 302, BUTTERCUP, HIRANANDANI MEADOWS AND ITS INVESTMENT IN ACQUISITION OF ANOTHER FLAT. IN THE LIGHT OF THESE FACTS, WE DO NOT FIND THAT THERE IS ANY CHANGE OF OPINION OF THE AO FOR RECORDING REASONS FOR REOPENING OF THE ASSESSMENT UNDER SECTION 147 OF THE ACT. IN THE REASONS RECORDED, THE AO HAS CATEGORICALLY STATED THAT IN THE ORDER UNDER SECTION 143(3) PASSED ITA NO. 32BANG/2018 PAGE 4 OF 10 ON 28.03.2013, THE AO HAS COMPUTED THE LONG-TERM CAPITAL GAIN AND ALLOWED THE EXEMPTION UNDER SECTION 54 OF THE ACT AND TAXABLE LONG TERMS CAPITAL GAIN BEING NIL. HOWEVER, IT WAS SEEN FROM THE SALE DEED THAT ASSESSEE HAS DECLARED LONG TERM CAPITAL GAIN OF RS.18,66,239/- FROM THE SALE OF FLAT NO. 302, BUTTERCUP, HIRANANDANI MEADOWS, ON 28.06.2009. ON PERUSAL OF SALE DEED, THE AO OBSERVED THE SAID PROPERTY WAS REGISTERED IN THE NAME OF THE ASSESSEE VIDE SALE DEED DATED 06.03.2009 AGAINST PAYMENT OF RS.29,08,950/- AND WAS SOLD ON 28.06.2009 FOR RS. 62,92,500/- AS THE ASSET IS HELD FOR LESS THAN 3 YEARS, THE SAME IS TO BE ASSESSED AS SHORT-TERM CAPITAL GAIN. ALL THESE ASPECTS WERE NOT EXAMINED BY THE AO IN THE ORIGINAL ASSESSMENT PROCEEDINGS. THEREFORE, WE ARE OF THE VIEW THAT REOPENING IS VALID AND IT DOES NOT AMOUNT TO CHANGE OF OPINION. WE ACCORDINGLY HOLD THE REOPENING OF THE ASSESSMENT AND CONFIRM THE ORDER OF THE CIT(A) IN THIS REGARD. 5. THE OTHER GROUND IN THIS APPEAL RELATE TO THE CLAIM OF DEDUCTION UNDER SECTION 54 OF THE ACT. IN THIS REGARD, THE FACTS IN BRIEF BORNE OUT FROM THE RECORD ARE THAT ASSESSEE HAS BOOKED A FLAT WITH THE BUILDER ON 22.02.2006 ON MAKING PAYMENT OF RS.1,00,000/- AS EARNEST MONEY, THEREAFTER THE BUILDER GOT THE REMAINING PAYMENT FINANCED BY ICICI HOME FINANCE CO. LTD., (IHFC) TO THE ASSESSEE AND RECEIVED THE REMAINING PAYMENT FROM THE FINANCER. THE AGREEMENT OF SALE WHICH WAS CLAIMED TO BE THE SALE DEED BY THE ASSESSEE WAS EXECUTED AND REGISTERED IN FAVOUR OF THE ASSESSEE ON 06.03.2009. THE SAID FLAT WAS SOLD BY THE ASSESSEE TO THE BUYER BY ENTERING INTO ANOTHER SALE AGREEMENT ON 29.06.2009 FOR A SALE CONSIDERATION OF RS.62,91,500/-. THE ASSESSEE CLAIMED LONG TERM CAPITAL GAIN ON THE SALE OF THIS FLAT BY CONTENDING THAT THE DATE OF ACQUISITION OF THE FLAT IS 22.02.2006 OF WHICH THE FLAT WAS ALLOTTED TO HIM BY THE ALLOTMENT LETTER. THE CONTENTION OF THE ASSESSEE WAS DISPUTED BY THE REVENUE ON THE GROUND THAT ON 22.02.2006, ASSESSEE HAS NOT ACQUIRED THE PROPERTY, THEREFORE, IT