ACIT 18(3), MUMBAI V. VANDANA RANA ROY, MUMBAI

ITA 6173/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8320 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 17-10-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 07-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Cost of acquisition

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI BEFORE SHRI D.K. AGARWAL, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTAT MEMBER I.T.A. NO.6173/M/2011 ASSESSMENT YEAR:2007-2008 ASST. COMMISSIONER OF INCOME-TAX, 18(3), ROOM NO.209, 2 ND FLOOR, PIRAMAL CHAMBERS, LALBAUG, MUMBAI. VS. SMT. VANDANA RANA ROY, 20/204, HAMMERSMITH INDUSTRIAL ESTATE, SITLADEVI TEMPLE ROAD, MAHIM, MUMBAI 400 016. PAN:AAAPR6712L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJARSHI DWIVEDY, SR. DR RESPONDENT BY : SHRI K. GOPAL DATE OF HEARING: 17.10.2012 D ATE OF ORDER: 7.11.2012 O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT (A)-29, MUMBAI DATED 17.06.2011 FOR THE ASSESSMENT YEAR 2007-2008. 2. THERE ARE 5 GROUNDS IN THIS APPEAL AND THEY ALL REVOLVE AROUND THE ALLOWABILITY OF CAPITAL GAIN OF RS. 44,98,847/- AS LONG TERM CAP ITAL GAINS AS CLAIMED BY THE ASSESSEE WHEREAS, REVENUE DEEMS THE SAME AS SHORT T ERM CAPITAL GAINS. UNDISPUTED FACTS OF THE CASE ARE THAT THE ASSESSEE OWNS A FLAT AND SOLD THE SAME ON 23.8.2006 AND THE SAID FLAT WAS TAKEN POSSESSION BY THE ASSESSEE ON 14.8.2003. PAGE 111 OF THE PAPER BOOK AUTHENTICATES THE CLAIM. PRIOR TO THE POSSESSION OF THE FLAT, ASSESSEE GOT ALLOTMENT OF THE FLAT IN HER NAM E ON 19.11.2001 AND THE STAMP DUTY WAS ALSO PAID FOR THE REGISTRATION OF THE SAID FLAT ON 11.8.2003. REQUISITE PAYMENTS WERE MADE BY THE ASSESSEE FOR PURCHASE OF THE FLAT BETWEEN 28.11.2001 TO 20.4.2003. OTHERWISE, FLAT WAS FINALLY REGISTER ED ON 29.8.2003. REVENUE AUTHORITIES RECKONED THE DATE OF REGISTRATION OF TH E FLAT AS THE DATE OF ACQUISITION, IN THAT CASE THE PERIOD OF HOLDING IS LESS THAN 36 MON THS AND DEEMED THE GAINS AS SHORT TERM CAPITAL GAINS. 2 3. ON THE OTHER HAND, ASSESSEE ARGUED THAT THE DAT E OF ALLOTMENT I.E. 19.11.2001 SHOULD BE TAKEN AS THE DATE OF ACQUISITI ON FOR THE PERIOD OF COMPUTING THE HOLDING PERIOD OF THE FLAT. 4. MATTER TRAVELLED TO THE CIT (A) WHO HELD THAT TH E ASSESSED IS IN POSSESSION OF THE FLAT ON 14.8.2003, THE DATE OF TAKING POSSESSIO N OF FLAT AND THE HOLDING PERIOD EXCEEDS 36 MONTHS. IN THAT CASE, THE GAINS EARNED B Y THE ASSESSEE ARE LONG TERM CAPITAL GAINS AND THEREFORE, THE CIT (A) GRANTED RE LIEF TO THE ASSESSEE. AGGRIEVED WITH THE ABOVE RELIEF ORDER OF THE CIT (A), THE REV ENUE IS IN APPEAL BEFORE US. 5. BEFORE US, SHRI K. GOPAL, LD COUNSEL FILED THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. JINDAS PANCHAND G ANDHI (2005) 279 ITR 552 (GUJ) WHICH THE FOLLOWED THE JUDGMENT IN THE CASE OF CIT VS. ANILABEN UPENDRA SHAH (2003) 262 ITR 657 (GUJ) FOR THE PROPOSITION THAT THE DATE OF ALLOTMENT IS RELEVANT DATE FOR COMPUTING THE CAPITAL GAINS. FUR THER, LD COUNSEL ALSO RELIED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF JITENDRA MO HAN VS. ITO (2007) 11 SOT 594 (DEL) WHEREIN IT WAS HELD THAT THE DATE OF ALLOTMEN T LETTER SHOULD BE CONSIDERED IN THIS REGARD. THEY HAVE ALSO FOLLOWED THE DECISION O F HONBLE GUJARAT HIGH COURT IN THE CASE OF ANILABEN UPENDRA SHAH (SUPRA) FOR DECID ING THE ISSUE IN FAVOUR OF THE ASSESSEE. 6. