Sandeep Kumar Mittal, Delhi V. ITO, New Delhi

ITA 5811/DEL/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6599 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 01-03-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 21-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: B : NEW DELHI BEFORE SHRI R.S. SYAL, AM & SHRI A.T. VARKEY, JM ITA NO.5811/DEL/2015 ASSESSMENT YEAR : 2009-10 SANDEEP KUMAR MITTAL, PROP. SRI BANKEY BIHARI PAPERS, A-2/106, MILAN VIHAR APARTMENT, 72, IP EXTENSION, DELHI. PAN: AADPM6092R VS. ITO, WARD-36(3), NEW DELHI. ASSESSEE BY : SHRI V.R. SACHDEV, CA & MS SONIA, CA DEPTT. BY : SHRI SAMEER SHARMA, SR. DR DATE OF HEARING : 01.03.2016 DATE OF PRONOUNCEMENT : 01.03.2016 ORDER PER R.S. SYAL, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 31.7.2015 IN RELATION TO TH E ASSESSMENT YEAR 2009-10. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE TREATMENT OF CAPITAL GAIN ARISING FROM THE TRANSFER OF PROPERTY. ITA NO.5811/DEL/2015 2 3. SUCCINCTLY, THE FACTS OF THE CASE ARE THAT THE A SSESSEE FILED HIS RETURN DECLARING, INTER ALIA , SHORT-TERM CAPITAL GAIN ON TRANSFER OF FLAT AT GAUR GREEN AVENUE, GHAZIABAD (U P). THEREAFTER, AN APPLICATION WAS MOVED ON 26.8.2011 S UBMITTING THAT THE CAPITAL GAIN ON SALE OF THIS FLAT WAS WRON GLY SHOWN AS SHORT-TERM CAPITAL GAIN WHILE THE SAME SHOULD HAVE BEEN TREATED AS LONG-TERM CAPITAL GAIN. TO SUPPORT THIS CONTENTION, IT WAS MENTIONED THAT THE FLAT WAS BOOKED ON 22.3.2005 AND PAYMENT ON ALLOTMENT SPECIFYING FLAT NO., AREA AND APPROXIMATE COST WAS DONE ON 20.4.2005. AS THIS PROPERTY WAS S OLD VIDE AGREEMENT TO SELL DATED 9.9.2008, THE ASSESSEE CLAI MED THAT IT WAS HELD FOR MORE THAN 36 MONTHS AND HENCE IT CONST ITUTED A LONG-TERM CAPITAL ASSET. THAT IS HOW, THE ASSESSEE WORKED OUT LONG-TERM CAPITAL LOSS OF RS.7,53,364/- FROM THE SA LE OF THIS PROPERTY AS AGAINST ORIGINALLY SHOWN SHORT-TERM CAP ITAL GAIN OF RS.1,80,209/-. THE AO REFUSED TO ACCEPT THE ASSESSE ES CONTENTION AS, IN HIS OPINION, THE FLAT WAS NOT IN EXISTENCE ON THE DATE OF ITS BOOKING BY THE ASSESSEE. HE OPINED THAT ITA NO.5811/DEL/2015 3 PAYMENT TO BUILDER WAS IN THE NATURE OF ADVANCE. H E HELD THAT THE ASSET COULD BE CONSIDERED TO HAVE BEEN HELD ON THE DATE ON WHICH THE ASSESSEE WAS HANDED OVER THE POSSESSION. HE, THEREFORE, DID NOT ACCEPT THE ASSESSEES CONTENTION . THE LD. CIT(A) ECHOED THE ASSESSMENT ORDER ON THIS POINT. T HE ASSESSEE IS AGGRIEVED BEFORE US. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL. WE FIND THAT THE ISSUE RAISED IN THIS APPEAL IS NO MORE RES INTEGRA IN VIEW OF THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN CIT VS. K. RAMAKRISHNAN (2014) 363 ITR 59 (DEL) , IN WHICH IT HAS BEEN HELD THAT THE DATE OF ALLOTMENT IS RELEVANT FOR THE PURPOSES OF COMPUTING THE HOLDING PERIOD AND NOT THE REGISTRATION OF CONVEYANCE DEED FOR COMPUTING CAPITAL GAIN. SIMILAR VIEW HAS BEEN TAKE N BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN MADHU KAUL VS. CIT AND ANR. (2014) 363 ITR 54 (P&H), LAYING DOWN THAT PAYMENT OF FIRST INSTALLMENT CONFERS A RIGHT UPON THE ASSES SEE TO HOLD A ITA NO.5811/DEL/2015 4 FLAT. MERE FACT THAT THE POSSESSION WAS DELIVERED LATER ON DOES NOT DETRACT FROM THE FACT THAT THE ALLOTTEE WAS CON FERRED A RIGHT TO HOLD PROPERTY ON ISSUANCE OF AN ALLOTMENT LETTER . IT HAS FURTHER BEEN HELD THAT PAYMENT OF BALANCE INSTALLME NTS, IDENTIFICATION OF A PARTICULAR FLAT AND DELIVERY OF POSSESSION ARE CONSEQUENTIAL ACTS WHICH RELATE BACK TO AND ARISE F ROM RIGHTS CONFERRED BY ALLOTMENT LETTER. 5. ADVERTING TO THE FACTS OF THE INSTANT CASE, W E FIND THAT THE ASSESSEE BOOKED THE FLAT ON 22.3.2005. PAYMENT ON ALLOTMENT SPECIFYING THE FLAT NO. AREA AND APPROXIMATE COST W AS DONE ON 20.4.2005. IT IS THIS DATE ON WHICH THAT THE PROPE RTY CAN BE SAID TO HAVE BEEN ACQUIRED BY THE ASSESSEE. SINCE THE SAME WAS SOLD VIDE AGREEMENT TO SELL DATED 9.9.2008, THE PERIOD OF HOLDING EXCEEDS 36 MONTHS. WE, THEREFORE, HOLD THA T THE ASSESSEE WAS RIGHT IN ARGUING THAT HE HELD A LONG-T ERM CAPITAL ASSET, GAIN ON WHOSE TRANSFER WAS TO BE CONSIDERED AS LONG- ITA NO.5811/DEL/2015 5 TERM CAPITAL GAIN. OVERTURNING THE IMPUGNED ORDER ON THIS SCORE, WE ACCEPT THE ASSESSEES VIEW POINT. 6. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01.03.2016. SD/- SD/- [A.T. VARKEY] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 01 ST MARCH, 2016. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.