CANNOT BE CONSIDERED AS THE DATE OF ACQUISITION FOR THE PURPOSE OF COMPUTATION OF THE CAPITAL GAIN. THE AO HAS ALSO MADE OUT A CASE THAT CONSTRUCTION OF THE SAID PROPERTY WAS NOT ITA NO. 32BANG/2018 PAGE 5 OF 10 RATHER COMMENCED ON THAT DATE AS THE COMMENCEMENT OF CONSTRUCTION WAS STARTED AFTER 17.11.2006. THEY HAVE ALSO PLACED RELIANCE UPON THE MUNICIPAL CERTIFICATE THROUGH WHICH THE PERMISSION WAS ACCORDED FOR CONSTRUCTION OF THE APARTMENT. THE AO ACCORDINGLY DISALLOWED THE CLAIM OF EXEMPTION UNDER SECTION 51 OF THE ACT AND TREATED IT TO BE SHORT TERM CAPITAL GAIN AND TAXED THE SAME. 6. ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND REITERATED ITS CONTENTIONS. THE CIT(A) HAS EXAMINED ALL THESE ASPECTS AND CONFIRMED THE ORDER OF THE AO DISALLOWING THE CLAIM UNDER SECTION 54 OF THE ACT. THE RELEVANT OBSERVATION OF THE CIT(A) IS EXTRACTED HEREUNDER: THE MAIN ISSUE IN THE INSTANT CASE IS WHETHER THE CAPITAL GAINS ARISING OUT OF THE SALE OF FLAT AT HIRANANDANI MEADOWS, THANE, MUMBAI, SOLD THROUGH REGISTERED SALE AGREEMENT DATED 29-06-2009, WHICH WAS PURCHASED BY THE ASSESSEE THROUGH REGISTERED PURCHASE DEED DATED 06-03-2009 IS A SHORT TERM CAPITAL GAIN OR A LONG-TERM CAPITAL GAIN. THE CONTENTION OF THE ASSESSEE TO TREAT THE GAINS AS LONG-TERM CAPITAL GAINS ON THE GROUND THAT THE ALLOTMENT DATE WAS 22- 02-2006 AND THAT THE ALLOTMENT DATE HAS TO BE TAKEN AS THE DATE OF ACQUISITION IS NOT ACCEPTABLE, DUE TO THE FOLLOWING REASONS: 1). AS SEEN FROM THE PURCHASE DEED DATED 0 . 603-2009, ON PAGE-14 PARE 13, THE POSSESSION OF THE FLAT IS TAKEN ON THE DATE OF PURCHASE I.E. 06-03-2009. ON THE DATE ALLOTMENT AS CLAIMED I.E. 22-02-2006, THE POSSESSION WAS NOT GIVEN AND THE FLAT WAS NOT READY TO OCCUPY - IT WAS IN THE PRE CONSTRUCTION STAGE. 2). AS COULD BE SEEN FROM PAGE 7 OF THE PURCHASE DEED IT IS CLEARLY MENTIONED THAT THE THANE MUNICIPAL CORPORATION HAS GRANTED THE PROMOTERS DEVELOPMENT PERMISSION/COMMENCEMENT CERTIFICATE FOR CONSTRUCTION OF MULTI-STORIED BUILDINGS, FOR CONSTRUCTION AND SALE OF FLATS/SHOPS/OFFICE PREMISES/GARAGE VIDE COMMENCEMENT CERTIFICATE NO. V.P. NO. 2003/07/TMC/TDD-539 DATED 17.11.2006. AS CLAIMED BY THE ASSESSEE THAT THE DATE OF ALLOTMENT SHOULD BE TAKEN AS THE DATE OF ACQUISITION, IN THE INSTANT CASE, EVEN THE PERMISSION TO COMMENCE THE APARTMENT HAS BEEN ISSUED BY THE THANE MUNICIPAL CORPORATION ONLY ON 17-11-2006, WHEREAS THE ASSESSEE'S CLAIM IS TO TAKE THE DATE AS 22-02-2006. 