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE CITE D DECISIONS AND WE FIND THAT THERE IS NO DISPUTE ON THE FACTS. THE ONLY ISSUE T HAT IS TO BE DECIDED IS WHETHER DATE OF ALLOTMENT OF THE FLAT OR THE DATE OF POSSESSION OF THE FLAT BY THE ASSESSEE SHOULD BE CONSIDERED AS DATE OF HOLDING FOR COMPUTING THE HOLDING PERIOD OF 36 MOTHS. IN ALTERNATIVE, THE DATE OF REGISTRATION SHOULD BE T HE RELEVANT DATE. ON PERUSAL OF THE SAID DECISIONS RELIED UPON BY THE LD COUNSEL, WE FI ND THAT THE DECISIONS ARE RELEVANT AND APPLICABLE TO THE FACTS OF THE PRESENT CASE. T HE CONCLUSION OF THE HONBLE GUJARAT HIGH COURT JUDGMENT IN THE CASE OF CIT VS. JINDAS PANCHAND GANDHI READS AS UNDER: 3 ASSESSEE HAVING SOLD THE FLAT ALLOTTED TO HIM BY A CO-OPERATIVE HOUSING SOCIETY AFTER A PERIOD OF 36 MONTHS FROM THE DATE O F ALLOTMENT, CAPITAL GAINS ARISING TO HIM WERE LONG-TERM CAPITAL GAINS DESPITE THE FACT THAT THE PHYSICAL POSSESSION OF THE FLAT WAS GIVEN TO THE ASSESSEE MU CH LATER AND, THEREFORE HE WAS ENTITLED TO DEDUCTION FROM SUCH GAINS AS PER LA W. 7.1 THE CONCLUSION OF THE HONBLE GUJARAT HIGH COUR T JUDGMENT IN THE CASE OF CIT VS. ANILABEN UPENDRA SHAH READS AS UNDER: ASSESSEE HAVING HELD THE SHARES AND ALLOTMENT OF A FLAT IN A CO-OPERATIVE HOUSING SOCIETY FOR A PERIOD OF MORE THAN 36 MOTHS THE CAPITAL GAIN ARISING FROM SALE OF SAID FLAT WAS LONG-TERM CAPITAL GAIN A ND ASSESSEE WAS ENTITLED TO BENEFIT OF SECTION 80T IRRESPECTIVE OF THE FACT THA T THE ASSESSEE DID NOT GET POSSESSION OF THE FLAT IN QUESTION AT THE TIME OF A LLOTMENT AND IT WAS CONSTRUCTED LATER ON. 7.2. THE CONCLUSION OF HONBLE ITAT, DELHI BENCH IN THE CASE OF JITENDRA MOHAN VS. ITO READS AS UNDER: ON THE FACTS OF THE CASE, ASSESSEE HELD THE CAPITA L ASSET (SHED) ALLOTTED TO IT ON INSTALLMENT BASIS FROM 28 TH DECEMBER, 1994, THE DATE OF PAYMENT OF SECOND INSTALLMENT AND SALE THEREOF ON 15 TH DECEMBER, 2000, GAVE RISE TO LONG TERM CAPITAL LOSS EVEN THOUGH POSSESSION OF SH ED WAS HANDED OVER BY DSIDC TO ASSESSEE ON 28 TH MAY, 1998. 7.3. THE CONCLUSION OF HONBLE ITAT, DELHI BENCH IN THE CASE OF PRAVEEN GUPTA VS. ACIT READS AS UNDER: ASSESSEE CAN BE SAID TO HAVE HELD THE FLAT WHEN HE MADE THE PAYMENT TO THE BUILDER AND RECEIVED THE ALLOTMENT LETTER, AND THEREFORE, BENEFIT OF INDEXATION OF COST OF ACQUISITION OF THE FLAT HAS T O BE GRANTED TO THE ASSESSEE FROM THE DATE (1995) WHEN HE STARTED MAKING PAYMENT TO THE BUILDER AND NOT FROM THE DATE OF EXECUTION OF CONVEYANCE DEED I N 2001. 8. ALL THE ABOVE DECISIONS ARE UNIFORM IN CONCLUDIN G THAT THE DATE OF ALLOTMENT IS RECKONED AS THE DATE FOR COMPUTING THE HOLDING PERIOD FOR THE PURPOSE OF CAPITAL GAINS. THE DATE OF ALLOTMENT IN THIS CASE BEING 19.11.2001 AND THE DATE OF SALE IS 23.8.2006, THEREFORE, THE HOLD ING PERIOD IS MUCH MORE THAN 36 MONTHS. IN THIS CASE, THE GAINS EARNED BY THE ASSES SEE ON THE SALE OF FLAT HAVE TO BE COMPUTED AS CAPITAL GAINS. WITHOUT PREJUDICE, E VEN IF THE DATE OF POSSESSION, BEING 14.8.2003, IS CONSIDERED; THE ASSESSEE IS STI LL ENTITLED TO THE BENEFITS OF THE LONG TERM CAPITAL GAINS. THEREFORE, IN OUR OPINION , ORDER OF THE CIT (A) DOES NOT 4 CALL FOR ANY INTERFERENCE. ACCORDINGLY, THE GROUND S RAISED BY THE REVENUE ARE DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 7 TH DAY OF NOVEMBER, 2012. SD/- SD/- (D.K. AGARWAL) (D. KARUNAKARA RAO) JUDICIAL MEMBER AC COUNTANT MEMBER DATE : 7.11.2012 AT :MUMBAI OKK COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR F, BENCH, ITAT, MUMBAI. 6. GUARD FILE. // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI.