Usha Gupta, New Delhi V. ACIT Circle-47(1), New Delhi

ITA 4859/DEL/2019

AI Insights

The case revolves around the classification of capital gains from the sale of a property located at DSM-528, DLF Towers, Shivaji Marg, New Delhi, by Smt. Usha Gupta. The primary issue was whether the property was held for more than 36 months, which is the threshold for classifying gains as long term capital gains under the Income Tax Act. The Assessing Officer initially classified the gains as short term, leading to a tax addition of Rs. 1,16,81,422. However, the Tribunal, after examining the payment schedule and legal documents, concluded that the assessee had acquired a legal right in the property in the financial year 2007-08, thus holding it for more than the required period.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 300867 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 18-10-2023
• Assessment Year: 2015-2016
• Appeal Filed On: 27-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset; Cost of acquisition; Capital Gains

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘B’ BENCH, NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ITA No. 4859/DEL/2019 [A.Y 2015-16] Smt. Usha Gupta Vs. The A.C.I.T. 180-A, Gali Teliyan, Circle - 47(1) Tilak Bazar, New Delhi New Delhi PAN: AAHPG 2655 G (Applicant) (Respondent) Assessee By : Shri Gautam Jain, Adv Department By : Shri Vivek Kumar Upadhyay, Sr. DR Date of Hearing : 19.10.2023 Date of Pronouncement : 30.10.2023 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER:- This appeal by the assessee is preferred against the order of the CIT[A]- 16, New Delhi dated 29.03.2019 pertaining to Assessment Year 2015-16. 2 2. The sum and substance of the grievance of the assessee is that the ld. CIT(A) erred in upholding the determination of short term capital gain as against long term capital loss by the Assessing Officer in respect of disinvestment of property located at DSM-528, DLF Towers, Shivaji Marg, New Delhi. 3. Briefly stated, the facts of the case are that the assessee filed return of income on 23.10.2015 declaring total income of Rs. 24,87,820/. Return was selected for scrutiny assessment and accordingly, statutory notices were issued and served upon the assessee. 4. During the course of scrutiny assessment proceedings, the Assessing Officer noticed sale of property at DSM-528, DLF Towers, Shivaji Marg, New Delhi on which the assessee claimed indexed cost of acquisition from A.Y 2007-08 onwards. The Assessing Officer found that the purchase deed of the said property was executed on 24.01.2013. Therefore, the Assessing Officer came to the belief that the assessee has sold the said property without holding it for a period of more than 36 months and hence it attracts short term capital gain and, accordingly, made addition of Rs. 1,16,81,422/-. 3 5. Assessment was confirmed by the ld. CIT(A). 6. Representatives of both the sides were heard at length. Case records carefully perused. 7. The entire quarrel revolves around the fact whether the assessee has held the property for more than 36 months. Basis of this quarrel is the claim of the assessee that right in the property was acquired in F.Y. 2007-08 when substantial payments were made whereas the point of the Revenue is that the impugned property was transferred in the name of the assessee on 24.01.2013, therefore, the period of holding starts from F.Y. 2012-13. 8. It would be pertinent to see the Payment Schedule, which is as under: F.Y. AMOUNT 2007-08 2,564,322 2008-09 4,500,000 2010-11 2,791,137 2011-12 1,700,173 2012-13 3,190,049 2014-15 161,218 14,906,899 4 9. The above figures are not at all in dispute. Therefore, it can be seen from the above chart that substantial payments were made in the earlier F.Y and the assessee acquired a legal right in the said property. 10. Legal right can also be found from the agreement to sell dated 11.11.2010 wherein it has been specifically mentioned that total consideration is Rs. 1,20,29,000/- and the assessee has paid Rs. 70,64,322/- which comes to 59% of the total consideration This also goes to show that after paying more than 50% of the consideration, the assessee acquired right in the impugned property in F.Y. 2007-08. 11. This right of the assessee was also recognized by DLF Universal Limited who recognized the legal right on 25.11.2010 and issued the following letter: 5 12. A perusal of the above letter clearly shows that DLF has given Space Buyers Agreement for the impugned property to the assessee on 26.06.2008. 6 13. These clinching evidences go on to show that the assessee had legal right in the impugned property acquired in F.Y. 2007-08, thereby making the holding period of more than 36 months and thereby making the capital gains as long term capital gains. 14. Considering the clinching evidences on record, we have no hesitation in holding the property as long term capital asset and the gains arising out of the sale of the said property as long term capital gains. We, accordingly, direct he Assessing Officer to accept the long term capital loss as shown by the assessee. 15. In the result, the appeal of the assessee in ITA No. 4859/DEL/2019 is allowed. The order is pronounced in the open court on 30.10.2023 in the presence of both the representatives. Sd/- Sd/- [CHALLA NAGENDRA PRASAD] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 30 th OCTOBER, 2023. 7 VL/ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) Asst. Registrar, 5. DR ITAT, New Delhi Date of dictation Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr.PS/PS Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr.PS/PS Date on which the final order is uploaded on the website of ITAT Date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order