3) ON THE PAGE NO.7 OF THE PURCHASE DEED IT IS MENTIONED THAT THE ARCHITECT OF THE PROMOTERS HAS ALSO ISSUED A CERTIFICATE DATED 21-11-2006 STATING THAT THE BUILDING NO.3 REFERRED- TO IN THE -- COMMENCEMENT CERTIFICATE ISSUED BY THE - THANE MUNICIPAL ITA NO. 32BANG/2018 PAGE 6 OF 10 CORPORATION UNDER PERMIT NO.2003/07/TMC/TDD/539 DATED 17-11-2006 SHALL BE NAMED AS 'BUTTERCUP' ON THE PROPOSED SURVEY NO.342, THANE. 4) IN REAL ESTATE TRANSACTIONS, THE REGISTRATION OF THE PROPERTY BEFORE THE SUB REGISTRAR PLAYS A VERY PIVOTAL ROLE, SINCE THE LEGAL OWNERSHIP AND TITLE OF THE PROPERTY PASSES ON FROM THE SELLER TO THE BUYER ON THAT DATE, AFTER PAYMENT OF THE REQUISITE STAMP DUTY AND REGISTRATION CHARGES. EVEN GOING BY THE PROVISIONS OF THE INDIAN EVIDENCE ACT, INSTRUMENTS WHICH ARE NOT DULY STAMPED ARE INADMISSIBLE IN EVIDENCE AND AS PER SECTION 34 OF THE STAMPS ACT, 1957, NO INSTRUMENT CHARGEABLE WITH DUTY SHALL BE ADMITTED IN EVIDENCE OR SHALL BE ACTED UPON, REGISTERED OR AUTHENTICATED BY TRY PUBLIC OFFICER, UNLESS SUCH INSTRUMENT IS DULY STAMPED. A PLAIN RENDING OF THESE SECTIONS EMPHASIZES THE IMPORTANCE OF GETTING IMMOVABLE PROPERTIES REGISTERED BEFORE A GOVERNMENT AUTHORITY BY PAYING PRESCRIBED STAMP DUTY AND REGISTRATION CHARGES, FOR OBTAINING THE CLEAR LEGALITY TITLE OVER SUCH PROPERTY. HENCE, THE DATE OF ALLOTMENT CANNOT BE CONSIDERED AS THE DATE OF ACQUISITION OF PROPERTY, BUT THE DATE ON WHICH THE PROPERTY WAS REGISTERED BEFORE A GOVERNMENT AUTHORITY, GIVES THE LEGAL STATUS AND TITLE FOR THE PROPERTY. THEREFORE, IN THE INSTANT CASE THE DATE OF ACQUISITION IS TAKEN AS THE DATE OF REGISTRATION I.E. 06-03-2009 AND AS THE DATE OF SALE IS 29-06-2009, THE GAINS ARISING OUT OF THE SALE CAN BE ONLY 'SHORT TERM CAPITAL GAINS'. IT IS ALSO PERTINENT TO NOTE HERE THE INTENTION OF THE ASSESSEE. THE STEEP RISE IN PROPERTY PRICES OVER THE PAST FEW YEARS PARTICULARLY IN LARGER CITIES LIKE MUMBAI, DELHI, BANGALORE, HAS PLACED ONE CATEGORY OF HOMEBUYERS IN A VERY FORTUNATE SITUATION. THOSE WHO BOOKED YET TO BE CONSTRUCTED FLATS THREE OR FOUR YEARS AGO MADE PAYMENTS OVER THE PAST FEW YEARS AT BOOKING RATES AND ARE NOW GETTING POSSESSION OF THE READY FLATS, ARE TEMPTED TO SELL THE FLATS AT THE HIGH PRICES THAT THE READY FLATS NOW COMMAND COMPARED WITH THE CS WHICH THEY WERE BOOKED. THE ASSESSEE'S INTENTION IN THIS PROJECT DOES NOT SEEM TO OCCUPY THE FLAT AND RESIDE IN THE SAME, SINCE AS SEEN FROM THE DOCUMENTS ON