IN INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES , MUMBAI Before Shri Mahavir Singh, JM and Shri Ramit Kochar, AM ITA No.2239/Mum/2016 : Asst.Year 2012-13 Aditya Anil Sejpal HUF Income Tax Officer 2303, Glen Heights Ward 29(1)(1) Hiranandani Garden, Powai Vs. Mumbai. Mumbai 400 076 PAN : AAEHA0653H. ( Appellant) ( Respondent) Appellant by : Shri Vimal Punmiya Respondent by : Shri Vikash Kumar Agarwal Date of Hearing : 04.10.2016 Date of Pronouncement : 04.10.2016 O R D E R Per Mahavir Singh, JM : This appeal by assessee arising out of order of Commissioner of Income-tax (Appeals)-40, Mumbai in appeal No.CIT(A)-40/IT-723/2014-15 dated 01.03.2016. only issue in this appeal of assessee is against order of CIT(A) in taking acquisition date as 15.12.2009 instead claim of assessee of acquisition of property as 08.04.2008 and claim of long term capital gain and also deduction u/s 54F of Income-tax Act, 1961 (hereinafter Act ). For this, assessee has raise following grounds:- 1. On facts and circumstances of case and law, Ld.CIT(A) erred in confirming gain arising on from transfer of property as Short Term capital gain instead of Long Term Capital Gain. 2 ITA No.2239/Mum/2016. Shri Aditya Anil Sejpal HUF. 2. On facts and circumstances of case and law, Ld.CIT(A) erred in not allowing exemption under section 54F of Long term gain arose on transfer of property. 3. On facts and circumstances of case and law, Ld.CIT(A) erred in taking Period of holding from date 15.12.2009 instead of 08.04.2008. 2. We have heard rival contentions and gone through facts and circumstances of case. Briefly stated facts are that assessee is HUF. assessee sold immovable property at Jogeshwari, i.e., flat in society, on 31.05.2011, which was purchased vide agreement dated 15.12.2009 and according to A.O. period of holding was less than 36 months. assessee claimed that this property was purchased on 08.04.2008 vide allotment-cum-reservation letter issued by builder on payment of Rs.30,00,000. total purchase consideration of this flat was Rs.76,87,900. assessee claimed sale consideration as long term capital gain amounting to Rs.80,53,000 and claimed exemption u/s 54F of Act, by investing same in new property at Vikhroli. According to A.O. date of agreement to purchase, i.e., registered agreement should be taken as date of purchase and hence he considered holding period less than 36 months and treated capital gain as short term. He also disallowed consequential claim of exemption u/s 54F of Act. Aggrieved, assessee preferred appeal before CIT(A), who also confirmed action of A.O. 3. We find that assessee has given events of property under dispute, which read as under:- 3 ITA No.2239/Mum/2016. Shri Aditya Anil Sejpal HUF. Date Particular 03.01.2008 Appellant has booked under construction flat (a right in property) for Rs.76,87,900/- from M/s.Panchratna Builder and make first payment of Rs.10,00,000/-. 08.04.2008 Builder issued allotment cum reservation letter to appellant for allotment of flat. Till 8.4.08 appellant has made payment of Rs.30,00,000/- to builder. 15.12.2009 Registered agreement of property was made. Till this date appellant has paid Rs.60,00,000/- out of Rs.76,87,900/- for sale consideration of such property. balance 16,87,900/- was remain due to builder. right in such property is acquired by appellant on 08.04.2008. Thereafter only for legal formality agreement of property was registered on 15.12.2009. 31.05.2011 Appellant without taking possession of flat sold flat (i.e. right in property) to Mr.Vikram Gunjal by registered agreement for Rs.1,27,62,100/- (total sale consideration was Rs.1,44,50,000/- however out of that Rs.16,87,900/- which was remain due to builder is paid by Mr.Vikram Gunjal to builder directly). 08.11.2011 Invested in residential flat on from Wadhwa Residency Pvt. Ltd. For Rs.1,65,32,500/-. 3.1 We find from above events of property, which are not at all in dispute. only disputed point is whether date of acquisition can be considered i.e. when builder issued reservation-cum-allotment agreement to assessee on payment of Rs.30,00,000 or when registered agreement of property was made. We find that this issue is covered by decision of Hon ble Punjab & Haryana High Court in case of Vinod Kumar Jain v. CIT (P&H) ITA No.140 of 2000 dated 24.09.2010, wherein Hon ble High Court has held that once assessee gets title to property on issuance of allotment letter and payment of installments is only consequential action upon which delivery of possession flows and in calculation of holding period, period from date of allotment and up to date of possession will also be counted for purpose of computation of 4 ITA No.2239/Mum/2016. Shri Aditya Anil Sejpal HUF. capital gains. Similar view is taken by co-ordinate Bench of ITAT Delhi Benches in case of Praveen Gupta v. ACIT, wherein it is held as under:- Assessee can be said to have held flat when he made payment to builder and received allotment letter, and therefore, benefit of indexation of cost of acquisition of flat has to be granted to assessee from date (1995) when he started making payment to builder and not from date of execution of conveyance deed in 2001. All above decisions are uniform in concluding that date of allotment is reckoned as date for computing holding period for purpose of capital gains. date of allotment in this case being 19.11.2001 and date of sale is 23.8.2006, therefore, holding period is much more than 36 months. In this case, gains earned by assessee on sale of flat have to be computed as capital gains. Without prejudice, even if date of possession, being 14.8.2003, is considered, assessee is still entitled to benefits of Long Term Capital Gains. Therefore, in our opinion, order of CIT(A) does not call for any interference. Accordingly, grounds raised by Revenue are dismissed. 3.2 In view of above precedents, we are of view that date of allotment is to be reckoned as date for computing holding period for purpose of computation of capital gains. In present case, date of allotment being 08.04.2008 and date of sale being 31.05.2011, therefore, holding period is more than 36 months. In this case, gains earned by assessee on sale of flats have to be computed as capital gains, but indexation is to be done on basis of payment made proportionately. Assessing Officer will also allow consequential exemption u/s.54F of Act, in view of assessee invested this sale proceeds in residential flat in Wadhwa Residency Private Limited for sum of Rs.1,65,32,500. A.O. will verify facts relating to investment of this sale proceeds in residential flats. In terms of above, we restore matter back to file of Assessing 5 ITA No.2239/Mum/2016. Shri Aditya Anil Sejpal HUF. Officer, who will consider capital gain as long term and will allow consequential exemption u/s 54F after verification. 4. In result, appeal of assessee is allowed for statistical purposes. Order pronounced on this 04th day of October, 2016. Sd/- Sd/- (Ramit Kochar) (Mahavir Singh) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated : 04th October, 2016. Devdas* Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. CIT, Mumbai. 4. CIT(A) - 40, Mumbai 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai Aditya Anil Sejpal HUF v. Income Tax Officer Ward 29(1)(1), Mumbai