DURING THE FY 2009-10 RELEVANT FOR AY 2010-11, THE ASSESSEE HAS ALSO SOLD A SITE AT GUJARAT ON 19-09-2009 FOR RS.17 LAKHS AND SOLD THE IMPUGNED FLAT AT HIRANANDANI MEADOWS, THANE, AND REINVESTED THE CONSIDERATION IN THE PURCHASE OF ANOTHER APARTMENT CALLED 'SAPPHIRE HEIGHTS' IN MUMBAI THROUGH REGISTERED AGREEMENT DATED 29-07-2009 FOR AN AGREED CONSIDERATION OF RS.71,58,750/-. HENCE, THE GAINS ARISING OUT OF THE SALE OF THE APARTMENT AT FLAT NO. 302, BUTTERCUP, HIRANANDANI MEADOWS, THANE, MUMBAI, IS BROUGHT TO TAX AS SHORT TERM CAPITAL GAINS AND --IT COMPUTATION IS SHOWN AS UNDER: ITA NO. 32BANG/2018 PAGE 7 OF 10 PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT INITIATED FOR CONCEALMENT/FURNISHING INACCURATE PARTICULARS OF INCOME. SALE CONSIDERATION RECEIVED 28-06-2009 : RS.62,91,500/- LESS: COST OF ACQUISITION ON 06-03-2009 : RS.29,08,950/- SHORT TERM CAPITAL GAINS RS.33,82,550/- 7. AGGRIEVED, ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND DURING THE COURSE OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE EMPHATICALLY ARGUED THAT THE IMPUGNED FLAT WAS ALLOTTED TO THE ASSESSEE ON 22.02.2006 THROUGH THE ALLOTMENT LETTER DATED 22.02.2006. THEREFORE, THE PROPERTY WAS ACQUIRED ON 22.02.2006 WHICH WAS LATER ON SOLD ON 29.06.2009 AFTER HOLDING THE CAPITAL ASSET FOR MORE THAN 3 YEARS. THEREFORE, THE LONG TERM CAPITAL GAIN WAS RIGHTLY COMPUTED BY THE ASSESSEE. IN SUPPORT OF HIS CONTENTION, HE PLACED RELIANCE UPON THE FOLLOWING JUDGMENTS: 1. ITO VS. TECHSPAN INDIA PVT. LTD., & ANR (2018) ITR 0386 (KARN.) 2. CIT & ANR VS. HEWLETT PACKARD GLOBAL SOFT PVT. LTD., (2016) 380 ITR 0386 (KARN). 3. LAHAR SINGH SIROYA VS. ACIT (2016) 138 DTR 0331 (KAR). 4. VINOD KUMAR JAIN VS. CIT & ORS (2012) 344 ITR 0501. 5. MADHU KAUL VS. CIT & ANR (2014) 363 ITR 0054 (P & H). 6. CIT VS. S. R. JEYASHANKAR (2015) 373 ITR 0120 (MAD). 8. THE LEARNED DR ON THE OTHER HAND CONTENDED THAT ON 22.02.2006, ASSESSEE HAS SIMPLY BOOKED A FLAT WITH THE BUILDER BY MAKING A PAYMENT OF RS.1,00,000/- OF WHICH RECEIPT IS PLACED ON RECORD. THEREAFTER, THE BALANCE AMOUNT OF RS.28,08,950/- WAS GOT FINANCED BY THE BUILDER THROUGH ICICI HOME FINANCE COMPANY LTD. THE LETTER OF THE BUILDER I.E., HIRANDANI DATED 09.03.2006 ADDRESSED TO THE ICICI HOME FINANCE COMPANY LTD., FOR GRANT OF LOAN OF RS.28,08,950/- AND ISSUE OF CHEQUE IN FAVOUR OF THE BUILDER IS ALSO PLACED ON RECORD. THE LEARNED DR FURTHER INVITED OUR ATTENTION THAT SALE ITA NO. 32BANG/2018 PAGE 8 OF 10 AGREEMENT EXECUTED BETWEEN THE BUILDER AND THE APPELLANT ON 06.03.2009 APPEARING AT PAGE NOS. 1 TO 37 OF THE COMPILATION WITH THE SUBMISSION THAT IN PAGE NO. 8 IN AGREEMENT TO SELL, IT HAS BEEN MENTIONED THAT SANCTION OF DEVELOPMENT PERMISSION/COMMENCEMENT CERTIFICATE WAS GRANTED ON 17.11.2006 AND IN THE SAME PAGE, THE ARCHITECT OF THE PROMOTER HAS ISSUED A CERTIFICATE DATED 21.11.2006 STATING THAT BUILDING NO. 3 REFERRED TO IN THE COMMENCEMENT CERTIFICATE ISSUED BY THE THANE MUNICIPAL CORPORATION AND ON THE SAME PAGE, THE ARCHITECT HAS ALSO CERTIFIED THAT THANE MUNICIPAL CORPORATION HAS ALSO GRANTED THE DEVELOPMENT PERMISSION AND COMMENCEMENT CERTIFICATE ON 17.11.2006 MEANING THEREBY THAT EVEN THE CONSTRUCTION OF THE APARTMENT WAS NOT STARTED BEFORE 17.11.2006. THE LEARNED DR FURTHER INVITED OUR ATTENTION TO THE OCCUPANCY CERTIFICATE GIVEN BY THANE MUNICIPAL CORPORATION WHICH IS APPEARING AT PAGE NO. 54 OF THE COMPILATION WITH THE SUBMISSION THAT THE COMMENCEMENT/OCCUPANCY CERTIFICATE WAS GRANTED TO THE BUILDER ON 18.02.2009. AFTER THE OCCUPANCY CERTIFICATE WAS OBTAINED BY THE BUILDER, THE AGREEMENT TO SELL WAS EXECUTED BETWEEN THE APPELLANT AND THE BUILDER ON 06.03.2009 MEANING THEREBY THE ASSESSEE IN FACT ACQUIRED THE PROPERTY ON 06.03.2009 AND NOT ON 22.02.2006 AS CONTENDED BY THE ASSESSEE. IN THE LIGHT OF THESE FACTS, THE CLAIM OF LONG TERM CAPITAL GAIN IS NOT SUSTAINABLE IN THE EYES OF LAW. HE HAS ALSO PLACED RELIANCE UPON THE FOLLOWING JUDGMENTS: 1. CIT VS. BALBIR SINGH MAINI [2017] 86 TAXMANN.COM 94 (SC). 2. SHRI. M. C. SATYANARAYANA GOWDA VS. ITO, WARD 5(4), BANGALORE IN ITA NO. 1057/BANG/2016 DATED 26.02.2018 3. CIT VS. JUMRAMAL SONS (1986) 25 TAXMAN 242 (ALL). 4. HOME FINDERS HOUSING LTD., VS. ITO (2018) 94 TAXMANN.COM 84 (SC) 5. PR. CIT, VADODARA-2 VS. SUN PHARMACEUTICAL INDUSTRIES LTD., (2017) 79 TAXMANN.COM 61 (SC) 6. PR. CIT, VADODARA-2 VS. SUN PHARMACEUTICAL INDUSTRIES LTD., (2017) 77 TAXMANN.COM 53 (SC) ITA NO. 32BANG/2018 PAGE 9 OF 10 7. JIVRAJ TEA CO. 377 ITR 337 (GUJARAT) 9. HAVING CAREFULLY EXAMINED THE ORDER OF AUTHORITIES BELOW IN THE LIGHT OF RIVAL SUBMISSIONS, WE FIND THAT ASSESSEE HAS SIMPLY BOOKED THE FLAT BY MAKING THE PAYMENT OF RS.1,00,000/- TO THE BUILDER ON 22.02.2006, THEREAFTER THE REMAINING PAYMENT WAS GOT FINANCED FINANCED BY THE BUILDER FROM THE FINANCER ICICI HOME FINANCE CO. LTD. IT IS ALSO EVIDENT FROM THE SALE AGREEMENT EXECUTED BETWEEN THE APPELLANT AND THE BUILDER THAT THE DEVELOPMENT PERMISSION/COMMENCEMENT CERTIFICATE WAS GRANTED BY THE MUNICIPAL CORPORATION ON 17.11.2006 MEANING THEREBY UPTO17.11.2006, EVEN THE COMMENCEMENT OF THE CONSTRUCTION OF THE APARTMENT WAS NOT STARTED. WE HAVE ALSO CAREFULLY EXAMINED THE OCCUPANCY CERTIFICATE GIVEN BY THE MUNICIPALITY TO THE BUILDER AND WE FIND THAT OCCUPANCY CERTIFICATE WAS GRANTED TO THE BUILDER ON 18.02.2009 MEANING THEREBY UPTO 18.02.2009, THE ASSESSEE HAD NOT EVEN ACQUIRED ANY RIGHT TO OCCUPY THE FLAT. AFTER OCCUPANCY CERTIFICATE, THE AGREEMENT TO SALE WAS EXECUTED ON 06.03.2009, MEANING THEREBY THE ASSESSEE COULD GET THE POSSESSION OF THE FLAT ON EXECUTION OF THE AGREEMENT OF SALE ON 06.03.2009. THIS AGREEMENT TO SELL WAS CLAIMED BY THE ASSESSEE TO BE SALE DEED WAS IN FACT AN AGREEMENT TO SALE. ON THE BASIS OF THIS AGREEMENT TO SELL, THE ASSESSEE FURTHER SOLD OUT THE PROPERTY TO ANOTHER BUYER BY EXECUTING AN AGREEMENT TO SELL FOR A SUM OF RS.62,91,500/-. KEEPING IN VIEW THE TOTALITY OF THE FACTS AND THE CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT CAPITAL GAIN OF WHICH EXEMPTION UNDER SECTION 54F WAS CLAIMED WAS NOT HELD BY THE ASSESSEE FOR MORE THAN 3 YEARS. EVEN THE CONSTRUCTION OF THE APARTMENT WAS NOT STARTED UPTO 17.11.2006 AND THE PROPERTY WAS SOLD ON 28.06.2009. FROM ANY ANGLE, THE CAPITAL ASSET WAS NOT HELD BY THE ASSESSEE FOR MORE THAN 3 YEARS. 10. WE HAVE CAREFULLY EXAMINED THE VARIOUS JUDGMENTS REFERRED TO BY THE ASSESSEE BUT THEY ARE ALL DISTINGUISHABLE ON FACTS AS IN NONE OF THE JUDGMENTS, THE DATE OF ACQUISITION STARTS FROM THE DATE OF BOOKING A FLAT IN THE PROPOSED PROJECT. THEREFORE, ITA NO. 32BANG/2018 PAGE 10 OF 10 WE ARE OF THE CONSIDERED OPINION THE REVENUE HAS RIGHTLY HELD THIS GAIN ACCRUED ON SALE OF THIS PROPERTY AS SHORT TERM CAPITAL GAIN. ACCORDINGLY, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) AND WE CONFIRM THE SAME. THE LAST GROUND RELATES TO INTEREST UNDER SECTION 234A AND 234B OF THE ACT WHICH ARE CONSEQUENTIAL IN NATURE AND NEEDS NO INDEPENDENT ADJUDICATION. ACCORDINGLY, APPEAL OF THE ASSESSEE STANDS DISMISSED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 21 ST AUGUST, 2018. SD/- SD/- BANGALORE. DATED: 21 ST AUGUST, 2018. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. DR 5. GUARD FILE BY ORDER SR. PRIVATE SECRETARY, ITAT, BANGALORE. ( A. K. GARODIA ) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER